Baltic
Dry Index. 2066 +36 Brent Crude 109.64
Spot Gold 4671 Spot Silver 72.25
US 2 Year Yield 3.79 -0.02
US Federal Debt. 39.081 trillion
US GDP 31.301 trillion.
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.
Ludwig von Mises
We are 38 days into the costly Persian Gulf war, but things get worse fast from here.
The last of the crude oil tankers, LNG and LPG ships that left the Gulf on Feb 28 are arriving in Europe and east Asia over the next few days, after that, the effect of the missing shipping Gulf products really starts showing up in Europe and Asia.
If President Trump follows through on his threat to start crushing Iran’s infrastructure from tomorrow as his 10 day ultimatum runs out, and doesn’t perform his signature TACO, no ship owners or ship insurers will risk entering or leaving the Persian Gulf.
The global economy starts to fail from here. First, many of the Persian Gulf economies suffer from a lack of sales income. There goes Europe’s luxury goods market. The missing Gulf dollars don’t get recycled into financing the USA’s massively out of control debt.
The European and Asian economies face price rationing, probably fast followed by government imposed rationing.
I could go on, but I think you can see where
this goes.
CNBC Daily Open: Trump posts expletive-filled Iran
threats on Easter Sunday
Published Sun, Apr 5 2026 9:17 PM EDT
Hello, this is Dylan Butts writing to you
from Singapore. Welcome to another edition of CNBC’s Daily Open.
We’re now entering the sixth week of the
Iran war, and it appears that U.S. President Donald Trump is growing
increasingly frustrated with the fallout of the conflict.
In an expletives-laden social media post
on Sunday that drew a sharp backlash from opposition leaders and civil society
groups, Trump vowed to strike Iran’s power plants and bridges if the Strait of
Hormuz was not opened to all marine traffic by Tuesday.
What you need to know today
Trump’s aggressive
social media post comes as his deadline for Iran to reopen the Strait
of Hormuz was set to end Monday, after he extended it by 10 days last
month.
The strait is a vital shipping route for
the world’s oil and gas supplies, and its continued blockade has seen oil
prices surge, with U.S. crude topping $114 per barrel on Sunday.
In a separate post later on Sunday, Trump
had said “Tuesday, 8:00 P.M. Eastern Time!” with the White House clarifying to
MS NOW that the date was the new the deadline for Iran to reach a deal with the
U.S.
Iran, so far, has shown no signs of
backing down and has continued to strike economic and infrastructure targets in
neighboring Gulf Arab countries.
Tehran also downed
an American F-15E Strike Eagle fighter jet over the weekend,
with Trump saying on
Sunday that the missing service member had been
rescued.
Trump is scheduled to hold a news
conference at the Oval Office on Monday at 1 p.m. ET.
With the conflict in the Middle East
raging on during the Weekend, stock
futures fell on Sunday, after posting gains last week on hopes of a
de-escalation.
Markets will also monitor upcoming
developments with the Federal Reserve. The Senate Banking Committee is set to
hold a nomination
hearing on April 16 for Trump-backed Kevin Warsh to be the next chair
of the Federal Reserve, a person familiar with the matter told CNBC.
Warsh’s
nomination is moving ahead even as a separate criminal probe into the
Fed continues, setting up a potential clash between the two parallel processes
set in motion by the Trump administration.
CNBC
Daily Open: Trump posts expletive-filled Iran threats on Easter Sunday
The war’s economic impact could get worse for
Americans
Even if the conflict resolves in the next
few weeks, some economic pain will linger for months.
April 4, 2026 at 6:00 a.m. EDT
Amazon is adding a fuel surcharge to its
e-commerce deliveries. Mortgage rates have risen to their highest mark in seven
months. And consumers may soon see higher prices for soda bottles and
detergents.
These are all early indications of
the Iran
war’s impact
on the U.S. economy. So far, the costs of the joint U.S.-Israeli military
campaign have been modest, especially compared with the economic turmoil
roiling Asia, and U.S. growth remains solid. On Friday, the Labor Department
said employers added a robust 178,000 jobs in March.
But like thunderclaps that herald an
advancing storm, rising energy bills, interest rates and supply shortfalls may
be warnings of worse to come.
Americans, by a margin of 56 percent to 7
percent, expect the war to have a “mostly negative impact” on their personal
financial situation, according to a March 31 Ipsos poll. A Middle East conflict
that lasts for several more months would almost certainly spread higher prices
and supply chain disruption beyond Asia and Europe to American shores.
“I don’t think the U.S. will avoid it.
These are global markets,” said Rachel Ziemba, a New York-based analyst who
advises corporations on geopolitical risk. “Experts, even a week ago, were
worried. Now they are more worried.”
President Donald Trump has suggested the
war could end later this month and told the nation on Wednesday that the
conflict was “nearing completion.” Oil market pricing shows that investors
anticipate a return to normal operations in the Middle East by midsummer.
The Iranian chokehold on the Strait of
Hormuz, through which about 20 percent of global oil supplies pass each year,
represents the largest energy shock in history, according to the International
Energy Agency in Paris.Ask The Post AIDive deeper
A three-month interruption of normal
maritime commerce would drive oil prices to $170 per barrel, said Bloomberg
Economics. If the war lasts for six months, the global economy — starved of 13
million barrels of oil each day — would sink into a recession, Oxford Economics
said on Thursday.
Blocking the strait already has cost the
global economy hundreds of millions of barrels of oil, with the effects felt on
a rolling basis that corresponds with travel time from the Persian Gulf, said a
recent client note from JPMorgan’s commodities specialists.
First to feel the loss of Gulf oil
shipments was Asia, where governments have ordered rationing and conservation
measures. Europe is likely to suffer physical shortages by mid-April as the
last vessels that were loaded with oil before the war arrive at continental
ports.
Since it takes 35 to 45 days to reach U.S.
ports from the strait, the United States will be the last market to suffer.
Prices will rise, but shortages of refined products starting in late April or
May will probably be confined to California, which is physically isolated from
the nation’s fuel supply system, the JPMorgan report said.
More
The war’s economic
impact could get worse for Americans - The Washington Post
U.S.-Iran war ‘tax’ begins to hit American
businesses and consumers
Published Sat, Apr 4 2026 9:16 AM EDT
Nick Friedman, co-founder of Tampa-based
College Hunks Hauling Junk and Moving, says his business has been facing
multiple headwinds. High mortgage rates have
dampened the real estate market, while rising insurance premiums are eating
into operating costs. Now there’s the U.S.-Iran war and
a surge in
diesel fuel prices that is eating into profit margins. Yet,
he doesn’t feel like he can raise prices.
“We are in a bit of a Catch-22,” said
Friedman. “Our fear would be if we start raising prices it will hurt our
customers.”
Bigger companies, he says,
can probably get away with adding fees. As rapidly rising
fuel costs are cascading across the American economy, that is exactly what some
are doing.
United Airlines and JetBlue both raised
prices on baggage this week. Amazon announced a 3.5% “fuel
surcharge” on
sellers.
Amazon described the surcharge as
“meaningfully lower” than levies applied by other major carriers in a statement
to CNBC. JetBlue said as operating costs rise, it “regularly evaluates how
to manage those costs while keeping base fares competitive and continuing to
invest in the experience our customers value.”
For Friedman, that evaluation isn’t easy.
“If you have to fly, you have to fly,” he said.
But as Friedman’s moving company considers
whether to raise prices, “I don’t know that we have that luxury,” he
said. Customers can choose to trade down to a moving service that is cheaper
and maybe less protected, or even assemble some buddies with
pickup trucks to help with a move, leaving Hunks’ 2,000-truck fleet
increasingly idle. But filling up the trucks with gas is also an expensive
proposition.
Friedman says that historically, fuel has
taken 3 to 5 percent of revenue as an expense line item, but has
doubled to 6 to 10 percent since the war started. “It is very
difficult from a business perspective,” Friedman says. Hunks runs
on a franchise model with over 200 locations, putting many franchisees in
precarious positions.
----“Discretionary spending is
typically where the cycle starts. Consumers pull back from items which are
discretionary first,” said MassMutual Wealth chief investment officer Daken
Vanderburg.
Vanderburg says higher energy prices act
as a tax on consumers because they ripple across so many goods and services. If
the war and its disruption is short, consumers will dip into savings
and weather the higher costs. But a longer-duration conflict will cause
consumers to cut back. “That slows growth and hits spending, and does it
quite quickly,” Vanderburg said.
----Unlike past economic shocks to the
system, such as the Great Recession or Covid, there will be fewer tools for the
government to use to lessen the blow for businesses and consumers. “Policy
is likely not riding to the rescue like it did during the Covid era,”
Vanderburg said.
More
U.S.-Iran war
'tax' begins to hit American businesses and consumers
In markets news.
Wall Street Week Ahead
Apr 05 2026
Wall Street heads into the new week with
investors focused on inflation data and energy.
Oil will be an early driver, with OPEC+
meeting Sunday to decide on output policy amid the surge in prices with the
closure of the Strait of Hormuz and whipsawing expectations for either
escalation or de-escalation in the Iran war.
The macro spotlight will fall on inflation
reports, with the core PCE index due Thursday and the March Consumer Price
Index on Friday. Economists expect core CPI to hold at 2.5% annually, making
the data critical for shaping expectations around Federal Reserve policy. Fed
minutes on Wednesday and remarks from policymakers, including Austan Goolsbee,
will also be closely watched.
Earnings are led by Delta Air Lines (DAL), Constellation
Brands (STZ), Levi Strauss (LEVI), and BlackBerry
(BB), offering
insight into travel demand, consumer trends, and enterprise spending.
In tech, the HumanX AI Conference in San
Francisco will feature companies including Nvidia (NVDA), Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOGL), keeping AI
momentum in focus.
Wall Street Week
Ahead | Seeking Alpha
Japan, South Korea stocks open higher as investors
assess Trump's Iran war comments, extended deadline
Published Sun, Apr 5 2026 8:01 PM EDT
Japan and South Korean stocks
rose Monday, while most Asian markets were closed for holidays, as
investors parsed the latest developments in the Middle East conflict over the
weekend.
President Donald Trump on Sunday
issued a fresh round of threats to attack Iran’s power plants and civilian
infrastructure starting Tuesday, if Tehran failed to fully reopen the Strait of
Hormuz.
The key oil chokepoint between Iran and
the Arabian Peninsula handled about one-fifth of the world’s oil supplies
before the war between U.S.-Israel and Iran started on Feb. 28.
In an expletive-laden social media post,
Trump vowed to bring “Hell” to
Iran after U.S. forces rescued an American airman in Iran last week.
He later posted about a “Tuesday 8 P.M.
Eastern Time” deadline without elaborating. The White House on Sunday told MS
NOW that the
date is the new deadline for Iran to reach a deal with the U.S.
Trump said he will hold a press conference
“with the Military” at the Oval Office at 1 p.m. on Monday.
Iran has pushed back against Trump’s
ultimatum to reopen the Strait of Hormuz, saying that the critical waterway
would only reopen fully after damage from the war is compensated. Tehran has continued
strikes on economic and infrastructure targets in the neighboring Gulf region,
including Kuwait’s oil headquarters.
Eight members of the Organization of the
Petroleum Exporting Countries and allies raised their production quotas on
Sunday by 206,000 barrels per day for May, though the move appeared largely
symbolic as the war has constrained shipments from several members.
The U.S. West Texas Intermediate for
May was up 2.57% at $114.11 per barrel. International benchmark Brent crude had gained
about 2.62% to $111.65 per barrel as of 7:51 p.m. ET.
Japan’s Nikkei 225 jumped 0.62%, and
the broad-based Topix gained 0.23%.
South Korea’s blue-chip
Kospi advanced 1.8% while the small-cap Kosdaq gained 0.98%.
Many markets in Asia are closed on Monday
for holidays as Australia, New Zealand, and Hong Kong celebrate Easter, while
mainland China and Taiwan celebrate Qingming Festival, the tomb-sweeping
holiday.
Stock futures slip after a winning week as oil
prices tick higher: Live updates
Updated Mon, Apr 6 2026 12:31 AM EDT
Stock futures fell on Monday, following a
winning week, as traders continue to monitor the latest developments in the
U.S.-Iran war and oil prices rose.
Dow Jones Industrial Average futures lost
105 points, or 0.2%, narrowing losses from the earlier session. S&P 500 and Nasdaq-100 futures shed 0.1%
and 0.2%, respectively.
The futures pared losses after an Axios report that the U.S., Iran, and a group of
regional mediators were discussing terms for a potential 45-day ceasefire that
could lead to a permanent end to the war, although the chances for reaching a
partial deal before the Tuesday deadline were slim.
Wall Street is coming off a strong
performance last week, with the S&P 500 soaring nearly 6%. That gain
snapped a five-week losing streak and marked the benchmark’s best weekly
performance since late November.
The Dow and Nasdaq also ended their
respective five-week slides. The former advanced 3% for the week, while the
latter popped 4.4%.
Those gains weren’t easy to come by,
however. The major averages experienced wild swings during the week, as traders
assessed updates on the U.S.-Iran war and gauged when the conflict may end.
On Sunday, President Donald Trump warned
the U.S. would strike Iran’s power plants and bridges if the Strait of Hormuz
isn’t opened by Tuesday. “Tuesday will be Power Plant Day, and Bridge Day, all
wrapped up in one, in Iran. There will be nothing like it!!!” Trump
said in a Truth Social post.
Crude prices ticked higher to start the
week. West Texas Intermediate
futures gained 1.9% to $113.53 per barrel. Brent crude climbed 1.3% to
$110.44 per barrel.
Monday will mark the first session during
which investors will be able to react to the March jobs report, which came out
on Friday. (U.S. markets were closed due to Good Friday.)
The U.S. economy added 178,000 jobs in
March, well above the Dow Jones consensus of 59,000. The unemployment rate also
fell to 4.3% from 4.4%, though that was largely due to a big drop in labor
force participation.
“The March employment data showed a strong
rebound from February’s weak numbers but likely won’t completely reassure
markets as a deeper look suggests a labor market that is limping along,” said
Ryan Weldon, portfolio manager at IFM Investors. “The layoff data from earlier
this week ticked up for the first time in three months and job openings
remained lower than expected. Higher oil prices are likely to flow
through to higher input costs and ultimately higher inflation.”
Stock
market today: Live updates
In other news.
India makes first Iranian oil purchase in seven
years with no payment problems
Published Sat, Apr 4 2026 6:58 AM EDT
Indian refiners have purchased Iranian oil
amid the Middle East conflict that has disrupted supplies through the Strait
of Hormuz, the oil ministry said on Saturday.
The world’s third-biggest oil importer and
consumer, India has not received a cargo from Tehran since May 2019,
following U.S. pressure not to buy Iranian crude, but supply disruptions from
the U.S.-Israel war have hit
the South Asian nation hard.
“Amid Middle East supply disruptions,
Indian refiners have secured their crude oil requirements, including from Iran;
and there is no payment hurdle for Iranian crude imports,” the oil ministry
said on X.
Last month, the United States
temporarily removed sanctions on Iranian
oil and refined products to ease supply shortages.
India has secured its full requirements of
crude oil for the coming months, the ministry added.
“India imports crude oil from 40-plus
countries, with companies having full flexibility to source oil from
different sources and geographies based on commercial considerations.”
India has also bought 44,000 metric tons
of Iranian liquefied petroleum gas loaded on a sanctioned vessel. The ministry
said the vessel, which berthed at the western port of Mangalore on
Wednesday, is discharging the fuel.
India makes first
Iranian oil purchase in seven years
Trump’s Iran war speech paints a grim
picture for oil markets with more than 600 million barrels at risk
Published Thu, Apr 2 2026 1:57 PM EDT Updated
Thu, Apr 2 2026 3:59 PM EDT
President Donald Trump has doubled
down on the U.S. war against Iran, spiking oil prices Thursday as traders
prepare for a longer conflict that will exacerbate the already deep disruption
to global energy supplies.
The oil market had hoped Trump would
present a clear exit strategy during his national address Wednesday
night. Instead, the president said the war will continue for weeks and vowed to
hit the Islamic Republic “extremely hard.”
“With the conflict now expected to last at
least into deep April, the barrel math becomes increasingly grim,” said Ryan
McKay, senior commodity strategist at TD Securities, in a Thursday note to
clients.
Nearly 1 billion barrels will be lost by
the end of the month, comprising up to 600 million barrels of crude oil and
roughly 350 million barrels of refined products like jet fuel, diesel and
gasoline, McKay said. Every month the war drags on will see an additional
combined loss of 450 million barrels, he said.
Rapidan Energy forecasts a total net loss
of 630 million barrels of oil and products by the end of June when accounting
for redirected flows through pipelines, emergency stockpile releases and
inventory drawdowns.
U.S. crude oil prices have
soared more than 10% to top $110 per barrel in the aftermath of Trump’s
remarks. Brent prices, the
international benchmark, jumped over 6% to top $107.
Buyers of physical barrels of U.S. oil are
willing to pay nearly $120 in Houston at the moment or a premium of about $5.50
over the May futures contract, said Tom Kloza, an independent oil analyst at
Kloza Advisors.
“The speech was a disaster,” John Kilduff,
founding partner at Again Capital, told CNBC. The market is rapidly pricing in
the impact of a prolonged war and closure of the Strait of Hormuz, he said.
No U.S. plan to open Hormuz
Trump did not present a U.S. plan to open
the strait during his speech, the vital sea route that Iran has effectively
shut down with its attacks on tankers. The strait connects the Persian Gulf to
the global market. About 20% of global supplies passed through the waterway
before the war.
“The United States imports almost no oil
through the Hormuz Strait and won’t be taking any in the future. We don’t need
it. We haven’t needed it and we don’t need it,” Trump said in his speech.
----Trump threatened to bomb Iran’s
power plants and send the country “back to the stone ages.” He told countries
affected by the closure of the strait to buy oil from the U.S.
“I can’t believe the U.S military didn’t
start degrading Hormuz interdiction capabilities on day one,” Bob McNally,
president of Rapidan Energy, told CNBC. “Just as you wouldn’t imagine a
parachutist diving out of a plane without putting on the parachute.”
Fuel shortages
Oil prices have been insulated from
rallying even higher due to refinery run cuts, a surplus of supply before the
war and the release of emergency oil by the more than 30 countries in the
International Energy Agency, said Matthew Bernstein, an analyst at Rystad
Energy.
The market is starting to price in the
longer-term impact from the war, Bernstein told CNBC.
“Moving forward, there will be no going
back to the prewar status quo,” the analyst said. “Prices will be supported
even after the war ends by new demand for stockpiling, heightened insurance and
freight costs associated with the Strait of Hormuz, and a broader geopolitical
risk premium in the market.”
With the strait still shut down, oil
stockpiles will start to feel pressure. Oil stored on tankers will draw down
quickly and onshore inventories could fall to multiyear lows as early as
August, TD Securities’ McKay said.
“As market inventory buffers erode, the
physical tightness seen thus far in Asia begins to cascade globally,” the
strategist said. Crude oil and product prices will “face increasing upward
pressure in the coming weeks and months” until high prices start to reduce
demand, he said.
Shell CEO Wael Sawan warned last week in
Houston that fuel shortages will ripple around the world beginning with jet
fuel, followed by diesel and finally gasoline.
More
Trump Iran war
speech points to even deeper oil supply disruption
Abu Dhabi aluminium complex recovery could take up
to 12 months
Some units may resume operations sooner,
says Emirates Global Aluminium
Last updated: April 03, 2026 | 20:26
Abu Dhabi: Emirates Global
Aluminium (EGA) has
said its Al Taweelah site sustained significant damage following recent Iranian
missile and drone attacks, with full restoration of primary aluminium
production likely to take up to 12 months.
In an initial assessment released on
Friday, the company confirmed that the sprawling industrial complex at Khalifa
Economic Zone Abu Dhabi (KEZAD) was fully evacuated, and all facilities were
placed under emergency shutdown procedures.
The Al Taweelah site — one of the world’s
largest aluminium production hubs — includes a smelter, casthouse, power plant,
alumina refinery, and recycling plant. The facility was attacked last week.
Gradual restart expected
EGA said restarting operations at the
smelter would require extensive infrastructure repairs, followed by the gradual
restoration of individual reduction cells — a process that is both technically
complex and time-intensive.
“Early indications are that a complete
restoration of primary aluminium production could take up to 12 months,” the
company said.
However, some units may resume operations
sooner. The Al Taweelah alumina refinery and recycling plant could partially
restart earlier, depending on the outcome of ongoing damage assessments.
Al Taweelah alumina refinery and Al
Taweelah recycling plant may be able to restart some production earlier,
depending on the final assessment of site damage, reported state news agency
WAM.
----Global
supply concerns
The disruption is expected to have wider
implications, given Al Taweelah’s role in global aluminium supply chains.
“Our Al Taweelah site is a foundation of
the global economy, and a significant contributor to global supply, making this
incident damaging to industries and prosperity worldwide,” Bin Kalban said.
The company added it is working closely
with customers whose deliveries may be affected.
The Al Taweelah smelter produced 1.6
million tonnes of cast metal in 2025, making it a key contributor to EGA’s
overall output. The alumina refinery produced 2.4 million tonnes last year,
meeting 46 per cent of the company’s total alumina requirements.
Meanwhile, the recycling plant has an
annual production capacity of 185,000 tonnes.
EGA said it has substantial metal stock
available both within the UAE and at overseas locations, which may help cushion
immediate supply disruptions.
Global Inflation/Stagflation/Recession
Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians.
About
that Good Friday US jobs report, I’m sceptical.
If recent history is any guide, that March new jobs number of 178,000 will
likely get revised lower. Then there’s an AI jobs losses count, still to come.
The March jobs report isn’t as good as it looks. Here are the bad parts.
Most businesses
aren’t hiring lots of people
Published: April 3,
2026 at 12:56 p.m. ET
The U.S. economy created
the most new jobs in March in almost a year and a half, so happy days are here
again for frustrated jobseekers, right?Unfortunately, no.
The estimated 178,000 increase in new jobs last
month came as a relief
after a dismal February employment report. The jobless rate also fell a tick,
to 4.3%.
Under the surface of the
March employment report, however, were some disturbing signs that underscore
the U.S. labor market is not as good as it looks.
Start with the decline in
the unemployment rate: The chief reason why it fell was because almost 400,000
people dropped out of the labor force.
The simple truth is,
people stop looking for work when jobs are harder to find. And right now jobs
are, in fact, hard to find.
With more people exiting
the labor force, the so-called participation rate fell in March to 61.9%, to
mark the lowest level in nearly five years.
If the pandemic era is
omitted, that’s the lowest rate since 1976 — just when women were entering the
workforce in huge numbers. Let that sink in.
In the longer run, the
labor force could continue to shrink.
“The decline in the
labor-force participation rate since the pandemic recovery is coming from an
aging workforce, and more recently the crackdown on immigration,” said Gus
Faucher, chief economist at PNC Financial Services.
The only industry that’s
consistently been hiring lots of workers, meanwhile, is healthcare. Over the
past year, healthcare employment has increased while the rest of the economy
has shed jobs.
As a result, the U.S.
economy has generated just 327,000 jobs in the last 12 months. By contrast, the
economy historically has created 1 million to 2 million jobs a year.
The lack of demand for
labor is also showing up in weaker wage growth. The increase in hourly pay in
the 12 months from March 2025 through March 2026 slowed to 3.5% — also a
five-year low.
What’s more, wage
increases are slowing as inflation is rising again due to the Iran war. The
conflict has sharply raised the price of oil, which augurs more price increases
ahead.
The labor market is still
in good condition overall, mind you, if just because of the surprising paucity
of layoffs. Companies aren’t cutting many jobs.
“Hiring is low, but so
are layoffs,” said Bill Adams, chief U.S. economist at Fifth Third Commercial
Bank in Dallas.
The trend in jobless
claims — or applications for unemployment benefits — illustrates the low level
of layoffs.
The four-week average of
new claims slid to 207,750 at the end of March, even lower than it was one year
earlier. It’s also one of the lowest levels ever.
That’s why economists say
the U.S. currently has a low-hire, low-fire labor market. It could be a lot
worse.
“If there’s a silver
lining, it’s that employers that still appear relatively stoic in the face of
uncertainty,” said Jim Baird, chief investment officer at Plante Moran
Financial Advisors. “Layoffs remain quite low, keeping the labor market in a
delicate balance.”
The March jobs report isn’t as good as it looks. Here are the bad parts.
- MarketWatch
Technology
Update.
With events happening fast in the
development of solar power and graphene, among other things, I’ve added this
section Updates as they get reported.
Chinese chip firms hit record high revenue driven by the AI boom
and U.S. curbs
Published Fri, Apr 3 2026 1:00 AM EDT
Chinese semiconductor firms have reported record revenue last year
driven by AI demand, a shortage of memory chips and U.S. export restrictions
that have pushed Beijing to bolster its homegrown tech industry.
Analysts and the companies themselves are also expecting further
revenue surges this year, underscoring how Chinese chip players are
capitalizing on strong demand from domestic tech giants looking to build their
AI infrastructure.
U.S. export restrictions on China’s tech sector over the last few
years have added “rocket fuel” on chip demand, amplifying growth from other
areas like electric vehicles and AI data centers, according to Paul Triolo, a
partner at Albright Stonebridge Group.
Semiconductor
Manufacturing International Co. (SMIC), China’s largest
chip manufacturer, said revenue for 2025 rose 16% from a year ago to a record
$9.3 billion. Revenue could top $11 billion in 2026, according to LSEG analyst
estimates.
Hua Hong,
another Chinese chipmaker, said fourth-quarter revenue came in at a record
$659.9 million and forecast sales of between $650 million and $660 million.
Moore Threads,
which is aiming to rival Nvidia,
guided that 2025 revenue would be between 1.45 billion yuan ($209.8 million)
and 1.52 billion yuan, a 231% to 247% year-on-year increase.
What is driving sales records?
There are multiple factors at play. The growth of electric
vehicles and related infrastructure has provided support for less-advanced or
“mature node” semiconductors, while demand for more advanced chips is “through
the roof because of AI,” Triolo told CNBC.
U.S. restrictions over the past few years, which cut off China
from key technologies, have accelerated a self-sufficiency push from Beijing to
wean itself off American tech.
More recently, U.S. export curbs
on Nvidia’s chips to China has prompted Beijing to encourage
local firms to buy domestic alternatives, with companies like Huawei stepping in
to fill the void, even if the performance of their semiconductors lags the U.S.
“While China does not yet lead in peak GPU performance, these
homegrown solutions are filling the domestic ‘compute gap’ and driving record
revenues,” Parv Sharma, senior analyst at Counterpoint Research, told CNBC.
Memory chip players in China have also seen a boost. Memory, a key
component for AI data centers and consumer electronics, is in short supply
globally while demand remains high. This has led to an unprecedented
spike in prices of memory chips.
More
Chinese chip firms
post record high revenue on AI boom, U.S. curbs
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt Clocks
(usdebtclock.org)
The most important thing to remember is that inflation is not an
act of God, that inflation is not a catastrophe of the elements or a disease
that comes like the plague. Inflation is a policy.
Ludwig von Mises
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