HARDWARE

The Great Semi Shortage of 2021

Today’s average car has 100 million lines of code, a 10x increase over 2010. And highly automated cars could require 500 million lines of code, according to Bosch. Major global automakers are also gearing up for mass production of software-heavy EVs. 

These rolling supercomputers need lots of semiconductors, which are in short supply right now. So far, Volkswagen, Daimler, Ford, Subaru, Toyota, Honda, Nissan, and Fiat Chrysler have announced production cuts as a result. 

How did this happen? 

A brief timeline, c/o Bloomberg: 

• Hit by a Covid-induced demand shock in mid-2020, carmakers slashed orders for vehicle components, including chips. Auto supply chains run on lean inventory and just-in-time manufacturing doctrines. 
• Semiconductor foundries prioritized production for customers experiencing surging demand. 
• Auto demand bounced back. Carmakers were late to put in orders with contract chipmakers, who were tied up making parts for Nintendo Switches and other hot gadgets. 

Automakers have governments on speed dial

European and American automakers have approached Taipei for help. Germany’s economic minister wrote to his Taiwanese counterpart with strong “plz fix” vibes: “I would be pleased if you could take on this matter and underline the importance of additional semiconductor capacities for the German automotive industry to TSMC.”

Taiwan’s economic ministry is running interference and asking chipmakers to pivot to cars. US automakers say they’re coordinating with the Biden administration. 

• Still, the shortage could last for months, leading to more intermittent idling of auto plants. 
• Help is on the horizon later this year: TSMC will spend up to $28 billion on capex in 2021. 

The common denominators are TSMC, the world’s largest contract chipmaker, and Taiwan. Specifically referring to semis, JP Morgan’s Ruchir Sharma recently wrote that “pound for pound, [Taiwan] is the most important place in the world.”

Bottom line: Seeing two pretty best friends is more likely than semis fading from prominence in the tech and geopolitical universes. 

SPACE

Rideshare Rocket

Yesterday morning, while you were still deciding whether or not to put on pants, SpaceX sent 143 satellites into space on a single Falcon 9 rocket. 

Why the weekend work?

The company is still testing the limits of its first dedicated rideshare mission, Transporter-1, and this broke the record for the most satellite ride-alongs yet in the “cosmic carpool,” reports Space.com. So far, the limit does not exist. 

Who’s buying: It’s a lot cheaper for smaller operators to book spots for satellites on a SpaceX mission than to build and launch their own spacecraft. Think of it like booking a Main Cabin seat on a plane...if the ticket cost $1 million. 

• This time around, customers included Planet Labs, Kepler, and Swarm (which paid the way for 36 of its IoT communications satellites). 

Other passengers included 10 of SpaceX’s own Starlink internet satellites, which were recently cleared by the FCC to be sent into polar orbit. The goal: Bring broadband coverage to remote areas of Alaska. 

Happily ever after: After an initial 24-hour weather delay, Sunday’s launch was successful—including the recycling aspect. The rocket’s first stage landed on “Of Course I Still Love You,” one of SpaceX’s autonomous spaceport drone ships. 

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EXPLORATIONS

AI's Five-Year Plan

If artificial intelligence had to sit through its own year-end review, it’d have a tough time answering “Where do you see yourself in five years?” That's because 1) AI isn't great at answering abstract questions, and 2) 2020 was an especially complicated year for the technology.

So, for the first installment in our Demystifying Algorithms series, we decided to ask nine of the smartest people working on algorithms to imagine the next five years of AI. Hayden spoke with Andrew Ng, founder of DeepLearning.AI, and Cathy O’Neil, author of Weapons of Math Destruction—plus leaders at Google, Microsoft, Waymo, Salesforce, and more. 

Our question: "What's the single biggest challenge that those building and working on algorithms will need to grapple with in the next five years?" Click here to read the feature and see what they told us. 

BITS & BYTES

Stat: Between March and November 2020, Indian tech company Jio Platforms—owned by the country’s richest man, Mukesh Ambani—raised more than $27 billion from investors including Facebook, Qualcomm, Intel, Google, and Silver Lake Partners. 

Quote: “I don’t want any master. I know everything for myself.”—Radius the robot, a character in playwright Karel Čapek’s R.U.R. (short for “Rossum’s Universal Robots”). And on that note...

Read: On the 100th anniversary of “robot” being coined, WSJ’s Chris Mims wrote about the rising tide of automation.

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WHAT ELSE IS BREWING

• GPT-3 generates writing that is biased against Muslims, according to Stanford and McMaster researchers.
• Italy told TikTok to freeze all unverified accounts after a 10-year-old girl died while partaking in a viral challenge. 
• Waymo’s CEO doesn’t think Tesla can reach full autonomy by relying on cameras and using driver assist features as the technological bridge.
• Wingcopter, the German drone delivery startup, will expand to the US with help from its $22 million Series A. 
• SoftBank Vision Fund lost another managing partner—the second to depart his role this month, per Bloomberg. 
• Facebook VP Andrew Bosworth (aka “Boz”) wrote a memo telling employees to prioritize privacy over user experience in product development, per Big Technology.
• Latch, a smart lock company, will SPAC. Four other companies also announced intentions to SPAC this morning.

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THREE THINGS WE'RE WATCHING

All week: It’s Big Tech earnings season for Microsoft (Tuesday), Facebook, and Apple (Wednesday). Shares of the big five had been trending below-market in recent months, but on Friday, FAMGA wrapped up their best week since we were all deciding whether or not to dress up for Zoom Halloween.  

Wednesday: They grow up so fast...Tesla will release its first earnings report since joining the S&P 500 club. You can bet analysts will ask about demand and manufacturing timelines, since construction is underway on new Gigafactories in Berlin and Texas. In 2020, Tesla delivered just shy of 500k vehicles—above Wall Street’s target, but slightly less than Elon’s own goal. 

Thursday and Friday: Samsung and LG, respectively, will report their Q4 earnings. In earnings estimates, Samsung projected a ~25% spike in Q4 operating profit, and LG forecasted its highest Q4 operating profit ever, thanks to the work-from-home boom. 

TECH THROWBACK

On this day in 2004: After traveling in space for a few months, NASA’s Opportunity rover landed on Mars, halfway around the planet from where Spirit, its sibling rover, touched down three weeks before. Oppy spent 14 years driving around Mars and searching for Matt Damon. 

ICYMI

Catch up on the top Emerging Tech Brew stories from the past few editions: 

• Upgraded “robot brains”: New research 
• Industry updates: Cruise and Rivian
• Q&A: Inside Waymo’s 2021 game plan