Investment Opportunities in the Chip War

Economic power blocs worldwide are striving for greater technological independence. The superpowers are encouraging their companies to develop their own innovative technology. Investors can also benefit from this boost, explain Tom Simonts, Senior Financial Economist at KBC Group, and Joris Franck, Portfolio Manager at KBC Asset Management. “You don’t achieve strategic independence overnight – just imagine the infrastructure to manufacture chips, data storage or cybersecurity. These were popular themes on the market last year. And this trend is likely to continue for quite some time”, says Franck.

In the so-called ‘Chip War’, Europe seems to be the underdog, but Simonts refutes that. “We may not have major technology groups or production houses here, but we’re more advanced than you might initially think. Europe provides the cement, so to speak, for international technology companies. We make the machines to produce the chips, and we develop the technology the Americans and the Chinese need. This makes us a referee of sorts, deciding what everyone can and cannot do. Still, as a region, we need to further refine our own policy. And our businesses, too.”

Protecting yourself and your business is crucial. According to Franck, “you have to retain autonomy over your data. That starts with being very selective about who you allow access to it. Secondly, where will your data be stored – in the cloud or on your own servers? Eventually, you’ll send this data to other parties. Which channels and devices do you use to send this data? Last but not least: chips – the foundation of the digital world. The question of which technology to use and being aware of its risks is therefore very relevant.” 

“There are now many Chips Acts in the United States, Europe and other powers. We all want big data centres on our own soil”, Simonts adds. But he points out that companies are also taking responsibility and this presents opportunities for
investors. “Always carefully consider whether you should just hand over all your data to a company like Microsoft. French company OVHcloud, for example, is establishing itself as a fierce critic, offering space in the European cloud. Amazon, on the other hand, recently acquired a nuclear power plant to make sure it has enough energy to power its data centres.”