Beyond Mathematical odds - All Out Hybrid War
Von Clausewitz shit.
Primarily, this post was supposed to be a bigger chip/semiconductor post, but I rather just make a big, encompassing post about Everything… The Everything shortage is back on the menu, with compounding interest.
I want the opinions of readers on this format (me interjecting between each piece of news) over the other one, might try another one in the near future (days). Also, do you guys and girls want me to cover the events cascading right now daily ? Need some input on this too.
Gotta a feeling we won’t get as many virus-related papers in the near future… I will still work on it.
Given the current heating up of the conflict in Ukraine, even if this is a mere flare-up, and it dies down as quickly as it came up, it already disrupted the system, it became a tipping point on its own.
This post ties well with this, which I would consider the basis for understanding this Substack.
My work usually build on itself, part by part, so should read some of my Daily Briefings, like this one, Cascades Abound, Molecules Shortage. As per the current news, Ukraine, and as a spillover Lithuania got hit by a cyberattack (a cyber weapon really).
In the post Collapse of Complex Societies, I had mentioned that there was a growing shortage of Lysine, a very important amino acid for raising and improving animals.
Corn and L-Lysine HCL prices soar
The price of corn has reached its highest levels in 7 years after China purchased 5.85 MMT of American corn in just 4 days. This is believed to be the biggest purchase since 1972, when the Soviet Union bought 9MMT of grain from the United States during the “Great Grain Robbery” causing global grain prices to soar.
Now that significant supply has moved offshore, there are questions as to whether the United States will be able to meet forthcoming demand at home for corn and corn derived products.
In line with what we are seeing in corn prices, the price of L-Lysine HCL has gone up 4.6% globally since last week. Producers of Lysine around the world are anticipating shortages in supply following major movements of corn to China, and stocking up accordingly.
Is everything that I posted making sense to you now ? This move from both Russia, and China (Turkey will be a hidden player, double agent state of some sorts) was telegraphed since January 2021.
China's stockpiles of grains, its massive purchases of everything, control of amino acids, minerals, and everything else. China will invade and take control of Taiwan, and if that drags on, they have enough stockpiles, this will affect Lysine production and supply.
In the growing threat of long-term conflict and severe systemic disruption, one would assume someone inside some governments would model some of this out and keep some corn…
Qatar Says ‘Almost Impossible’ to Quickly Replace Russian LNG Supplies to Europe
Neither Qatar nor any other single country has the capacity to replace Russian gas supplies to Europe with liquefied natural gas (LNG) in the event of disruption due to a conflict between Russia and Ukraine, Qatar’s energy minister said on Tuesday.
Tensions between Russia and Ukraine escalated on Tuesday after Moscow ordered troops into two breakaway regions in eastern Ukraine.
The United States and its European allies are set to announce fresh sanctions against Russia after President Vladimir Putin formally recognised the independence of the two regions in eastern Ukraine. The sanctions could affect the Russian flow of gas into Europe.
“Russia (provides) I think 30-40% of the supply to Europe. There is no single country that can replace that kind of volume, there isn’t the capacity to do that from LNG,” minister Saad al-Kaabi told reporters at a gas conference in Doha.
“Most of the LNG are tied to long-term contracts and destinations that are very clear. So, to replace that sum of volume that quickly is almost impossible,” he said.
Qatar, one of the world’s top LNG producers, has recently been approached by the United States to reroute gas supplies to Europe in case Russia attacks Ukraine and the United States imposes sanctions on Moscow.
Energy Supply Is ‘Clearly’ Germany’s Top Risk in Russia Crisis
Other fallout seen limited after Crimea sanctions hit trade
Scholz says Nord Stream 2 pipeline can’t be certified now
The continued flow of natural gas is the key concern for Germany’s economy as tensions with Russia over Ukraine intensify.
The vulnerability “is clearly energy supply, but even there, the winter is almost over and other supply routes, other sources of supply have been discussed at least and have been prepared,” Ifo President Clemens Fuest said Tuesday in a Bloomberg Television interview with Tom Mackenzie.
“The German economy will be affected by rising energy prices but probably not much more than everyone else,” he said.
Two parts of the same problem, an increasing problem now with the Russo-Ukrainian conflict, Qatar, which possess the biggest, and most modern LNG fleet in the world, can’t keep up with the demand, and most of its carriers are under a long term contract, while the US, right now, is producing more LNG than Qatar, it can’t export as much because it barely has a fleet of its own.
The long dream of building its own fleet takes time, money, and most builders globally are now booked for a few years (you will see this is a growing trend in many industries).
In its pursuit of societal suicide by Green Policy, Germany over-relied on Russia for not only, but it gets 50% of its coal from Russia, along with 35% of its oil. Germany is partially responsible for this entire mess.
The economical effects of this event can already be felt in Germany can already be felt, and the economical damage to the region, however short or long will be severe, with many implications.
China Signals Coal Reliance to Continue With Three New Mines
Projects require total investment of almost $4 billion
Approvals come as much of rest of the world shuns coal
China’s top planning agency approved three different billion-dollar coal mine projects on Monday as the country continues to support the fuel that much of the rest of the world is shunning.
The National Development and Reform Commission gave the go ahead to two mines in the northwestern province of Shaanxi and another in Inner Mongolia. The three projects will require a total investment of 24.1 billion yuan ($3.8 billion) and produce 19 million tons of coal a year.
As I previously stated many times, the CCP won’t collapse their own economy for whatever misguided conception Western elites had. Given the current circumstances, that I already lined out for weeks, and many experts did the same to a more extensive and proper degree, coal consumption is going to skyrocket this decade. No further commentary for now.
Here link for the news on the screenshot below, something I already mentioned, and outlined many times.
Key Supplier of Wafers for Chips Has Sold Out Through 2026
Sumco expects supply-demand imbalance to last five years
Silicon wafer maker sees little room for factory expansion
Sumco Corp., a key supplier of silicon wafers for the semiconductor industry, said it has already sold out its production capacity through 2026, a sign shortages in the industry may not abate for years.
The Japanese company, one of a handful to provide the specialized silicon slabs that chipmakers use to create their designs, has orders to cover all output of its 300mm wafers for the next five years, it said after reporting earnings on Wednesday. It is not taking such long-term orders for 150mm and 200mm wafers, but demand is likely to keep surpassing supply for years to come, the company said. The price of wafers rose by 10% in 2021 over the previous year and Sumco expects to see increases continue until at least 2024.
Europe is taking a crowbar to its own rules to tackle the global semiconductor chip shortage
Brussels wants to quadruple semiconductor production in Europe by 2030, luring Intel, TSMC, and their “megafabs.”
On Tuesday, the European Commission triggered a clause that neutralizes its strict corset of rules governing state aid to lure companies like Intel and Taiwan Semiconductor Manufacturing Co. (TSMC), the most valuable tech company in Asia, to build more microprocessors in the region.
It’s part of a sweeping package of proposals unveiled under the new EU Chips Act, designed to jump-start the bloc’s moribund semiconductor assembly industry. The aim is to quadruple production over the decade while expanding its footprint into cutting-edge chips it currently imports from abroad.
Broadly similar draft legislation aimed at ensuring the U.S. economy is more resilient to chip shortages is in its final stages in Washington, after initial bills finally passed both houses of Congress.
“Chips are at the center of the global technological race, they are the bedrock of our modern economies, and they are essential for the goods we use on an everyday basis,” EU Commission President Ursula von der Leyen told reporters on Tuesday.
Semiconductor sales top half a trillion dollars for the first time, and are expected to keep growing
In 2021, global chip sales surged 26.2% to a record $555.9 billion, compared with 2020’s $440.4 billion, according to trade group Semiconductor Industry Association Monday. The number of units shipped in 2021 also reached a record 1.15 trillion, as chip makers worked to meet spiking demand after the COVID-19 pandemic upset supply chains and overwhelmed chip-making capacity in 2020.
The number of individual semiconductors sold passed the one trillion mark for the first time in 2018, when annual sales hit $468.8 billion.
“In 2021, amid the ongoing global chip shortage, semiconductor companies substantially ramped up production to unprecedented levels to address persistently high demand, resulting in record chip sales and units shipped,” said John Neuffer, SIA chief executive, in a statement. “Demand for semiconductor production is projected to rise significantly in the years ahead, as chips become even more heavily embedded in the essential technologies of now and the future.”
By category, sales of logic and memory chips accounted for the largest sales groups in 2021 with sales of $154.8 billion and $153.8 billion, respectively. Micron Technology Inc. MU , a big player in memory chips, is expected to report earnings at the end of March.
In December, world-wide chip sales rose 28.3% to $50.9 billion, and fourth quarter sales rose 28.3% to $152.6 billion from a year ago, according to SIA.
While China remained the largest purchaser in December at $17.6 billion and Asia-Pacific customers were the second largest at $13.6 billion — a 29% and 23% increase, respectively, from a year ago — the Americas logged a 62% surge in purchases to $13.3 billion, according to SIA.
Solar polysilicon shortage could turn to glut by 2025
This year will be the last in which polysilicon shortage is limiting solar growth globally as new factories will start coming online in mid-2023 to meet the significant demand, Rethink Energy says in its new paper – Polysilicon Manufacturing forecast to 2030.
In 2021, demand exceeded supply by 50 GW and the gap could be even bigger in 2022.
“The polysilicon shortage will continue to limit worldwide solar installations until mid-2023, in which year 250 GW of polysilicon solar will be commissioned. The price of polysilicon will take at least five years to return to the record low of 2020, but will then decline even further,” commented solar analyst Andries Wantenaar, who is also a lead author of the paper.
Production capacity will more than quadruple this decade compared to the scale seen in 2020 [..] China’s dominance of the industry will go from strength to strength, but India will build and shelter domestic production under protectionist policies, and the US may do likewise depending on the Biden Administration’s upcoming spending bills,” Wantenaar said.
The chip shortage crippled parts of the world economy. A Russian invasion of Ukraine would make it even worse
Russia and Ukraine are among the world’s top producers of key components in semiconductor manufacturing.
If Russia does invade Ukraine, as seems increasingly possible, the global shortage in semiconductors will likely be extended well into next year.
That’s because it turns out that the two potential combatants are major exporters of two little-known but key raw materials in the creation of computer chips.Ukraine is a leading exporter of highly purified neon gas, which is necessary for the lasers that are used to etch circuit designs into silicon wafers to create chips. Russia, meanwhile, is the world’s leading producer of palladium, which is essential for many memory and sensor chips. The country also produces several other key raw materials for computer chips, including the rare–earth metal scandium.
Many of these gases are produced as a byproduct of Russian steel production, but then refined by specialized Ukrainian firms for use by semiconductor manufacturers. Owing to the cross-border nature of this trade, any war between Russian and Ukraine will almost certainly disrupt supplies.
The last time Russia invaded Ukraine, in 2014, the price of neon shot up 600%, almost overnight, causing havoc in the semiconductor industry. Since then, chipmakers have tried to diversify the countries from which they purchase the gas. But Ukraine remains a key supplier.
As for palladium, Russia produces more than 45% of the global supply. The price of the metal has already run up substantially, as traders anticipate potential supply disruptions if Russia invades Ukraine and the rest of the world imposes severe economic sanctions on Russia in response. It is currently trading at $2,400 per ounce, having climbed 52% since mid-December.
This was supposed to be a Chip/Semi-Conductor post, partially with the effects of what a possible conflict could cascade off. Now it is, but reality itself.
These are the most important tech parts of the current century, a literal war is about to be fought for it (China-Taiwan), there are massive geopolitical moves and governments to secure the production and resources for these essential items…yet.
Before the current events unfolded, as you can clearly see, some of the biggest manufacturers are already booked for 2026, as Sumco, they won’t be able to meet demand, there isn’t enough investment (and now even materials in my opinion, or specialized workforce) to build new factories, and can the reader guess which countries are the biggest Silicon producers in the world ? China by a large margin, followed by Russia.
So if anything goes wrong inside some factories, you guess who can constrain the supply long enough to set off another tipping point ?
Another unexpected (for me) shortage of solar panel materials, besides the ones I already covered (aluminum, besides having a “dirty” production, is energy-intensive), and just another marker to an already long list, and confirmation bias for my analysis, that no country will collapse itself and the current green policies of the West are mere pipe dreams from misguided, at a minimum, suicidal most likely, elite. Like they historically get when their empire starts to crumble.
The last article is the most important one and cements all the facts I have been raising for weeks, the chip/semiconductor shortage is about to grow exponentially, the prices will go even higher, no producer will be able to meet demand, and this will cascade into (small, contained, for now) system failures. Here is a recent one, from Reuters, stating pretty much the same thing.
If you are a small business, you must try your best to secure supply and contracts, because all big corporations and buyers use long-term contracts to fulfill their needs, yes these events will affect them, but marginally. This is an angle of massive consolidation of power I foresee in 2018.
A significant gas shortage that I missed was the following. Helium markets now experiencing ‘Helium Shortage 4.0’
I recommend you to read the entire piece, but this was one of the parts that stood out.
However, after briefly producing helium for a few weeks in September, the Amur helium plant in Russia was taken down to complete construction punch-list items. While Amur was shut down, the natural gas processing plants that produce feed gas for the first of three helium plants experienced a fire on 8th October and a second explosion/fire on 5th January that will delay Amur’s helium production until at least Q3 of 2022. How long it will take to restart helium production from Amur remains to be seen, with speculation ranging from the most optimistic late Q3 to more pessimistic predictions that Amur will produce little, if any, helium before 2023.
While military experts and analysts debate that Hybrid Warfare isn’t new, and one could argue it is not, this modern version is unique enough for me to state Russia either created or refined it, given the difference in technologies from even 70 years ago.
Read the article, and that paragraph, tell me this isn’t a strategic, long-term move, using a Hybrid War tactic to slowly, but surely cripple the West. Helium is a very important gas, to produce in LCD, aerospace, auto industry to *check notes semiconductors.
Wow… what a coincidence.
My only question for the spooks who follow me is this one. How the fuck you people missed ALL OF THIS.
Add this one to the continuous list of coincidences inside the American territory, while the living dead president steers the country in the direction the elites want.
Another amazing choice from the American government, is not to supply water, under a shortage of fertilizer and pesticides, to a state that produces a sizable portion of the food of the entire country.
At the end of this decade, Biden will take the reign as a singular genius on national destruction.
Wilmar Flags Tough Outlook for China Soy Crushing as Costs Soar
Wilmar International Ltd., one of the world’s biggest food processors, warned that the outlook for soybean crushing will be challenging due to surging prices of the oilseed and poor hog margins in China.
The Singapore-based company, which operates more than 300 plants in China, posted weaker sales volume from soybean crushing in 2021. This comes as Chicago soy futures are near a nine-year high, while Chinese hog prices have lost about 50% in the past year, denting demand for soymeal used in feed.
A reminder, as per the last non-virus post (Daily Briefings), the world's biggest soy producer (Brazil) will have on average 13% less yield this year. Soybean shipments from South America did not cover demand, and China dips into its massive state reserve.
Macron Government Makes Energy-Price Vow Before French Elections
Finance minister says support will last as long as needed
France wants to reduce debt load, Le Maire tells Bloomberg TV
France will use tax cuts and subsidies for as long as needed to shield consumers and companies from soaring energy costs, Finance Minister Bruno Le Maire said, offering a pledge to voters that stretches beyond April’s presidential elections.
Following Denmark, Italy, and Greece's footsteps, France will intervene and subsidize its energy price. Now I foresee most of Europe doing this because the current events in Ukraine will raise the prices of every single stable for modern society, sky-high.
As a final note, a reminder that corporate defaults are a historical norm, for over 700 years. There is an amazing paper named “This time is different” and I recommend you to do a cursory reading of it.
If you enjoy or take value from my independent, interdisciplinary analysis, consider becoming a free or paying subscriber, my work is now fully support by you. Sharing also helps me tremendously. Appreciate all supporters.
You realize "the West" may appear to stumble "inevitably", because of incompetence/short sightedness/fatality, to a state of crisis resembling very much ... the Davos advertized "Great Reset".
So, what if it's not incompetence/short sightedness?