Finimize - 💧 London’s parching

What’s going on here?

Samsung, the South Korean electronics titan, is gearing up for a big leap in the tiny world of semiconductors – announcing plans to make the world’s smallest chips by 2025.

What does this mean?

Taiwan’s TSMC is currently king of the hill, boasting a hefty 59% market share that completely dwarfs Samsung’s 13%. But with the rise of AI and a potential semiconductor boom on the horizon, Samsung’s now ready to shake things up. The company just unveiled plans to ship minuscule two-nanometer chips – that’s two billionths of a meter – in just a couple of years. And that gambit will put it toe-to-toe with TSMC, which also has some tidy little two-nanometer plans in the works.

Why should I care?

For markets: The never-ending race.

Gordon Moore, the original chip guru, observed that the size of semiconductors halves about every two years. That means we can pack more and more chips into our devices, computers, and cars as time goes on – unlocking increasingly sophisticated capabilities. So, while two nanometers might seem microscopic, the race won’t stop there. Next up, one nanometer, then a half, then a quarter… You get the idea. That’s great news for tech enthusiasts – but it’s a dream come true for firms selling chipmaking equipment.

The bigger picture: Proceed with caution.

Semiconductor capacity is being ramped up in the US and Taiwan, all in anticipation of a big chip boom. After all, with demand for chips set to skyrocket, no one wants to be turning away orders. But here’s the thing: if this boom doesn’t happen as expected or gets delayed – let’s say, due to a recession – chipmakers could find themselves in a tight spot. And instead of turning gung-ho customers away, they might be left scrambling to make sales targets instead.

What’s going on here?

The UK’s biggest water company might be going – ahem – under water.

What does this mean?

Thames Water is two years into an ambitious eight-year plan to plug leakages and reduce nasty sewage outflows into rivers. But instead of a pat on the back, it’s facing a report card showing that leakage rates are the highest in five years. And as if that’s not enough, Thames Water is already struggling with a whopping $17 billion debt pile. Add on the firm’s CEO deciding to call it quits this week, and that only added to worries about Thames Water’s financial stability, sending the price of one of its bonds to the lowest level ever. That panic’s got the UK government stepping in now too, holding emergency talks to discuss options – including temporarily nationalizing the business.

Why should I care?

The bigger picture: Davy Jones’s ledger.

Thames Water’s problems aren’t just a drop in the ocean. They’re part of a tidal wave that could hit the whole sector. You see, Thames Water may be the most indebted, but it’s not the only one struggling to stay afloat: UK water companies are collectively sinking under nearly $80 billion in debt. And in a world of low interest rates, they might have been able to tread water – but with rates on the rise, they’re having a hard time. So, given the importance of water supply, and the fact that Thames Water’s collapse could pull other water companies down too, it’s no wonder the government's prepping to buoy things up.

Zooming out: Water safety.

The current plight of UK water companies aside, utility firms can actually serve as pretty reliable safe harbors in troubled times. They’re steady Eddies, after all – providing essential services, churning out predictable income, and usually paying steady dividends. So while they might not make a big splash with returns, they’re usually a good bet when things get choppy.