Monetary Matters with Jack Farley The Era of AI Semiconductor CapEx | Angus Shillington & Nick Frasse (Fireside Chat)
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Sep 7, 2025 Angus Shillington, lead semiconductor analyst at VanEck, and Nick Frasse, product manager for thematic ETFs at VanEck, dive into the explosive growth of capital expenditure in the semiconductor industry driven by AI. They discuss the monopolistic landscape shaped by firms like NVIDIA and TSMC, drawing parallels between AI's impact and past economic revolutions. Shillington shares insights on how tech giants are adapting their semiconductor strategies, while Frasse highlights the performance of VanEck's ETFs tailored for the AI-driven market.
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Monopolies Have Replaced Cyclical Chaos
- Semiconductors now look like monopolies across the stack rather than a fragmented cyclical industry. This structural concentration explains why CapEx from hyperscalers feels unusually large and sustained.
Three Forces Powering AI CapEx
- AI CapEx is driven by three forces: internal hyperscaler demand, external product demand, and competition urgency. These forces combine to push spending far beyond historical norms and sustain the cycle.
AI Is An Industrial-Scale Transformation
- AI's societal impact is more akin to the industrial revolution than the dot-com era. That implies a longer tail of structural change rather than a short speculative boom.
