Biden's $280B “Chip and Science Act” – What is the Taiwanese hedge?

Biden's $280B “Chip and Science Act” – What is the Taiwanese hedge?

den 11 augusti 2022 författare Carlsquare

Yesterday US president Joe Biden signed a bipartisan bill to strengthen U.S competitiveness with China on chip manufacturing. The bill, called “The Chips and Science Act”, will give US chip manufacturing companies roughly $52 billion as well as billions in tax breaks, to encourage investments in the semiconductor industry.

The Taiwanese-based sector favourite, TSMC, has dominated in technology and market share but the imminent and growing geopolitical risk with China has dragged the stock down to a PE level below its 2017-2022 average. Viewing some of the US companies in the chip manufacturing pool, valuations have moved somewhat similar during 2022 with NVIDIA having the highest PE valuation and INTEL the lowest.

Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results.

Looking strictly at valuations, a buy on INTEL could be a favourable sector hedge boosted by the Biden administration, against the geopolitical uncertainty in Taiwan.

Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results.

Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results.

The full name for abbreviations used in the previous text:
EMA 9: 9-day exponential moving average
Fibonacci: There are several Fibonacci lines used in technical analysis. Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers.
MA20: 20-day moving average
MA50: 50-day moving average
MA100: 100-day moving average
MA200: 200-day moving average
MACD: Moving average convergence divergence

Important notice
This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the trading products (securities) mentioned herein, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms. The base prospectus and final terms constitute the solely binding sales documents for the securities and are available under the product links. It is recommended that potential investors read these documents before making any investment decision. The documents and the key information document are published on the website of the issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany, on prospectus.vontobel.com and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. This information includes or relates to figures of past performance. Past performance is not a reliable indicator of future results.

2022-09-27 03:50:53

 

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