UBS On-Air: Market Moves Top of the Morning: Chips Ahoy - The semiconductor
Feb 27, 2026
Kevin Deneen, tech strategist on semiconductors and AI infrastructure. Kurt Ryman, macro head with historical and policy perspective on transformational innovation. They trace the microchip’s origins, the scale of transistor progress, policy and trade shifts like the CHIPS Act, and how chips now enable AI, autos, robotics, and healthcare.
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Enabling Versus Application Layers Drive Big Gains
- Transformational technologies have an enabling layer and an application layer that together drive massive productivity gains.
- CIO compares electrification (enabling) and the assembly line (application) to semiconductors enabling AI-enabled applications and large output increases.
Hold Through Transformational Tech Volatility
- Don't be prematurely pessimistic about transformational tech despite periodic setbacks.
- Kurt advises that long-term holders from the microchip era gained ~4 percentage points annualized despite 1980s and early-2000s downturns.
Microchips Seeded By Military And Apollo Programs
- Early semiconductor development was driven by government and military procurement, not consumer gadgets.
- Kurt notes 70% of semiconductor spending in the late 1960s and early 1970s came from the military and Apollo-era projects seeded commercial adoption.