the small chips aren't everything these days from planes and national defense systems to your smartphone, your car, all the way down to your coffee maker. but it looks like relief is just around the corner as analysts believe the chip cycle downturn is nearing. i'm chris vi and you're watching the cost of everything where today we're breaking down how global supply chain disruptions and changes in the chip industry are costing you in a big way. ah, most people don't talk about semi conductors in their everyday life. but these little chips, power everything around you, your phone, your computer, your car, without them. technology comes to homes, which is why the semiconductor value chain is one of the most complex and geographically dispersed processes. what is the cost of supply and semiconductors to the market? while the typical cycle take more than a $100.00 days with a chip crossing international border 70 or more times and ultimately making the

equivalent of 3 full trips around the world to fabricate. as many will recall headlines of chip george's filled the news in 2020 due to supply chain disruptions caused by us trying to trade war and subsequently cove. it billions were invested into expanding the chip industry and building out foundries, pie one semiconductor manufacturing, and then some electronics announced 3 year global capital expenditure plans and 2021 of approximately a $100000000000.00 each. but building a chip boundary is a far cry from an apartment complex. you watch rise over the summer. these factories that build these chips, that cost between $10.00 to $20000000000.00 and can take 3 to 5 years to build. this is due to the hundreds of steps and the necessity for air time clean room and strict temperature controlled as robots transport the wafers from machine to

machine. so optimistically, these new foundry investments would likely begin producing chips and late 2023 or early 2024. but well, there still be demand for all these chips then when we still be experiencing a chip shortage by 2024. well, that's hard to say, as the world becomes increasingly reliant on technology, these chips which are basically the brains behind all the modern electronics, will become increasingly more valuable. but with production rising so dramatically from all these investments around the world, into new foundries. does the industry risk over supply and to break this down further, let's bring in i keyless lead a founder and ceo of our wealth management. now how is the chip industry now and are we still seeing constraints in the chip industry today? yeah, absolutely. we're seeing the constraints due to supply chain issues. we're also

seeing inflation affecting it, the capital expenditures that these companies are making are all part and parcel. these are 5 to 10 year plans for these companies. so that's absolutely nothing due to that. you know, samsung and i want semi conducted the leaders in the field tend to be putting more money right now, as you said, between 10 to 20000000000. and that's going to see, we're going to see if that's going to pay off within the next 510 years. it's not an overnight, as we talked about before. but the state of the industry in flux inflation of but affecting the prices at the same time. how much of those price is going to be going up and can they get the products to market? you know, chips are in anything to, to brushes, to washing machines, cars and trucks and the like. they're so used in our life. yes, it's going to be affected by what's going on with inflation. and yes,

we're going to see some slow downs, but we only think here that it's going to go out to 2020. and now we have recent checks with the industry contracts reflecting an accelerating and broadening trend of order cancellations that actually started in april of this year. so it seems like the vice makers are increasingly reluctant to take inventory of chips since they can't complete products amid supply chain constraints for other components. so well all those heavy cap ex investments into foundries pay off or is the industry in for a slump? well, the capital expenditures they, these companies knew that they were going to have to do what they're doing these type of investments. they're trying to do forward thinking, going forward anywhere between 3 and 10 years. corporations are looking at, i personally believe that there is already a room and plenty of product, even though some companies may hold off. what i see end up happening is that they

can actually pay more for later. because i want semiconductor intel samsung. they're all saying they're going to raise the prices. so these companies, either you spend now, or if you're holding off, you're gonna see that later. and it's going to cost you quite a bit more. the semi industry seems to be moving from global collaboration to a more self sufficient strategy with 3 emerging centers of influence. if you will, you have the west of china and japan and korea. so is that a net positive or a net negative for the industry? now that it's become so segregated, well, i can't see this as a net positive at this particular point. would i like to see more countries and more regions get involved in it? yes, but that's not going to happen at this particular point. we have dominant players, we're going to continue to dominate like taiwan,

china and the west. the 40 thing is if you're looking at the united states, united states really doesn't have anywhere where we're match your factory chips. a lot of these countries have subsidies as high as 70 percent to build those factories there. so that's why you're starting to see a lot more code countries in the east b, the dominators like your china and taiwan. so the world are low with korea as well, and i don't see that changing at this particular point. so i can't say it's neutral . i actually thinks a little more negative at this point. and high inflation is also driving the semi conductor industry and reverse. so how exactly does inflation affect the chips industry? yeah, well inflation affects everything. if you think about it, just look at what we've seen recently with gasoline prices going up more than 60 percent in some countries. and although we're seeing that inflation has gone up 9

percent, this particular much the highest, it's ever been in a particular short period of time. we're actually starting to see, we're thinking that that's actually the piece that we're going to start the see the move downward as we had until august inflation, one of the big indicators, inflation is gasoline prices. and those prices for the last 20 days have gone down. every single day. so from the high point that we saw just 20 days ago, it's gone down. we see the same thing happening with the chip. yes, people are going to have to pay more for those products. in some cases, it's gone as high as 40 percent, but at the same time as inflation starts to bait and things start to go down, we're going to see the similar back in the semiconductor area. and things will

start to reverting back to normal by 1st quarter 2023. we're also thinking that the computers are going to be less affected than other areas where chips are a big part of their industry. a kayla maria, founder and ceo of laura wealth management. thank you so much for joining us today . i now the real cost of semiconductor chips is found in the complexity and their design and manufacturing process, as they're so often made using raw materials like silicon and germanium. along with other pure elements, the production involves adding impurities to the base elements and a process called doping. computer memory, integrated circuits and transistors are all built using semi conductors during production, semiconductors are fabricated on single crystal materials. and during this process,

molten poly crystal lean semiconductor material is combined with a dope and, and then a seed crystal is introduced. the crystal is then pull polish and dice into wafers that are polished into a point of being almost completely flat at an atomic level. next is a process known as photo lithography, which uses light to transfer geometric pattern from a photo mask to a photo sensitive chemical. by doing this, the process coats the surface of the way for with a mask that blocks everything not meant to be exposed to u. v. light. once completed, the exposed portion is dissolved which leaves part of the surface, protected, and other portions exposed for etching, which traces the shape of wiring and other components. the entire process establishes a single layer of a circuit. and depending on the complexity of the manufacturing process, there can be up to $1400.00 process steps in the overall manufacturing of the

semiconductor way for alone. once fabrication is complete, the semiconductors on the silica way for must go through assembly testing and packaging, also known as a t p stages of production, which can take an additional 6 weeks to complete. past the 14 to 20 weeks. it takes to manufacture the way for the 1st place. in short, the cost of semiconductor chip is found in its complexity. it's time consuming process and in the very controlled environment in which it is created. when we come back, port congestion is generating again a higher cost for manufacturing and eventually to you will have more after the break. ah need to come to russian state total. never. i've stayed as i'm phoning the most 19,

divest with eclipse in 55 with. okay. so 9 is 25, i'm speaking with ben in the european union, the kremlin media machine, the state on russia for date, and school r t spoke neck, given our video agency, roughly all band on youtube and pinterest. and with me, i, my name is franklin richardson, so dos you got in the movement, in the age of 13 or 14, we were violent towards those people because we believe there were in this race. we

were here 1st and this is our country being part of that movement. i got your sense of power. when i felt powerless, we got attention when i felt invisible and accepted when i talked to level the life after hey, is an organization that was founded by 4 of skinheads, neo nazi white supremacists in the u. s. in canada. and they found each other and they knew that they wanted to help other guys get out was 2 parts to getting out of a violent extremely good. the 1st part is disengagement, which is where you leave the social group. and then the next part is d. radicalization work belief systems audiology are removed. it was very impactful. when someone finally came along with no fear, no judge, i heard my story did nothing challenge with when i was showing the wrong one,

i just don't know. i mean, you, well, you have to figure out this thing becomes the attitude and engagement. it was betrayal. when so many find themselves worlds apart, we choose to look for common ground. ah, a digital collaboration cloth that get who, what is the best time in which the i go about them. this is i'm a bundle with what i see school for carbonate port backwards but some same. yeah. it's not that much scheme importantly cut order. the subdivision of last week on your snow krinski part of it, which it,

it said the chest. i use the menu to one that you that you don't can be comma a utah and b communist somebody mp community that deep coma, a left for you know, it is all right. you supposed to, these are out, they can still affect it or only out of the july the media with us got some is clear but, but then with the routing, the spoofing it right? nobody see whether you to pull the soaking at the door with a reason why we should shoot graphical much. but he did with chris, was it was the case was a and then your big us will if you go that they sure i seem to notice the shipper that we're still a little systems don't put those in. when are you know, but it will be love enough to get to know something

a slow down or congestion is growing again as a result of labor and equipment and efficiencies, especially as we enter into peak season for our logistic managers. shanghai, the largest, the port in the world is still in the process of reopening manufacturing plants and shanghai have been shut down for $75.00 days. due to 0, coven friction, and even operating a 247 capacity, they still will not be caught up until at least the end of july. meanwhile, in europe, port congestion is worsening as the availability of empty containers to be filled with trade. the situation is compounded with the persistent shortage of truck drivers, as well as a labor strife between trade unions and the seaport. despite the historic volumes of containers, a pullback is expected as feature or as a chinese manufacturing have dropped one t to 30 percent with marla stated

a port let's bring in doctor jack rasmus, professor of economics and politics at st. mary's college. so jack, what is the root cause of all of the back, like in these ports, is that simply kelvin? well, sir, partly called it, but it's, it's more than just coded a course sir. you know, during, during co read what happened on the porch says that the, you know, a lot of the workers a got laid off the same with the shipping. and then when they tried to reopen, they had a supply chain problem. not just in a porch, but in the, in the shipping lanes and so forth and unloading to ports, et cetera. so, you know, it was covered and to some extent it still is covered in china because of the shut down going on there. but it's not just a totally corridor. we've got other problems now with the inflation and energy

shortages are delivery of energy shortages because of what's going on in europe in ukraine, other places in the sanctions, the so forth. so the supply chain problems and still exist. but the supply chain means not just what's going from port to port over the oceans. it's also do you have sufficient skilled workers at the ports to be able to unload in all the goods? and the, you know, d, do you have available truck truckers to carry the goods from the ports to the you know, inner warehouses now your warehouses from those warehouses to the local warehouses? well, we've had a shortage of, of labor here in the u. s. a particularly in a row delivery trucks, 18 wheeler. so that's partly because so darn expensive now for these are these truck drivers to wait at these ports and idle there?

no, they're, they're trucks in order to pick pick things up. so a lot of them haven't come back to work in other words, and then you have problems in the warehouses the same thing. so the labor markets have been seriously disrupted, not just the, the goods markets, as we would say in economics. and that's part of the problem as, as well, railroad, the employment, the skilled employment and so forth. so it's all that's covered related, but you know, when you, when you get the shortages are engineered because of the sanctions and that adds to the problems a, another layer, odd. and the wouldn't. what that means is that there's not as much demand for imports, or companies can't afford it and put off for, you know, their purchases of a, some i finished goods for imports in our consumers because of the inflation. i

can't afford to buy as many goods. so you don't have as much delivered into the ports that's exacerbated most in the case of europe, for example, a. so there's different problems in different parts of the country. you know, whether you're in china, where they are in the u. s. where they are in europe, but in all cases it means we have a multiple set of problems in the supply chains that still exist. now, good, all one of the biggest tech power houses is moving aggressively to support logistics and supply chain operations with its google cloud platform. what do you think of this move and how can google help fix these logistics issues? well, google can help are making, you know, the movement of goods and the predicting of the movement of go, it's more efficient, but that really doesn't resolve the problem on the for example, in the u. s. u, you've got this tremendous know increase in gasoline and fuel prices. that's not

going to solve the problem. the truckers can't afford to wait at the ports for 4 hours with their engines idling and pay that extra cost. the gas is nothing good can do about that. that's an inflation problem, that's an energy cost, energy price problem. and now that has a bigger causes than, than just the ports. how do these port congestion and a late effect, the consumer? well, the effect that the consumer is, you know, in significant ways. first of all, if you have fewer goods coming into the country than the price of those goods are going to go up. and that means inflation is going to go up, import inflation goes up, drives the whole consumer price index up. and that's contributing to what's going on as well in the u. s. and you know, and if businesses can get their goods, they're so my finished goods in or on materials and so forth. and they're not going to invest and expand, you know, they're going to wait and see and not taking aggressive. know,

increasing their output and hiring more people on so forth. or they're going to start laying people off, which is their, you know, just beginning to, to occur here. so it has a big impact on employment on business, on g d, p and as an impact on consumers and spending on, you know, it's part of the general problem we have with, you know, accelerating inflation. the problem is that, you know, with the ports and supply chains, it's really 2 sides of the same coin here. you know, the problem, the point is the problem with, with supply chains. and but the supply chain problem has been exacerbated by what's going on in global commodities markets. as a result largely the sanctions and what's, what's happening in europe and elsewhere. thank you so much dr. jack rasmus, for your insight i

when it comes to the cost of semi conductors with all of the supply chain disruptions around the world, there are very few winners besides the transport companies that are able to charge for those services. companies now have to reject their operations and it's forcing them to question long held beliefs about justin time or traditionally chit production chip works well when there are no disruptions and all the goods arrive just in time. i scheduled, but now many companies are forced to pivot to just in case or chick production where it is forced to move or use cash on hand to purchase excess inventory. this leads to other costs associated with checks such as more effective products, waste of space, extra equipment over time, and simply more storage costs. so how long are we supposed to live with the supply chain disruptions and we'll let ever be resolved or fixed? unfortunately, a lot of the problems that we have with the supply chain are deeply rooted points

of congestion that will take a significant amount of topple, expenditure and investment in order to modernize issues like labor shortages, that the dos and lack of truck drivers are going to continue to play the local economies. i think global for congestion is set to continue until at least early 2023, where the spot rate rates continuing to be elevated. that's our show for today. i'm christy i and i'll see you next time for the cost of everything. ready the ah with another well you while you easy while friend.

ah. yeah. do you know it's a one slide? yes. south. yeah. thrashing south with a new dock garza boys. now watch them up all mutable up. right. beat them is emma? yeah. pull video from sure. let me just kim's room, thoughtfully, it's, it's the y fi, ela, a bill. and yes, my thought or jane in that again the audio fortune pretty up in the be a lot about this morning. just financial

a forward to talking to you all. that technology should work for people. a robot must obey the orders given by human beings except where such order is a conflict with the 1st law show your identification. we should be very careful about our personal intelligence at that point obviously is too great trust, rather than fear. i would like to take on various job with artificial intelligence . real, somebody with a robot must protect its own existence with a only one. main thing is important for knox. ism internationally speaking, that is, that nations allowed to do anything. all the mazda races, and then you have the mind, the nations who are the slaves. americans, brock,

obama and others have had a concept of american exceptionalism. international law exist as long as it serves american interest. if it doesn't, it doesn't exist by turning those russians into this. danger is boy, man that wants to take over the world. that was a culture strategy, so some booked out of it on your own. i not leashed off in zebulon and tablet block . nato said it's ours. we move east. the reason you us, hey jim, it is so dangerous, is it? the law is the sovereignty of all the countries. the exceptionalism that american uses and its international war planning is one of the greatest threats to the populations of different nations. nato. what is bad shareholders in united states and elsewhere in large obs companies would lose millions and millions,

or is business and businesses good. and that is the reality of what we're facing, which is fashion. and with the 1st time in history and the entire country's culture has been cancelled the very modern weapon cancel culture, daily data on the global sheffield my last we thought it was, but you can't just sit in the loop with the phrase now, particularly refers to counseling russian culture, them know what she cleared the she was good to william, i was sure she will be all there is children that go with most of the separate yolanda e. normally what rushes created over the past 1500 years. there's no question. ashley condemned, reviled and reject it to sort of like

a bill of bramble. there's a lot closer on a whole bunch. thank you said a little short list. joining total condemnation grows daily and now enclosed dostoevsky, to cascade, shostakovich. i need to you all left, but yes, she says that what the time will you do? obama lee. you're not going to do that a lot. ah, [000:00:00;00]

with because these are the federal to sweden. c. o gone. he's mission funder, washington for the about sean on house. please be fun. claudia, beauty a . i'm a constant soonest. means when you get, when you come to the party, she'll go get her sure. and you don't know if she likes me. deal is get a minute. looks that on the minute, those number which finish those and that, but our mission is to get a minute. those new with story creased ya go to other, but i should. characters in fact is until one ish a sub washington,

big tier 2 doors on to fifty's is on. so why is his name in v fan to the folk? long as all you can do a deadly trinity stand behind you doing fun for by my daughter. now will police my, me look on the ones when i spawns in dawson with, ah, the slope of this. because if the west doesn't like you to morrow, anyone could be next. russia is foreign minister, a surrogate lever off comments on their main security challenges facing europe as the fields. questions are the media conference in moscow also had on the program today of paris try to remain part of an african initiative to fight terrorism. locals in particular, fall so speak out about frances continued military footprints in the region. the french are going through all the means to take control to dominate us. we no longer