The U.S. government seeks to stabilize market interest rates through long-term Treasury bond purchases, while domestic semiconductor companies have embarked on competition with different HBM technology strategies.
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The U.S. Treasury Department is considering using its approximately $1 trillion General Account (TGA) balance to purchase long-term Treasury bonds. This aims to calm the recently surging long-term Treasury yields, with CNBC reporting that senior Treasury officials are discussing this plan. This strategy is expected to resemble a 'Treasury Twist,' where short-term bonds are issued to buy long-term bonds.
The Treasury General Account (TGA) is an account where the federal government deposits taxes and other revenues with the Federal Reserve (Fed), serving as the government's surplus funds and emergency reserve. Currently, the balance in this account stands at approximately $950 billion, a significant increase compared to when the Biden administration took office. The possibility of using these funds as a resource for purchasing long-term Treasury bonds has been raised.
The core of this strategy is similar to a 'Treasury Twist,' which adjusts the Treasury yield curve by leveraging the difference between short-term and long-term interest rates. The idea is that by issuing short-term bonds to secure funds and then purchasing long-term bonds, short-term bond yields might rise slightly, but long-term bond yields can be lowered. Recently, accumulated debt since COVID-19 and increased bond issuance by big tech companies have been identified as major causes of the imbalance in Treasury bond supply and demand. A Treasury official emphasized reducing debt through economic growth as a long-term solution.
Global attention is focused on the remarks of the Federal Reserve (Fed) Chair at the Jackson Hole meeting, which opens on August 27. The U.S. economy currently faces a dilemma of high inflationary pressure and employment shock. The market is closely watching what policy direction the Chair will present regarding the current economic situation, particularly whether he will signal a possibility of interest rate cuts.
If the Fed Chair expresses caution about further tightening or hints at easing, expectations for a drop in long-term interest rates could grow. The market this week is anticipating that long-term interest rates could stabilize if the Treasury Department's bond purchasing efforts align with the Fed's policy direction, creating a synergy. This suggests that the Fed's cautious stance could positively influence the Treasury's efforts.
The U.S. economy structurally carries a massive debt burden, which acts as a fundamental problem in the long-term Treasury bond market. In addition, short-term supply and demand imbalances, such as bond issuances by big tech companies, further increase market instability. A long-term solution proposed for this is to reduce the debt burden by increasing economic growth rates.
China's YMTC has achieved a 14% market share in the NAND market, rising to become the world's third-largest company. Rapidly narrowing the technology gap with Samsung Electronics (25%) and SK Hynix (22%), YMTC is aggressively promoting its goal to expand wafer production to 300,000 units next year. This is analyzed as part of a strategy to increase corporate value ahead of its IPO.
YMTC possesses its unique 'Xtacking' technology. This technology does not simply stack NAND flash memory vertically but rather bonds wafers top and bottom to create layers. Due to this technology, Samsung Electronics and SK Hynix may have to pay royalties to YMTC for its use, drawing attention to potential patent disputes.
Samsung Electronics is introducing technology that redesigns the High Bandwidth Memory (HBM) base die to perform computing functions directly within the memory. This strategy aims to resolve data bottlenecks between the Graphics Processing Unit (GPU) and memory, thereby improving overall system efficiency. Samsung Electronics plans to maximize HBM performance by leveraging its foundry capabilities to produce customized base dies.
SK Hynix is making a bold move in the high-performance HBM market with 20-stack technology. While current HBM stacking technology peaks at 12 layers, SK Hynix aims to surpass this by stacking up to 20 layers to maximize productivity. To address the inevitable heat generation that occurs with high-stacking, the company plans to introduce micro-cooling technology to ensure stable operation. This technological development is a core strategy to meet the rapidly increasing demand in the artificial intelligence (AI) and high-performance computing markets.
A nuclear power plant project, which initially estimated a budget of 11 trillion won, has been found to require an additional 12 trillion won, despite exhausting the initial funds. This massive cost overrun is a major cause of construction delays. Consequently, the project remains incomplete, serving as an example of budget overrun risk becoming a reality.
In the past, Westinghouse's value was relatively low because it only possessed technology but had no active nuclear power plant construction projects. However, with nuclear power plant construction now almost definitively proceeding in the United States, Westinghouse's market value has significantly increased. This is a prime example of a company's value rising due to changes in the market environment.
Acquiring a stake in Westinghouse can provide a strategic advantage beyond simply securing management rights, by fostering friendly relationships with nuclear power plant equipment suppliers. In the past, during competition with Toshiba, companies like Doosan Heavy Industries existed, but now, through equity investment, there is an expectation to strengthen cooperative relationships and gain a favorable position when proceeding with nuclear power plant construction projects. This aims for indirect influence and improved cooperative relations through equity participation, rather than a full management acquisition.
The Haeundae Amso Galbi meal kit is available in a large 1.2kg package, selling in the 50,000 won range. This product is portioned for 6 people, and Department Head Kwon Soon-woo explained that this configuration offers a price and quantity that would satisfy even Americans. It was introduced as a cost-effective product suitable for large families or entertaining guests.
The Samsung Galaxy Book laptop features an i7 CPU and offers a free RAM and SSD upgrade upon purchase. The RAM is upgraded from the original 8GB to 24GB, and the SSD to 1TB. This is an attractive offer for users who require high-performance tasks and can significantly enhance the laptop's overall performance.
Samsung smartphones and the Galaxy Book offer seamless interoperability, providing users with great convenience. Content worked on a smartphone can be immediately viewed or edited on the Galaxy Book, supporting an uninterrupted workflow between devices. Department Head Kwon Soon-woo also emphasized the convenience of this interoperability while using a Galaxy phone and Galaxy Book together.
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