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🚰 Zoomtown droughts, explained

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The Hustle

A California cannabis company is being sued for “THC Inflation,” or in other words — not getting customers high enough.

In today’s email:

  • TSMC: What you should know about it.
  • Chart: Day traders are giving up.
  • Drying up: Remote workers are straining water resources.
  • Around the Web: Half-baked inspo, Wikipedia’s “deaditors,” custom emoji, and more cool internet finds.

🎧 On the go? Listen to today’s 10-minute podcast to hear Jacob and Rob break down TSMC’s problematic semiconductor dominance, a trending open letter to Zuck, Beyond Steak, and more.

The big idea
chip

What to know about the Taiwan chip situation

Replace eggs with semiconductors, and the phrase “don’t put all your eggs in one basket” describes an enormous issue facing the global economy.

At the middle of it is Taiwan Semiconductor Manufacturing Company, a $300B+ company that accounts for 92% of global advanced semiconductor production capacity, building chips for much of the world’s tech across iPhones, military equipment, cars — you name it.

As the name suggests, TSMC is in Taiwan

That presents a dicey geopolitical conundrum:

  • China is threatening military action to gain control over Taiwan.
  • Taiwan views its chip supremacy as a “silicon shield” — if China were to attack Taiwan, the US would have to protect it.
  • The US is now hedging its bets, committing to protect Taiwan while also pushing both TSMC and US chip companies to start manufacturing stateside.

What’s being done?

In July, Congress passed the CHIPS and Science Act, putting ~$53B toward US manufacturing.

The US also recently blocked the sale of advanced semiconductors and equipment to Chinese firms, and restricted US companies and citizens from aiding Chinese chip development.

As for companies…

  • Intel is investing $20B+ on two factories in Ohio, Micron said it’ll spend $100B on one in New York, and Samsung is dropping $17B on a factory in Texas.
  • Even TSMC was swayed by the Trump administration to build a $12B fab in Arizona.

These moves are a start, but the estimated total investment required for major global regions to completely reshore production is pegged at ~$1T each, plus $45B-$125B a year thereafter. In other words, we’ve got a ways to go.

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TRENDING
eyeball wearing a hat

Dear Mark: Brad Gerstner, whose Altimeter Capital holds 2m+ shares of Meta, wrote an open letter to Mark Zuckerberg outlining ways to cut costs and refocus the company.

SNIPPETS

Beyond Meat launched its steak product in 5k+ stores. Beyond’s stock is down 80%+ this year, and it plans to cut 19% of staff. (Also, its COO was arrested for biting someone’s nose.)

Apple raised the monthly prices of Apple Music and Apple TV+, citing higher licensing costs and a growing catalog of video content.

Good news, gamers: A new study found kids who play video games have better memory and motor skills control.

Startup WeTravel scored $27m in funding to expand its group travel booking platform.

Rishi Sunak, the UK’s ex-finance minister, will become its first prime minister of color following Liz Truss’ resignation.

Red Bull owner and co-founder Dietrich Mateschitz has died at age 79. He began selling the energy drink in Austria in 1987.

A federal appeals court has blocked student loan forgiveness as it considers a motion from six states to halt the program. The Biden admin is still encouraging those with debt to apply.

Myth-busting time: For ages, the business world has bought into the notion that introverts can’t lead. We made a short video explaining why that’s BS, and how introversion can be a leadership superpower.

Chart
retail trades per day

Olivia Heller

Amateur investors are bowing out

Meme stocks, crypto crazes, stimulus checks, and a bull market all contributed to a frenzy of trading activity between 2020 and 2021.

With 2.5m new US millionaires minted last year, there was reason for optimism.

Fast forward to today, where a looming recession has traders pumping the breaks, per The Wall Street Journal.

Daily trading volume…

… has fallen sharply across the board as the S&P 500, Dow Jones Industrial Average, and Nasdaq composite are all down big year to date.

  • For Robinhood, the app most associated with powering meme stock mania, July was the weakest trading month on record.

The irony is that investors can get some of their favorite stocks much cheaper today than at any point in 2021, and as the downturn continues, long-term investors will likely be eager to pounce.

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Zoomtowns
drought

Zoomtowns are drying up, literally

Many remote workers moved from pricey cities to cheaper areas where they could afford a home.

This not only drives up housing costs, but transplants are also straining limited water resources, according to Business Insider.

This is especially true…

… in the drought-stricken American Southwest, where temperatures are high and water is diminishing amid climate change.

  • Cities including Phoenix, Austin, and Santa Fe all saw their remote-work shares bump to 20%+ in 2021, compared to the national average of 17.9%.
  • A University of Nevada, Las Vegas study found residential water use in Henderson, Nevada increased amid the pandemic, due in part to remote work.

While an individual household doesn’t use as much water as, say, agriculture or giant companies, it’s still troubling.

What’s the solution?

Just increasing water costs could harm lower-income families while failing to change the habits of those who can afford it.

But similar strategies do work. In southern Nevada, water usage has decreased 25%+ in the last 20 years, despite an increasing population, thanks to tactics like:

  • Penalties for water-wasters
  • Restrictions on water usage
  • Rebate programs for sustainable changes, like replacing grass with climate-friendly plants

Meanwhile, some areas are trying public shaming.

For example: The Suffolk County Water Authority’s 2022 “water hogs” include Joann Goldsman, wife of Batman & Robin screenwriter Akiva Goldsman. Poison Ivy would be so pissed.

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AROUND THE WEB

🖥️ On this day: In 2001, Microsoft released Windows XP, which replaced the “blue screen of death” with a pop-up.

😊 How to: Add custom emoji to Slack.

💡 Haha: This website lists half-baked ideas.

🪦 That’s interesting: Wikipedia’s “deaditors” update pages upon someone’s death. And sometimes, they’re faster than the news.

🐣 Aww: And now, co-parenting.

Meme
closing tabs meme

Follow Sara on Twitter

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Today’s email was brought to you by Jacob Cohen, Juliet Bennett Rylah, and Rob Litterst.
Editing by: Mark “The Mayor of Zoomtown” Dent.

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