Three Phases of Modern Globalization
The evolution of globalization over the last three decades can be segmented into three phases: The Golden Era, Nationalist Backlash and the Dual-Track Era.
Sectors Caught in the Crosshairs of a New Era of Globalization
A New Era of Globalization | Chapter 2
Deglobalization is playing out more narrowly and more slowly than is commonly thought. In sectors at the heart of great power rivalry and protectionist industrial policy, a new set of investment opportunities and risks are emerging. There are three sectors where industrial policy is quite rapidly altering the investment landscape:
AI and Advanced Semiconductors
• The dynamics for advanced chipmaking differ significantly from most other manufacturing processes, due to its capital-intensive and “winner-take-all” nature as well as a truly global supply chain.
• Industrial policy actions aim to build up domestic fabrication capabilities for advanced chips and reduce reliance on China and Taiwan.
• Increasingly, companies integral in the chip value chain—like Nvidia—are finding themselves entangled in trade restrictions that are designed to limit technology transfer.
*high-end refers to 7nm and smaller
Electric Vehicles
- China is the largest consumer market for EVs, accounting for 60% of sales in 2023.
- China, which by some estimates has poured over $230 billion into EV makers since 2009, is also the biggest producer and dominates supply chains.
- The EU and US have responded to Chinese dominance by increasing tariffs to protect their domestic industries.
Metals and Minerals
- Copper, nickel and lithium are a few vital inputs for electrification, batteries and clean energy, while rare earths are essential for making semiconductors.
- Because metals and minerals are geographically dispersed, no country has an absolute advantage in mining—but comparative advantages exist across other segments of the value chain.
- China has become the world’s leading producer and refiner of several critical metals and minerals, after spending decades securing access.
Investment Implications
Semiconductors & AI amidst great power rivalry
Winning the EV race
Real estate opportunities on both sides of the US-Mexico border
No way around critical minerals & metals
Explore the Research
Portfolio Implications
Four crossportfolio implications for CIOs to consider for the impact of the new dual-track era of globalization.