Start of the Day with Chris Forte – EVs

Posted on September 15, 2022 by Scott Shuda

What do Jeep, Aehr Test Systems (AEHR), and Indie Semiconductors (INDI) have in common?

Jeep has been around since 1941. Their tough machines have traditionally appealed to the more adventurous drivers. They have a very loyal following.

Today Jeep is known for their rugged SUVs. Recently they announced they are releasing four new all-electric EV models in the US and Europe before the end of 2025. That’s not that far away. It’s part of Jeep’s plan to reach 50% electric vehicle sales in the US by 2030 and 100% in Europe – aggressive like the brand.

Christian Meunier, CEO said, “This is a major, MAJOR opportunity for us. It’s an opportunity to make Jeep even more JEEP, more capable, more fun.”

By 2025 Jeep will offer some type of EV for each model in their lineup. For example the Recon is a Wrangler inspired off-road EV.

Jeep is not alone. Every large automaker will be cranking out EV’s as fast as they can make them.

So what about AEHR? They’ve been around for 40 years. They are known primarily for their “burn-in” test equipment for manufacturing semiconductors.

Okay, what does that mean? “Burn-in” is a testing process where devices that are known to be working are subjected to elevated temperatures and voltages to accelerate their lives.

Say what? They make the devices older? Simply, yes. Semiconductors may last 20 years but they tend to fail most often during the first year. AEHR accelerates their life and makes them one year old quickly, making the tested devices reliable and high quality.

So who buys AEHR’s test systems? Semiconductor companies that make Silicon Carbide (SiC) chips for one. These are the unique “power” chips that are vital for EV cars. Without these chips the cars are pretty much a 4000 pound paperweight.

By the way, AEHR surged 14% during Tuesday’s market debacle. They signed a contract with “a major supplier of silicon carbide devices serving several significant markets including the electric vehicle industry.”

So who makes these important auto chips and devices? Indie Semi (INDI) is among a select group. Indie is a leader in the Autotech revolution with next-generation automotive semiconductors and software platforms. LiDAR and Radar are big parts of their business.

To say INDI is a grower would be an understatement.. “Indie exceeded Q2 top and bottom line expectations driven by increasing global demand for our differentiated Autotech portfolio.” Their expected growth for 2022 is 130% year-over-year.

EV cars are loaded with chips, almost double the number in a traditional gas car. Demand will be exceptional for years to come. Companies like AEHR and INDI will be revving up revenues and helping you drive 500 miles on one charge in your stylish new Jeep Wagoneer.
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QUICKIES
*Breakout Investor Bryan Robson does a dynamite job with his update of Diamcor Mining (DMIFF). “I spoke with Dean this past Monday. Some notes follow…” Check it out – great info! (Subscription)
*Florian Buschek who covers diamond miner DMIFF follows up with “India’s Younger Generations Could Be A Boon For Global Diamond Demand.”
*Scott Shuda gives us an updated “Wisdom of the Crowd – August 22 Community Survey – Portfolio Names and Weight.” (Subscription) Yep, SMSI is still number one. It’s “held by 75% of survey respondents, and among those shareholders, 39% consider their current position to be Overweight.” Ownership of BWLKF is surging.

*Bespoke Investment: We noted numerous times how COVID has created so many distortions in the economy that the job of forecasting it has become exceedingly difficult, and the fact that every ‘beat’ of this magnitude in core CPI has occurred since COVID only reinforces this point.
*Since the Fed started raising in March the ITB US Home ETF is down 17%. Mission accomplished – the housing sector has cooled off spectacularly
*The 1200+ point loss Tuesday for the Dow was the 7th largest loss in history.
*Not a perfect ten: 10 of 11 S&P 500 sectors are more than 10% below their 52 week highs
*Oil rose with China easing lockdown restrictions and the US is considering the SPR refill.

Electricity is really just organized lightning. – GEORGE CARLIN

Good luck to all – Chris

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