Let's get to our guest, Kirk Young, chairman and CEO at Kirkland Capital. Kirt, great to have you on the program. Some interesting little tidbits in your notes. I would put one of the comments into this adage of a little bit of knowledge can be a dangerous thing, where you say that national leaders in the U S And China really didn't know anything about high tech, certainly quantum computing and AI and and the semiconductors that went into it, and now that they know a little bit about it,
they're all ginned up over national security. Explain your thoughts to us, sure, uh, I would say that for the last several years, many people, especially national leaders, believe technology are things like Internet or Google or Amazon or Facebook. Let me now know that to keep everything was semi conductors. So about two years ago when US had the trade war was China, when they found out that Huawei and Cite presents a threat to US, they started to focus
on technology. They kind of found out semi conductor was the chock point, almost by accident, because they realized that US have control and influenced a lot of semiconductor manufacturing process from software to semi canal equipment, to chemicals. That's why it's seeing that US have all the leverage for last year or two putting all the restrictions on China. Unfortunately, the manufacturing process quite complicated that there's not much China
can do to resolve the choke points. They have probably over a hundred chock points. So I would say that to your point that maybe a little knowledge is dangerous, but US definitely found a way to limit China's um um investment or trying to progress on semi conductors, especially now semi conductor is becoming more national security issues rather than business issues. We talk about semic a doutors can make things like a like super computers, like missiles, airplanes
for example. So that's why US is even putting more pressure to limit the highest civic co doctors to China. So cook, if there's not much that China can do, does that mean that the US kind of wins this chip warring? And then how investable is China? Take sure? I would say that for the next fact to ten years, there's not much China can do. Obviously, China now realize its shortcomings, so trying to trying very hard to catch up. There are a lot of you know, smart people, PhD, etcetera.
In China, so gifvely in five to ten years there might be a possibility for them to catch up, but in the near term it's almost impossible. So for investment opportunity, one theory ahead is called one world two systems, which means you're going to see one standard for China, one standard for non China. So for trying to specific investment opportunities, you have to look at domestic opportunities copy like bi do, like Ali Baba, et cetera, only focused on china domestic market. Unfortunately,
it will be difficult for them to go outside China. Well. A good example of how US officials were caught off guard as well, uh is the the Huawei and um you know, basically had a big lead in five G right that that that um, what they were doing with five G was more advanced than what the US was doing.
That's correct. I would say for many years, China's been making cheap products to seal into US, like you know, toys and phones because those were not related to national security, So is it US did not pay too much attention. I would say Huawei also Zte are the first time US realized that the communications could be national security issues
because all the conversation or the secret goes into telecommunications. Huawei, because we're so cost competitive, seeing start in many phone companies, especially as you mentioned, they were leading leader in five G. That's why US became really worry and cautious on China attack. So that's why they were able to find semi choke point.
As you know that after US put a restriction on Huawei, Whabi is a phone business pretty much gone, is facing business almost putty much gone because everything without semi conductors. So US was able to find the choke point to limit China's technology investment. What's the outlook for some of these phone suppliers. I mean, we saw Apple saying it's going to make fewer of the new iPhones, and that's
due to the lockdowns in China. But you've also got to argue whether or not people want to continue to upgrade amidst all the concerns about to slow down. Do you need a new iPhone if you're potentially going to lose your job or have a decrease in living conditions due to higher costs. Yeah, that's actually a very good point.
My concerns more demand than supply demand. As you mentioned that right now, because higher interest rate people have less discretional spending, they have to spend money on like more gage, like rent, you know, higher gasoline, higher food cost. So the last thing they want to buy is a new phone, especially in the last two years during the COVID shutdown when people work at home, many people bought new phones
and new PCs computer in the last two years. So right now there's really no reason to buy new consumer electronic So I think the man you hit the nail on the head. That is the biggest concern fund supply perspective. The zero China COVID policy UH is actually a big issue for China. Company like fast Com, even Quantact that make iMac. I'm sure you heard that. Even disney Land shut down the Shan High operation, Macail, Casino and g also shut down for a day. So zero COVID policy
is making things very difficult in China. But if you look at Apple, Apple's UH press announcement like cutting about three million phones out of ninety MILLIONI so the show fall is probably around five percent, maybe ten percent. I don't think it's it's high. Thirty percent is some other media reported but still show for is my smaller concert My biggest concerts actually demand I do not expect and to be strong this year even next. Let's talk a little bit about areas that you look at that offer
a lot of opportunity for investors. Let me give you, uh would you rather kind of question in terms of opportunity to you like autonomous driving more or the metaverse. I was say a ton about driving for sure, because EV is something you can see electrly. Vehicle is something we are using today. Just look at Tesla. So from the electric vehicle perspective, the important functions like battery, like charging stations. Of course a ton of driving there will
be the key going forward. Metaverse is a next concept, but I think we might be years away from really looking for applications if a revenue for metaverse, so I think something might happen, but as years away. But EV you can see today we're using today, so to be autonomous driving that is actually the biggest opportunity in the next three to five years, especially given that we have seen the slowdown for PCs for phones, et cetera. Industry,
vehicle and related industry. UH companies should be the investment opportunity to focus on. So yeah, who, Yeah, we want to know names. Okay, if you like autonomous driving, who makes the money? Sure? Uh? The company in Japan, uh give example called Tier four. It makes the software to control cars. Also, we have company that makes sensors, sensors like a company in Taiwan. Um it's called Ability. For example,
they make like the sensors in the car. If you look your cars today, they are about night to ten cameras around the car that sense. So okay, Kirk, you teached us very nicely. They're certain to get an invite back. We want to hear more. Kirk, thanks very much for joining us. Kirk Young, Chairman and CEO at Kirkland Capital