Chinese companies are resorting to chips repurposed from standard PC gaming products to develop artificial intelligence tools after Washington blocked US exports of high-performance processors. Thousands of Nvidia gaming graphics cards are being stripped of their core components in factories and workshops every month, before being installed on new circuit boards, according to two factory managers and two chip buyers familiar with the situation. Industry experts said the repurposing of chips from cards designed to be slotted into consumer PC motherboards to improve gaming graphics amounted to a rough workaround to tackle the lack of high-end processors in China.
- Date Posted:
- January 11, 2024
Why did the economy not slow down more, and why did Fed hikes not result in a rise in unemployment? There are two reasons. First, the post-Covid economy saw surprising strength in the non-cyclical components of the economy, such as eating at restaurants, staying at hotels, and flying on airplanes, etc. Consumers wanted to travel and go to concerts and sporting events after Covid, and this has kept consumer spending strong. Second, financial conditions eased significantly following SVB, and this boosted GDP growth to 4.9% in the third quarter of 2023. Similarly, the rally in the stock market, credit markets, and Treasury markets since October and after the Fed pivot in December have also eased financial conditions significantly, likely boosting the cyclical components of GDP over the coming months. The bottom line is that the non-cyclical components continue to grow steadily because of post-Covid strong demand for consumer services, and the cyclical components are rebounding because of easier financial conditions. The likely scenario is that the economy will reaccelerate over the coming months, which will put renewed upward pressure on inflation and, hence, bring back a more hawkish Fed.