Added fresh $UAMY long @ $10.51

As the separation of the U.S./China value chain continues, rare earth/strategic minerals will become more important. I can see the US govt taking more stakes in US rare earth producers beyond $MP.

Antimony is used for munition and other military applications, and China produces ~80% of it. UAMY is the only significant pure-play and vertically integrated antimony company.

Spent some time digesting the $INTC news today. As expected, performance gains were announced for Panther Lake versus prior-gen chips, driven by 18A’s GAA and BSPDN technology. This was already anticipated, so while it’s welcomed, it’s not exactly material.

The most incremental takeaway, in my view, is that Fab 52 is now fully operational and set to enter HVM in Q4’25, with broad availability in January 2026.

This helps derisk some of the concerns about potential 18A production delays into 2026, which is materially incremental imo. It also means Intel is now producing the most advanced leading-edge node fully manufactured in the U.S. TSMC Arizona currently produces N4, while 18A is already competitive with N3. Obviously, that carries strong political value (maybe Trump even congratulates Intel with a tweet — who knows).

There wasn’t much concrete detail on yields, so it’s hard to analyze further. Realistically, while there’s some positive progress, the road ahead in catching up to TSMC’s technology remains very tough. It will require perfect execution, a deep cultural transformation, taking calculated but necessary leaps of faith that pays off (e.g., moving first to high-NA), and of course, industry and USG support.

TSMC’s moat extends well beyond lithography expertise. It is also deeply rooted in their design enablement and co-optimization capabilities with customers. Intel, on the other hand, has never served external customers at scale, which underscores the magnitude of the cultural shift required to make IFS succeed.

That said, revival is not impossible. Incremental datapoints and news over the coming months will reveal how likely IFS’s revival is.

Over the course of this week, there’s been a subtle escalation in U.S.-China hostility, especially from China’s side. Rare earth export bans, enforcing stricter checks on NVDA chip imports, implementing special port fees on U.S. ships.. I’m guessing trade talks are not going fantastic atm and the Chinese want some leverage.

If it worsens, $BABA might chop around for a short while.. I view $UAMY and $INTC as indirect hedges to escalating tensions.

Lol, called it. Should have derisked. $UAMY is reacting positively to the escalating tensions as expected. $INTC also holding in there, for now.

And totally forgot about our $FIVE short also being an indirect hedge.

What a sell-off. I’m de-risking low-conviction ideas for the weekend and keeping some ammo for next week. If you want to panic, be the first one out the door.

Tho, I don’t think markets will crater that badly over the next few months, unlike April, now that markets know about TACO Trump. Could be famous last words, idk.

Besides the derisking of some positions, I also added some $BABA @ $159.9.

TBH, why is $BABA down 8%? Seems like an overreaction when they don’t export to USA, and US chips import/export bans might even be bullish for them given that they’re coming up with their own China-based chips.

Anyway, I also view BABA as a hedge to my US-China tension hedges, in case trump changes his mind over the weekend again. 😂

Lastly also added to $INTC ~$37. Nothing much else to say about this, you probably already get it.

Have a great weekend!

https://x.com/brad_setser/status/1976691234103058664?s=46

Aligned w our theory

Changed my mind, exited $UAMY @ $12.2-$12.35 and re-added some positions that were derisked earlier back.

Reasoning is if the Chinese were trying to find maximum leverage for trade negotiations, they’d first try to push DT to the point where he has no more tolerance.

This would explain why they were trickling in subtle yet escalatory news over the past week. Now DT losing it on Truth Social today is probably near that point.

The Chinese know that if they continue pushing, DT will not back down and they risk potential backfire. I believe both parties have very strong incentives to not let the trade war blow out of control again, like per April.

Hence, if the Chinese have found their maximum pressure point, the next logical step is to soften their hold in exchange for trade benefits (maybe xx% tariffs reliefs instead of full reliefs)

All just my speculation. Not sure, am also trying to avoid over pontificating about macro and the thought processes of megalomaniacs.

China's clarification on rare earth controls; no retaliation to USA 100% tariffs, more of a "we're not banning rare earth, but just reviewing controls" tone set. Imo, at best a softening of stance, at least, not escalatory. Seems like an outreach to DT for him to deescalate graciously. Will need to see how DT perceives it though.

"Going forward, the Chinese government will conduct reviews in accordance with laws and regulations, grant licenses to eligible applications, as well as actively considering the applicability of facilitation measures such as general licenses and license exemptions to effectively promote legitimate trade. I want to emphasize that China’s export controls are not export bans. All applications of compliant export for civil use can get approval, so that relevant businesses have no need to worry. The Chinese government will work with all countries as always, to firmly safeguard world peace and stability in neighboring regions, and jointly maintain the stability of global industrial and supply chains."

"Willful threats of high tariffs are not the right way to get along with China. China’s position on the trade war is consistent: we do not want it, but we are not afraid of it. China urges the U.S. to promptly correct its wrong practices, adhere to the important consensuses of the phone calls between the two heads of state, protect the hard-won outcomes of consultations, continue to use the China-U.S. economic and trade consultation mechanism, and address respective concerns and properly manage differences through dialogues and on the basis of mutual respect and equal-footed consultation, so as to ensure the stable, sound and sustainable development of the China-U.S. economic and trade relationship. If the U.S. insists on going the wrong way, China will surely take resolute measures to protect its legitimate rights and interests."

https://x.com/MOFCOM_China/status/1977193939729104997

Just in — so far, so good. Fingers crossed though, still some time till market opens.

https://x.com/zerohedge/status/1977385782030557621?s=46

Thank you for your attention to the matter!!

Added $763.HK (ZTE) and $981.HK (SMIC) longs at HK$43.23 and HK$80.21 respectively. I’ll name this theme the China Decoupling Beneficiaries.

While I believe tensions should ease heading into the Trump–Xi meeting in November, the Pandora’s box has already been opened. Both superpowers have now revealed their cards and the leverage they hold over each other. This dynamic will likely accelerate efforts on both sides to decouple critical chokepoints in their respective supply chains.

On the surface, they may start to play nice in a bid to buy time — as neither can yet fully do without the other — but beneath that veneer lies a sleepless and tedious grind toward independence from each other. At the eye of this storm is simply AI. AI is a national security imperative, and neither side can afford to fall behind in the race, nor risk being held hostage by export controls from its rival.

Cut $ALAB @ $209 for -6% on OpenAI <> Broadcom’s AI accelerator deal.

The AI accelerators will use AVGO’s ethernet-based switches, likely scale up ethernet (SUE). With AVGO’s stronghold on custom silicon, their networking architecture will likely become the industry’s primary architecture.

This is not good for $ALAB’s PCIe-based switches as I think it’s a winner-take-all market. ALAB’s valuation is also on the high side and much of that is dependent on the growth of their switches.

With the amount of excess overflow coming out of OpenAI — as seen from $AMD and $AVGO lately — I think $INTC may potentially catch an OpenAI deal too.. maybe something to do with their idle advanced packaging capacity.

Also exited $MU long @ ~$190 and added to $SNDK long @ ~$126

Strong set of results from $TSM

- double beats on rev and eps
- price/wafer crossed record high again
- all end-markets up DD% q/q
- “AI demand is insane”. Mgmt’s conviction on AI demand is incremental
- planning on building out more capacity to meet future demand; including acquiring second U.S. site in U.S.
- talking to customers’ customers (vs just customers previously) to understand AI market requirements

Overall demand picture remains really healthy all around, across all end-markets (and likely to be the case through 2026). Capacity is also expected to remain relatively tight. If there was ever a good time for someone else to start another external foundry..

Moonshot play $TGEN finally starting to move after a long consolidation.. +35% from avg cost of $9.06 to $12.25

Moving on no news though is kind of strange. Not sure if it’s insider front running or just a small cap rerating. Hopefully $VRT just buys it out one day.