Memory Chip Shortage is Global Crisis in the Making | The Pulse 2/16/2026
Watch on YouTube ↗  |  February 16, 2026 at 12:02 UTC  |  48:05  |  Bloomberg Markets
Speakers
Francine Lacqua — Anchor, Bloomberg
Marco Rubio — U.S. Secretary of State
Rachel Ellwood — Former NATO / Defense Expert
John — Head of iShares Fixed Income Strategy
Neil Campling — Senior Strategist, Bloomberg (Tech/AI)
Jordan Sinclair — President, Robinhood UK
Laura Noonan — Global Finance Reporter, Bloomberg
Alexandria Ocasio-Cortez — U.S. Representative

Summary

  • Global Memory Crisis: A severe shortage of memory chips is emerging due to AI demand (AI chips require 6-10x the memory of standard chips). New fabrication plants take 3-5 years to build, creating a structural supply bottleneck that will inflate costs for consumer electronics (PCs, Autos) while boosting profits for pure-play memory producers.
  • Geopolitical Realignment (2026 Context): The U.S. administration (implied Trump/Vance era given Rubio's role) is aggressively pushing Europe to fund its own conventional defense and decouple supply chains from China. This signals a structural bull market for European defense contractors and non-Chinese supply chain infrastructure.
  • Credit over Treasuries: Institutional strategy favors High Quality Credit over Government Bonds due to concerns over U.S. fiscal spending and volatility, with specific flows moving toward European fixed income and Emerging Market local currency debt.
  • Retail Tokenization: The UK is becoming a battleground for retail investment, with a shift toward "tokenized equities" and 24/7 markets, bridging the gap between public and private market access.
Trade Ideas
Ticker Direction Speaker Thesis Time
LONG John (iShares) "We are seeing people really allocating to credit as a way to perhaps diversify their portfolios from government bonds where I do see more risk from fiscal spend... Last year we saw more than 50% of flows into bond ETFs going into European fixed income strategies." Investors are fleeing U.S. Treasuries due to fiscal profligacy/volatility and moving into Investment Grade (IG) credit and European assets. The "structural favoritism towards Europe" suggests undervalued assets relative to the U.S. LONG High Quality Corporate Credit and European fixed income/equities. Contagion from U.S. volatility or a resurgence of inflation in the Eurozone. 12:14
LONG Neil Campling
Tech/TMT Analyst
"With the latest AI chips they used 10 times or 6 times the amount of memory... it takes 3-5 years to build a new memory fabrication plant, and that is creating a bottleneck." Demand is exponential (AI) while supply is inelastic (multi-year build times). This creates a classic super-cycle for memory manufacturers where pricing power shifts entirely to the producers. LONG pure-play memory manufacturers and semiconductor equipment suppliers. Global recession dampening AI capex; rapid resolution of supply chain issues (unlikely given the 3-5 year lead time).
AVOID Neil Campling
Tech/TMT Analyst
"Samsung is also saying they will be impacted negatively because they make smartphones, PCs and TVs... inflate prices on everything from laptops to cars." While Samsung makes chips, their massive exposure to consumer electronics means they are a net victim of rising component costs. Higher memory costs crush margins on hardware or kill demand if passed to consumers. AVOID hardware manufacturers with high memory exposure who lack the pricing power of the hyperscalers. Samsung's memory division profits outweighing their consumer electronics losses. 25:16
LONG Marco Rubio
Secretary of State
Rubio states the U.S. expects Europe to "step up ramping up conventional defense." Ellwood notes Europe is trying to project it is "doing more for its own conventional defense." The geopolitical pressure from the U.S. forces European nations to increase defense budgets significantly. This spending flows directly to defense contractors (both U.S. exporters and European domestic firms). LONG Defense sector as government spending is mandated by alliance survival. Diplomatic resolution in Ukraine reducing urgency for re-armament.
LONG Jordan Sinclair
President, Robinhood UK
Robinhood is expanding in the UK with "2000 tokenized equities" and sees "massive change" in retail participation. They remain "optimistic on the future of crypto." The push for 24/7 trading and tokenization of real-world assets (RWA) and private equity democratizes access. As platforms like Robinhood remove barriers (fees, settlement times), volume and adoption of the underlying infrastructure (Bitcoin/Crypto) increase. LONG platforms enabling tokenization and the underlying crypto assets. Regulatory crackdown in the UK or EU; failure of tokenization to gain mainstream trust. 24:20
WATCH Laura Noonan
Global Finance Reporter, Bloomberg
Regulators are concerned about "unseen ties between private credit and banks" ($2.2 Trillion in lending commitments). However, there is a "move towards deregulation." The sector is growing rapidly and deregulation fuels it further, but the opacity creates "tail risk." If regulators cannot see the leverage, a shock could be systemic. WATCH. The deregulation trend is bullish for profitability in the short term, but the systemic risk is rising. A credit event revealing hidden leverage that triggers a regulatory overreaction. 36:07