• Economic-Security : the concept of Economic Security can be said to be the concept of incorporating and managing national resources, finances, and markets into the security domain in order to maintain the power and wealth of the country at or above a certain level. It’s based on the recognition that economic prosperity is essential to expand a nation’s military and diplomatic capabilities.

• Example of U.S. economic and security policy : The Biden administration has announced policies to stabilize supply chains for four key items, including semiconductor manufacturing and advanced packaging; large capacity batteries, like those for electric vehicles; critical minerals and materials; and pharmaceuticals and advanced pharmaceutical ingredients (APIs).

• An economic security investment strategy analyzes the supply chain and considers investments in industries that may have a direct impact on national security (e.g., the four U.S. critical commodities; semiconductors, batteries, pharmaceuticals, and rare earths).
• In addition, the defense industry is also emerging as an Economic Security-related industry, as geopolitical risks and increased defense spending by major nations have led to increased profits for defense-related companies.

• Semiconductors are vital to the overall economy and are increasingly recognized as a key industry that can make or break industrial competitiveness. In the future, the importance of semiconductors in the AI era is expected to increase.
• Batteries will become a key material and industry in the future spread of electrification, especially in the era of electric vehicles.
• Rare earths are key minerals for the aforementioned semiconductors and batteries, as well as green energy technologies, and are expected to increase in both demand and importance.
• In the wake of COVID-19, the importance of medical manufacturing has been emphasized, but the supply chain for drug manufacturing facilities in the U.S. has been criticized for being relatively weak.

• However, key industries that are suitable for economic security investment strategies face policy risks due to competition from the United States and China.
• Therefore, we may recommend investing through ETFs rather than individual stocks, and we recommend an investment strategy that reduces risk and maximizes returns through diversification in each industry.

• ETF examples; SOXX ETF, LIT ETF, XBI ETF, etc.

THOTH Investment, The Kairos CEO

Winston

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