John Coogan

discussion.

On Apple's last two earnings conference calls, Cook blamed a lack of availability of advanced chips for Apple's inability to meet customer demands for iPhones.

The constraints are expected to continue in the current quarter, affecting several Mac models, Cook said, quote, we think, looking forward, that the Mac Mini and the Mac Studio may take several months to reach supply-demand balance.

And after the earnings call, Apple raised the Mac Mini's starting price.

And so, TSMC's manufacturing capabilities far surpass those of Samsung and Intel, makers of other kinds of chips for memory and storage, for example, are more competitive with one another, giving Apple multiple sources of supply, although, of course, they are memory constrained.

Apple's long been TSMC's top customer, but skyrocketing demand for its manufacturing capacity from NVIDIA and other designers of AI chips means Apple no longer has as much leverage to secure the supplies that it needs.

Starting in 2006, Apple used Intel-designed CPUs as its main processor of its personal computers, but switched to its own custom CPUs based on ARM design in 2020.

That's the dawn of Apple Silicon.

And so there's been an incredible economic and financial performance concentrated in just a handful of trillion-dollar tech companies, Intel starting to join and starting to perform like that.

There's a few memory stocks.

I saw one report that referred to it as the MAG-10, and they'd added a few other AI names to that group.

But there's just a few companies that are driving the vast majority of returns in the stock market.

So, Mag7 plus AMD Broadcom and one other, who is that?

Micron.

Now make up 40% of the market.

Railroads, for reference, during 1835 to 1910, were 63% of the market, and he comps it to Japan, the nifty 50, tech and telecom throughout various periods of time.

And so I was reading this post by, or this piece by Greg Ip in the Wall Street Journal, and he was trying to disentangle what's happening in the overall American economy from the AI economy.

Where is the growth coming from?

He sort of backed the envelope, did he?

He said the AI economy grew 31% while the non-AI economy just 0.1%.