Year: 2018

The fourth test flight of Virgin Galactic’s SpaceShipTwo took its test pilots to the very edge of space this morning, reaching just over 52 miles of altitude and a maximum speed of Mach 2.9. It’s another exciting leapfrog of the aspiring space tourism company’s previous achievements.

Takeoff was at 7:30 AM against a lovely sunrise in the Mojave:

The actual spacecraft, SpaceShipTwo, was strapped to the belly of WhiteKnightTwo (VSS Unity and VMS Eve specifically) as the latter gave it a ride up to about 45,000 feet.

At that point SpaceShipTwo ignited its rocket engine and started zooming upwards at increasing speed. The 60-second burn of the engine, 18 seconds longer than the third test flight’s, took the craft up to Mach 2.9 — quite a bit faster than before.

After that minute-long burn SpaceShipTwo deployed its “feathers,” helping slow and guide it to a controlled re-entry. It had at this point reached 271,268 feet, approximately 51.4 miles or 82.7 kilometers.

Now, space “officially” begins by international consensus at 100 km, at what’s called the Karman line. But space-like conditions begin well before that, and a planned altitude of around 80 km was good enough for NASA to load a set of microgravity experiments onto the craft. And some have suggested the line should be 80 km instead. So while it’s debatable whether Virgin Galactic truly went to space (the company is saying so), it definitely got close enough to get a taste.

And the pilots, Mark ‘forger’ Stucky and CJ Sturckow, are definitely astronauts.

If this flight isn’t the one that makes Virgin Galactic the first to get to space without a national space organization’s help, chances are the next one will be. I’m awaiting more images from the flight and will update this post with them as soon as they’re available.

Since its public debut in fall 2017, Google’s parental control software dubbed Family Link, has been steadily expanding, both in terms of its capabilities and its reach. Today, it’s making the jump beyond smartphones for the first time, with newly added support for Chromebook computers. As on Android devices, parents will now be able to manage their child’s use of a Chromebook – including by setting time limits, managing the apps that can be downloaded, setting content filters, and more.

As a Family Link household ourselves, I’ve found I prefer managing my child’s device from a single, dedicated app, rather than having to dig around in the iPhone’s settings – as I did when my daughter used to tote an iPod. (Parental controls moved to “Screen Time” on iOS 12, by the way, in case you’re wondering where the “Restrictions” section went).

With Family Link, you can configure nearly every aspect of device usage, including content restrictions on apps, movies, TV, and other media. Helpfully, you can enable settings across the Google ecosystem, as well. For example, you can turn on Google’s SafeSearch, enable a mature content filter in Chrome (or even limit Chrome to select websites), disable the child’s access to third-party apps on Google Assistant, and more.

You can also track your child’s location, locate or ring a lost device (you’ll do this often), and monitor and manage screen time and device bedtime schedules.

Now parents can configure these sorts of settings on a Chromebook, too. (However, only select Chromebooks support Google Play apps.)

The expansion makes Chromebooks a more compelling option for families. Already, there are a number of affordable Chromebooks that will work well for the child’s first computer, but Family Link can also work on a shared device, Google says.

That is, the software can manage the child’s account when they’re logged in. Parents can also manage the child’s Google account from Family Link and remotely lock a supervised account, if need be.

The support for Family Link on Chromebooks follows the shutdown of Chrome’s parental controls earlier this year. At the time, we suspected that the features would make their way over to Family Link in the months ahead.

The Ministry of Europe and Foreign Affairs in France has released a statement announcing that personal information has been stolen in a data breach. Around 540,000 records have been stolen — those records contained names, phone numbers and email addresses.

Back in 2010, the Ministry created an emergency service called Ariane. If you’re traveling to an unsafe country, you can register to Ariane to tell the Ministry when you’re be going there.

By doing that, you receive security briefs, you will be contacted if there’s a crisis and the government keeps emergency contact information in case something happens to you.

And today’s breach is related to emergency contact information. On December 5th, an unauthorized party accessed that database with everyone’s emergency contacts. According to the Ministry, the vulnerability has already been fixed. The Ministry also contacted France’s data watchdog, the CNIL, within 72 hours.

That database in particular contained first names, last names, phone numbers and email addresses. Ariane’s user base hasn’t been exposed — it means that passwords and travel information have not been accessed. The relationship between emergency contacts and Ariane users have not been accessed either.

If somebody put your contact information as their emergency contact, the Ministry has sent you an email to tell you that you’ve been affected by the breach. There’s also a chance that you’ve been affected but you don’t know because somebody put your name, your phone number and an email address you don’t use anymore.

You basically don’t need to do anything as there’s no password to change or anything. Just be aware that stolen data could be used for spamming purposes as well as phishing.

Even the old smart assistant needs a fresh coat of paint, from time to time. For those looking to switch things up a touch, Google announced today that Assistant is now capable of speaking in a couple of additional accents for U.S.-based users.

Head to the Settings tab on a compatible handset, and you can swap the standard American for an Australian or British accent — or, rather “Sydney Harbour Blue” and “British Racing Green.”

Google’s blog post that spells out the new feature, along with few obligatory references to fish and chip shops and the like. No reason’s given why the feature has arrived on American shores, beyond the the fact that it would be night to hear the exchange rate for a pound delivered in a more appropriate accent.

“These voices are built using DeepMind’s speech synthesis model WaveNet,” says Google, “which uses deep neural networks to generate raw audio waveforms resulting in more realistic and natural sounding Assistant voices.”

Perhaps it will be a comfort to ex-pats or just those who find the standard U.S. accent generally grating. Look, I get it. I’ve talked this way my whole life. These folks were certainly annoyed when their devices inexplicably switched over to American. The voices are the same as those found in their native areas, albeit localized for the U.S. market, according to Google. 

Interestingly, the feature arrives just as Bixby has learned to understand a British accent, so the two smart assistants can have a nice char.

Investors and entrepreneurs are beginning to bring new diagnostic tools to market that promise better results for cancer patients through the identification of mutations in cancer cells that can create more targeted therapies.

Earlier this month, research using technology developed by the startup Mission Bio helped identify cellular mutations in acute myeloid leukemia cancer cells that could be indicators of potential relapse or recurrence of the cancer after therapy.

In the study, which was presented at the American Society for Hematology’s recent conference, a team from the MD Anderson cancer research institute in Texas, including Dr. Koishi Takahashi, sequenced more than 500,000 cells across 70 patients using Mission Bio’s “Tapestri” platform.

“These results demonstrate the power of analyzing heterogeneity for the study and treatment of cancer patients,” said Dr. Takahashi, in a statement. “Tapestri’s ability to precisely identify cancer subclones throughout treatment and disease progression brings us closer to delivering on the promise of precision medicine.”

Increasingly, researchers are coming to the conclusion that genetic mutations of individual cancer cells can lead to the persistence of minimal residual disease and therapy resistance. Other leading cancer centers at  universities including the University of California, San Francisco, University of Pennsylvania, and Stanford University have also released papers on the viability of Mission Bio’s approach.

That research may help explain why Mission Bio was able to land $30 million in new funding from a slew of investors including Agilent Technologies, Cota Capital, LabCorp, LAM Capital, and Mayfield.

The company said it will use the cash to increase the work it’s doing in blood cancer research while expanding its business into the analysis of CRISPR applications and potential mutations that can occur through the use of that gene editing technology.

“Cancer will kill 10 million people this year alone. We can beat cancer with more effective, dynamic therapies, but we first need to precisely understand its biology, starting with the varying genetic composition of each and every cancerous cell,” explained Charlie Silver, CEO of Mission Bio. “Minimal residual disease is a major cause of cancer relapse; overlooking even one cell could put a life at risk. With the Tapestri Platform, we can track every cell, every mutation, to better guide treatments and save patient lives.”

That mutation tracking is also what brought Agilent on board as the company takes its initial steps into monitoring the intended and unintended consequences of using CRISPR technology to edit genes.

“The Tapestri platform’s unique quality control capabilities are strenghtening our CRISPR R&D programs,” remarked Darlene Solomon, Senior Vice President and Chief Technology Officer of Agilent Technologies. “Agilent’s commitment to innovation and precision medicine are well matched with Mission Bio’s Tapestri platform as it has the potential to improve patient outcomes in the fight against cancer — and that’s the most meaningful benchmark of all.”

Mission Bio isn’t the only company making strides when it comes to cancer treatments and new targeted monitoring technologies.

Cambridge Cancer Genomics is another startup company working on bringing new technologies to blood sample analysis that can better identify cancer and target personalized therapies for the disease.

The company has raised $4.5 million to build what it’s calling one of the largest datasets of longitudinal cancer in the world. 

Like Mission Bio, CCG is hoping that its data can help map the ways cancer cells evolve in response to treatments and suggest new therapies to doctors.

Financing the companies rollout are investors including AME Cloud Ventures, Refactor Capital, Romulus Capital and Y Combinator. Additional capital has come from the company’s early partner, the Comprehensive Blood and Cancer Center in Bakersfield, Calif. who invested not only cash but provided 4,000 clinical samples for CCG to analyze and develop their monitoring and predictive solution.

Both companies are trying to tackle the “one-size-fits-all” approach to cancer therapy that exists for most patients around the world.

First line cancer treatment fails two-thirds of all patients and the realization that treatments aren’t working can take up to six months to recognize. Like Mission Bio, CCG is also working to identify whether a patient is at risk of relapse — something the company claims it can do 7 months earlier than standard practices.

“When you drill down into the DNA changes behind cancer, you quickly find that no two tumors are the same. To apply cancer therapies more successfully to any given tumor, we need a deeper understanding of what exactly has gone wrong in each case at a molecular level,” says Dr. Harry Clifford, a co-founder and chief technology officer at Cambridge Cancer Genomics. “This starts with effective tools to capture that information. The approaches we’re developing at CCG will have widespread applications, from identifying targets for new therapy development, to deciding which personalized approach is best for a given patient.”

That echoes the thinking of companies like Mission Bio, and like Mission Bio, CCG has published results from recent trials of its technology.

The company applied its predictive technology to the outcome of different therapies in over 2,500 breast cancer patients and used its machine learning technology to identify the same kind of variants that Mission Bio is working to call out in an attempt to understand when and how relapses can occur.

 

1) Interlacing Personal and Reference Genomes for Machine Learning Disease-Variant Detection 

https://arxiv.org/abs/1811.11674

Summary: Differences in our DNA underlie many aspects of human health; from rare genetic diseases to cancer. In this paper, we build a new class of software for detecting DNA variants. Based on the same principles behind facial recognition, our technique can identify cancer variants with unparalleled accuracy. We hope that releasing this software for non-commercial use will lead to more successful targeted therapy and personalized cancer medicine. 

Investors and entrepreneurs are beginning to bring new diagnostic tools to market that promise better results for cancer patients through the identification of mutations in cancer cells that can create more targeted therapies.

Earlier this month, research using technology developed by the startup Mission Bio helped identify cellular mutations in acute myeloid leukemia cancer cells that could be indicators of potential relapse or recurrence of the cancer after therapy.

In the study, which was presented at the American Society for Hematology’s recent conference, a team from the MD Anderson cancer research institute in Texas, including Dr. Koishi Takahashi, sequenced more than 500,000 cells across 70 patients using Mission Bio’s “Tapestri” platform.

“These results demonstrate the power of analyzing heterogeneity for the study and treatment of cancer patients,” said Dr. Takahashi, in a statement. “Tapestri’s ability to precisely identify cancer subclones throughout treatment and disease progression brings us closer to delivering on the promise of precision medicine.”

Increasingly, researchers are coming to the conclusion that genetic mutations of individual cancer cells can lead to the persistence of minimal residual disease and therapy resistance. Other leading cancer centers at  universities including the University of California, San Francisco, University of Pennsylvania, and Stanford University have also released papers on the viability of Mission Bio’s approach.

That research may help explain why Mission Bio was able to land $30 million in new funding from a slew of investors including Agilent Technologies, Cota Capital, LabCorp, LAM Capital, and Mayfield.

The company said it will use the cash to increase the work it’s doing in blood cancer research while expanding its business into the analysis of CRISPR applications and potential mutations that can occur through the use of that gene editing technology.

“Cancer will kill 10 million people this year alone. We can beat cancer with more effective, dynamic therapies, but we first need to precisely understand its biology, starting with the varying genetic composition of each and every cancerous cell,” explained Charlie Silver, CEO of Mission Bio. “Minimal residual disease is a major cause of cancer relapse; overlooking even one cell could put a life at risk. With the Tapestri Platform, we can track every cell, every mutation, to better guide treatments and save patient lives.”

That mutation tracking is also what brought Agilent on board as the company takes its initial steps into monitoring the intended and unintended consequences of using CRISPR technology to edit genes.

“The Tapestri platform’s unique quality control capabilities are strenghtening our CRISPR R&D programs,” remarked Darlene Solomon, Senior Vice President and Chief Technology Officer of Agilent Technologies. “Agilent’s commitment to innovation and precision medicine are well matched with Mission Bio’s Tapestri platform as it has the potential to improve patient outcomes in the fight against cancer — and that’s the most meaningful benchmark of all.”

Mission Bio isn’t the only company making strides when it comes to cancer treatments and new targeted monitoring technologies.

Cambridge Cancer Genomics is another startup company working on bringing new technologies to blood sample analysis that can better identify cancer and target personalized therapies for the disease.

The company has raised $4.5 million to build what it’s calling one of the largest datasets of longitudinal cancer in the world. 

Like Mission Bio, CCG is hoping that its data can help map the ways cancer cells evolve in response to treatments and suggest new therapies to doctors.

Financing the companies rollout are investors including AME Cloud Ventures, Refactor Capital, Romulus Capital and Y Combinator. Additional capital has come from the company’s early partner, the Comprehensive Blood and Cancer Center in Bakersfield, Calif. who invested not only cash but provided 4,000 clinical samples for CCG to analyze and develop their monitoring and predictive solution.

Both companies are trying to tackle the “one-size-fits-all” approach to cancer therapy that exists for most patients around the world.

First line cancer treatment fails two-thirds of all patients and the realization that treatments aren’t working can take up to six months to recognize. Like Mission Bio, CCG is also working to identify whether a patient is at risk of relapse — something the company claims it can do 7 months earlier than standard practices.

“When you drill down into the DNA changes behind cancer, you quickly find that no two tumors are the same. To apply cancer therapies more successfully to any given tumor, we need a deeper understanding of what exactly has gone wrong in each case at a molecular level,” says Dr. Harry Clifford, a co-founder and chief technology officer at Cambridge Cancer Genomics. “This starts with effective tools to capture that information. The approaches we’re developing at CCG will have widespread applications, from identifying targets for new therapy development, to deciding which personalized approach is best for a given patient.”

That echoes the thinking of companies like Mission Bio, and like Mission Bio, CCG has published results from recent trials of its technology.

The company applied its predictive technology to the outcome of different therapies in over 2,500 breast cancer patients and used its machine learning technology to identify the same kind of variants that Mission Bio is working to call out in an attempt to understand when and how relapses can occur.

 

1) Interlacing Personal and Reference Genomes for Machine Learning Disease-Variant Detection 

https://arxiv.org/abs/1811.11674

Summary: Differences in our DNA underlie many aspects of human health; from rare genetic diseases to cancer. In this paper, we build a new class of software for detecting DNA variants. Based on the same principles behind facial recognition, our technique can identify cancer variants with unparalleled accuracy. We hope that releasing this software for non-commercial use will lead to more successful targeted therapy and personalized cancer medicine. 

There’s been a break in the multi-year feud between Google and Amazon, apparently, as Amazon is now — once again — selling Google Chromecast devices on its site. The devices were banned from Amazon back in 2015, when the retailer then decided that only devices supporting Prime Video would be allowed. A year ago, it said it was assorting Chromecast but that didn’t hold up. Instead, the two companies entered into another feud — this time over Amazon’s implementation of a YouTube player on its Echo Show.

But now, things seem to be cooling down again.

As first spotted by Android Police, Chomecasts are back for sale on Amazon.com.

Specifically, the $35 third-generation Chromecast and the $69 Chromecast Ultra are available, the report found.

Amazon declined to offer a public statement on the matter, but TechCrunch has confirmed that the Amazon assortment officially includes these two devices — that is, their listings are not a fluke or a mistake.

Of course, this leaves some Chromecast users hopeful that Google has chosen to support Prime Video — especially since that’s the reason why Amazon finally allowed the Apple TV back on its site last year, after those two companies buried their own hatchet. That’s not the case as of today, however.

It’s a shame that Amazon and Google haven’t been able to play nice, as it’s consumers who suffer as a result.

Not only was it impossible for Amazon shoppers to find one of the most popular streamers on the market, Chromecast’s lack of Prime Video means that Fire TV also lacks Google’s YouTube TV. Access to these streaming services are a major selling point for media players, and likely a key reason why the more agnostic platform Roku has fared so well.

There’s been a break in the multi-year feud between Google and Amazon, apparently, as Amazon is now — once again — selling Google Chromecast devices on its site. The devices were banned from Amazon back in 2015, when the retailer then decided that only devices supporting Prime Video would be allowed. A year ago, it said it was assorting Chromecast but that didn’t hold up. Instead, the two companies entered into another feud — this time over Amazon’s implementation of a YouTube player on its Echo Show.

But now, things seem to be cooling down again.

As first spotted by Android Police, Chomecasts are back for sale on Amazon.com.

Specifically, the $35 third-generation Chromecast and the $69 Chromecast Ultra are available, the report found.

Amazon declined to offer a public statement on the matter, but TechCrunch has confirmed that the Amazon assortment officially includes these two devices — that is, their listings are not a fluke or a mistake.

Of course, this leaves some Chromecast users hopeful that Google has chosen to support Prime Video — especially since that’s the reason why Amazon finally allowed the Apple TV back on its site last year, after those two companies buried their own hatchet. That’s not the case as of today, however.

It’s a shame that Amazon and Google haven’t been able to play nice, as it’s consumers who suffer as a result.

Not only was it impossible for Amazon shoppers to find one of the most popular streamers on the market, Chromecast’s lack of Prime Video means that Fire TV also lacks Google’s YouTube TV. Access to these streaming services are a major selling point for media players, and likely a key reason why the more agnostic platform Roku has fared so well.

Yesterday’s analysis of Nvidia’s challneges triggered a surge of mail from readers. The company has lost about half of its value over the past two months, and has mostly blamed a “crypto hangover” for the problem. But as I pointed yesterday, it’s really the three Cs: “Crypto, customers, and China.” There are nuances here worth exploring though.

TechCrunch is experimenting with new content forms. This is a rough draft of something new – provide your feedback directly to the author (Danny at danny@techcrunch.com) if you like or hate something here.

Rapacious capitalists and short-termism

One major vein of reader feedback was around the remarkable short-termism of my analysis, which (mostly) looked at Nvidia over the past 60 days. As a reader named Stephen wrote to me:

By focusing on the peak price from this summer and its fall you ignore the fact that the stock price today is nearly the same as it was in June of 2017. Nvidia was on a huge run because of Bitcoin and the associated run on GPUs by miners. With the crypto currency market in decline so is the demand for advanced GPUs.

There is nothing Nvidia can do about that. They profited greatly from that blip and now they are returning to normal.

That’s entirely fair. After diving in the 2008 financial crisis along with the rest of the market, Nvidia’s market cap steadily gained value for nearly seven years, growing from around $3.6 billion in 2008 to around $15 billion at the end of 2015, far outpacing the S&P 500 or other standard benchmarks.

As the crypto craze took off in 2016 though, that fairly linear growth became exponential. The company hit a peak this past August, reaching $175 billion in value, only to slam back down to Earth with today’s $91.2 billion. So in about three full years — even with the last two month’s 50% drop — the company has managed to grow its market value roughly six times. That’s very strong growth for an established company, even in the technology sector.

The key question though is whether today’s market value is backed by the company’s positioning in the marketplace.

As much as Nvidia has blamed the collapse of crypto prices for its challenging position, that is hardly the whole story. New competition from startups and its own customers are challenging the company on its plan to dominate a series of new workload applications like machine learning and autonomous vehicles.

If Nvidia succeeds, its market cap makes a whole lot of sense. But if it fails to keep a market dominant position in these new applications, then it will have to revert back to its core gamer audience, and today’s market cap makes no sense given the limited size and growth of that market.

China / Nvidia

Another strain of readers asked for more analysis around China tariffs and their potential effect on Nvidia (you short sellers are a fascinating lot).

Let’s be clear on my position: I expect the trade conflict to get worse, not better. There is not a single issue for Trump that has better optics, political positioning, and broad support than improving the status quo around China trade. There is broad bipartisan agreement that the status quo is untenable, and while folks might disagree about specific approaches or tactics, no one thinks that China has played fair in trade for years. Trump can look like a fighter for the American worker while bringing (some) Democrats and most of his entire party on board. It’s a potent issue.

That places Nvidia in a real bind, because China is a critical end market for its products, and its manufacturing is heavily intertwined with Chinese supply chains. As just an example of this, just a few months ago, Nvidia chose TSMC over Samsung in a bidding competition to produce its large GPUs.

As Arman and I have talked with some supply chain folks about tariffs, the general consensus is that low tariffs won’t have much impact, but higher tariffs will force huge changes in the way supply chains are built to counteract those costs. That seems to be the conclusion of Debby Wu at Bloomberg as well within the iPhone supply chain world.

That said, as much as I think there should be caution on this front, Nvidia is in a relatively enviable position. Its contract manufacturers will have to deal with the tariffs directly, but Nvidia can move its manufacturing to wherever it needs to go — Korea, Vietnam, back to the U.S. or wherever. There is of course some time lag, but I would be much more worried about TSMC’s position long-term than Nvidia’s.

Quick Bites

Short summaries and analysis of important news stories, outside our main analysis

SBI Says It Made An Error Allocating Shares in SoftBank IPO – one of the underwriters for SoftBank’s IPO accidentally sent lower share numbers to some buyers, leading to speculation that the company was dealing with a mass selloff. Things seem to be righted, and blockchain enthusiasts will once again get to scream “BLOCKCHAIN” at another financial markets screwup.

The North Face – Cory Arcangel does a great job of decomposing the modern EDM “product” and placing it into today’s context — with some nice connections to our discussion above about Nvidia. “EDM is the perfect reflection of 2018. It is intense, adrenaline-fueled, all-night music made by hyper efficient, work-a-holic, laptop bureaucrats.” Talking about Steve Angello and his rapid series of engagements on the EDM circuit: “Instead, he—his literal, physical self—was being shipped around, with minutes to spare, as part of an intricate just-in-time supply chain. Like Apple’s, this supply chain is also exceedingly light—Angello is the only asset required.” Hat tip to Robert Cottrell at The Browser for this one.

Semiconductor equipment sales forecast: $62B in 2018 a new record – More uplift for 2018, if some challenges in 2019 forecasted. “In 2018, South Korea will remain the largest equipment market for the second year in a row. China will rise in the rankings to claim the second spot for the first time, dislodging Taiwan, which will fall to the third position.” It will be interesting to see how tariffs affect these numbers next year.

What’s next

More semiconductors probably. And Arman and I are side glancing at Yelp these days. Any thoughts? Email me at danny@techcrunch.com.

This newsletter is written with the assistance of Arman Tabatabai from New York

Yesterday’s analysis of Nvidia’s challneges triggered a surge of mail from readers. The company has lost about half of its value over the past two months, and has mostly blamed a “crypto hangover” for the problem. But as I pointed yesterday, it’s really the three Cs: “Crypto, customers, and China.” There are nuances here worth exploring though.

TechCrunch is experimenting with new content forms. This is a rough draft of something new – provide your feedback directly to the author (Danny at danny@techcrunch.com) if you like or hate something here.

Rapacious capitalists and short-termism

One major vein of reader feedback was around the remarkable short-termism of my analysis, which (mostly) looked at Nvidia over the past 60 days. As a reader named Stephen wrote to me:

By focusing on the peak price from this summer and its fall you ignore the fact that the stock price today is nearly the same as it was in June of 2017. Nvidia was on a huge run because of Bitcoin and the associated run on GPUs by miners. With the crypto currency market in decline so is the demand for advanced GPUs.

There is nothing Nvidia can do about that. They profited greatly from that blip and now they are returning to normal.

That’s entirely fair. After diving in the 2008 financial crisis along with the rest of the market, Nvidia’s market cap steadily gained value for nearly seven years, growing from around $3.6 billion in 2008 to around $15 billion at the end of 2015, far outpacing the S&P 500 or other standard benchmarks.

As the crypto craze took off in 2016 though, that fairly linear growth became exponential. The company hit a peak this past August, reaching $175 billion in value, only to slam back down to Earth with today’s $91.2 billion. So in about three full years — even with the last two month’s 50% drop — the company has managed to grow its market value roughly six times. That’s very strong growth for an established company, even in the technology sector.

The key question though is whether today’s market value is backed by the company’s positioning in the marketplace.

As much as Nvidia has blamed the collapse of crypto prices for its challenging position, that is hardly the whole story. New competition from startups and its own customers are challenging the company on its plan to dominate a series of new workload applications like machine learning and autonomous vehicles.

If Nvidia succeeds, its market cap makes a whole lot of sense. But if it fails to keep a market dominant position in these new applications, then it will have to revert back to its core gamer audience, and today’s market cap makes no sense given the limited size and growth of that market.

China / Nvidia

Another strain of readers asked for more analysis around China tariffs and their potential effect on Nvidia (you short sellers are a fascinating lot).

Let’s be clear on my position: I expect the trade conflict to get worse, not better. There is not a single issue for Trump that has better optics, political positioning, and broad support than improving the status quo around China trade. There is broad bipartisan agreement that the status quo is untenable, and while folks might disagree about specific approaches or tactics, no one thinks that China has played fair in trade for years. Trump can look like a fighter for the American worker while bringing (some) Democrats and most of his entire party on board. It’s a potent issue.

That places Nvidia in a real bind, because China is a critical end market for its products, and its manufacturing is heavily intertwined with Chinese supply chains. As just an example of this, just a few months ago, Nvidia chose TSMC over Samsung in a bidding competition to produce its large GPUs.

As Arman and I have talked with some supply chain folks about tariffs, the general consensus is that low tariffs won’t have much impact, but higher tariffs will force huge changes in the way supply chains are built to counteract those costs. That seems to be the conclusion of Debby Wu at Bloomberg as well within the iPhone supply chain world.

That said, as much as I think there should be caution on this front, Nvidia is in a relatively enviable position. Its contract manufacturers will have to deal with the tariffs directly, but Nvidia can move its manufacturing to wherever it needs to go — Korea, Vietnam, back to the U.S. or wherever. There is of course some time lag, but I would be much more worried about TSMC’s position long-term than Nvidia’s.

Quick Bites

Short summaries and analysis of important news stories, outside our main analysis

SBI Says It Made An Error Allocating Shares in SoftBank IPO – one of the underwriters for SoftBank’s IPO accidentally sent lower share numbers to some buyers, leading to speculation that the company was dealing with a mass selloff. Things seem to be righted, and blockchain enthusiasts will once again get to scream “BLOCKCHAIN” at another financial markets screwup.

The North Face – Cory Arcangel does a great job of decomposing the modern EDM “product” and placing it into today’s context — with some nice connections to our discussion above about Nvidia. “EDM is the perfect reflection of 2018. It is intense, adrenaline-fueled, all-night music made by hyper efficient, work-a-holic, laptop bureaucrats.” Talking about Steve Angello and his rapid series of engagements on the EDM circuit: “Instead, he—his literal, physical self—was being shipped around, with minutes to spare, as part of an intricate just-in-time supply chain. Like Apple’s, this supply chain is also exceedingly light—Angello is the only asset required.” Hat tip to Robert Cottrell at The Browser for this one.

Semiconductor equipment sales forecast: $62B in 2018 a new record – More uplift for 2018, if some challenges in 2019 forecasted. “In 2018, South Korea will remain the largest equipment market for the second year in a row. China will rise in the rankings to claim the second spot for the first time, dislodging Taiwan, which will fall to the third position.” It will be interesting to see how tariffs affect these numbers next year.

What’s next

More semiconductors probably. And Arman and I are side glancing at Yelp these days. Any thoughts? Email me at danny@techcrunch.com.

This newsletter is written with the assistance of Arman Tabatabai from New York