January 2023 Highlights - Climate Alpha, Chip War, Insurtech, Web3 Outlook & Southeast Asia's moment

We start the new year by wishing every one of you out there a happy lunar new year of the rabbit in 2023, and have a prosperous, healthy, and great year ahead! Here are the key takeaways and recommendations in Jan 2023 on these key topics: climate alpha, chip war, insurtech, web3 outlook, and why it's Southeast Asia's moment now. which you can digest quickly with smart brevity.

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The Rise of Asia from a semiconductor's point of view with Chris Miller

You can now read the full transcript of the conversation with Chris.

Key Takeaways:

• The history of the semiconductors business globally mirrors the rise of the Asian economies: Japan, Korea, Singapore and Taiwan.
• The one important data point which prompted Chris Miller to dive deep into semiconductors: the trade data in the late 2010s show that China has spent more money importing chips than importing oil.
• Why China is not able to build its semiconductors industry: The United States has built an ecosystem where the expertise and materials are specifically maintained by different companies in different parts of the world. For example, there are the EUV lithography machines made by ASML in the Netherlands, the manufacturing capability by TSMC in Taiwan, the chemicals made and exported by different suppliers in Japan, the mobile chips by Samsung in Korea and the chip architectures by ARM in the UK. They utilized export controls to stop China to gain the top 1% of the semiconductor chips in the market.
• TSMC's competitive advantage: The economics of chip fabrication was such that the more chips that are designed by other companies you produce, the more economies of scale TSMC would gain. Morris Chang betted on the idea that if TSMC built a facility that only manufactures chips, the customers (design firms or Apple) will grow over time.

Climate Alpha with Parag Khanna

Key Takeaways:

• The 3 trillion dollars real estate market is going to be disrupted by climate change. Most businesses are focusing on climate mitigation and not on climate adaptation. Today, there are no investors from sovereign wealth funds to investment banks which are analysing the real estate which will be affected by climate change.
• Climate Alpha leverages artificial intelligence (AI) and available public and private datasets out there to generate analyses on how real estate in different parts of the world will be affected by climate change, for example, the hurricanes battering the coasts of Florida.
• The end state is that Climate Alpha becomes a market maker or exchange platform for investing in the real estate market given an understanding of the likelihood of how a specific region of interest may be affected by climate change. Parag has highlighted that he would set up a fund to invest in real estate as Climate Alpha evolves.

Insurtech in the Asia Pacific with George Kesselman

Key Takeaways:

• The one thing that George knows that very few people understand about Insurtech in the Asia Pacific is the lack of knowledge of evolving insurance regulations by different governments across different countries.
• The water drop model was pioneered by China's tech and insurance giants where they are insuring a large group of people by amassing small amounts of insurance contributions from huge populations of at least greater than 100m people.
• One key example is the insurance giant from China, Zhong Ann Tech or ZA Tech is working with Grab to deploy the water drop model to cover drivers' insurance in Indonesia.

True Global Ventures and Web3 Investment Outlook in 2023

Key Takeaways:

• True Global Ventures (TGV) investment thesis is to invest in serial entrepreneurs globally. They started investing in crypto and web3 companies in 2018.
• The five key trends which Kelly spoke of after their reflection from TGV's recent partner's summit: 1/ 2022’s Winners are going to be more attractive in 2023; 2/ Centralisation is Dead. Decentralisation is more than back!; 3/ Consumer demand will accelerate the need for Security and Privacy; 4/ Open Metaverse accelerates to become Mainstream and 5/ Decentralised AI in Web3
• Animoca Brands and the Sandbox (for the token SAND) were key investments made by TGV. In the podcast, Kelly highlighted other enterprise blockchain companies, for example, Chronicled in the life sciences industry and Tiny Tap in edutech.

Our Recommendations in Jan 2023:

Asia Partners 2023 Southeast Asia Internet Report: Southeast Asia's moment

The Southeast Asian growth equity firm, Asia Partners have published their 4th report on the Southeast Asia Internet Report 2023 and a professionally made documentary video which we have placed here for you to view. One of the co-founders, Nick Nash was the president of SEA Group (formerly Garena) who helped the SEA group to go public. The introduction was done by Nancy Hungerford, a former anchor from CNBC Singapore.

The content was broken into 8 parts:

• Part I: Welcome by Nancy Hungerford [0:00]
• Part II: The Case for Southeast Asia [4:08]
• Part III: Plan vs. Actual: Holding Ourselves Accountable to our 2019 Predictions [17:28]
• Part IV: Talent Flows in SE Asia’s Innovation Ecosystem [44:38]
• Part V: Where are We in the Macro Cycle? When Will IPOs Return? [1:08:35]
• Part VI: Where and When Does GDP Growth Lead to Value Creation? [1:53:49]
• Part VII: To Each Their Own: Regional Specialization in Building TMT Equity Value [2:18:26]
• Part VIII: Final Thoughts: Semiconductors, Vietnam’s Sea Turtles, Bytedance Alumni, and Why the Founders of 2024-32 Will Change the World [2:29:38]

Of course, it has been on Bernard's wish list to interview Nick Nash on Analyse Asia. If that cannot materializes even if we ask, we will present an analysis of the report in the future.

Compounding Curiosity Podcast Episode 51 by Kalani Scarrott (Subtack)

Recently, I switched my role from a host to a guest on another podcast. I discussed the challenges of monetization and distribution for Asian podcasts and shared the trade secrets on how to growth-hack your podcast after doing this for 8 years. It did help me to organize my thoughts on where the future of Analyse Asia is heading.

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