Horizons Newsletter – week 24 // 2019

Horizons is a bi-monthly Dasym Research initiative to show you how the Dasym themes have been in the news. We publish the Horizons on our website and as an email newsletter. If you wish to receive the email, please contact Investor Relations.
Do you have a question about the digitization of consumer’s daily lives? As a research-driven investment company, we want to be relevant to you, so please provide us with your questions and remarks. Your feedback will help us to drive our research agenda.

Capturing CO2
Reducing CO2 levels is a global challenge. Although reducing emissions is a first priority, multiple researchers state that preventing carbon from getting into the atmosphere is just as important. Carbon capture and storage (CCS) is one of a few technology solutions that can significantly reduce emissions directly at the source. According to the International Energy Agency, CCS will have to account for 7% of the cumulative emission reductions needed by 2040, implying a rapid scale-up of deployments. While eight years ago, CCS technologies would cost $1.000 per ton CO2 captured, current research shows that the costs of today’s technology are below $100 per ton CO2 and that the technology achieves significant carbon removal. This has led to a remarkable series of recent funding deals for CCS startups, with investments from major oil and gas companies such as BHP, Chevron, and Occidental Petroleum. However, for CCS to reach full potential, it needs to be implemented beyond the oil and gas sector in all key industrial processes from heavy emitters.

Asia’s next growth engines
The “Asian Miracle” started in the 1960s with the opening up of Hong Kong, South Korea, Singapore and Taiwan, followed by China in the 1980s. Now, as growth in these economies is slowing or “normalizing”, Asia’s rise will increasingly depend on other economies. Over the past two months, more than one billion people cast their vote during elections in India, Indonesia and the Philippines. Incumbent parties and leaders promising economic reforms and investments in infrastructure have won these elections. In the Philippines, Duterte’s party secured a stronger mandate. In India and Indonesia, Modi and Widodo won a second term of ruling. Given their size (a combined population of 1.7 billion people and economy of $4.4 trillion) and similar level of socio-economic development, these three countries will have a significant impact on the global economy and regional Asian power dynamics. If the newly emboldened leadership in India, Indonesia and the Philippines succeed to reform their economies and leverage their strategic positions in the Asia-Pacific region, they are well positioned to become Asia’s next growth engines.

Semis connect
While the semiconductor industry is still navigating a cyclical downturn and escalating trade tensions, a strategic growth opportunity is building in the form of connectivity. The number of connected devices is increasing, and so is the need of chipmakers to add connectivity to their microcontrollers by integrating LTE, Wi-Fi or Bluetooth. Last month saw several companies staking out better positions through M&A and fundraisings. Both Infineon and NXP announced acquisitions in the connectivity space. Infineon Technologies will acquire Cypress Semiconductor, which provides chips for use in vehicles and IoT. NXP agreed to buy the Wi-Fi connectivity products business of Marvell Technology Group to use for applications in automotive electronics, communications infrastructure, and industrial systems. At the same time, IoT startup Morse Micro raised $23.8 million. Morse builds Wi-Fi chips for IoT devices, allowing devices to connect at a lower cost, at long-range, and with longer battery life. In all cases, the chips created by these companies will enable a new era of smart, connected products for both consumer and industrial applications.