SWISSQUOTE N°3 JULY 2020 A TRILLION MICROCHIPS WWW.SWISSQUOTE.COM FINANCE ANDTECHNOLOGY UNPACKED N°3 JULY 2020 Etsy, thecraftsmaster E-COMMERCE Alcon dreamsbig PORTRAIT the Swissstockmarket A wave ofoptimismhits CORONAVIRUS

INTEL

TSMC

NVIDIA WWW.SWISSQUOTE.COM CHF9.-

ASML

has alreadybegun The ultra-connected future MICROCHIPS A TRILLION DOSSIER AMD

COMET

INFINEON

©Photograph: Laurent Ballesta/Gombessa Project www.blancpain-ocean-commitment.com HELP PROTECT THEOCEAN TRANSMIT OURPASSION, RAISE AWARENESS,

Fifty Fathoms COLLECTION BAHNHOFSTRASSE 28·PARADEPLATZ ·8001ZURICHTEL.+41(0)44 2201180 RUE DURHÔNE40 ·1204GENEVA ·TEL.+41(0)2231259 39 EDITORIAL SWISSQUOTE JULY 2020

The chip war is only just beginning

By Marc Bürki, CEO of Swissquote

Donald Trump is not a geek, he’s a However, ironically, pressure from real estate developer. However, the Washington may not have the intended White House’s current resident does effect. Rather than submit to the trade understand the importance of sem- war, China is now fast-tracking its own p. 62 iconductors. Found inside smart- development and investing heavily to phones, aeroplanes, data centres and do so. Its objective: to produce 40% even everyday smart objects, elec- of all semiconductors sold in the p. 30 tronic chips are everywhere, and in country in 2020, and 70% by 2025. the near future, with the emergence The initial results of this policy are be- of artificial intelligence, these chips ginning to become clear. According to will make decisions for us, drive the firm IC Insights, HiSilicon, ’s our cars, steer missiles, and more. driving force in the semiconductor in- dustry, made a dramatic entrance into So it’s not surprising that the the global top 10 chip manufacturers United States is trying to maintain in Q1 2020. Thus far, HiSilicon has control over the development and only designed electronic components, manufacturing of these electron- with their production outsourced to ic components. While the current Taiwanese company TSMC. Howev- industry leaders are American er, the Chinese company is sending companies, the trade war that the more and more of its manufactur- US president is currently waging ing orders to its compatriot SMIC. against Chinese telecoms provider Huawei is largely designed to stop And where is Europe in all this? from acquiring these skills, With start-ups such as UK-based because while China is indeed the ARM, Dutch company ASML and world’s factory, semiconductors are Swiss group Comet, Europe is p. 40 still its Achilles heel. According to a mastering crucial elements in the report from the Centre for Strategic steps to manufacture electron- and International Studies (CSIS) ic chips. However, it will need to published in February 2019, China do more to become a top player, produces only 16% of the semicon- like the United States is now, and ductors it consumes, which is not presumably China in the future. enough to ensure its autonomy. Good reading!

3 SWISSQUOTE JULY 2020 CONTENTS SWISSQUOTE JULY 2020

E-COMMERCE PUBLISHER Swissquote DOSSIER Chemin de la Crétaux 33 1196 Gland – T. +41 44 825 88 88 www.swissquote.com THE CHIP [email protected] 68 Manager Brigitta Cooper INVASION EDITORIAL Editor-in-chief Ludovic Chappex CORONAVIRUS Associate editor Bertrand Beauté 66 Design director Natalie Bindelli and Caroline Fischer CANA atelier graphique Route de Jussy 29 – 1226 Thônex www.ateliercana.ch Editorial staff CONSUMERISM Bertrand Beauté, Ludovic Chappex, 24 Gérard Duclos, Raphaël Leuba, TRAVEL Martin Longet, Angélique Mounier-Kuhn, Grégoire Nicolet, Gaëlle Sinnassamy, 22 Julie Zaugg Layout Natalie Bindelli, Caroline Fischer, Romain Guerini (CANA atelier graphique) Cover Getty Images Photography Thierry Parel, AFP, Keystone, Getty images, iStockphoto, 30 72 Newscom, Reuters BUSINESS TRIP Editing (English version) Ose Ayewoh, Marco Simon Translation CONTENTS Technicis Finance

PRINTING, BINDING AND DISTRIBUTION 3. EDITORIAL 18. PORTRAIT 66. E-COMMERCE 72. TRAVEL Stämpfli Ltd. DOSSIER : by Marc Bürki Alcon has its 30. THE CHIP INVASION Etsy: crafts boom Raja Ampat, Wölflistrasse 1 – 3001 Bern eye on the future thanks to coronavirus an underwater www.staempfli.com No factories, Chip giants 6. SCANS 36. 44. technicoloured dream but plenty ADVERTISING Economic 22. BUSINESS TRIP 68. CONSUMERISM Infoplus AG 53. What will chips of of ideas Traubenweg 51, CH-8700 Küsnacht survey Business trips the future look like? Made in China: in jeopardy the coolest of labels [email protected] 38. Infographic: 14. TRENDS WEMF the value chain 58. Interview REMP 2019: 53,752 Ex. Print run: 60,000 ex. Personality, 24. CORONAVIRUS of microprocessors with Éric Baissus, country, innovation A wave of optimism CEO of Kalray Erratum hits the Swiss 40 . Interview with An error was made in our last edition on page 25. stock market Heinz Kundert, 62. China dreams The figure 3.6 is the number of hospital beds in CEO of Comet of becoming a acute care per 1,000 inhabitants in Switzerland SUBSCRIPTIONABONNEMENT semiconductor giant and not the number of beds in intensive care. CHF 40.-40 FOR pour 6 6ISSUES numéros Our apologies for this unfortunate mistake. www.swissquote.ch/magazine/f/www.swissquote.ch/magazine ISTOCK / CHINAFACE / GETTYIMAGES STR AFP7 AFP ISTOCK / CHINAFACE

4 5 SWISSQUOTE JULY 2020 SCANS SWISSQUOTE JULY 2020

streaming RANKING PANDEMIC PUTS CINEMAS ON PAUSE SCANS TOP 5 SUPPORTED COMPLETED CAMPAIGNS ON KICKSTARTER (total funds pledged in dollars)

telecoms 1. PEBBLE TIME LOON BALLOONS DEPLOYED IN KENYA SMARTWATCH (2015) 20.34 M 2. COOLEST COOLER xxxx PORTABLE REFRIGERATOR (2014) 13.29 M 3. FROSTHAVEN BOARD GAME (2020) 12.97 M “Currently, 4. PEBBLE 2, TIME 2 SMARTWATCH (2016) Switzerland 12.78 M needs open 5. KINGDOM DEATH: MONSTER 1.5 BOARD GAME (2017) markets, not 12.39 M

dangerous Source : Kickstarter political ex- TOP 5 SMARTPHONE COMPANIES periments” (amount of phones sold globally in Q1

LOON 2020) Jan Atteslander, The Loon project from X, the Alphabet the Alphabet subsidiary was able to member of the board 1. subsidiary, aims to provide internet test their effectiveness in Peru and of directors at 58.3 M to some of the world’s most Puerto Rico, where internet users were economiesuisse 2. HUAWEI remote regions, via stratospheric provided free access if the tradition- balloons filled with helium. These al cellular data network was down. 49.0 M balloons, which were launched from The COVID-19 pandemic spurred the 3. APPLE the United States, now make it pos- Kenyan government to fast-track the 36.7 M sible for Kenyans to access 4G from project’s approval. Mozambique has 4. Telkom Kenya in every region of the already followed suit, making a similar 29.5 M country. This is the first commercial agreement with the operator Vodacom. 5. VIVO deployment of Loon balloons, but GOOG TKG VOD 24.8 M Walt Dohrn, the director of Trolls 2, Source : IDC in good company, before COVID-19 THE WORLD’S TOP 5 HIGHEST PAID spread around the DOTA 2 (E-SPORT) PLAYERS world. Here in (in millions of dollars as of 8 May 2020) Berlin, on 17 February. ISA FOLTIN/GETTY IMAGES ISA FOLTIN/GETTY 1. N0TAIL (JOHAN SUNDSTEIN) pharma ROCHE STRENGTHENS ITS POSITION As cinemas worldwide were forced to leased for $19.99 — a relatively high price 6.9 M IN GENETIC SEQUENCING close, production studios had to rethink for a VOD rental. It was a huge success, 2. JERAX (JESSE VAINIKKA) their distribution channels. In the with Universal reporting that the film 6.47 M Roche acquired US-based genetics access to the procedures developed United States, several feature-length has already brought in more than $100 3. ANA (ANATHAN PHAM) films, such as Bloodshot and The Hunt, million. CEO Jeff Shell later announced sequencing specialist Stratos Genomics by Stratos. The objective is to bring DNA 6 M in May for an undisclosed sum. In 2014, sequencing to market, making diagno- went live on streaming platforms just a in the Wall Street Journal that his studio the pharma giant had already ses faster and cheaper, at a cost of few days after their release, bypassing would continue to release films simulta- 4. CEB (SÉBASTIEN DEBS) injected $15 million into the Seattle- around 200 Swiss francs per person, the 90-day period that is usually reserved neously in both formats, even after the 5.5 M 24 based company, whose board of direc- according to experts from ZKB. As a for cinema-goers after the release date. health crisis ends. But Universal quickly 5. TOPSON (TOPIAS ZAAVITSAINEN) The number of tors includes Heiner Dreismann, former comparison, the first commercial DNA Troll 2: World Tour, produced by Universal, had to retract its statement, as cinemas 5.4 M countries in which director of the Diagnostics division at sequencing cost $3 million per patient. was even available live on streaming threatened to boycott the group’s studio Roche. This acquisition gives Roche ROG platforms the very same day it was re- productions. CMCSA 5G is now available. Source : Statista

6 7 SCANS SWISSQUOTE JULY 2020 SCANS SWISSQUOTE JULY 2020

SCANS cryptocurrencies E-EURO: KICKSTARTER BANQUE DE FRANCE SETS THE BALL ROLLING social media INSTAGRAM TREATS ITS INFLUENCERS

Squeezie, the YouTube influencer, is also very present on Instagram. Coming soon in paid mode? “Customers want Replay and going against their wishes will MENDI MENDI: REAL BRAIN TRAINER not work” MANUEL COHEN / VIA AFP TRAINING YOUR BRAIN The Banque de France announced on May 20 on Twitter that it had Urs Schaeppi, “successfully tested the use of a blockchain to experiment with

SYLVAIN THOMAS / AFP SYLVAIN CEO of Swisscom, regarding TV companies’ the use of a central bank digital currency”, adding that other tests Projects that exceed $2 million The social network Instagram, owned by to their names in the comments, desire to remove the will be carried out in the weeks to come. The test took place in on the crowdfunding platform are Facebook, will now provide its members improving their visibility. For their part, Replay functionality partnership with the Société Générale bank. In practice, the latter rare – but Swedish start-up Mendi with the possibility of monetizing their content creators will have the list of issued 40 million euros in financial securities in the form of secu- achieved this milestone with the live video services. This new function- all badge holders for their account. rity tokens, which were settled on the blockchain of the Banque new brain training method it has ality in the test phase, called “Badges”, Instagram currently has no commission de France’s digital euro. developed, whose design was allows spectators to financially support on transactions, with creators pocketing financed by the European Union, the content creator of their choice, by all monies paid. Live video is a booming among others. Previously, this type paying a flat rate of $0.99, $1.99 or format on Instagram, with live viewing of training was reserved for those $4.99. Depending on the amount invest- having jumped 70% between February who could spend $15,000 for a few ed, one, two or three hearts will appear and March. FB sessions in specialist clinics – but Mendi offers its system for $500. The device is a band equipped with sensors that measure the cerebral activity of the pre-frontal cortex. It also includes a mobile application that translates your brain activ- ity into a score. Users can play a game on their mobile devices to geolocation consciously control this score, ON THE RIGHT TRACK and in time, control the activity “My grand- of the pre-frontal cortex in order $900 million – that’s how much Intel will children are to strengthen this area. Benefits spend to acquire a 200-person start-up 1.8 M include improved concentration and that was worth $131 million in February demanding greater capacity for memorisation, 2018. Israeli start-up Moovit saw its user The number of more environ- as well as the ability to fall asleep base skyrocket over the last two years, guns sold in the faster or reduce the amount of now reaching nearly 800 million. The app, United States in mentalism sleep needed. which helps users travel through a city April, an increase at Nestlé” 10.3% in the most efficient way possible using of 71% compared all types of transport, is available in to 2019. In March, For the first time, 3,200 cities in 103 countries. Intel plans Paul Bulcke, 2.6 million guns organic food products to integrate Moovit into Mobileye, anoth- CEO of Nestlé, were sold, up 85% FUNDS RAISED AVAILABLE exceeded a 10% er Israeli start-up acquired in 2017 that in an interview compared to the with RTS $2,144,360 SEPTEMBER market share in develops anti-collision and advanced previous year. 2020 Switzerland in 2019. MOOVIT driving assistance systems. INTC

8 9 SCANS SWISSQUOTE JULY 2020 SCANS SWISSQUOTE JULY 2020

SCANS automotive gaming AUTONOMOUS VEHICLES AT A STANDSTILL ANIMAL CROSSING AND NINTENDO: LOCKDOWN’S WINNERS

The Bosch IoT concept shuttle at the 2019 Motor Show.

“I look at [TikTok] as so fundamentally parasitic, that it’s always listening. The $150 M fingerprinting The total amount technology they raised in gaming

GLENN CHAPMAN / AFP use is truly platform Roblox’s

DR terrifying, and latest fundraiser. Tech companies promised that functional been delayed by several months. The Thanks to its flagship autonomous vehicles would be on the California company was nonetheless able With children (and adults!) at home, the first month on the market. In the midst I could not bring game Minecraft, roads by 2020, but perfecting the tech- to raise $750 million in early May, which timing of the release of Animal Crossing: of lockdown, the social component of myself to install the company is now nology is taking longer than expected is in addition to the $2.25 billion raised New Horizons couldn’t have been more the game seems to have played a crucial an app like that valued at €4 billion, and the pandemic has made the task in March. Large manufacturers aren’t perfect for Nintendo. The latest version role in its success. Sales of the Switch on my phone” according to the even more difficult. Social distancing has faring any better: Ford announced that of the popular simulation series was an console also boomed during this time. Wall Street Journal. prevented tests from being carried out, its autonomous vehicle would now be immediate success. It was the most- In March 2020, sales doubled compared as test drives often require two people in delayed from 2021 to 2022, and PSA has sold game in March across all platforms, to March 2019 — the highest Q1 sales Steve Huffman, the vehicle to prevent accidents. Faced long abandoned the sector. Only Cruise, becoming the third-best launch in of a Nintendo console since 2010. The CEO of Reddit, at the Social 2030 conference with astronomical operating costs and no supported by GM and Honda, recently Nintendo’s history. Only Super Smash Japanese company increased production in late February revenue, start-ups are conducting mass presented a functional model, dubbed Bros. Ultimate (2018) and Super Smash of the Switch by 10% to keep up with layoffs (Zoox, Lyft, Ike, Kodiak Robotics), Cruise Origin, which is currently limited Bros. Brawl (2008) sold higher in their demand. 7974 being acquired (Drive.ai by Apple) or clos- to travelling only in relatively enclosed ing down (Starsky Robotics). At Waymo, environments. an Alphabet subsidiary, development has F UG GM 7267 GOOG

food 3D-PRINTED CHOCOLATE: REALITY MEETS FICTION

THE FLOP

media The Smart City of Toronto is no more TAMEDIA FORCES AN UPDATE Sidewalk Labs, an Alphabet packages and collect rubbish. subsidiary, hoped to create an But local opposition became The internet platforms of the Tribune ultra-modern living space in increasingly vocal over the last de Genève and 24 heures newspapers Toronto, built on a 5-hectare two years, notably due to a lack underwent a drastic update. The Tribune -98.9% abandoned port area. An ambi- of transparency from de Genève page is cleaner after a reduc- tious smart city project was first regarding the use of the data it tion in the number of sections available, The incredible proposed in 2017. It included was collecting. Along with the while the new 24 heures site highlights decline in the THE BARRY CALLEBAUT GROUP number of local numerous innovations such as company’s recent austerity cuts news in the canton of Vaud. This update In episode 136 of the successful series first chocolate 3D printing studio. The cycle tracks that were heated as a result of the pandemic, comes at a time when the entire press passengers at Zurich Elementary, Sherlock Holmes 3D-printed company is operating this new technology in the winter and spaces that this opposition was the last industry is experiencing a significant in April 2020, a chocolate rabbit with the help of a via its food decoration brand Mona Lisa. could be transformed based straw for the Google smart city drop in advertising revenue due to the down to 20,866 Zurich scientist and his chocolatier The Mona Lisa 3D Studio allows chefs to on the day of the week. Robots project. coronavirus pandemic, despite a big travellers, compared brother in Brooklyn. Two years after the design their own bespoke confections and were also supposed to deliver GOOG uptick in readers. TXGN to 1,951,979 a episode was released, the Zurich group produce them quickly on a large scale at year earlier. Barry Callebaut has opened the world’s an affordable price. BARN

10 11 SCANS SWISSQUOTE JULY 2020

SCANS robotics NEW MISSIONS FOR SPOT THE ROBOT DOG

“We pay up to $100,000 a minute for our premium The robot dog of long-form American company Boston Dynamics movies and welcomes patients at chapters” the Changi Exhibition Centre in Singapore (24 April, 2020).

Meg Whitman, EDGAR SU / REUTERS CEO of streaming application Quibi, which There has been a lot of talk about robots nicate remotely with patients waiting in launched in early April. in recent months following their con- line and triage accordingly, without the The budget is comparable tribution to caring for sick coronavirus risk of contamination from direct con- to that of large productions patients, including in China, Lombardy tact. Spot’s four articulated legs allow it from Netflix, , and Thailand. Sensing an opportunity, to reach many places where other robots HBO Max and Disney+. Boston Dynamics, a subsidiary of the cannot go. The city of Singapore also Softbank group, adapted its robot dog found another use for Spot: encouraging Spot into a mobile videoconferencing social distancing by patrolling parks with system. Equipped with an iPad, Spot an audio message directed at citizens. allows healthcare workers to commu- 9984

IPO

A CHINESE CLOUD LEADER $19.8 BN GOES PUBLIC ON THE NASDAQ While the COVID-19 pandemic par- the company indicated that it alysed most IPOs, Kingsoft Cloud, is now independent. Alongside The amount raised a Chinese company that special- Alibaba and Tencent, Kingsoft in 2019 globally by ises in cloud computing, was able Cloud is one of the cloud leaders agri-food start-ups, an to raise more than $500 million in China. But while its sales con- increase of 250% in during its IPO in the United States tinue to grow (from $174.5 million five years, according in early May. Founded in 2012, in 2017 to $557 million in 2019), to the firm AgFunder. Kingsoft Cloud was originally a so do the company’s losses subsidiary of Chinese software (from $100.5 million in 2017 giant Kingsoft Corp., but in its to $156 million in 2019). IPO documentation paperwork, KC

12 SWISSQUOTE JULY 2020 TRENDS SWISSQUOTE JULY 2020 TRENDS

the country CHILE

A top-ranked country on the brink of chaos ARTUR VERKHOVESTKIY / DEPOSITPHOTOS.COM: BOSCH SENSORTEC ARTUR VERKHOVESTKIY In 2010, Chile joined the very exclu- sive club of countries that belong to the OECD, the same year that it was ranked the most competitive country in Latin America by the WEF Global Competitiveness Report. But in the last 10 years, inequality has grown the figure and Chile has become the most RYAN ROSLANSKY unequal country in the OECD. In October 2019, an increase in the price of a Networking at Population subway ticket in the capi- the head of LinkedIn 18,729,160 (2018) tal city was the last straw After more than 11 years as CEO of and the country saw an LinkedIn, Jeff Weiner has stepped GDP per capita unprecedented wave of Position down. He was replaced on 1 June by $15,923 (2018) protests. The government the innovation CEO Ryan Roslansky, who previously held even had to mobilise the SMARTGLASSES LIGHT DRIVE Manufacturer the roles of senior vice president Growth army to stop looting. Bosch Age and product director. The announce- +1 (est. 2019) 42 ment was posted on LinkedIn, of The protests were ex- Stylish smart glasses Available from course. Jeff Weiner mentioned that Main economic pected to start again in 2021 Nationality Roslansky was the first person he sectors March after the austral Bosch has developed a small op- instructions. The advantage of this remain clear, American recruited in 2009 after being named mining summer holidays, but as tical device named “Smartglasses new technology is that it maintains regardless of Price CEO in December 2008. The two (copper, carbon holidaymakers returned Light Drive” that can transform the wearer’s privacy, as the infor- whether it is Not disclosed met while working at Yahoo!. During their collaboration at and nitrate), home, the first cases of any pair of traditional glasses into mation projected onto the lenses is being viewed in LinkedIn, the number of members worldwide increased food products, coronavirus appeared. smart glasses. Keeping the user’s not visible to other people. In fact, full sun or at from 33 million to 675 million, with revenue rising from chemicals, wood As a result, the govern- hands free and leaving the field of the image is not projected onto the night. Current smart glasses are $78 million in 2008 to $7.5 billion today. It is the biggest and agriculture ment declared lockdown vision unaffected, Smartglasses lenses themselves, but directly often seen as unattractive by (peaches, wine change in the social network’s executive team since and postponed until Light Drive can display a route, onto the surface of the retina. potential consumers, but with this and fruits) it was acquired by in 2016 for $26.2 billion. October a referendum receive calls and notifications, and miniature projection system, design- Weiner isn’t leaving the company entirely; he will remain on the creation of a new consult information such as a gro- As a result, the German company ers can offer more stylish smart the executive chairman of LinkedIn’s board of directors. constitution to replace the one cery list, recipe or even assembly claims that the image will always models suitable for daily wear. from Augusto Pinochet’s military dictatorship. While the pandem- ic ended the protests, Chileans remain angry at the right-wing government led by Sebastian Piñera.

14 15

SWISSQUOTE JULY 2020 ANALYSIS SWISSQUOTE JULY 2020

and is therefore illegal to import. Europe is a modest prospect, even ANALYSIS though the medicinal market lead

SPECIALISTS’ VIEWPOINT by Germany and Italy is expected HARRISON KOYMAN to grow. Legal consumption would increase for the time being to a FOCUS dozen tonnes, according to Faes, which is certainly not enough to help Canadian producers get rid of their unsold stock. A bad trip in the Aurora Cannabis announced a shocking cost-savings plan in early February. The plan included: 500 employees (nearly 15% of the country of green gold workforce) terminated, debt re­ The Canadian cannabis industry is under pressure, structuring, suspended investments, due to chronic overproduction and resistance from and the retirement of its founder the black market. and CEO Terry Booth. The aggressive development strategy of this inte- BY ANGÉLIQUE MOUNIER-KUHN AND BERTRAND BEAUTÉ grated company (including produc- A HEXO greenhouse in Canada. The company tion, marketing and transformation), was formerly known as was backed by a series of expensive Hydropothecary. acquisitions. But it is struggling to ust a flash in the pan? At the 2018. The other major players in the granted by the Canadian govern- fulfil its promises: in the quarter J start of the COVID-19 cri- industry, such as Aurora Cannabis, ment. Together, these companies that closed at the end of December sis, legal cannabis sales saw an Aphria and Hexo, also benefited from have a total production capacity 2019, Aurora Cannabis generated a unprecedented boom in Canada this enthusiasm. But since then, the of 2,300 tonnes, whereas global net loss of CAN$1.3 billion. as consumers swarmed shops to companies that invested in the buzz demand is probably around 700 to bubble that put a brutal end to the The (SNB) stock up before quarantine. Over Q3 are now tumbling on the Toronto 750 tonnes per year, of which 227 overvalued IPOs in the tech industry seems to agree. According to in- which ended on 31 March, Aurora stock market. is for legal consumption. Therefore, in 2000. formation in Swiss daily Le Temps, Cannabis – one of the most prom- demand is nearly four times less To a lesser extent, the Swiss bank took advantage of inent companies in the green gold On average, the primary companies than production capacity.” this situation However, the cannabis industry re- the coronavirus crisis to double its market – sold 12,729 kilos of can- in the industry saw their market mains promising. “There will be more shares of Aurora Cannabis. In late nabis, a 39% increase compared to capitalisation fall nearly 70% in This is because, despite legalisa- is similar to losses and bankruptcies,” predicted March, its portfolio held 4.2 million the same quarter the previous year. 2019, despite the fact that the year tion, the number of total users has the burst of the Faes. “Just because a bubble burst shares in the Canadian company, But the coronavirus effect quickly was quite successful for Canadian not grown: according to Statistics internet bubble on the stock market, it doesn’t mean compared to 2.4 million previously. dissipated, and the sweet scents of stocks (+19% for the S&P/TSX Canada, 1.8 million Canadians, or that the black market has disap- For companies in the industry, the cannabis faded away. According to Composite, the main index of the Ca- nearly 6% of the population, con- peared. Gradually, the legal market green light at the end of the tunnel Michael Singer, the interim CEO of nadian stock market). And because sume cannabis every day, which is will overtake the black market.” could come from institutional inves- Aurora Cannabis, April sales have of the pandemic that has upended the same amount as before the mar- “The rationalisation programme According to a report from firm BDS tors. Indeed, while individuals have returned to their pre-pandemic level the world since the start of 2020, ket opened. Furthermore, the black shouldn’t be a surprise to anyone; Analytics, published in late April, the been closely following the cannabis and companies in the industry have the market will not be restarted in market is still functioning much even the most optimistic investors global cannabis market is expected industry since the very beginning, plunged back into the bleak climate a sustainable way: after reaching its better than expected. According to knew that it was inevitable,” said to reach $47 billion in 2025, which is asset managers waited for quite that the industry faced previously. lowest point in mid-March at under Statistics Canada, 42% of consum- analysts from the Canadian Impe- an annual growth of 21% compared some time due to “too-limited per- CAN$15, Canopy shares are now ers purchased marijuana from illegal rial Bank of Commerce (CIBC) in a to 2019. “Growth outlooks for long- formance history, too-high valuation In autumn 2018, the legalisation around CAN$25, slightly higher than suppliers in Q2 2019. recent note. What’s more surprising, term sales in the global legal can- levels, or internal restrictions,” said of recreational marijuana in Canada at the end of 2019. according to the analysts, is that nabis markets remain exceptional,” the CIBC. The fact that a certain piqued incredible interest from As a result, prices went down and the downturn hit almost everyone said Roy Bingham, co-founder and number of players have reached investors. Dubbed the “green rush”, “The problem is that too many stocks took the hit. Furthermore, equally. Whether full of cash or CEO of BDS Analytics. “The cannabis operational profitability (EBITDA) the hype caused share prices of companies entered this young exports will not be able to absorb drowning in debt, profitable or not, industry could soon reach a decisive and are generating positive cash Canadian producers to skyrocket market and were valued based on overproduction. Even though medic- engaged in solid partnerships or all moment where US states, faced with flows, probably starting in 2021, (read our May 2018 edition). Ontario- their production capacities,” said inal marijuana is now legal in 33 US alone, cannabis stocks have all seen an imminent global recession, will will “force” institutional investors to based Canopy Growth saw its share Nikolaas Faes, an analyst at Bryan, states and 11 authorise recreational a somewhat uniform devaluation.” consider legalising cannabis as a reconsider the industry. For analysts price go from CAN$3 in 2016 to Garnier & Co. “In recent years, more marijuana, cannabis remains illegal To a lesser extent, this situation is potentially lucrative new source of from the Canadian bank, the count- more than CAN$60 in September than 200 production licences were at a federal level in the United States, similar to the burst of the Internet tax revenue.” down for the rebound has begun.

16 17 PORTRAIT SWISSQUOTE JULY 2020 PORTRAIT SWISSQUOTE JULY 2020

he divorce took place In 2008, the Vevey-based group on 9 April 2019. Alcon decided to sell off Alcon in incre- was independent once ments to Novartis, and the acqui- again, after more than sition was complete in late 2010. Alcon has its eye T40 years under Swiss giants Nestlé But working within the Basel-based and Novartis. Originally from Texas, group proved to be less comforta- the small company specialising in ble. “Novartis focused all its energy sterile ophthalmic products has on its pharmaceutical division and on the future taken an unusual path. It was first ignored its other segments, such acquired by Nestlé in 1977 and, as ophthalmology and generics,” Separated from Novartis last year, the under the food giant, quickly became says Bischofberger. “As a result, Geneva-based group stands out in the one of the main players in the eye Alcon suffered from years of un- promising ophthalmology market. We care market. “Nestlé invested a lot der-investment in its research and of money in Alcon, but also gave development department, as well take a closer look. it enough autonomy to develop its as in its sales force and factories, BY JULIE ZAUGG own products and strategies,” says which caused a loss of market Sibylle Bischofberger, an analyst at share.” In the second half of 2015 . and into 2016, Alcon even slipped into the red.

The poor performance convinced Novartis to give Alcon its freedom back as part of a split transaction that led to Alcon being listed on the Swiss exchange and NYSE in April 2019. The company used the transaction to move its headquar- ters to Geneva. It is now valued at 24.7 billion Swiss francs.

“It dominates the IN FIGURES ophthalmic surgery sector, with a 5 BN $7.36 BN market share of The number of people who Total sales made by Alcon 40%-45%” could be myopic by 2050, in 2019, up 5% Daniel Buchta, analyst at Vontobel which is half of the projected global population, according to experts 1945 Freed from the yoke of the Basel- Year the company based group, Alcon can now “focus on its growth strategy and devote was founded in more energy to launching each 22,142 Forth Worth, Texas new product,” says Scott Bardo, an Number of employees analyst at Berenberg. Alcon, which has 22,142 employees and is present in more than 180 countries, will be-

KEYSTONE come “quicker and more agile”, said

18 19 PORTRAIT SWISSQUOTE JULY 2020

Sergio Duplan, head of Alcon’s North High-end positioning ANALYST ADVICE American market, in September 2019. Alcon is also strongly positioned One example of this is Pataday, a in the contact lens market, ranked “A SOLID INVESTMENT brand of eye drops that was brought number two globally. In particular IN THE MEDIUM TERM” to market just 17 days after it was it dominates the high-end lens approved by the US health author- segment, thanks to its water gra- Driven together ities, just in time for the start of dient range named Dailies Total 1. In 2019, Alcon saw its sales in- crease 5% to reach $7.36 billion. the hay fever season. “We are now But this positioning is also Alcon’s The ophthalmic surgery sector in charge of our own destiny,” said main weakness. Its competitors did particularly well, growing 0.9% leasing or extra bonus Alcon CEO David Endicott in the US Johnson & Johnson, CooperVision by 7% to reach $4.2 billion. financial press. and Bausch & Lomb all have cheaper The implants sector saw even on available new vehicles products that work better for the higher growth at 9%. “Implants mass market. “To address this vul- have the most significant Leader in its market growth potential for Alcon, Alcon seems to be well-positioned nerability, Alcon recently launched due in particular to the perfor- to tackle the challenges it faces. “It a cheaper water gradient lens called mance of the PanOptix implant dominates the ophthalmic surgery Precision 1, which should help the in the US market,” says Scott sector, with a market share of 40%- company regain market share,” Bardo, an analyst at Berenberg. 45%, far ahead of the global number says Daniel Buchta of Vontobel. Alcon’s margins are also expec- two, Johnson & Johnson, which only ted to improve. has an 11%-13% market share,” says In 2019, its margins were at Daniel Buchta, an analyst at Vontobel. 17.2%, but the company hopes “As the population to reach 20%-25% by 2023. Alcon has a particularly strong pres- gets older, demand Bardo believes that the Swiss ence in various surgery segments, for cataract surgeries company, whose shares he such as procedures to treat cataracts, recommends purchasing, is a will increase good medium-term investment retinal detachment and macular due to its dominant market po- degeneration. Alcon also has its own significantly” Sibylle Bischofberger, analyst sition in the eye health market brand of surgical devices, implants at Zurich Cantonal Bank and the strength of its brand, and disposable surgical products, which is synonymous with qua- which are well-known and appreciat- lity. But Alcon needs to conti- ed by surgeons. This gives the brand nue to innovate in order not a competitive advantage over other Another issue is its heavy dependence to lose any ground to its rivals such as Carl Zeiss, Abbott and companies in the industry, it says. on reusable lenses, which need to Bausch Health in the surgical be changed once a week or once a sector and Johnson & Johnson One of Alcon’s flagship products is month. “This type of lens is declining and CooperVision for contact a state-of-the-art implant named compared to daily lenses, which re- lenses. PanOptix. This artificial lens is de- quire less maintenance,” says Buchta. Audi A4 Avant Audi A1 Sportback Audi Q3 signed for patients suffering from And if the reusable market shrinks, starting at CHF 399.–/month¹ starting at CHF 179.–/month² starting at CHF 299.–/month³ cataracts and is a significant ad- it would hurt sales of contact lens vance on existing technology, as cleaning solution. “Here again, Alcon Damien Gatinel, a cataracts expert is very exposed,” adds Buchta. at Fondation Adolphe de Rothschild Hospital in Paris, explains: “Until now, Nevertheless, Alcon’s medium-term this type of lens allowed patients to outlooks are favourable. “As the popu- audi.ch I Audi Swiss Service Package+ included for 10 years or 100 000 km. only see close up (30-45 cm) and lation gets older, demand for cataract far away (more than 1 m). The Alcon surgeries will increase significantly Furthermore, there is also increased ¹ Audi A4 Avant 35 TDI, 163 HP, 7-speed S tronic, 6.2 l/100 km, 163 g CO₂/km, category B. Cash purchase price CHF 44 950.– (including deduction of all instant bonuses CHF 12 310.–). Leasing rate: CHF 399.–/month with down payment: CHF 9997.–. Displayed model: 40 TDI, 190 HP, 7-speed S tronic, 6.8 l/100 km, 178 g CO₂/km, category D, Edition One in Terra implant is different in that it is a in the coming years, particularly in demand from developing countries, in Grey metallic finish, Audi Sport cast aluminium wheels with 5-V-spoke star design in matt titanium look, high-gloss turned finish, 8.5 J × 19 with 245/35 R 19 tyres, black optical trifocal lens, so patients can also have Europe and the United States,” says which cataract surgeries and the use package, black wing mirror casing, LED headlights and LED tail lights with dynamic indicators, red front and rear brake callipers, Audi rings on front and rear end in Black gloss finish, cash purchase price CHF 68 660.–. Leasing rate: CHF 599.–/month with down payment: CHF 15 325.–. Audi² A1 Sportback Attraction 30 TFSI, 116 HP, 6-speed manual, an intermediate field of vision, around Sibylle Bischofberger. The prevalence of contact lenses have just started 6.5 l/100 km, 148 g CO₂/km, category B. Cash purchase price CHF 27 240.– (including deduction of all instant bonuses CHF 6570.–). Leasing rate: CHF 179.–/month with down 60-80 cm, which is the field of vision of myopia among young people will to take root, particularly among the payment: CHF 6810.–. Displayed model: 40 TFSI, 200 HP, 7-speed S tronic, 7.6 l/100 km, 171 g CO₂/km, category D. S line, Python Yellow metallic finish, black optical package, Audi Sport cast aluminium wheels with 7-spoke rotor design in Anthracite Black gloss finish, 7.5 J × 18, 215/40 R 18 tyres, roof contrast, contrast package [2], tinted LED headlights, cash we use when looking at a computer also increase, as they spend more new middle classes. Alcon already purchase price CHF 35 550.–. Leasing rate: CHF 299.–/month with down payment: CHF 8455.–. ³ Audi Q3 Attraction 35 TFSI, 150 HP, 7-speed S tronic, 6.3 l/100 km, 145 g CO₂/km, screen.” PanOptix has been available and more time looking at screens. “In generates 25% of its revenue from category A. Cash purchase price CHF 39 600.– (including deduction of all instant bonuses CHF 12 000.–). Leasing rate: CHF 299.–/month with down payment: CHF 8355.–. Displayed model: 40 TDI, 190 HP, 7-speed S tronic quattro, 7.8 l/100 km, 204 g CO₂/km, category F. S line, Turbo Blue, Audi Sport cast aluminium wheels with 5-V-spoke star design in matt on the European market since 2015 China, 90% of this segment of the emerging markets and records titanium look, high-gloss turned finish, 8.5 J × 20, 255/40 R 20 tyres, Audi Matrix LED headlights, LED tail lights, black mirror wing cas- ing, contrasting paint, black optical package, cash purchase price CHF 56 450.–. Leasing rate: CHF 399.–/month with down payment: and is just starting to break into the US population is already affected,” she double-digit annual growth in such A A A CHF 13 705.–. ¹, ², ³ Annual percentage rate for leasing: 0.9%, term: 48 months (10 000 km/year), excluding compulsory comprehen- B B B sive insurance. The granting of credit is prohibited if it leads to over-indebtedness on the part of the consumer. Financing provided by market. “This is the only product of this said. This is great news for contact countries, particularly in China, Brazil C C C D D D D D AMAG Leasing AG. Offer valid for contracts concluded between 8.5.2020 and 30.6.2020. Applies to all vehicles imported by AMAG type on the US market,” says Bardo. lens sellers such as Alcon. and Russia. ALC E E E Import Ltd. Suggested list price of importer AMAG Import AG. The Audi Swiss Service Package+ covers all repair costs including the re- F F F F placement of wear parts for 3 years* or 100 000 km* and also includes service for 3 years* or 100 000 km* (*whichever occurs sooner; G G G excludes motor oil). Further information is available from your Audi partner or online at audi.ch 20 ¹ ² ³ TRAVEL SWISSQUOTE JULY 2020 TRAVEL SWISSQUOTE JULY 2020

discovered very effective online home in March, the investment bank ACADEMICS ON collaboration tools, such as Miro had to start teleworking overnight. THE FRONT LINE Business trips and Jumbo, which give employees Even after just a few weeks, the At the University of Geneva, this new ways to collaborate with their experience has already caused many period served as a life-size test. With ecosystem,” adds Normand. Two to rethink how business will be con- colloquiums, conferences and invita- years ago, Normand himself decided ducted after the crisis. “We need to tions, the academic world traditionally in jeopardy that he would systematically refuse prioritise travel that has the purpose involves a lot of air travel. Announced all requests to attend international of growing business or making deci- last year, the new air travel policy Already under fire as a result of corporate sustainability conferences: “I always suggest that sions. Physical presence is important at UNIGE was expected to enter policies, certain types of business trips will not survive conference organisers find people during project launch meetings, but into force at the start of the next the coronavirus crisis. locally who can say the same thing once the roadmap, roles and respon- academic year. The policy includes

I would.” sibilities are clear, it’s very easy to a 50% reduction in CO2 emissions BY ANGÉLIQUE MOUNIER-KUHN work remotely,” said Schuster. from air travel by 2030 (compared to According to the expert on innovation 2019) through increased use of train in society and governance, rethinking travel and videoconferencing. The the added value of business travel – “Any company global pandemic accelerated the pro- one of the main sources of a cess. “We skipped right over several usiness trips have long travel quickly disappeared: “Busi- disappear,” said Paul Hudson, CEO of company’s carbon emissions – and that hadn’t yet steps,” says Fabrice Calame, head been associated with the ness travel has become the latest Sanofi and former CEO of Novartis, choosing digital alternatives instead experimented of sustainable development goals idea of escape, a chance casualty of the coronavirus pande- in the Wall Street Journal on 3 April. is just “common sense”. Especially with long-distance at the UNIGE Rectorate. This was to get away from the mic, coming to a halt across the “That’s incredibly important for our since the current economic slump collaboration was particularly true for the training step, Bdaily grind, pressure from manage- globe,” lamented the Global Travel commitment to the environment and means that companies are reviewing forced to change” since everyone had to dive right in, ment and family obligations, and Business Association (GTBA) in to respect people’s time away from their bottom line: as they look to cut Jonathan Normand, executive director as well as the communication step, an opportunity to enjoy crisp white early April. According to this inter- families. We’ll be more demanding costs, travel is often a very signifi- at B Lab Switzerland which was designed to convince sheets at an expensive hotel after a national lobbying group, companies of the digital space.” cant expense in the tertiary sector. people who were less enthusiastic business class flight. But the reality worldwide suspended all business about the merits of the new policy. of business trips isn’t what it once trips and international borders were “The crisis resulted in a major acceler- RETHINKING PRACTICES As an example of this evolution in Thus far, feedback on the technolog- was. Called upon by shareholders closed, which resulted in a loss of ation of companies using digital tools. But this advocacy for remote work progress, UBP organised its first ical infrastructure the university has and clients to reduce their envi- $122.5 billion per month for the That will certainly have long-term has its opponents, particularly in virtual team-building session in April invested in has been positive overall. ronmental footprint, an increasing industry. Revenue for the travel effects,” says Jonathan Normand, exe- the finance industry. “Business trips with its teams in Asia: “We were “But it remains to be seen whether number of companies have revised sector was estimated at $1,330 bil- cutive director at B Lab Switzerland, are an integral part of a Wealth supposed to do a flashmob. I was this period is enough to establish their travel policies in recent years lion in 2017. which runs a certification process Management career: our entire busi- standing up, clapping my hands what will be a fundamental cultural to adapt to the climate crisis. to recognise businesses that meet ness is based on trust, and meeting with colleagues in Hong Kong and shift,” says Calame. UNIGE staff take “Once this pandemic is successfully the highest standards of social and with clients in person is necessary,” Singapore. It was a lot of fun and it nearly 4,000 aeroplane trips per year. Now, the COVID-19 pandemic could combated, business travel can return environmental performance. “Any says Bernard Schuster, head of group really helped us establish a team be a fatal blow to business trips to being a positive economic driver company that hadn’t yet experiment- communications at Union Bancaire dynamic, even though everyone was and other roadshows. Following the of the global economy,” said the ed with long-distance collaboration Privée (UBP). Forced to cancel all in- in their own homes,” says Schuster. emergence of the virus in Asia and GTBA in a press release. Wishful was forced to change. In addition ternational travel and require almost its spread around the world, business thinking? “The one-meeting trip will to teleconferencing, companies all of its employees to work from

22 23 CORONAVIRUS SWISSQUOTE JULY 2020 CORONAVIRUSPORTRAIT SWISSQUOTE JULY 2020

have positive outlooks – means this pandemic, watching its revenue why the current crisis calls for index is not representative of the virtually disappear (-94% in April). highly active management. “Don’t Swiss stock market,” asserts Jérôme On the other end of the spectrum, think in terms of indices like the A wave of optimism Schupp. “If you look at the other Logitech has benefited from the SMI or even in terms of sectors,” SMI companies and more broadly lockdown, boosting sales for web- she emphasises. “There are winners all companies listed in Switzerland, cam and video conferencing equip- and losers as a result of the crisis it’s a different story.” Duty-free ment by 32% and 60% respectively. across every segment. Investors hits the Swiss airport retailer Dufry, for example, need to focus on companies that has been hit hard by the coronavirus For Eleanor Taylor Jolidon, that’s create value.” stock market

The SMI regained its lustre after a rough ride Construction sites in March. But the Swiss stock market’s flagship have been hit hard by the coronavirus index hides a wide range of realities. crisis. Here, in Bern, two workers keep BY BERTRAND BEAUTÉ their distance (20 March).

he Swiss Market Index nies. When the economic backdrop is extremely fragile. A lot of people – which represents the is poor in some countries, it’s better have lost their jobs – nearly 40 mil- top 20 companies in in others. Being active in a multi- lion in the US – and I’m not sure Switzerland by market tude of markets enables companies that they’ll return to work any time Tcapitalisation – picked up again to buffer the impact of the crisis,” soon. There is currently a great deal after taking a steep nosedive in explains Jérôme Schupp, financial of optimism on the markets, but I March. In early June it had already analyst at Prime Partners. “What’s anticipate corrections with rather passed the 10,000-point threshold, more, Swiss companies are general- painful surprises, followed by more

slipping only 6% year-to-date. By ly very well-positioned – either the positive moments.” KEYSTONE contrast, losses amounted to 19% number one or a top-ranking player for Italy’s FTSE MIB index, 18.5% for in their market, which makes them The current optimism is partly due MANUFACTURING TAKES A BEATING the French CAC 40 and 9% for the indispensable.” to the publication of Q1 2020 earn- ABB…Geberit…LafargeHolcim…Sika German DAX over the same period. ings, which turned out to be better “The Swiss market outperforms all than expected (see the infographic Manufacturing is paying a steep being heavily geared towards the au- will take for their clients to start in- the main markets,” emphasises The SMI is on p. 27). “The markets are very price over coronavirus. “In the second tomotive sector,” says Eleanor Taylor vesting again, a reprieve isn’t likely to Eleanor Taylor Jolidon, co-head excited,” Jolidon continues. “People quarter, we expect ABB’s operations Jolidon, co-head Swiss and global be on the cards before summer 2021. Swiss and global equity portfolio also distorting saw the Q1 earnings and thought, to be significantly challenged by a equity portfolio management at UBP. management at Union Bancaire market ‘that’s not so bad after all.’ But the sharp drop in demand due to lock- “The crisis may last quite a while for “Swiss manufacturers will survive Privée (UBP). In her view, this is most important figures are those to downs in many parts of the world,” them because I doubt that people’s because they are managed well. because “alongside US firms, Swiss perspective come, not those already published. warned Björn Rosengren, CEO of first impulse after lockdown ends But they won’t come out unscathed companies are the biggest value Q1 earnings don’t reflect the scope ABB, during the presentation of the will be to buy a car.” The pandemic and there will be lay-offs in the creators in the world. It’s a tough of the crisis because Europe and the company’s Q1 earnings on 28 April. will likely have a long-term impact on machine-tool industry,” forecasts situation for companies that need US were unaffected by the pandemic This industrial robot specialist isn’t companies that are highly depend- Jérôme Schupp, financial analyst at strong economic growth to perform. Nevertheless, it’s not going to be all for the first three months of the year. the only one in hot water. Building ent on automakers, such as Tornos Prime Partners. At the other end of But that’s not the case for the roses from here on out. “We jumped We won’t see the real impact of the materials leader LafargeHolcim has and Autoneum. According to a press the spectrum, however, some compa- majority of Swiss companies, so from extreme pessimism to a bit crisis until Q2 earnings come out.” had to shut down construction sites, release by Swissmem on 26 May, nies should weather the storm quite I expect that the Swiss market too much optimism,” Schupp adds. while sanitary products specialist “incoming orders for Switzerland’s well. Such is the case for VAT Group, will continue to outperform.” “The markets view the pandem- In a way, the SMI is also distorting Geberit and adhesive and sealant mechanical and electrical engineer- INFICON and the Comet Group, three ic as a temporary crisis that will market perspective. “The dispropor- manufacturer Sika have also closed ing industries (MEM industries) may subcontractors in the semiconduc- In these difficult times, Swiss subsequently give way to a strong tionate weight of Roche, Novartis and operations. bottom out”. Nearly three-quarters of tors sector – a market that marches companies benefit from a number of recovery. But we’re only at the Nestlé – the top three SMI stocks, MEM companies (72%) expect losses to its own cyclical tune and seems advantages to overcome the crisis. beginning of the difficult times.” which have also been more resilient Outside of the SMI, “some Swiss or insufficient margins in 2020. Not fairly immune to the crisis (see our “They are very international compa- Jolidon agrees: “The global economy to the crisis than the market and manufacturers have the misfortune of only that, but considering the time it report on p. 30).

24 25 CORONAVIRUS SWISSQUOTE JULY 2020 CORONAVIRUS SWISSQUOTE JULY 2020

PHARMA AND AGRIFOOD ENJOY FAIRLY CLEAR SKIES Nestlé…Novartis…Roche…Alcon…Lonza...Givaudan STRONG Q1 EARNINGS The pandemic had little impact on revenue for SMI companies in Q1 2020 Unsurprisingly, the pharmaceutical Beyond these two companies, Change versus Q1 2019 industry performs rather well in a Lonza partnered up with US biotech health crisis. “But not all perfor- firm Moderna Therapeutics at the mances are created equal,” says end of May to help develop a vac- SERVICES SUFFER +13% Eleanor Taylor Jolidon, co-head cine against COVID-19. If they suc- Adecco...SGS Swiss and global equity portfolio ceed, the Swiss drug manufacturer +10.3%+10% management at Union Bancaire – whose Q1 revenue gained over It’s common knowledge that during +7.4% +7% +7% Privée (UBP). “Roche is in a better 7.4% compared to 2019 – could be- a crisis, temporary workers are the +6.1% position than Novartis, for example.” come a major player in the produc- first to find themselves in line for +3% One reason for this is that Roche’s tion of the long-awaited vaccine. unemployment. And temporary-staf- +2% diagnostics expertise is critical in Givaudan is also doing relatively fing giant Adecco is right with them. +1% Geberit Swisscom Nestlé ABB Adecco LafargeHolcim Richemont** Swiss Life the fight against COVID-19. It can well. The Geneva-based aroma and In Q1, the Zurich-based company also rely on Actemra – a drug in its perfume specialist saw its (luxury) recorded losses of €348 million ver- UBS Sika SGS* Alcon

portfolio used by patients suffering perfume division impacted and sus profit of €133 million last year. Lonza Roche

from serious pulmonary complica- switched gears, altering its pro- “With April revenues down around Novartis -3.9% Swiss Re Givaudan -4.3% tions. Novartis, on the other hand, duction capacity to manufacture 40% year-on-year, we expect Q2 to -6.2% owns very few molecules that sanitising gel. As for agrifood giant be a challenging quarter,” admitted Swatch Group* -9% -9% are effective against coronavirus, Nestlé, the company benefited in Adecco CEO Alain Dehaza in a press Zurich Insurance except for the highly controversial Q1 from stockpiling purchases by release. -11.2% hydroxychloroquine, of which the customers on lockdown. Basel-based group is one of the For Geneva-based certification group manufacturers. SGS, the situation is more difficult -18% to gauge. On the one hand, the *Neither SGS nor Swatch Group publish quarterly results -20% company wasn’t the least bit spared **Q4 ended on 31 March 2020 The Basel group by the recession, but on the other, it Roche has developed is launching profitable new services a diagnostic like on-site verification testing for TURBULENCE ON THE STOCK MARKET test for COVID-19 called "v-Tac". disinfection and face-mask com- Change in share price of SMI companies from 1 January to 1 June* pliance certification.

+33%

LUXURY BRANDS SCRAMBLE FOR CUSTOMERS +14% +13% Swatch Group…Richemont +9% The watchmaking industry is likely

in the biggest crisis it has ever Nestlé Swisscom Novartis Sika Geberit SGS UBS ABB Zurich Insurance Adecco LafargeHolcim Richemont Swatch Group Swiss Life Credit Suisse Swiss Re experienced. Swiss watch sales -1% have come to a screeching halt due -2.5% Alcon Lonza to the closure of shops and factories Roche

in response to lockdown measures Givaudan -10% -10% as well as the lack of tourism. In -14% -15% the eyes of Prime Partners financial -17% -17% analyst Jérôme Schupp, “Swatch and -22% Richemont will continue to have a -25% -26% -26% -29% rough ride at least until the end of -31% the year. Since tourism generates a -34% substantial portion of their revenue,

Budrul Chukrut/ZUMA Press/Newscom they still have a long way to go on the *Share prices recorded at closing on 30 December 2019 and 29 May 2020 -40% road to recovery.”

26 27 CORONAVIRUS SWISSQUOTE JULY 2020

BANKS AND INSURANCE COMPANIES REMAIN CAUTIOUS Credit Suisse…UBS…Swiss Life…Swiss Re…Zurich Insurance

The industry has had dazzling results. Partners. “Moreover, interest rates will pany’s business. And it would seem UBS and Credit Suisse saw profits stay low, which will be a wet blanket that the worst is yet to come. The post- skyrocket in Q1 versus 2019, up 40% for bank margins.” ponement of the Tokyo 2020 Olympics and 75% respectively. Both banks could cost Swiss Re $250 million. benefited from increased customer And for their part, insurers will be In a press release published on activity in wealth management and in- strapped with payouts linked to the 14 May, Zurich Insurance announced vestment banking at the beginning of pandemic. In Q1, Swiss Re reported it had already paid out $280 million the year. But the circumstances still net losses of $225 million com- in P&C claims related to the pande- call for caution. “During recessions, pared with $429 million in profits mic. The bill could reach a total of payment defaults soar. That’s what the previous year. The two extremes $750 million over 2020 as a whole, happened in 2008,” recalls Jérôme illustrate the scope of the impact of an estimate that remains very uncer- Schupp, financial analyst at Prime coronavirus on the reinsurance com- tain, according to the group.

DIGITAL WINS BIG Swisscom

For Swisscom, the only telecoms for digital services, particularly owing which is benefiting greatly from the company listed on the SMI, the pan- to the massive increase in telework, pandemic. The IT accessories company demic has been smooth sailing. “But but the telecoms market is saturated posted revenue of $709.2 million in Q1, Swisscom’s growth is incidental,” says in Switzerland and Swisscom’s growth up 14% year-on-year. Profits shot up Jérôme Schupp, financial analyst at potential is therefore limited.” That’s five-fold. Software companies such as Prime Partners. “Lockdown measures why it’s better to examine cases Crealogix and Temenos may also get a obviously led to heightened demand outside of the SMI, such as Logitech, boost from the crisis.

Urs Schaeppi, CEO of Swisscom, at the presentation of the 2019 results on 6 February in Zurich.

Mit 5 Lyxor Themen-ETFs

Unsere neue ETF-Reihe bündelt Big Data mit menschlicher und künstlicher Intelligenz und schafft liquiden, kostengünstigen und transparenten Zugang zu den großen Themen unserer Zeit.

In einer stets im Wandel begriffenen Welt setzen wir auf solide Megatrends wie die digitale Wirtschaft, disruptive Technologien, die Mobilität der Zukunft, Smart Cities und auf die Generation der Millennials, deren Kaufverhalten die Welt verändern wird.

Die Zukunft ist schon da.

Für qualifizierte Anleger. Kapitalverlustrisiko. Quelle: Lyxor International Asset Management. Dieses Dokument gilt nur für Informationszwecke und stellt keine Offerte, Einladung zur Offertenabgabe, Werbung oder Empfehlung für eine KEYSTONE Investition in ein kollektives Anlageprodukt dar. Eine Investition in kollektive Kapitalanlagen ist mit erheblichen Risiken verbunden, welche im Prospekt bzw. im Werbematerial beschrieben werden. Jede potentielle Anlegerin und jeder potentielle Anleger sollte den ganzen Prospekt bzw. das ganze Werbematerial durchlesen und sollte, vor einem Anlageentscheid, die Risiken sorgfältig abwägen. Der Vertreter und die Zahlstelle der kollektiven Kapitalanlagen ist Société Générale, Paris, Zweigniederlassung Zürich, Talacker 50, 8001 Zürich. Der Prospekt oder das Werbematerial, die Key Investor Information Dokumente, das Verwaltungsreglement, die Statuten und/oder andere Gründungsdokumente sowie der Jahres- und Halbjahresabschlussbericht können kostenlos beim Vertreter in der Schweiz bezogen werden. In Bezug auf die vertriebenen Anteile einer kollektiven Kapitalanlage in der Schweiz oder von der Schweiz aus, gilt der Sitz des 28 Vertreters in der Schweiz als Erfüllungsort und Gerichtsstand. SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORS SWISSQUOTE JULY 2020

DOSSIER TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD. SEMICONDUCTOR MANUFACTURING TAIWAN THE CHIP INVASION As more and more objects become equipped with electronic chips, the industry looks to a promising future, in spite of the coronavirus.

BY BERTRAND BEAUTÉ AND LUDOVIC CHAPPEX

hey are everywhere: in our 36. No factories, homes, our cars, at work and but plenty of ideas even soon under our skin. What are “they”, you ask? 38. Infographic: the value TElectronic chips, of course. First in- chain of microproces- vented in the 1950s, they have grad- sors ually taken over the planet and have now become omnipresent in all of 40. Interview with the devices we use every day. Since Heinz Kundert, 2017, more than 1,000 billion chips CEO of Comet are produced each year in fabrication 44. Chip giants plants – gigantic factories that make semiconductors for all the tech com- 53. What will chips of panies, such as Apple, Huawei, the future look like? and . And the takeover has just begun: “The fundamental trend 58. Interview with for the next 10 years is more and Éric Baissus, more semiconductors,” said Hugo CEO of Kalray Paternoster, an industry expert at AlphaValue. “Volumes will increase Dossier prepared by: 62. China dreams of Bertrand Beauté, as smart objects, including cars, be- becoming a semi- come more available to a wider range Ludovic Chappex conductor giant and Julie Zaugg of consumers.”

30 31 SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORS SWISSQUOTE JULY 2020

While waiting for this prosperous fected the most, those that design also consumption,” said Frédéric NON-STOP SALES GROWTH future, the semiconductor market chips for smartphones (Qualcomm, Yoboué, analyst at Bryan, Garnier & Co. Democratisation of technological objects has led to a continuous increase in the is experiencing a difficult period. MediaTek) and cars (Infineon, NXP, “During a health crisis, people are semiconductor industry's revenue – a sector that is going from strength to strength. Before the coronavirus crisis even STMicroelectronics) will certainly less inclined to buy gadgets.” began, the market had experi- bear the brunt of the brutal drop enced a disappointing 2019, with in production and consumption. On THE CLOUD BLESSED BY 500 BN a drop in sales of 12.8% over one 29 April, US company Qualcomm an- THE PANDEMIC year, to $409 billion. A loss of this nounced a 21% fall in demand during However, not all companies are af- magnitude hasn’t been recorded in Q1 for its chips, which are used in fected by the virus in the same way. US-China 10 years. “The macroeconomic situ- most smartphones. It is predicting Far from it, in fact. Some companies trade war ation was complicated in 2019, a 30% decline for the next three even seem to be benefiting from the COVID-19 with slowed growth in China, the months. The same applies to NXP, crisis, such as those that equip cloud pandemic* 400 BN US-China trade war and sluggish which generates nearly 50% of its computing giants. “With the boom smartphone sales,” said Frederic revenue from the automobile sector. in homeworking, streaming plat- Yoboué, industry analyst for the In Q1, the Dutch company recorded a forms, e-commerce sites and all the Bryan, Garnier & Co. investment fall of 12% compared to the previous dematerialised services, companies bank. “Prices dropped even more quarter. Here again, the company is in the cloud computing space need to significantly given that chip man- expecting the worst, predicting a increase the capacities of their data 300 BN ufacturers invested very heavily in drop of between 14% and 23% of its centres,” said Julien Leegenhoek, Financial crisis 2017, when the price of semicon- revenue in Q2 compared to 2019. tech stock analyst at Union Bancaire ductors skyrocketed. When demand Privée. The internet- flipped in late 2018, manufacturers bubble boom had far too many chips in stock and On 20 March, e-commerce giant surplus production capacities, which Alibaba announced that it would 200 BN led to a very sharp price drop.” "We just be investing $28 billion in its cloud infrastructure over the next three For everyone in the industry, 2020 experienced years. The Chinese group justified its was supposed to be a year of recov- two years' worth decision with the boom in homework- ery. In December 2019, World Semi- ing since the start of the COVID-19 conductor Trade Statistics (WSTS) of digital pandemic, which has led to a sharp 100 BN predicted 5.9% growth for this year transformation increase in demand for demateri- and 6.3% in 2021. But COVID-19 now alised services. This is a godsend overshadows these rosy outlooks. In in two months" for memory manufacturers, such as Satya Nadella, CEO of Microsoft a study published in April, consulting Korean companies SK Hynix and Sam- firm McKinsey now estimates that sung Electronics, as well as server 0 BN demand for semiconductors will drop chip manufacturers (Intel, AMD). SK 1990 1995 2000 2005 2010 2015 2020 by between 5% and 15% in 2020, “The coronavirus has impacted the Hynix, for example, announced a 6% compared to the previous year. entire value chain: production, with increase in revenue in Q1, reaching Of the companies that will be af- the closure of several factories, but €5.4 billion. * An optimistic semiconductor revenue forecast, with fourth quarter global economic recovery.

Sources: World Semiconductor Trade Statistics/Statista From Faraday to Moore 1833 1947 1958 1965 1969 1971

Michael Faraday makes a surprising American researchers from American Jack Kilby connects Engineer Gordon E. Moore, who Several companies, like Four-Phase Intel markets the first micropro- discovery for the time period: the invent the transistor, several transistors together, would co-found Intel in 1968, says Systems, begin working on proto- cessor: "Intel 4004" with 2,300 capacity of certain metals to con- a semiconductor system made creating an integrated circuit, in Electronics magazine that “the type microprocessors: silicon chips transistors and engraving finesse duct a current increases when the up of three electrodes that can otherwise known as the first complexity for minimum component filled with transistors capable of of 10,000 nanometres (nm). As temperature rises. These materials control an electric current. electronic chip. costs has increased at a rate of executing a computer program. semiconductor companies multiply aren’t really insulators, but neither roughly a factor of two per year”. in Santa Clara Valley – Intel's loca- are they really conductors, so they This empirical prediction is known tion – journalist Don Hoefler nick- are named "semiconductors". as “Moore’s Law”. names the region "Silicon Valley".

32 33 34 short term. That said, vehicles contain short term.Thatsaid,vehiclescontain we’re notexpectingarecoveryinthe the carmarketdecreasedby5%and ing batteryconsumption.“In2019, screens insidethevehicletooptimis cessors now:fromconnectingthe chips. Everythingusesmicropro become quitereliantonelectronic is cars,whichinrecentyearshave pealing tothesemiconductorindustry The otherdomainthatisquiteap therefore moreexpensive. with higheraddedvalueandare as 5Gsmartphoneswillrequirechips phone brands.” Thisisespecially true 30% oftheirrevenuefrommobile ductor companieswhichmakenearly network, whichisidealforsemicon are compatiblewiththisnewmobile sumers willwanttobuymobilesthat industry upwards,” saidYoboué. “Con “The roll-outof5Gwilldrivethe are expectedtogenerallyrecover. picks upagainsemiconductorsales In thelongerterm,wheneconomy 5G AND AUTONOMOUS over oneyear, reaching$12.3billion. for businesses,increasedby27% ty, whichincludesitsAzureplatform Microsoft's “intelligentcloud”activi CEO ofMicrosoft,on29April.InQ1, two months,” saidSatyaNadella, worth ofdigitaltransformationin “We justexperiencedtwoyears' are inthesamesituationasAlibaba. Web Services,GoogleandMicrosoft) Other cloudgiants(suchasAmazon VEHICLES tion embedded in a plastic rectangle. tion embeddedinaplasticrectangle. This inventionwillfindnumerous ap cuit capableofmemorisinginforma the "smartcard"–anintegrated cir plications, the best known of which plications, thebest knownofwhich Frenchman Roland Moreno invents Frenchman RolandMorenoinvents are bankcardsand SIMcards. 1974

------artificial intelligence(AI)–asector their technologicalcapacitywith autonomous, theyneedtoincrease In orderforvehiclestobecome $2,000 pervehicle. in autonomousvehicleswillbenearly that theaverage valueofchipsused mous.” Expertsarealreadypredicting will becomeelectricandautono this futurewillindeedhappen:cars Privée. “Evenifitseemsfaraway, tech equityanalystatUnionBancaire tor industry,” saidJulienLeegenhoek, excellent newsforthesemiconduc autonomous, whichisundoubtedly “Cars willgoelectric,andeventually electric counterpart. model, comparedto$820forits100% inside acarwas$370incombustion 2018, theaverage valueofchipsused tronic chips,” saidHugoPaternoster. In an ever-increasingnumberofelec that isarealgoldmineforthesemi THE HOLYTHE GRAIL ARTIFICIAL INTELLIGENCE: the microprocessors is what doubles the microprocessorsiswhatdoubles transistors doubled every1.96years. precise: the number of transistors in precise: thenumberoftransistors in specialist atMcKinsey Ondrej Burkacky, GPUs orCPUs chips that aren’t a newmarket for intelligence opens “Artificial every two years. Between 1971 and every twoyears.Between1971and Gordon Moore makes his law more Gordon Mooremakeshislawmore singly accurate, as the density of singly accurate, as thedensityof 2001, thispredictionwassurpri SEMICONDUCTORS 1975 a semiconductor "

- -

- - - intelligence, andmanyplayersare imperfect championsofartificial display videogames,GPUsare so simple.Initiallydevelopedto Except thatthingsaren'tquite tively. will eventuallyreplaceCPUsdefini its GPUscannowdoeverythingand This marketingtacticindicatesthat rather “GeneralProcessingUnits”. GPUs “GraphicProcessingUnits”,but Moreover, Nvidianolongercallsits must handlelargequantitiesofdata. in AI–anindustrywhichprocessors its competitorAMDhave beenleaders Since then,theGPUsfromNvidiaand was quitesuccessful. processing unitsorCPUs).Theresult rather thanIntelprocessors(central for machinelearning–apartofAI University hadtheideatouseGPUs But in2009,researchersatStanford ny hadn’tparticularlyfocusedonAI. almost bychance.Infact,thecompa take advantageofthisgrowingmarket, seems tobethebestpositioned in graphicprocessingunits(GPUs), US companyNvidia,whichspecialises in 2019. in 2025,comparedto$42.8billion over sixyearstoreach$128.9billion industry, etc.)willlikelytripleinsize technology, health,cars,telecoms, cations acrossallfields(information chips inartificialintelligenceappli Markit, theprospectsofelectronic conductor industry.AccordingtoIHS mes thecomputing progressmarker. Moore’s Law. Processor powerbeco Semiconductors (ITRS). It publishes Semiconductors (ITRS).Itpublishes The big players agree to advance at The bigplayersagreetoadvance at one goal: stay in the framework of one goal:stayin the frameworkof the samerate,foundingInter an industry biennial roadmap with an industrybiennialroadmapwith national Technology Roadmapfor 1992 SWISSQUOTE JULYSWISSQUOTE 2020 - - -

- - company has launched TPUs (tensor company haslaunchedTPUs(tensor nies likeGoogle.” TheMountainView produced forthisusagebycompa at McKinsey.“Thesearebespokechips Burkacky, asemiconductorspecialist aren’t GPUsorCPUs,” saidOndrej opens anewmarketforchipsthat the needsofAI.“Artificialintelligence ture specificallydesignedtomeet to developnewchiparchitec trying processor attheCIS processor Jensen Huang, CEO Jensen Huang, CEO of Nvidia, presents of Nvidia, presents can befinelyengraved tojust 65nm, in Las Vegasin Las 2018. the Volta graphics As Moore’s Law celebrates its 40th As Moore’sLawcelebratesits40th Gordon Moore admits that "it won’t Gordon Mooreadmitsthat"itwon’t the GPUmarket. anniversary and microprocessors anniversary andmicroprocessors The Santa Clara SantaClara The the forefront of the forefront company isat last forever". 2005

- - companies arewillingtowieldtheir To notgetleftbehind,thetraditional the traditionalplayers. many start-ups.Allhopetodethrone specifically tomachinelearning,asare working onmicroprocessorsdedicated one. AmazonandFacebookarealso for AItechnology.Anditisnottheonly processing units)designedspecifically longer usesMoore’sLaw. Thenew ITRS roadmap,dubbed“Morethan than blindlydoubling theirpower capacities totheirusage,rather The semiconductorindustryno Moore”, advisesadaptingchip every twoyears. SEMICONDUCTORS 2016

optimised forartificialintelligence. promising marketofelectronicchips but isalreadywellpositionedinthe bana Labsisbarelythreeyearsold, for $2billioninDecember2019.Ha acquired Israelistart-upHabanaLabs Intel, theleaderinmicroprocessors, start-up MellanoxTechnologies. spent $6.9billiontoacquireIsraeli chequebooks: inMarch2019,Nvidia to startproductionon5nmchips, Taiwanese foundryTSMCexpects which couldcontainupto 30 billiontransistors. 2020 SWISSQUOTE JULYSWISSQUOTE 2020 -

MANDEL NGAN / AFP 35 SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORS SWISSQUOTE JULY 2020

A TSMC factory. The Taiwanese giant manufactures NONO FACTORIES,FACTORIES, BUTBUT chips for several fabless companies like Apple, AMD PLENTYPLENTY OFOF IDEASIDEAS and Nvidia. TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD. SEMICONDUCTOR MANUFACTURING TAIWAN

With the notable exception of Intel, the big electronic chip companies don’t have production facilities. This “fabless” business model allows them to focus solely on R&D.

BY BERTRAND BEAUTÉ

n 2015, history was made in "Most companies around the world years in the red. AMD decided to sell the semiconductor world: IBM known for their microchips, with off its production facilities, which sold all its microchip pro- the notable exception of Intel, are would become GlobalFoundries, and duction sites to US company fabless," points out Frédéric Yoboué, go fabless. Since then, AMD has been IGlobalFoundries. It was the end of an a semiconductor analyst at Bryan, winning market share in the domain era. Created in 1911, Big Blue was Garnier & Co. “These companies of PC and server microprocessors, only be able to produce its first 7 nm Since the company was unable to anywhere from $200,000 to tens an iconic player in the industry. But delegate production to foundries thanks to TSMC’s production technol- products in 2021. At a conference finance factories, it sold the result of of millions of dollars (based on after being shaken up by newcom- and concentrate on the design and ogies, which are considered the best in March, George Davis, CFO of Intel, its R&D under licence. In the 1990s, various criteria such as licence du- ers, the venerable US company had architecture of the chips themselves. in the world. admitted that his company was two the ARM architecture was particular- ration or exclusivity clauses), as well to change its strategy, selling off a This separation of tasks is due to years behind the competition. ly interesting to , as royalties on each chip sold. The struggling business that recorded a the exorbitant cost of production which at the time was designing chips architecture is then “customisable” $700 million loss in 2013. factories for microchips. In addition, Another advantage of the fabless for mobile phones. This partner- at will by the purchasers, that can given the recurrence of investments, model is that new players – i.e. ship was the start of something good. apply their own innovations, such as However, IBM hasn’t left semicon- enormous volumes are needed to "ARM is one start-ups that don’t have the funds the A13 chip – designed by Apple on ductors completely behind. The giant make them profitable.” For example, of the best to build factories – can emerge and In the years that followed, the UK ARM architecture – which is used continues to develop its own chips, the Taiwanese foundry TSMC, which disrupt the semiconductor market. company filed many patents and in the iPhone 11 (see infographic particularly its Power processors alone produces more than half of all companies UK start-up ARM did exactly that. claimed intellectual property on on p. 38). that are used in its high-performance chips in the world, spent $17 billion I know of" “ARM is one of the best companies all processors designed for the servers and supercomputers. But it on its latest production facility. Julien Leegenhoek, tech stock analyst I know of,” said Julien Leegenhoek, telephone market. Its strength lies “More than 80% of smartphones no longer produces them. That task is at Union Bancaire Privée (UBP) tech stock analyst at Union Bancaire in the way it designs chips, which sold worldwide currently run on now delegated to GlobalFoundries. By Free from these gigantic invest- Privée (UBP). “In just a few years, makes them less expensive and ARM architecture,” said Leegenhoek. abandoning its production facilities to ments, chip designers can con- it has become the R&D office for less energy-hungry. The compe- This piqued the interest of Softbank, focus on research and development, centrate solely on research and At the same time, its main com- the entire semiconductor industry.” tition, however, which is led by which acquired the company in 2016 Big Blue is simply adopting a method development, while simultaneously petitor in this industry, Intel, which ARM was founded in Cambridge in Intel, is still focused exclusively for $31 billion. Since the acquisition, that has become the norm in the benefiting from the best production produces all its chips internally, is 1983 when the UK manufacturer on power. In practice, ARM clients, ARM is trying to diversify by develop- semiconductor industry: the fabless technologies. AMD is an excellent struggling to overcome challenges Acorn was designing ARM1, a simple, which now include Apple, Samsung, ing chips for connected devices (no factory) model, which has been example of this strategy. In the early at its production facilities. While inexpensive processor for comput- Huawei and Qualcomm, pay for as well as artificial intelligence successful for other companies such 2010s, the US graphics card spe- TSMC will launch mass production ers designed to be used in British the rights to use ARM architec- servers. And it’s doing it all without as Apple, Qualcomm and Nvidia. cialist was struggling after several of 5 nm chips in April 2020, Intel will schools. tures. These companies pay ARM factories.

36 37 38 THE VALUE CHAIN OF OTHER PROCESSORS MADE? CHIPS HOW ARE chip, usedintheiPhone11. case studywithApple’sA13Bionic manufacturing processors.Here,a Many companiesareinvolvedin

PC MOBILE

SEMICONDUCTORS company ARM. designed andpatentedbyBritish The architectureofthechipis ARCHITECTURE INTEL AMD ARM SWISSQUOTE JULYSWISSQUOTE 2020 the US). the US). Taiwan) andGlobalFoundries(in foundries areTSMC,UMC(bothin for avarietyofclients.Themain THE DIFFERENTTYPESOFCOMPANIES INVOLVED systems onthechip(SoC). to executeandspecifyingthe tions thatthechipwillbeable includes definingtheinstruc Apple designsthechip.That DESIGN QUALCOMM NVIDIA APPLE They manufacture chips They manufacturechips Foundries -

include Nvidia, Apple and AMD. include Nvidia,AppleandAMD. foundries. Somefablesscompanies chips. Productionisdelegatedto factories andfocusondesigning produces theA13Bionicchip. The Taiwanese foundryTSMC MANUFACTURING GLOBALFOUNDRIES UMC &TSMC SAMSUNG TSMC & These companiesdon'thave Fabless companies TSMC UMC SEMICONDUCTORS

A13 company Intel. manufacturer ofprocessorsisUS final products.Themainintegrated production chain,rightdowntothe around theworld. mobile phonesarethensold areassembled,andthe The chipissenttoChinawhere REACHING THECONSUMER They controltheentire Integrated manufacturers APPLE APPLE ACER HTC RIM HP LG

A13 SWISSQUOTE JULYSWISSQUOTE 2020 39 SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORS SWISSQUOTE JULY 2020

INTERIM DELUXE In June 2019, René Lenggenhager cess story from 2015 to 2018. He stepped down from his position as remains on the board of directors CEO of Comet Group for personal of VAT Group. reasons, and was quickly replaced by Heinz Kundert, chairman of With his extensive practical expe- the board of directors. It would rience, this mechanical engineer be difficult to find a more experi- has understandably won over enced person to fill the role of in- analysts, who commend his prag- terim CEO of the Fribourg group. matism and track record at the Not many people around the world head of VAT. During his time as in- truly know the semiconductor terim CEO of Comet over the past industry from the inside out. year, he has led quite significant strategic reorganisations, as he Swiss native Heinz Kundert, aged has aimed to refocus the company 68, spent 10 years as vice presi- towards its key areas of business, dent of the international semicon- primarily semiconductors. The ductor association (SEMI Interna- ebeam division (non-contact steri- tional), based in the United States, lisation systems), which had been but he has also successfully led in the red since the beginning, many groups in the industry, in- was let go. Kundert will cede his cluding Swiss companies Unaxis interim CEO position on 1 Octo- (now named OC Oerlikon) and ber of this year, at the latest, to more recently VAT Group, a Swiss British-American Kevin Crofton, family business that he guided while remaining chairman of to become a stock market suc- Comet’s board of directors.

he semiconductor industry can be divided into four categories: T companies that design chips, companies that make chips, compa- nies that make the machines that make chips, and smaller compa- nies that supply the critical parts for these machines. Comet Group falls under the latter group, an ultra-specialised sector worth an estimated $12 billion. The head of INTERVIEW the Swiss group (read the company feature on p. 42) since June 2019, Heinz Kundert granted us an inter- view. He explained the developments “TRUST IS AS IMPORTANT of an industry in which his company plays a decisive role.

AS TECHNOLOGY” In the next five years, what will be the most promising avenues Heinz Kundert, CEO of Swiss company Comet Group, for the semiconductor industry? takes us behind the scenes in his industry. The biggest trend is the expansion BY LUDOVIC CHAPPEX of data centres, which store and PHOTOGRAPHS: THIERRY PAREL process a huge amount of data in the cloud, and which can be ac- cessed in a few milliseconds. We can add to the list the Internet of Things, 5G, automotive electrification and

40 41 SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORS SWISSQUOTE JULY 2020

FOUNDED COMET GROUP: THE ESSENTIAL SUBCONTRACTOR 1948 HEADQUARTERS FLAMATT (CH) Fribourg-based company its products continues to grow. EMPLOYEES Comet is known for its x-ray It’s going to launch a new 1,330 systems, usually used by radiofrequency generator that 2019 REVENUE automobile and aeronautics could result in Japanese giant CHF 371.6 M groups to test materials, as Tokyo Electron becoming one well as in airports for inspec- of its clients, alongside Ameri- COTN tion purposes. But the public can groups Lam Research and knows less about the Swiss Applied Materials (ed. note: firm’s products designed for these three companies alone semiconductor manufactu- account for approximately artificial intelligence (AI). Further- rers. This division, named 80% of the market share in Plasma Control Technologies, this industry).” more, some configurations become actually makes up most of crucial, such as latency for the Comet’s revenue. And the This optimistic outlook is automotive sector due to safety trend is likely to continue, shared by Michael Foeth, requirements. with Comet estimating that analyst at Vontobel: “Comet this industry will represent is clearly the global leader in In what way will these changes 70% of its revenue by 2025. its field. The products it offers to its clients are ever more affect Comet? Alongside products with complementary and inte- In terms of manufacturing chips, obscure names such as RF grated, and the new feedback there is no major technological leap generators and vacuum capa- loop measuring systems make in sight, but rather constant improve- citors, Comet components are Comet products even more ments. Regardless of whether a chip an essential part of the silicon attractive.” is used for artificial intelligence or chips found in our computers and smartphones. In practice, Boasting a very full order storage, the manufacturing process Comet supplies these compo- book despite the uncertain- is the same, and always requires nents to a handful of compa- ties of COVID-19, Comet can silicon. There are a few alternative nies (Lam Research, Applied capitalise on the industry’s materials, but in practice, these ma- Materials). upwards trend over the me- terials are difficult to work with on dium to long term, according an industrial scale. These companies then build to analysts. A good example the machines that the pri- is the foundry TSMC, which mary manufacturers (Intel, will invest more than $10 bil- So we won’t see a disruptive Samsung, GlobalFoundries lion into its factories in 2020. manufacturing technology in and TSMC) use to create their Alongside the semiconductor the near future? chips. Comet is therefore industry, the Fribourg com- That’s a question that industry spe- Why is going from the prototype nearly 30 years for this technology to a joint development with a client (ed. one of the first steps in the pany is also banking on its cialists often ask us. Professors at stage to large-scale commerciali- become a real market. Our products note: Tetra Pak) that began in 2005. subcontracting chain that x-ray division, a speciality Stanford University, who are at the sation so complex? are used to manufacture this type It is a very expensive technology supplies the very concen- of which includes reliability trated semiconductor indus- testing of parts and materials. cutting edge of chip design, particu- It’s a long process. In our case, it of chip. Another trend in the industry that is difficult to build, and 15 years try (see the portrait gallery larly in terms of cost reduction and takes seven years before a new prod- is miniaturising production tools. It’s later, we still hadn’t achieved mass in this dossier on p. 44 to 52). Comet has production sites energy consumption, are intensively uct goes into production, and that is a way for us to improve profitability: production. This activity was never in Europe, China, the United considering new processes. We have the result of a close collaboration doing better with less parts results profitable for us. It’s a business that And the Swiss company States and, as of this year, multiple options on the table, but all between companies. It is not possi- in more compact machines. At Lam is feasible for a very large company, excels in more than just its Malaysia. It generated a pro- of them are based on the same manu- ble to simply offer our clients new Research, which is one of our clients, such as Tetra Pak, but not for Comet. specialised field, says Robin fit of 12 million Swiss francs Seydoux, analyst at Research during the 2019 financial facturing methods that we use now. technology that has not been jointly the newest generation of machines In our industry, the most success- Partners: “Comet controls a year, and its EBITDA margin developed with them. is 50% smaller than the previous ful companies are focused on their significant share of the market reached 10.8%. Most ana- If you don’t change the manu- generation. speciality. This is something that I for vacuum capacitors and lysts recommend purchasing facturing process, will you still What are the most striking innova- was able to see as the vice president x-ray tubes, and demand for shares. be adhering to Moore’s Law tions when it comes to production? In recent months, you’ve simplified of the global semiconductor associa- according to which the number Currently, NAND 3D technology, which the organisation and objectives tion. Diversified companies are falling of transistors doubles every stacks transistors to increase their of your company considerably, behind, and getting weighed down 18 months? storage capacity, is very popular. This particularly by divesting of your because companies need to invest so This law will continue to apply but technology was invented by Toshiba in ebeam division (non-contact steri- much money and intelligence to be in additional new formats, such as 1986 but has only been used commer- lisation of surfaces). Why is that? successful that spreading out across multichip-modules. cially since 2015. So you see it took The ebeam division was the result of business lines just isn’t possible.

42 43 SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORS SWISSQUOTESWISSQUOTE SEPTEMBRE JULY 20202019

AND ALSO…

SILTRONIC, THE WAFER EXPERT To manufacture electronic chips, a key ingredient is a raw CHIP material: silicon wafers. This industry is dominated by a handful of suppliers: Shin-Etsu and Sumco from Japan, Siltronic from Germany, GlobalWafers from Taiwan, and SK Siltron from South Korea. These five compa- GIANTS nies control more than 90% of the global market, estimated at $11.2 billion in 2019. Siltronic, The semiconductor market is primarily which has a 15% global market dominated by US companies such as Intel, share, supplies TSMC and Intel. FOUNDED: 1968 AMD and Nvidia. But lesser-known players HEADQUARTERS: MUNICH (DE) from Europe and Asia want to shake up the EMPLOYEES: 3,700 2019 REVENUE: € 1.3 BN established order. We feature some of the best. WAF

BY BERTRAND BEAUTÉ AND JULIE ZAUGG NXP, THE AUTO PRO Number two globally in the automotive chip market, Dutch company NXP generates 47% of its sales in this industry, and NVIDIA the remaining 21% in telecoms infrastructure, 18% in industrials and 13% in mobile telephones. In April 2019, the company pur- FOUNDED chased shares of French start- 1993 Nvidia, video game champion up Kalray, which develops smart HEADQUARTERS processors for data centres and SANTA CLARA (US) autonomous vehicles (see also EMPLOYEES p. 58). 13,000 FOUNDED: 2006 After reaching a record high of $315 volume for its Switch products by 2019 REVENUE HEADQUARTERS: EINDHOVEN (NL) $10.92 BN in February, the share price of graph- 20% to meet the growing demand. EMPLOYEES: 31,000 2019 REVENUE: € 8.88 BN NVDA ics chip specialist Nvidia dropped to The GPUs inside these Switch under $200 in mid-March as a result consoles are none other than NXPI of the coronavirus crisis. Unfortu- Nvidia chips. nately for investors looking for a good SAMSUNG, deal, shares have already returned THE MEMORY KING Nvidia generates The conglomerate Samsung is a to the top, trading at around $350 at major player in the semiconductor the beginning of June, which is higher more than 50% of and pursuing various markets such As a fabless company, Nvidia has industry. As the second-largest than before the pandemic. The US its revenue from the as data centres, supercalculators, TSMC make most of its chips and as chip buyer globally in 2019 behind company seems rather well immu- video game market, autonomous vehicles and artifi- a result benefits from the Taiwan- Apple, as well as the second- nised against the coronavirus. cial intelligence. In December, the ese manufacturer’s technological largest producer after Intel, the an industry that’s company unveiled its new Drive AGX advance (see also p. 50). The two Korean company primarily produc- Nvidia generates more than 50% booming during Orin chip designed for autonomous companies are currently developing es memory chips, which make up more than 80% of its revenue in of its revenue from the video game quarantine vehicles. A few months earlier, the 5 nm GPUs, according to Taiwanese the semiconductor industry. market, an industry that’s booming US company acquired Israeli start-up daily DigiTimes. This is a natural FOUNDED: 1938 during quarantine. In early April, for Mellanox, which specialises in multi- evolution, since the Nvidia 7 nm HEADQUARTERS: SEOUL (KR) example, Nintendo asked its subcon- Beyond the video game market, core chips, AI and data centres, for graphics cards will be released in EMPLOYEES: 310,000 tractors to increase the production Nvidia is diversifying even further $6.9 billion. 2020. 2019 REVENUE: $190 BN 005930

44 45 SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORS SWISSQUOTESWISSQUOTE SEPTEMBRE JULY 20202019

QUALCOMM, THE 5G LEADER Already top of the 4G cellular FOUNDED Intel, the upset king 1969 modems sector with a market AMD, the feared challenger share of nearly 50%, Qualcomm HEADQUARTERS SANTA CLARA (US) is a global leader when it comes to 5G chips as well (see also the And the king reclaims its crown. US a stinging loss at a time where mobile Bloomberg reports published on Revenge. Historically battered by Intel for microproces- EMPLOYEES 11,000 July 2019 edition of Swissquote giant Intel, which reigned over the phones are cutting into sales 23 April, Apple will no longer use sors and by Nvidia for graphics processors, AMD finally Magazine). But the drop in chip market from 1992 to 2016, re- for computer manufacturers, which Intel CPUs in its computers star- turned a profit in 2017 after six consecutive years in 2019 REVENUE smartphone sales as a result of turned to its number one spot atop are Intel’s main clients. ting in 2021. Rumour has it that the red. Since then, everything has been going smoothly $6.73 BN the pandemic could impact the the semiconductor market in 2019 Apple will now use AMD proces- for the US company, whose clients include all the big AMD company’s bottom line. ahead of Samsung. However, all is But more importantly, it seems as sors or its own chips developed names in the electronics industry (Amazon, Google, FOUNDED: 1985 not well. In a letter dated 31 March though Intel has lost ground in the using ARM architecture and Microsoft), as well as the general public with its graph- HEADQUARTERS: SAN DIEGO (US) EMPLOYEES: 37,000 addressed to employees, Intel CEO PC and server processor sector, manufactured by TSMC. ics cards (GPU) and processors (CPU) for PCs. AMD also 2019 REVENUE: $24.3 BN Bob Swan expressed his disap- the very industry for which it is equips the next generation of consoles, including the QCOM pointment: “We need to ensure that renowned. While Intel began produ- As a result, according to Bob Swan, PlayStation 5 and Microsoft’s Xbox Series X, which we exceed our customers’ expec- cing 10 nm semiconductors in March, the PC-focused company must is expected to be on the market by the end-of-year holi- SK HYNIX, NUMBER TWO tations and deliver what they need manufacturers Samsung and TSMC begin an urgent transformation days. Its Radeon graphics cards are also used in Apple’s IN THE MEMORY MARKET when they need it. Sometimes we (which produce chips for Intel’s com- to become more diversified. In computers. Despite the pandemic, Korean failed to do that last year, and that petitors AMD, Nvidia and Qualcomm) 2019, the company generated memory card manufacturer was unacceptable.” began producing 5 nm chips in 2020. 52% of its revenue from PCs AMD remains SK Hynix remains positive. The Intel will not be able to reach a simi- and 33% from data centres, but in good shape company closed Q1 2020 with While Intel $6.2 billion in revenue, up 4%. lar performance until 2022 or 2023. only 6% came from memories, because the These positive figures are due to 5% from the Internet of Things manufactures its California firm increased sales of DRAM memo- Even Apple, Intel’s long-time client, and 1% from the automotive own products, AMD is gaining more ries and Nand flash used in data It seems as though has turned away. According to sector. is happy to simply and more mar- servers, which made up for the Intel has lost ground ket share from sluggish smartphone market. develop its products FOUNDED: 1983 in the PC and server its rivals as a as a fabless company result of its HEADQUARTERS: ICHEON (KR) processor sector, EMPLOYEES: 22,000 Bob Swan, CEO more powerful 2019 REVENUE: $22.48 BN the very industry for of Intel, during a products (see 000660 which it is renowned results presentation the November 2019 edition of Swissquote Magazine). on 23 April. In August 2019 for example, AMD launched the second TOKYO ELECTRON, generation of its Epyc processors for data centres, FLYING SOLO which are based on 7 nm process technology, whereas The world’s third-biggest manu- With $72 billion in revenue in 2019, competing products from Intel will only move to 10 nm facturer, Japanese group Tokyo up 1.7% over one year, Intel is still chips in 2020. As a result, AMD was able to sell its Epyc Electron hoped to merge with doing well. But is seems that the US processors to the Microsoft and Amazon Web Services the number-one in the industry – US-based Applied Materials – to champion is becoming increasingly data centres. create a global giant. But the outdated. In July 2019, the company deal went under in 2015 after US definitively left the smartphone To deliver such performance, AMD relies heavily on authorities declined the merger. market. Despite the billions invested its partnership with TSMC. While Intel manufactures Since then, Tokyo Electron has over 15 years, Intel never succee- its own products, AMD is happy to simply develop its been on its own. But it’s still ded in breaking into the industry. It’s products as a fabless company. Production is handled doing quite well: from 2016 to by two manufacturers: US company GlobalFoundries 2019, revenue increased nearly 100%, going from less than for chips exceeding 7 nm and Taiwanese group TSMC $6 billion to $11.5 billion. The for more powerful products. As a very important client company supplies chip manu- FOUNDED for TSMC, AMD has access to the manufacturer’s latest facturing machines to Samsung, 1968 innovations. The California company is expected to be Intel and SK Hynix. FOUNDED: 1963 HEADQUARTERS one of the first in the world to benefit from the 5 nm SANTA CLARA (US) etching in 2021, right after Apple and its A14 Bionic chip HEADQUARTERS: TOKYO (JP) EMPLOYEES: 13,000 EMPLOYEES that will be used in the iPhone 12 model expected in 110,000 2019 REVENUE: $11.5 BN late 2020. 8035 2019 REVENUE $72 BN

INTC NEWSCOM

46 47 SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORS SWISSQUOTESWISSQUOTE SEPTEMBRE JULY 20202019

GIGADEVICE, During the Mobile THE CHINESE FIREBRAND FOUNDED World Congress 2019, 1999 Infineon presented The Beijing-based firm has entered Infineon, the automotive into a partnership with start-up HEADQUARTERS the humanoid robot NEUBIBERG (DE) “Roboy”, equipped specialist ChangXin Memory Technologies with several of their to produce DRAM memory cards EMPLOYEES 41,000 own chips. that are used to store data. By late 2020, the two partners plan to 2019 REVENUE Infineon chose a bad time to energy consumption of industrial € 8 BN produce 40,000 cards per month, make the largest acquisition machines and cars. For instance, which is 3% of the global total. IFX in its history. On 16 April, the the company supplies chips that This should cut into sales of South German manufacturer (which control the battery of the Tesla Korean companies Samsung and etches its own chips) announced Model 3. While Cypress is known SK Hynix, as well as US group in the middle of a pandemic for its Wi-Fi and Bluetooth com- Micron. FOUNDED: 2005 that it would acquire US-based ponents that are used in Ninten- HEADQUARTERS: BEIJING (CN) Cypress for €9 billion. With this do’s Switch console, as well as EMPLOYEES: 500 transaction, the Munich indus- infotainment systems in models 2019 REVENUE: CHF 452 M trial company (the result of from Audi, BMW, Mercedes-Benz, 603986 Siemens selling off its micropro- Porsche and Tesla. FOUNDED 1987 cessor business in 1999), has MICRON, THE DRAM EXPERT become the largest supplier of “Infineon is well-positioned US company Micron Technology HEADQUARTERS PLAN-LES-OUATES (CH) automotive chips in the world, to benefit from the promis- specialises in memory chips, of which it is the third-largest EMPLOYEES ahead of Dutch group NXP and ing automotive sector, which 46,000 Japanese company Renesas, is progressively interested in global producer. Specialised in dynamic random-access memory

2019 REVENUE INFINEON according to IHS Markit. electronic chips as a result of $9.56 BN (DRAM) chips often used in PCs the increased automation of and servers, the company could STM vehicles and electric motors,” increase its sales during the said Hugo Paternoster, an analyst pandemic. Indeed, analysts For instance, the specialising in semiconductors expect that cloud players will company supplies at AlphaValue. But the current increase their storage capacities context is hurting the German and PC sales will take off again STMicro, European patriot chips that control with more people working from the battery of the company, as the car industry is home. among the major victims of the FOUNDED: 1978 Tesla Model 3 COVID-19 crisis. Ratings agency HEADQUARTERS: BOISE (US) Created from the 1987 merger company has a diversified port- producing silicon carbide chips. Moody’s predicts that this market EMPLOYEES: 35,000 of Italian group SGS and French folio with business activity in the Compared to traditional silicon will decline in 2020 by 21% in 2019 REVENUE: $23.41 BN company Thomson Semiconduc- automotive sector, smartphones and which most electronic chips are On paper, the portfolios of Europe, 15% in the United States MU teurs, STMicroelectronics opened industry. Its biggest client is none made from, silicon carbide is used the two companies seem very and 10% in China. This will seri- its headquarters in Plan-les- other than Apple, whose iPhones to make components that allow complementary in terms of the ously impact Infineon’s profits, as Ouates, Switzerland, but under are equipped with several key com- the battery to last longer. These automotive sector: Infineon is the company made nearly 45% of AMEC, THE CHINESE Dutch law. A truly European ponents from STMicro. silicon carbide parts can prolong an expert in powerful electronic its revenue from the automotive EQUIPMENT SUPPLIER venture. Jean-Marc Chéry defends the range of electric and hybrid components, which regulate the industry before the merger. Advanced Micro-Fabrication the company’s European roots: vehicles. One of the first clients Equipment (AMEC) is one of the “Europe must not lose the chip “Europe must using this technology is US car only Chinese manufacturers able battle,” said the STMicro CEO in not lose the chip manufacturer Tesla. Quite a big to build machines that are used by 2018 in an interview with French battle. Keeping name. foundries to produce chips. Sold in daily newspaper Le Figaro. “Keep- the rest of Asia and Europe, these ing this industry and its expertise this industry and Alas, the coronavirus crisis has machines can be used to produce on our soil is very important.” significantly affected the smart- the newest generation of chips. its expertise on FOUNDED: 2004 our soil is very phone and automotive industries. HEADQUARTERS: SHANGHAI (CN) Ranked the European leader of the In Q1 2020, STMicro generated EMPLOYEES: 700 semiconductor industry in 2019, important” $2.23 billion in revenue, which is 2019 REVENUE: CHF 275 M STMicroelectronics, which develops Jean-Marc Chéry, CEO of STMicro below its predictions of around 688012 and manufactures its own chips, $2.36 billion, and the company has a few tricks up its sleeve to In the automotive sector, the is predicting that Q2 will be even compete with the US and Asia. The European company is focused on worse.

48 49 SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORS SWISSQUOTESWISSQUOTE SEPTEMBRE JULY 20202019 BROADCOM, THE TEMPTATION OF SOFTWARE Well-known in the semiconduc- tor market, Broadcom (of which 85% of its chips are produced TSMC, the unknown giant by Taiwanese giant TSMC), is becoming increasingly interested in software. In August 2019, the US company announced that it Despite a global slowdown due to to its smaller chips – which as acquired Symantec, which sells the coronavirus, Taiwanese giant a result use less energy and the famous anti-virus software A researcher at Norton, for $10.7 billion. One TSMC is still generating stag- are more powerful – TSMC is far TSMC, a flagship gering profits, almost as though ahead of its competitors. Glob- company of Taiwan. year earlier, Broadcom also there was no crisis. On 16 April, ally, only It manufactures 50% acquired CA Technologies, a US of the chips produced business software company, the company announced that its can keep up with TSMC, but the globally, including the for $18.9 billion. Q1 2020 revenue was up 42%, Korean company specialises in iPhone processors. FOUNDED: 1961 reaching $10.3 billion, and profits memory chips, whereas TSMC HEADQUARTERS: SAN JOSE (US) increased 90%, compared to the produces more complex products EMPLOYEES: 19,000 same period last year. While the such as graphics processors 2019 REVENUE: $22.60 BN name TSMC (Taiwan Semiconduc- (GPU) and central processing CO., LTD. SEMICONDUCTOR MANUFACTURING TAIWAN AVGO tor Manufacturing Company) isn’t units (CPU). very well-known, its products are APPLE, THE KINGMAKER nevertheless used in most elec- As the largest global purchas- tronic devices, including tablets, er of chips in 2019 ahead of smartphones and cars. In fact, TSMC currently Samsung, with $36.1 billion in TSMC is the largest semiconduc- purchases according to figures produces 7 nm chips from Gartner, Apple has a life- tor manufacturer in the world: or-death impact on some of its more than 50% of all electronic and will soon move suppliers. And that’s not ideal for chips produced in the world come to a 5 nm version. these suppliers: Apple doesn’t from TSMC factories. hide its ambitions to increas- Comparatively, ingly internalise the design But proceed with caution: TSMC Intel’s US factories of its electronic components. doesn’t sell anything to the general Several of its suppliers, including can only produce Intel, Qualcomm, Skyworks and public and doesn’t invent anything. 10nm chips. STMicroelectronics, have reason As a manufacturer, it is happy to to be concerned. produce chips for other companies, FOUNDED: 1976 most often fabless companies HEADQUARTERS: CUPERTINO (US) that don’t have their own facto- EMPLOYEES: 137,000 ries, such as Apple, AMD, Huawei, For Q2 2020, TSMC expects 2019 REVENUE: $260.17 BN AAPL Broadcom, Qualcomm and Nvidia. revenue between $10.1 and $10.4 billion, compared to TSMC widely dominates its $10.31 billion in Q1 2019. Of TEXAS INSTRUMENTS, industry because its fabrication course, the smartphone indus- FROM CALCULATORS plants are so productive. The try, which makes up 50% of its TO SMARTPHONES Taiwanese company currently revenue, will decrease in 2020. Known to the general public for produces 7 nm chips and will But this fall will likely be com- its school calculators (sharing soon move to a 5 nm version. pensated by the deployment of the global market with Casio), US Comparatively, Intel’s US facto- 5G networks, which include many group Texas Instruments is the seventh-largest global producer ries can only produce 10 nm chips electronic components, as well FOUNDED 1987 of electronic chips. The company and GlobalFoundries is only able as by the growth in the cloud produces semiconductors for all to produce 12 nm models. Thanks computing industry. HEADQUARTERS TAIWAN (TW) industries, including the automo- tive, industrial and smartphone EMPLOYEES 48,000 industries. FOUNDED: 1930 2019 REVENUE HEADQUARTERS: DALLAS (US) $35.6 BN EMPLOYEES: 30,000 TSM 2019 REVENUE: $14.38 BN TXN

50 51 SEMICONDUCTORS SWISSQUOTESWISSQUOTE SEPTEMBRE JULY 2020 2019 SEMICONDUCTORS SWISSQUOTE JULY 2020

APPLIED MATERIALS, THE NUMBER ONE ASML, the Dutch gem EQUIPMENT SUPPLIER With $14.61 billion in revenue in 2019, Applied Materials is the Size is important. To increase the supplies these machines to all of leader of the global market for WHAT WILL CHIPS OF number of components on each the large chip makers. And ASML manufacturers that supply ma- chines to chip foundries (TSMC, processor and therefore increase claims it is the only company on the Intel, Samsung, GlobalFoundries), power, the semiconductor industry market with an EUV process. ahead of Dutch group ASML. But has begun miniaturising. In this the two leaders aren’t direct com- THE FUTURE LOOK LIKE? race, Dutch company ASML, which “ASML is quite simply the most petitors. While Applied Materials for years has produced machines important company in the world dominates the market for metal used by all the manufacturers and no one knows about it,” effused deposition and etching equip- (Intel, Samsung, TSMC), has just Julien Leegenhoek, tech stock ment, ASML is the global leader The race to miniaturise electronic components is facing To multiply the number and process- for photolithography machines physical and economic roadblocks. In order to increase taken a huge leap forward by de- analyst at Union Bancaire Privée. (see opposite). ing power of these small components veloping a lithography process that “If ASML stops, the world will FOUNDED: 1967 their power, chips need to be completely reinvented in a on a given surface area, the preferred uses extreme ultraviolet rays (EUV). stop. There will be no more chips.” HEADQUARTERS: SANTA CLARA (US) historic industrial breakthrough. solution was always to reduce the Hugo Paternoster, an analyst that EMPLOYEES: 21,000 size of the transistors. The first specialises in semiconductors at 2019 REVENUE: $14.61 BN BY BERTRAND BEAUTÉ microprocessor, sold by Intel in 1971, AlphaValue, agrees: “ASML is a AMAT held 2,300 transistors that were “ASML is quite simply company that really shouldn’t be SMIC, each 10 micrometres (µm) wide, or the most important overlooked. It already has a virtual THE CHINESE FOUNDRY 0.001 millimetres. Current genera- monopoly on the classic lithography “While SMIC operates the most ere lies Moore’s Law. As ratisation of electronic devices, be- tions, such as the Bionic company in the world market, and every manufacturer competitive chip foundry in manufacturers try to produce cause the power of semiconductors used in the iPhone 11, hold more and no one knows on the planet, if it doesn’t want to China, its semiconductors are ever-smaller electronic compo- increased at a constant price. But than 40 billion 7 nm transistors (see about it” fall behind, will need to buy EUV still several generations behind Hnents, the semiconductor industry is now, the cost per mm2 is increasing infographic on p. 55). As production machines.” But these giants – four those produced by TSMC, with reaching a limit. “We may be able to faster than the chip’s power as a costs skyrocket, it becomes difficult Julien Leegenhoek, tech stock analyst much lower production volumes,” at Union Bancaire Privée metres high and eight metres long, Len Jelinek from the consultancy reduce the size by another few nano- result of the technology’s growing to push chips even further. weighing 180,000 kilos – don’t Omdia points out. But most ex- metres, but we can’t go much further complexity. come cheap: €120 million per unit. perts believe that SMIC will catch than that. We only have 10 or 15 years Rock’s Law, which states that the In other words, the semiconductor up to its competitors sooner or left maximum with the current model,” price of semiconductor factories industry is using rays of light to Manufacturers, however, aren’t put later, thanks to support from the says Mihai Adrian Ionescu, a profes- doubles every four years, is in the etch circuits that are printed on off by the investment, even during a Chinese government. sor at the Nanoelectronic Devices One by one, running to replace Moore’s Law. And FOUNDED: 2000 silicon wafers – a process called time of crisis: “The demand outlook Laboratory at the École polytechnique the result is that one by one, indus- HEADQUARTERS: SHANGHAI (CN) industrial players lithography. With its EUV process, is currently unchanged,” said the EMPLOYEES: 18,000 fédérale de Lausanne (EPFL). trial players are quitting the race which began large-scale production CEO of ASML Peter Wennink on 2019 REVENUE: $3.116 BN are quitting the towards miniaturisation. In 2018, in 2019, ASML was able to signif- 15 April. In Q1 2020, ASML generat- 981 Miniaturisation is up against three race towards US company GlobalFoundries, which icantly reduce the wavelength of ed a 9.2% increase over one year obstacles. First: a physical limitation. produces chips for AMD and IBM, and the ray, or the fineness of the line, in revenue, reaching €2.44 billion, LAM, THE SHARP SUPPLIER The size of transistors – a type of miniaturisation Taiwanese firm UMC, which produces therefore progressing from ultravio- with a gross margin of 45%. On 26 February, US company switch that transforms an electric chips for Qualcomm, Infineon and let to extreme ultraviolet. Lam Research, which supplies current into binary impulses – is MediaTek, gave up the fight, stopping equipment used to make chips, getting dangerously close to the size In this context, “following Moore’s development of 7 nm products. Taiwanese manufacturer TSMC’s announced that it partnered with of an : at 5 nm, the smallest Law is no longer possible,” said ability to launch 5-nanometre ASML to develop a new metal transistors currently available are Jensen Huang, CEO and co-founder IBM, which sold its production FOUNDED deposition and chip engraving chips in 2020 – for comparison, a 1984 technology adapted to the only the length of a few dozen silicon of Nvidia, at the 2019 Consumer business to GlobalFoundries in 2015, single hair is between 50,000 and EUV lithography process. Lam atoms laid end to end. And yet at Electronics Show (CES) in Las Vegas. Toshiba, and Sony also gave up. As a HEADQUARTERS 100,000-nm wide – is in part thanks VELDHOVEN (NL) Research is expected to benefit the atomic level, the quantum laws Of course, this isn’t the first time result, only three companies in the from the large-scale deployment to EUV machines. But ASML didn’t EMPLOYEES governing the infinitely small replace that the famous law has been de- world remain in the running: Intel, need EUV technology to stand out. 25,000 of EUV machines (see opposite). the laws of traditional physics and clared finished. Others, such as David Samsung and TSMC. Only the last two The company also dominates the The company has an 85% mar- 2019 REVENUE disrupt the functioning of the chip. Ku, CFO of MediaTek, prefer to call it will be able to break the 5 nm barrier €11.8 BN industry that processes photo- ket share with its less advanced sensitive resin used to manufac- a slowdown rather than a death. But this year, as Intel is nearly two years lithography machines and already ASML ture chips. Second: a thermal issue. Billions of the meaning is the same. Moore’s behind (see also p. 46). Compared to FOUNDED: 1980 transistors stacked onto each chip Law states that the number of tran- the 7 nm process, 5 nm technology HEADQUARTERS: FREMONT (US) result in increasingly untenable ther- sistors etched into a standard chip reduces energy consumption by 20% EMPLOYEES: 11,000 mal output. Third: economics. Moore’s will double every year at equal cost. while increasing performance by 2019 REVENUE: $9.65 BN Law allowed for a significant democ- This is no longer the case. 10%, according to Samsung. LRCX

52 53 SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORS SWISSQUOTE JULY 2020

“There’s a real debate in the indus- 10 µm 1971 10 µm try about whether or not to con- Intel 4004 TOWARDS THE INFINITELY SMALL tinue miniaturisation,” says Julien Semiconductor etching has improved spectacularly over Leegenhoek, a tech stock analyst at the last few decades. As a result, a given surface can Union Bancaire Privée (UBP). “Some now hold many more transistors than it did in the past. companies, which seem to be behind, The degree of precision has improved by a factor of are highlighting the fact that they’re 1,500 since the invention of the first microprocessor, developing new higher-performance the Intel 4004, launched in 1971. While improvements architectures. Other companies, have now become much more modest, the process however, are still trying to minia- 1979 size of an AMD Ryzen 7 processor, designed for office 3 µm turise.” According to their roadmap, Intel 8088 PCs and , is now at 7 nm, which is 50 times TSMC and Samsung hope to begin smaller than that of the Intel Pentium II, which launched producing 3 nm chips in 2022. And in 1997. after that? Intel is hoping to reach 1.4 nm by 2029, but technological 1.5 µm breakthroughs would need to occur 1982 in order for that to be possible. And Intel 80286 0.001 millimetre (mm) = an ever-increasing number of compa- 1 µm 1 micrometre (μm) = nies in the industry believe a rethink 1985 1,000 nanometre (nm) 1 µm of the entire electronics process is Intel 80386 more credible.

As of March 2016, the International 1992 600 nm Technology Roadmap for Semicon- Motorola PowerPC 601 ductors (ITRS), which sets objectives for the entire industry, declared the 1997 350 nm end of Moore’s Law and launched Intel Pentium II a new approach called “More than Moore”. Gone is the age when minia- 250 nm turisation and increased performance 1998 AMD K6-2 were the only goal. Now there are new targets, such as changing the architecture of chips and adapting their capacities to each use case. 2000 130 nm “We’re living through a fascinating 100 nm Motorola PowerPC 7447 time. For decades, engineers focused solely on improving a technology that dated back to the 1950s,” says Ionescu from EPFL. “Now they are 2006 65 nm developing new architectures. Elec- Intel Core 2 tronics still has a promising future, but it has become an open field once again, one in which everything needs to be created from scratch. When it comes to traditional chips, the United 2010 32nm States dominates the processor Intel Core i3 (Clarkdale) market and Asia rules the memory market. The paradigm shift that we’re 2014 living through is a golden opportunity Intel Core M (Broadwell) 14 nm for Europe to become a leader in the electronics of the future.” To achieve that goal, several approaches have 2017 Intel Core i9 (Skylake-X) 10 nm emerged, but none have won a gener- 10 nm al consensus within the industry. We The graph’s curve is shown in logarithmic scale 2019 take a closer look at them. AMD Ryzen 3000 7 nm 1970 1980 1990 2000 2010 2020 54 55 SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORSDOSSIER SWISSQUOTESWISSQUOTE MARS JULY 20202016

According to the article, for the first time, the company was able to per- COMPONENTS On May 27, 2017, Google’s AI system, form a calculation much faster than STACKED AlphaGo, defeated with traditional supercomputers. It HUNDREDS HIGH Ke Jie, the world's only took three minutes and twenty Traditionally, chips were construct- Go champion. seconds for Google’s quantum pro- ed as flat surfaces and transistors cessor to solve an extremely complex would be placed on top. To contin- calculation, whereas it would have ue to increase the density of the taken the most advanced computers transistors, manufacturers had the currently available 10,000 years to idea of building layers of transistors do so. Was it a marketing ploy? IBM vertically, like floors of a skyscraper. quickly countered the article, putting The memory chip industry was the Google’s advance into perspective. first to try this approach. In 2013, In a note published on its blog, Big Samsung was the first manufactur- Blue said it successfully completed er to produce NAND 3D flash chips, the calculation in question in only named Vertical NAND, by piling two and a half days with a tradition- 24 layers of transistors on top of al computer. This back-and-forth is each other. Seven years on, prod- proof that the quantum computer ucts from the Korean conglomerate war is well under way. All the big and its competitor SK Hynix now names, such as IBM, Google and Intel, have 128 layers, allowing storage are working on this technology, which capacity of 1,000 gigabits. And SK was long confined to the depths of Hynix doesn’t plan to stop there: it’s research labs. already working on the next genera- tion with 176 layers. But what works Imagined in the early 1980s by for memory chips isn’t necessarily LARRY LEUNG/FEATURECHINA/NEWSCOM Richard Feynman, winner of the possible for microprocessors. Nobel Prize for Physics, quantum five years, this type of product is But these chips still need to be fully object in many different videos. While from 768 Loihi neuromorphic chips, computers will revolutionise comput- “The big problem is heat dispersion,” expected to be on the market.” developed, and a source of energy current artificial intelligence systems which imitates the functioning of ing. In regular chips, information is says Mihai Adrian Ionescu, a professor that does not require batteries needs can also complete such a task, as 100 million neurons – the equivalent encoded in the form of bits that take at EPFL. “Memory only consumes elec- to be found. How? The laboratory is in- they can categorise massive amounts of the brain of a small rodent. Accord- one of two values – 0 or 1 – based trical current when data is being read FLEXIBLE AND vestigating the use of energy available of data, they also use extremely large ing to Intel, the system consumes on whether or not there is an electric from or written to the chip. So heat is ROLLABLE CHIPS in the environment: movement, heat amounts of energy, which means they less than 500 watts of energy, where- current passing through a transistor. produced only sporadically, and it’s not Embedding microchips into fabrics and sun exposure. “In the next five to have to go through the cloud in order as a standard office computer uses Conversely, quantum bits (or qubits) that much. Microprocessors, on the and other clothing has been on the 10 years, we’ll likely see flexible chips to reach their full power. approximately 200 watts per hour. can take both 0 and 1 simultaneous- other hand, generate a lot of heat.” horizon for several years. The sport on the market,” says Ionescu. ly. It is due to this strange property and health industries have already For example, AlphaGo, Google’s AI The company will use Pohoiki Springs that quantum computers are incred- Intel seems to have found a way begun working on this concept, with that crushed all the top Go champi- for automatic learning applications, ibly fast, making them the holy grail around that. Its Lakefield micropro- sensors of all kinds that can track COMPONENTS ons in 2017, consumes ten thousand including a possible insight into the when it comes to processing gigantic cessor, of which a prototype was pre- performance or physical constants. times more energy than a human spread of coronavirus. But the US calculations. sented in 2019, has five cores with But the ultimate objective is for these INSPIRED BY does when playing the same board group cautions that the technology is a 10 nm process: one core is used chips to be flexible so that they can THE BRAIN game, according to the CNRS. The still in the research phase and isn’t But don’t expect to have one in your for increased performance while the be embedded in the clothing itself. Artificial intelligence (AI) is at the reason is the separation of the designed to replace conventional home. In order to function, quantum others are energy-saving. This is the heart of every discussion. While memory and processing cores. To computing systems at this stage. chips need to be kept at extremely first microprocessor of its kind in the In 2011, for example, the Labora- cloud giants are already proposing AI solve this problem, the industry is cold temperatures close to absolute world. It will be used in Microsoft’s tory of Nanoscale Electronics and solutions, the real revolution could trying to produce artificial neurons zero (-273°C). “We imagine that Surface Neo tablets, which were Structures (LANES) at EPFL was come from neuromorphic chips. “We’re where each has its own memory and QUANTUM quantum computers will remain in supposed to launch in late 2020 but able to create the first chip made of trying to imitate the human brain as computing system. Electronics giants the cloud and there will be a sort could be pushed back a few months molybdenite, a material that exceeds much as possible, particularly the de- are keenly aware of current systems’ COMPUTERS: of quantum internet available so due to the global pandemic. “It’s an the physical limits of silicon in terms cision-making and learning process- limitations, and IBM, Intel, Qualcomm THE HOLY GRAIL that everyone can benefit from this intermediary step,” says Ionescu. of consumption and mechanical flexi- es,” explains Ionescu of EPFL. Despite and Samsung are looking to develop The news made headlines. On Octo- extraordinary computing power,” says “The real objective is to produce heter- bility. According to EPFL, molybdenite its limited capacities, the human brain their own neuromorphic chip. ber 2019, Google published an article Ionescu, a professor at EPFL. “But ogeneous 3D chips, which include could be used to create computers is actually very capable of learning In March 2020, for example, Intel in the prestigious scientific journal we’re still very far from that. We memory, processing circuits and radi- or devices that can be rolled up and to complete certain tasks, such as announced that it had completed Nature about the extraordinary per- still need at least 20 or 30 years of ofrequency components. In the next applied to the skin. detecting and identifying the same its Pohoiki Springs platform, built formance of its quantum computer. research.”

56 57 SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORS SWISSQUOTE JULY 2020

An engineer by training, Éric Baissus spent eight years at Texas Instruments. In 2002, he founded the start-up Open-Plug, rtificial intelligence is a gold Like ARM, Kalray doesn’t have second that needs to be analysed which he led until mine for the semiconductor production sites. Why did you very quickly in order to decide what it was acquired by industry. According to con- decide to outsource your produc- to do next, such as accelerate, turn Alcatel-Lucent in A 2010. He became sultancy firm IHS Markit, the sector tion to Taiwanese company TSMC or brake. But current artificial intelli- CEO of Kalray will triple in size over the next six rather than manufacture your gence algorithms use a lot of energy in 2014. years to reach $128.9 billion in 2025, own chips? and computer processors aren’t built compared to $42.8 billion in 2019. It’s a question of having 10 billion to process such a large amount of Thus far, the market is primarily dollars. Now, everyone in the high-­ information so quickly. So there’s split between two players: Intel and performance processor industry is a real demand for smart chips that Nvidia. But these two companies fabless, because building a manufac- are truly built for the demands of AI, are being increasingly challenged by turing plant for powerful electronic meaning they are both very powerful other established ones such as AMD, chips is extremely expensive and and energy-efficient. as well as by a swarm of start-ups you need immense volumes to make that have innovative technologies it profitable. Kalray is one of the pioneers in this of their own. One of the newcomers field. For more than 10 years, we’ve up against the American old guard been developing a new type of chip, is French start-up Kalray, which is a Massively Parallel Processor Array making bold moves. After 10 years of A self-driving car (MPPA). This technology is called research and development, in 2020, produces a gigabyte “manycore”. Our Coolidge processor, the company is beginning production which we are currently rolling out to of its Coolidge processor, designed (GB) of data per our clients, has 80 cores which can for smart data centres and the next second that needs process 25,000 billion operations per generation of vehicles. We interview to be analysed second, with an energy consumption Kalray’s CEO, Éric Baissus. of only 5 to 25 watts (which ranks it very quickly at the same performance level as the How can a small French Jetson Xavier processor from Nvidia, company like Kalray compete which is a leader in the field). As with US giants? For small companies like ours, the a comparison, a Small companies can sometimes fabless model is a considerable has four cores and consumes about advance faster than larger ones. advantage. We can rapidly generate 100 watts of energy. With our prod- Especially since artificial intelli- revenue without a massive invest- uct, we are targeting two markets: gence is completely reinventing the ment in production tools. Currently, smart data centres and the next semiconductor market. This opens our chips are produced by TSMC, generations of vehicles, particularly INTERVIEW up the door for newcomers, that which is the largest chip manufac- smart vehicles. have disruptive technologies, to go turer in the world, but we could also further than well-established play- turn to Samsung or GlobalFoundries. Why would you increase the ers. Remember, in the early 2000s, There are also initiatives to develop number of cores in a processor? Intel was the king of processors. production capacities in Europe and It’s a bit like putting multiple engines “AI NEEDS SMART CHIPS” And then came smartphones. De- we’re actively participating in those. in a car. Fifteen years ago, semicon- spite its power and technological ductor manufacturers only looked French pioneer Kalray develops smart processors for data advance, Intel completely missed You are developing “smart” at the clock frequency, that is, the centres and autonomous vehicles. We interview its CEO, that opportunity and UK start-up chips. How are those different speed at which the engine runs. Éric Baissus. ARM took over the smartphone mar- from chips that are already on But they reached a limit: beyond ket. Artificial intelligence will lead the market? 3.5 to 4 GHz, processors overheated. BY BERTRAND BEAUTÉ to a disruption in the semiconductor Smart systems need to process a To solve this problem, manufacturers industry similar to what we saw massive amount of data in order reworked the architecture of their with smartphones. For the time be- to make critical decisions in real chips to accommodate several cores, ing, no one knows who will lead this time. A self-driving car, for example, allowing each core to run at a lower giant market. produces a gigabyte (GB) of data per frequency. The latest smartphones, KALRAY

58 59 SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORS SWISSQUOTE JULY 2020

for example, contain up to eight KALRAY cores. But there’s a glass ceiling FOUNDED in the industry: besides Nvidia, not 2008 KALRAY: THE POWER OF CORES many companies know how to manu- The Coolidge HEADQUARTERS processor can MONTBONNOT- facture products that can have up to process 25,000 SAINT-MARTIN (FR) 50 cores. At Kalray, we have exceeded billion operations Founded in 2008, Kalray went ligence market will fragment, EMPLOYEES public in June 2018. The com- as CPUs and GPUs aren’t the that limit. per second. 70 pany, which develops multicore most efficient hardware for 2019 REVENUE smart processors, is up-and- this activity,” says Frédéric Who are your competitors? €1.27 MILLION coming in the growing edge Yoboué, an analyst at Bryan, Mainly the traditional companies in ALKAL computing market, by target- Garnier & Co. “Several start- the semiconductor industry. For data ing two specific sectors: smart ups, which develop chips centres, it’s US companies Broadcom data centres and autonomous specifically for this type of and Intel, as well as Israeli group vehicles. “In these two fields, application, could gain market Mellanox, which was acquired in I think that Kalray is well-po- share in some specific seg- sitioned to be a major player ments, such as UK company 2019 by Nvidia for $6.9 billion. For in the years to come,” says Graphcore, Israeli business cars, we’re an alternative to Nvidia, Éric Baissus, CEO of the young Habana (acquired by Intel) and which is the market leader when it company. French firm Kalray.” comes to artificial intelligence used in vehicles. In 2017, nearly 99% of hard- While it’s difficult to say who rity in these unstable times. But our ware dedicated to artificial in- will come out on top, Yoboué telligence was concentrated in says: “Kalray can count on its Kalray chips are etched using financial situation didn’t require it. the cloud. But the proliferation strategic partners, such as a 16 nm process, whereas The investment from the NXP group, of sensors in everyday prod- NXP, Renault and the Chinese your competitors like Nvidia which is now a shareholder along- ucts is changing the landscape. internet giant Baidu, as it are already at 7 nm. Isn’t that before the pandemic that we wouldn’t manufacturers such as Taiwanese side other large companies such This trend will lead to a decen- takes its first steps into the an issue? generate significant revenue in the company Wistron, which is one of the as the Renault-Nissan-Mitsubishi tralisation of smart systems in edge computing market.” There is a movement in the indus- industry before 2023 or 2024. This largest producers in the world, as Alliance and the Safran Group, edge computing. As a result, AI will be included in products After 10 years of research try towards increasingly smaller perspective remains unchanged well as French company 2CRSi. proves that NXP is very interested such as cars, healthcare devic- and development, the French transistors, because that improves and we continue to work with the in our processors. es and industrial machines, company is starting to produce performance. As a result, 7 nm chips Renault-Nissan-Mitsubishi Alliance, In February, the European Union but also in new types of data and roll out its products to its are 30–35% more powerful than which is one of our shareholders, as presented a white paper with For us, in terms of credibility, it’s a centres that are located closer clients this year. Kalray is tar- 16 nm chips, with 25% less energy well as about 10 top players in the its recommendations to preserve major announcement: when a com- to the data sources. geting 100 million in revenue consumption. We’re also follow- automotive industry. its sovereignty regarding arti- pany that’s been known for years in 2022. All of the financial “With the emergence of cloud analysts that follow Kalray rec- ing the miniaturisation movement, ficial intelligence. Why is that in the automotive chip field, with computing, the artificial intel- ommend purchasing shares. but we’re not in the first wave. Our For example, the autonomous vehicle important? €8.8 billion in revenue, invests in 7 nm processors will be available prototype Symbioz, developed by In the future, many critical systems your company, that means your in 18 months. This delay allows us Renault, uses our processors. Reve- will be based on artificial intelli- technology really is relevant. It’s to use proven technologies that are nue from our chips being used in gence – self-driving cars, of course, also important for our business, less expensive. In terms of the per- prototypes is limited, of course. but also defence and nuclear power because in partnership with NXP, formance difference, our manycore But when our clients begin produc- plants. It’s an extremely sensitive we’re going to develop a shared technology makes up for it. tion, this will represent several area because AI makes decisions for solution to deploy our technology hundreds of millions in potential you. So what happens if a supplier in the automotive market. The automotive sector is particu- revenue each year. country, for example, no longer larly affected by the pandemic. wants to sell its technologies to an- With NXP’s investment, Kalray Does that call your forecasts And what about data centres? other country? All of that country’s is now valued at approximately for that industry into question? With the massive adoption of rapid strategic activities will be impacted. €80 million. In your opinion, is It is likely that the car industry will storage memories, data centres will So it’s critical that the European that a fair price for the company? be impacted in the short term. But have an absolutely enormous need Union maintains its sovereignty in This valuation was calculated using since our automotive sector outlooks for computing power and artificial terms of artificial intelligence. the average share price in the days are designed for the medium- and intelligence over the next few years. leading up to the transaction. With- long-term, they won’t necessarily be It’s a new market that is beginning to On 2 April, in the middle of out offering too many thoughts on affected by the crisis – especially emerge and will take off, generating the pandemic, Dutch group the development of our valuation, Presented at the 2017 since we’ve always been very careful approximately €1 billion in 2022. Our NXP invested in Kalray. I of course believe that in the medi- Frankfurt Motor and conservative in our projections. goal is to become an industry leader, Did you need liquidity to um-term, Kalray could be worth much Show, the Renault Symbioz concept car For Kalray, the automotive industry with a market share of 10% in 2022, make it through the crisis? more if we achieve our ambition of is operated by Kalray is a strategic market that creates a meaning €100 million in revenue. Having a significant cash flow is ob- becoming the global leader in proces- processors. lot of value, but we were estimating We’re already working with server viously positive, and it provides secu- sors for new smart storage servers. MICHAEL DEBETS / PACIFIC PRESS / NEWSCOM MICHAEL DEBETS / PACIFIC

60 61 SEMICONDUCTORS SWISSQUOTE JULY 2020 SEMICONDUCTORS SWISSQUOTE JULY 2020

CHINA DREAMS hina may have become the US technology could be cut off with This move has brought several OF BECOMING A world’s factory for new a snap of the fingers, particularly promising firms to the fore, such technology, but the country regarding semiconductors,” says as SMIC, Hi­Silicon (a Huawei subsid- is still struggling to make a Jeffrey Towson, an American expert iary) and the Yangtze Memory Tech- Cname for itself in one sector: elec- on Chinese technology. “That realisa- nologies group (see features on p. 44 SEMICONDUCTOR tronic chips. “Only 16% of semicon- tion convinced the Chinese govern- and onwards). Alibaba, Tencent and ductors used in China are produced ment to develop its own semiconduc- the Gree group, the world’s largest domestically,” says Piero Scaruffi, a tor manufacturing chain to reduce its air conditioning manufacturer, have GIANT Silicon Valley historian. “The rest is reliance on the United States.” also assembled in-house initiatives to imported.” In 2018, this dependence produce semiconductors. cost China $312 billion. In October 2019, The second pillar in China’s strategy Beijing has wanted to balance that is acquiring expertise. At the end Still feeling the sting of US sanctions, Beijing has trade deficit for a long time. “De- China created of 2019, the Shanghai-based firm set its sights on developing its own electronic veloping a domestic chip industry another $29 billion Wingtech Technology bought the chip industry. This daunting and costly endeavour has been one of the Chinese gov- Dutch semiconductor manufactur- ernment’s priorities for at least a fund devoted to er Nexperia. Before that, in 2018, is now starting to produce results. decade,” says Len Jelinek, a semi- semiconductors the Beijing conglomerate Tsinghua BY JULIE ZAUGG IN HONG KONG conductor expert with the consulting Unigroup bought the French chip firm Omdia. In 2014, Beijing set up component producer Linxens. Beijing a $150 billion fund to invest in the National efforts became even more also managed to attract Korean semiconductor industry. The Made in urgent in 2019 when Washington groups Samsung and SK Hynix, US China 2025 Plan launched in 2015 stiffened its sanctions, banning US companies Intel and Global Found- established specific targets: under companies from selling their prod- ries, and Taiwanese firms TSMC and the plan, the country would produce ucts to dozens of Chinese firms, UMC. All have set up joint ventures 40% of its chips by 2020 and 70% including the tech giant Huawei. or opened plants in China. by 2025. Economic disaster began to loom, as chips are essential in order to pro- Thanks to this massive investment, But the real turning point came on duce Huawei smartphones, IT servers China is starting to catch up with its 16 April 2018. On that day, the United and electric cars, which China mass American competitors. “In terms of States banned American companies produces. The next step came in chip design, China is only 12 months from selling their chips to ZTE, one of October 2019, when China created behind,” says Malcolm Penn, who China’s leading telecommunications another $29 billion fund devoted to heads the consulting firm Future groups, which is accused of export- semiconductors. Horizons. HiSilicon’s Kirin chips, which ing hardware to Iran. Heavily reliant now feature in some Huawei smart- on US-made computer chips, ZTE Chinese strategy is focused on two phones, are some of the best around. suddenly found itself in a chokehold. main pillars. First, it aims to create Alibaba also unveiled its Hanguang national champions from the private 800 chip in September 2019. The test “That’s when Chinese companies sector by offering subsidies, tax platform MLPerf, known for its objec- became aware that their access to rebates and low-interest loans. tive industry benchmarks, says the

62 63 SEMICONDUCTORS SWISSQUOTE JULY 2020 FREE TIME SWISSQUOTE JULY 2020

Hanguang 800 outperforms Intel and But price isn’t the only problem. are on the verge of launching mass Nvidia products. More importantly, China lacks the production of these units and are INFOMANIAK MEET manufacturers. “The highly complex expected to generate between 3% and THE ETHICAL SKYPE Although China has begun design- machines used to produce chips 5% of global production by the end of TO READ, Developed by the Geneva-based hosting ing chips to rival US products, they are built by a handful of firms in the the year. , provider Infomaniak, Infomaniak Meet cannot yet be manufactured in the United States, the Netherlands and Google Play is a completely free video conferencing Free country. For example, the Hanguang Japan,” says Scaruffi, Silicon Valley “China also has an ace up its sleeve TO DOWNLOAD app that hopes to be an “alternative to 800 chip is built by the Taiwanese historian. And those manufacturers in the form of more basic chips for US solutions” such as Zoom, Skype and foundry TSMC, which produces tend to focus on their long-standing low-end smartphones and smart Google Hangouts. Infomaniak Meet is almost 50% of the chips ordered customers, like Samsung, TSMC and appliances that use Internet of Things based on the open-source software worldwide, including for Apple and Global Foundries, which currently technology,” says Towson. Chinese Jitsi Meet. The data exchanged on the Huawei. dominate their revenue base. manufacturer Gree released its first DON’T BE EVIL: platform are encrypted and transit air conditioners fitted with self-pro- HOW BIG TECH through Infomaniak’s data centres In comparison, SMIC, China’s larg- Exacerbating matters, the Trump ad- duced chips in June last year. Mean- BETRAYED ITS in Switzerland. est semiconductor maker, has only ministration is doing everything it can while, , a subsidiary of Tsinghua FOUNDING PRINCIPLES recently begun manufacturing 14- to make sure China can’t acquire the Unigroup, has become world leader — AND ALL OF US nanometre chips, while TSMC has best machines for its plants. In 2019, in chips for smartphones in the By Rana Foroohar PLAGUE INC launched production of 5-nanometre it pushed the Dutch group ASML to under-$100 range. A VERY CURRENT SIMULATION “Don’t be evil”: this saying from chips. “SMIC’s semiconductors are cancel the sale of one of its photoli- Plague Inc. has seen its popularity ex- Google’s early beginnings promised always several generations behind thography machines to SMIC. But Beijing has higher ambitions. a radiant future in which technology App Store, plode since the emergence of COVID-19. those produced by TSMC, with much “China wants to lead chip design for Currency Press, Google Play In the game, players can simulate the 2019 would inevitably make the world a Free, in-app lower production volumes on top of China’s workaround is to invest in artificial intelligence,” Towson says. CHF 20.- better, safer and smarter place. Twenty- purchases spread of a disease around the world it,” Len Jelinek from the consultancy the memory chip market, which is “Because this is a new area, no man- odd years later, we are now faced with which can eradicate the entire human Omdia points out. more accessible than the processor ufacturing standards have been set.” digital surveillance, erasure of private population, while thwarting the attempts and graphics card markets. “Memory This virgin territory is a perfect place life and the emergence of fake news, of unfortunate victims to find a cure Jeffrey Towson agrees: “Developing a chips are relatively easy to produce for new players to emerge (see p. 58). and our reality seems quite far from in time... state-of-the-art plant is extraordinar- on a large scale, and that’s an advan- “The debate isn’t about whether China the utopia that was first predicted. ily expensive and requires technical tage for firms serving a vast market will eventually dominate the chip Rana Foroohar, an American journal- expertise that China doesn’t have.” like China,” Penn says. Chinese com- industry,” Towson adds, “but whether ist specialising in new technologies CORONA SCIENCE TSMC’s latest production plant cost panies Yangtze Memory Technologies the reversal of fortune will take place who writes for the Financial Times, FIGHT THE NEW CORONAVIRUS $17 billion. and ChangXin Memory Technologies in three years or ten.” describes how we’ve arrived at this Developed by Bern University of Applied point and the ways in which we can App Store, Sciences and the Midata cooperative, still resist. Google Play the Corona Science app aims to gather Free as much COVID-19-related data as possible on the Swiss population in order to advance scientific knowledge. Anyone, Richard Yu, CEO of AMERICAN OLIGARCHS: Huawei’s consumer THE KUSHNERS, regardless of whether or not they have TOBIAS SCHWARZ / AFP TOBIAS SCHWARZ division, at the THE TRUMPS, AND had the virus, is invited to supply person- presentation of the al data which are then processed anony- group’s new 5G chip THE MARRIAGE OF on 6 September, MONEY AND POWER mously and made available to research- 2019 at the IFA in By Andrea Bernstein ers on an open-source platform. Berlin. Deprived of US chips, China In American Oligarchs, investigative has increased its investments journalist Andrea Bernstein delves into FOOTEJ CAMERA 2 the saga of the Trump and Kushner to become W.W. Norton Company, AN EMBEDDED CAMERA technologically 2020 families. Based on hundreds of inter- ASSISTANT independent. CHF 30.- views and more than 100,000 original Google Play Footej Camera had already made a name documents, the author meticulously Free, in-app for itself among the Android camera retraces the recent history of these purchases apps thanks to its simple interface and two families, from their arrival in the range of options. This second version in- United States to their rise to supreme cludes all the professional quality tools power. A fascinating book that reads that made its predecessor so success- like a novel, shedding raw light on the inner workings of this new American ful, such as manual ISO selection, cap- oligarchy. tures in RAW format, and HDR+ support on compatible devices.

64 65 66 thankstothe coronavirus coronavirus crafts boom ETSY effect effect E-COMMERCE

SWISSQUOTE JULYSWISSQUOTE 2020

GEOFFROY VAN DER HASSELT / AFP E cient supplyof surgicalmasks. were suggested duetoaninsuffi the spreadofvirus.Cloth masks Americans wearclothmasks to slow recommended forthefirsttime that eral healthagency),theWhite House on advicegivenbytheCDC(US fed the COVID-19 crisis.On 3April,based pire isoneofthebiggestwinners index, andthehome-madecraftem to 15.4%fortheNasdaqComposite jumped nearly69%inApril,compared reversed thetrend:sincethen,Etsy from USPresidentDonaldTrump that But thencameanannouncement in March,comingatunder$30. reached itslowestintwoyears After fluctuating,itsshareprice interest ofinvestorsinrecentyears. since 2015,struggledtocapturethe But Etsy,listedontheNasdaq previous year. goods, up26.5%comparedtothe sales of$5billioningrossvalue has over1,200employees,made kitsch. In2019,thecompany,which designed totheunapologetically everything onEtsy,fromthesleekly clothing –youcanfindalittlebitof sories, crafts,giftideas,furniture, vintage items.Jewellery,acces 47 millionbuyersofhandmadeor sell theirproducts,andmorethan 2.7 millioncreativesofallkindswho form isnowhometoacommunityof in Brooklyn,thee-commerceplat Robert Kalynandtwoofhisfriends in 2005byamateurcabinetmaker the post-pandemicworld?Created knacks. Coulditbeametaphorfor BY ANGÉLIQUEMOUNIER-KUHN during thepandemic.Here’sstory. is oneofthebiggeststockmarketwinners The Brooklyn-basede-commerceplatform and handmadeknick- tech stock,partvintage Street wonder:part tsy isthelatestWall

- - -

-

- which means allowing creatives to which meansallowing creativesto the same:“Keep commercehuman”, But onpaper, Etsy’smissionremains the yearsasCEOscameand went. consensus, haslostitssoul over promoted friendlinessandinternal lament thatthecompany,which once Early fansoftheplatformoften benefited therestofsite. the trafficbroughtinbymasks non-mask saleswereup79%,as million newcustomers.Evenbetter, $133 million–andbroughtinfour handmade masksinApril–worth result, Etsysoldmorethan12million engine toshowcasethemasks.Asa Etsy quicklyreconfigureditssearch started uptheirsewingmachines. 60,000 peopleansweredthecalland is hardlyalackoflabour. Morethan soaring unemploymentrate,there stay-at-home ordersandgiventhe Most oftheUnitedStatesisunder Josh Silvermaninarelease. a globalhealthcrisis,” saidCEO to addressthiscrucialneedduring community isuniquelypositioned to allvendorsonthesite.“TheEtsy masks,” saidthenotification sent “Calling allsellers:startmaking starting gunhadalreadybeenfired. going tobedoingit.” ButatEtsy,the ident immediately.“Idon’tthinkI’m “This isvoluntary,” saidtheUSpres machines their sewing up started people More than60,000

E-COMMERCE

-

by analysts. pared tothe$213 millionexpected of 70%–90%overoneyear) com $340 millioninrevenue(anincrease for Q2,predictingbetween$310 and Etsy reviseditspredictionsupwards up itsearningsoutlook.Inearly May, history”. Ofcourse,thisnow drives of thebestachievementsinEtsy’s company foralongtime,this“isone ing toForte,whohasfollowedthe an analystatDA Davidson. Accord its potentialmarket,” saysTom Forte, necessary equipment,whichgrows and itssellerstomeetademandfor ple ofthecapacitythisplatform “The masksareanexcellentexam benefited fromthehealthcrisis. merce platforms,whichhave also approach takenbycompetitore-com the oppositeof“massmarket” sustainable, responsibleway.Thisis profit fromtheirproductionina ANALYST ADVICE masks, ofcourse. goods. With of ary theexception discretion form areessentially soldontheplat the products sales, as toEtsy spread could slowdown the macroeconomic that out point itdoes But forts. ef itsmarketing to strengthen for capitalisingonthiswindfall who commendsthecompany gage oldones,” theanalyst, said gain andre-en newcustomers and theplatformwasableto into favourable windsforEtsy, adversetransformed conditions $52to$85.from “COVID-19 has itspricetarget and increased to“outperform” shares on Etsy itsrating revised Oppenheimer on 7May, theNew York broker published note In aresearch “FAVOURABLE WINDS”

ETSY SWISSQUOTE JULYSWISSQUOTE 2020 ------67 CONSUMERISM SWISSQUOTE JULY 2020 CONSUMERISM SWISSQUOTE JULY 2020

ast October, fashion mod- “More recently, we have seen the Generation Z,” notes Elijah Whaley, els took to the catwalk arrival of names that play on retro a specialist in Chinese digital of the Hôtel Salomon de imagery, a first in China where people marketing at the Park Lu agency. In Rothschild in the heart generally look to the future,” says addition to Perfect Diary, the brands Lof Paris to strut their stuff amid a Dao Nguyen, founder of the consult- Kaleidos and Hedone are following frenzy of camera flashes. They wore ing firm Essenzia. This can be seen this aesthetic inspired by the world oversized trench coats, luxurious in Li-Ning’s ’80s-style trainers, the of manga. down jackets and sleek schoolgirl modernisation of Pechoin cosmetics, dresses. The fashion show, named White Rabbit candies, and soaps This new Chinese wave came about “China Cool”, was organised by the from The Shanghai Soap Co., all after a major societal change. “The MADE Chinese e-commerce platform Tmall. brands created before the advent generation that grew up in the ’80s The purpose of the event was to of the People’s Republic of China and ’90s, the one that rebuilt the present a series of Chinese fashion in 1949. country after the Cultural Revolu- IN CHINA - brands that have become cult favour- tion and transformed China into the ites in their home country. Androgynous cosmetics ‘workshop of the world’, is starting In the field of cosmetics, “suc­ to give way to a cohort of younger THE COOLEST “Made in China” can no longer be cessful brands have adopted the consumers, who are familiar with associated with cheap, poor-quality androgynous codes of the video global trends and want to see their products. In recent years, China has game and cosplay platform Bilibili, country stand out on the interna- OF LABELS seen the emergence of brands that extremely popular among China’s tional scene,” says Nguyen. have as much (if not more as far as Chinese consumers are concerned) cachet as their Western inspirers.

“It started around a decade ago, with the arrival of Chinese designers who had trained at leading European or American fashion schools, such as Masha Ma and Huishan Zhang,” ex- plains Babette Radclyffe-Thomas, an expert in Chinese fashion. “Then over MARECHAL AURORE / ABACA NEWSCOM the past three years, ‘cool’ consumer brands have appeared.”

Some have only just emerged, such as the Perfect Diary cosmetics group founded in 2017. Others are estab- Chinese consumers love their home-grown products. lished fashion houses that have Some fashion brands, such as Li-Ning and Peacebird, have skilfully reinvented themselves, an become cult classics and are starting to expand abroad. example being the sportswear manu- facturer Li-Ning. We take a closer look.

BY JULIE ZAUGG These brands have various identities. Fashion labels like Peacebird, Bosideng and Urban Revivo mix the codes of fast fashion, typical of places such as Zara, with traditional Chinese motifs. A model wearing Meanwhile, Roaringwild, Hi Panda and Chinese brand Wookong, three brands created less Masha Ma, during Paris Fashion than 10 years ago, have taken inspira- Week fall/winter tion from streetwear. 2018/2019.

68 69 CONSUMERISM SWISSQUOTE JULY 2020 CONSUMERISM SWISSQUOTE JULY 2020

Milk candies from White Rabbit, a brand, a brand founded in 1943, have been successfully updated. Here a store This patriotism has completely Similarly, fashion designers can use Xiao Wanzi, which invites consum- in the city of Xi’an, transformed the perception of the the data gathered by e-commerce ers to join private chat rooms where Meanwhile, Peacebird, Urban Revivo in Shaanxi “Made in China” label. “The term is platforms such as Tmall – which they are presented with exclusive and Perfect Diary are targeting province (2019). no longer associated with poor- represents their main sales channel products, given make-up tips, and the Asian market, with shops and quality or old-fashioned goods, not – to analyse the products that work offered special promotions,” explains online sales channels set to open at all,” notes Janet Tsai, a specialist best and adapt their next collection Whaley. “It is a sort of personalised in Singapore, Malaysia, Thailand and in Chinese brands at the firm Ogilvy. accordingly. marketing that guarantees consumer South Korea. “Alongside this, Western brands have loyalty,” he adds lost some of their prestige among Most of these brands have also However, as Radclyffe-Thomas points Chinese consumers.” turned to community marketing, out, these brands don’t really need which is very popular with young to export: “The Chinese market is Moreover, Chinese brands have the Chinese consumers. They are pres- “These brands already large enough”. According to added advantage of having an in- ent on social networks like WeChat, market research company eMarketer, depth knowledge of local trends and invest in streaming platforms such don’t really need by 2021, China will have replaced the preferences. “A Chinese cosmetics as TikTok, and establish partnerships to export... the United States as the largest consum- brand is not going to market a line with “influencers” who will promote Chinese market er market in the world, with sales of lipsticks with purplish or bluish their products. equivalent to $5,800 billion. shades: they simply do not work with is already large an Asian complexion,” notes Babette Some go even further. “Perfect Diary enough”

Radclyffe-Thomas. has created a virtual avatar called Babette Radclyffe-Thomas, TIAN DONGHAI / IMAGINECHINA VIA AFP expert in Chinese fashion

Expanding to New York and Paris Although holding a strong position LI-NING BOSIDENG PEACEBIRD BARRY HUANG / REUTERS BARRY HUANG in their domestic market, Chinese THE STAR OF SPORTSWEAR THE CHINESE MONCLER THE HIPSTER’S FAVOURITE brands are struggling to establish Named after its founder, a gymnast Established in 1975, Bosideng was The Peacebird brand, based in the city themselves abroad, the negative and Olympic medallist, Li-Ning was originally a supplier of down jackets of Ningbo, has existed for more than image of “Made in China” proving created in 1989. “It was long consid- for brands like Adidas and North Face. 25 years. Having long been limited to difficult to shake. This was made ered a cheap sportswear brand lacking Then, in the early 2010s, the Hong secondary cities in China, it reposi- clear by the Bosideng clothing in technology,” notes Dao Nguyen, Kong-based brand began to promote tioned itself about two years ago to company, which ventured to London founder of the consulting firm Essenzia. its own line of luxury down jackets, seduce hipsters from the country’s and New York a few years ago. “Its But everything changed in 2017. A high- even opening outlets in New York and major metropolises, thanks to a series shops were unsuccessful because end division was created and products London. In China, it now has the same of collaborations with cutting-edge Western consumers had not heard were sold only in luxury boutiques in status as Canada Goose and Moncler, designers. Its latest collection of the brand and the French Moncler China. It later began making appear- thanks in particular to prestigious combines futuristic sportswear was already well established on the ances at Fashion Weeks and selling collaborations with designers like and pieces inspired by the world of luxury down jacket market,” says its products in trendy shops in the Tim Coppens and Antonin Tron. For the Harry Potter. Listed on the Shanghai West. In 2019, its revenue increased by financial year ending March 2019, the Stock Exchange, it saw its sales reach Radclyffe-Thomas. The New York 32%, reaching 13.87 billion Hong Kong company listed on the Hong Kong Stock 7.9 billion yuan ($1.1 billion) in 2019, outlet thus closed in 2016. dollars ($1.79 billion). The brand now Exchange saw its revenue grow by 17% up 3%. enjoys cult popularity thanks to its to 12.1 billion yuan ($1.7 billion). HEADQUARTERS: NINGBO, ZHEJIANG Li-Ning, on the other hand, is HEADQUARTERS: HONG KONG EMPLOYEES: 11,750 Dwayne Wade at a retro trainers and clothing. 2019 REVENUE: $1.1 BN promotional event starting to gain attention outside HEADQUARTERS: BEIJING EMPLOYEES: 6,400 with sportswear of China, thanks in particular to EMPLOYEES: 3,610 2019 REVENUE: $1.7 BN 603877 brand Li-Ning in collaborations with the American 2019 REVENUE: $1.79 BN 3998 Beijing. The iconic basketball player Dwyane Wade 2331 Miami Heats NBA player, who retired and the Berlin design firm Random this year, will have Identities. Its products are now sold helped to make the in a handful of specialised outlets brand more popular in the United States. in London, New York and Paris.

70 71 SWISSQUOTE JULY 2020 TRAVEL SWISSQUOTE JULY 2020 ISTOCK

TRAVEL Raja Ampat: an underwater technicoloured dream In need of a far-flung trip? Swissquote Magazine whisks you to the coast Papua, in anticipation of better days.

BY JULIE ZAUGG

RAJA AMPAT

JAYAPURA ravelling to Raja Ampat is an adventure in itself. To get there, you must first PAPAU head to Jakarta, the capi- Ttal of Indonesia. From there, take an aeroplane to Sorong, a small dusty MERAUKE city on the western tip of Papua, PORT MORESBY AUSTRALIA one of the wildest provinces in the gigantic archipelago made up of more than 17,000 islands. From there, take a ferry, then switch to a speedboat. The sea travel takes more than four hours in total. ISTOCK

72 73 TRAVEL SWISSQUOTE JULY 2020 TRAVEL SWISSQUOTE JULY 2020

THREE MAGNIFICENT ISTOCK HOTELS

Cove Eco Resort A dozen comfortable bungalows connected by a wooden walkway dot the coast of Yeben island. Each bungalow has an open-air shower and private terrace. Guests enjoy

an all-inclusive experience ISTOCK and share meals cooked with inventive ingredients around a communal table. Each day, chartered boats bring snorkellers and scuba divers to two different dive sites. On so visitors have to swim a few Tourism is a recent development. Wednesdays, guests can visit hundred metres to reach it. As soon The first hotels began to appear Pianemo, a string of limestone islands in the middle of the as you put a diving mask on, you’ll around 2010, following a series ocean. see at least four rays. They move in of government programmes put in As soon as you arrive in Yeben, a – swim about in the transparent lette sharks, which can “walk” with coveecoresort.com an aerial ballet, moving their large place to train local residents in tour- small island of only 1.6 sq. km cov- waters. Occasionally a turtle comes their fins along the ocean floor; giant wings and putting on a show for ism careers and provide subsidies to ered in thick jungle and surrounded along to snack on a piece of coral. clams, which are fluorescent blue astonished divers. families wishing to open homestay Misool Eco Resort by white sand, you will immediately Further below, a group of barracudas and can grow to almost two metres accommodation. forget any travel fatigue. Palm trees pass by furtively. in size; and tiny pygmy seahorses, Located on the southern tip of sway gently in the warm, humid which change colour to blend in with Raja Ampat in a natural marine But unlike other Indonesian islands park, this hotel has its own Tourism is a recent breeze. Bright orange hermit crabs Many of these marine species are their environment. coral reef, as well as 25 dive popular among travellers, such as crawl slowly along the beach. Birds native to Raja Ampat. Others have sites less than 15 minutes away development. The Bali or the Gili Islands, there are sing melodious songs from atop the become so rare that this is one of And of course the majestic manta by boat. Guests can watch the first hotels began to no nightclubs, restaurants or hotel tree canopy. Other than about 10 the last places in the world to see rays. You can find them on a rocky birth of sea turtles, look up chains on Raja Ampat. Instead, wooden bungalows along one side them in the wild. Some of the most point, where they clean themselves. at a starry sky free from light appear around 2010 there are a series of high-end re- of the island, there is no trace of spectacular species include epau- Boats are not allowed to dock there, pollution and explore exquisite sorts focused on eco-tourism. Built lagoons. Visitors can choose any human presence. between luxury villas on entirely from wood, the resorts do land or bungalows built above Raja Ampat is home to the largest not use PET bottles or plastic cut- the sea. marine biodiversity in the world. This lery, and have an airy architectural This archipelago misool.info Melanesian archipelago is home style that makes air conditioning DIVE IN RAJA AMPAT to 75% of all coral species known unnecessary. The resorts only is home to more in the world, and more than 1,600 serve local food, such as fresh fish All hotels have their own dive centres with certified instructors. Sorido Bay Resort Most dive sites are less than an hour from the resorts by speed- types of tropical fish. This incredible and tropical fruit. than 1,600 types This hotel, built about 20 years boat. Resorts offer all-inclusive packages which can include 2 to variety is due to the archipelago’s ago, is one of the first hotels on of tropical fish 4 dives per day, one of which may be a night dive. Snorkelling fans location within the coral triangle, These efforts are supported by Raja Ampat. Made up of small are also welcome to join these expeditions. Most of the sites are no white-walled houses decorated a zone that includes Indonesia, the locals. “At Raja Ampat, fishermen deeper than 5 metres, which is perfect for snorkelling. Visibility with Melanesian artwork, it Philippines and part of Malaysia. impose Sasi laut, a moratorium of six is excellent – except from June to mid-September when the wind But the main attraction is under- is one of the most accessible months from April to September, to picks up – and the water temperature remains between 28 and hotels (located an hour and water, of course. Around a wooden 30 degrees all year round. Raja Ampat is also located along the allow the fish populations to grow pontoon, baby sharks circle between 30 minutes from Sorong by South Equatorial Current, “a warm again,” said Huwae. The government schools of fish. In the distance, speedboat) and the only hotel ocean current that circulates from has limited the number of visitors to on Kri island, which is one of dolphins and flying fish jump against east to west between the Pacific 50,000 per year and have designat-

ISTOCK the most beautiful islands in the horizon. Further offshore, the the region. Sorido Bay Resort Ocean and the Indian Ocean, which ed areas where fishing is forbidden underwater life looks like a psyche- organises excursions to see produces ideal conditions for the entirely. delic kaleidoscope. Soft orange and birds of paradise and is home growth of coral and marine life,” said purple coral lay next to vast sec- to several cuscus, a small Marlon Arthur Huwae, an eco-tour- These measures are not just benefi- tions of bright red Gorgonian coral, marsupial with large eyes. ism expert at the University of cial to nature. For swimmers, float- interspersed with anemones full of papua-diving.com/our-resort Papua. This vast region of small ing between fish without any other clown fish. Above this underwater islands is also very isolated, with only humans or plastic in the water is a garden, schools of multicoloured 50,000 inhabitants spread across unique experience that has unfortu- fish – striped, spotted, rainbow 40,000 sq. km. nately become all too rare.

74 75 ADD A DASH Rainbow Rights OF COLOUR Certificate Celebrate Pride ISIN: CH0521605466 TO YOUR Symbol: RIGHTQ Month with PORTFOLIO LGBT+ friendly companies!

Today, inclusion and diversity are With the Rainbow Rights certificate, a central concern for our society. you can position yourself with An increasing number of companies companies who promote an inclusive are evolving to assume their social policy, respectful of LGBT+ rights, role, bringing together employees in just one click. and consumers.

swissquote.com/rainbow SWISSQUOTE JULY 2020 BOUTIQUE SWISSQUOTE JULY 2020

BOUTIQUE

SWISS QUALITY

Swiss brand Scott, renowned for its mountain bikes, also knows how to design electric ones. Demonstrating this is its new urban model “Silence eRIDE”, in particular the luxurious EVO version equipped with a carbon fork. Very manoeuvrable, with high-performance integrated daytime running lights and capa- ble of going at 45 km/h using its CYCLING JERSEYS MADE Bosch engine, this bike is attrac- IN SWITZERLAND tive in the post-pandemic era. scott-sports.com/ch Zug outfitter Qloom has added CHF 6,699.- some fun to its latest collection GREEN SURFING of cycling clothes, which are both stylish and technical. The close-fit Based in Montpellier, the start-up Yuyo specialises in environmentally-friendly styles are made from light, breath- surfboards that are made on demand. The boards are 3D-printed from plastic able materials. We particularly like waste and layered with non-polluting bio-composite materials. The design the azure blue short-sleeve Lennox and tech specifications can be completely customised. Head jersey, which makes us think yuyo.surf of Australia. From CHF 874.- qloom.com CHF 99.-

SPORTY ELEGANCE

The third generation of the TAG Heuer Connected watch, the latest from the Swiss watch- maker, is focused on versatility. Inspired by the brand’s classic TABLE BARBECUE PLAY LIKE MESSI watches, it combines design with everyday functionality and sport A SMART GREENHOUSE ON YOUR BALCONY Cookut reinvents the art of grilling with its barbecue grill In partnership with Google and EA Sports, Adidas is monitoring. Equipped with mul- that can be placed directly in the middle of the table. launching its GMR connected insole with a chip inside tiple sensors and an integrated Grow organic food at home with a smart greenhouse from start-up Mobile and compact, it can cook up to 20 sausages, eight that can be worn in football cleats. The device functions GPS, the watch measures per- Myfood. The City model is 3.5 m2 and can produce up to 100 kg of fruits skewers or beef ribs, either at home or away, thanks to like a tracker and the wearer’s sport performance in real formance during activities such and vegetables thanks to an ecosystem that is a mix of permaculture its convenient carrying case. The grill is easy life can be transferred to the video game FIFA Mobile. It as golf, running, cycling, walking and aquaponics. A dedicated app helps growers monitor the greenhouse to use and can be set up in less than 10 minutes. Just records distance travelled, speed, and the number and and workouts. from afar and regulate temperature, humidity levels and soil pH. pour water in the lower tray and place charcoal in the power of passes and shots. tagheuer.com myfood.eu upper tray. adidas.ch From CHF 1,750.- From CHF 5,000.- cookut.com CHF 39.95.- CHF 105.-

78 79 TRIED AND TESTED SWISSQUOTE JULY 2020

TRIED AND TESTED MAKING BEER AT HOME BY GÉRARD DUCLOS Swissquote Magazine tried its hand at home brewing. It was a disaster.

aking your own beer at So I pour all the malt extract into it tends to ooze a concentrated liquid INVEST IN home is a project you think the keg, which is much harder than that isn’t easy to clean up. Your floor you’ll get around to some- it seems because malt extract is (and your spouse) will thank you. Mday but never do, due to very sticky (and much of it remains lack of time or desire. But if you brew stuck to the bottom of the pan). The instructions recommended

your own beer, you’ll always have a leaving the keg for at least 7 to DR fermented beverage on hand – you Step one complete. I’m now ready 10 days in a warm place. After become self-sufficient in alcohol. to move on to the next instruction. studiously adhering to this, I decide THE CURE That prospect alone makes it worth I have to add the water and the to have a taste on that fateful tenth trying, especially in the current si- sugar, but in a specific order and in day. As I’m about to open the tap for tuation. Here’s the surprise: on paper, very precise proportions that could the first time, emotions run high. home brewing sounds shockingly almost be taken straight from an What flavours and aromas would we simple. To brew 20 litres of beer, alchemist’s tome. The amount of experience from this divine bever- all you need is a fermentation keg sugar and water changes depending age brewed by my own hands? Will (a big plastic bucket), a bubbler, a on the type of malt that is used. Not it be a summer beer, “light, blonde Pharma Opportunity bit of yeast, sugar, and a tin of malt to worry, the instructions include a and thirst-quenching for everyday Certificate extract. That’s it! And it’s affordable: detailed table on this very subject. drinking”, as promised by the pack- you can buy an entire kit for about Since I purchased the entry-level aging on the malt extract? The light 60 Swiss francs from one of the main Pilsner kit, I need 50 grams of sugar murky liquid, fills my glass, suppliers in western Switzerland. per litre and 16 litres of water. You then carefully comes to my lips... need to be very meticulous when and is absolutely undrinkable. It’s A chance to participate in the fight ISIN: CH0521605003 After just a few days of impatiently adding the sugar and the water: a bitter, acidic kind of cider that in against coronavirus! Symbol: CURETQ waiting, I receive the package. All first, mix the sugar in two litres of no way resembles a summer beer. the equipment and ingredients are warm water, then pour the rest of included, along with a rather brief the water into the fermentation It’s hard to say what caused this Laboratories and pharmaceutical companies the world over set of instructions, but it looks like bucket. It helps to have an ade- disaster. Perhaps proportion errors, are working to develop a treatment that could potentially they’ll be easy enough to follow. quate measuring tool when doing mismanaged fermentation, a combi- be used by millions. Make an investment with a promising this, otherwise calculating the pro- nation of many small – and big – It all seems so simple! Under the outlook for you and for the common good in one click with cover of darkness, I finally begin portions quickly becomes a chore. mistakes in preparing the beer, preparing. First, you warm the malt or simply the brewer’s gross the Pharma Opportunity Certificate( available on the SIX). extract, which looks like a kind of After dissolving the yeast in a small incompetence. As the equipment brownish treacle, and then pour it glass of water and adding it to the is reusable, I could try again from into a clean brewing bucket... Well, keg, I put on the lid and add the scratch, though next time hopeful- a saucepan will surely do, I think bubbler. And it’s done. All that’s left ly with the help of an experienced to myself – and then I realise that to do is wait. A tip I learnt along the friend or at least a few quality on- I was supposed to use the fermen- way: make sure the bucket is on a line tutorials. Clearly not everyone tation keg that comes with the kit. surface that won’t get damaged, as has what it takes to be a brewer... swissquote.com/pharma

80 AP_Swissquote_CODE_26394OR_AlligatorBlue_BR_200x260.indd 1 RAISED RAISED AROUND THE WORLD BORN IN LE BRASSUS AUDEMARS PIGUET BOUTIQUES : ZURICH | GENEVA 20.05.20 15:31

SWISSQUOTE N°3 JULY 2020 A TRILLION MICROCHIPS WWW.SWISSQUOTE.COM