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First Move with Julia Chatterley

More than 100,000 People Evacuated as Heavy Rains Hit China; Olympic Games Finally Get Started, but COVID Forces Some Athletes to Withdraw; Netflix Growth Slows as the Streaming Service Moves into Gaming. Aired 9- 10a ET

Aired July 21, 2021 - 09:00   ET



ISA SOARES, CNN CORRESPONDENT: Live from London, I am Isa Soares, in for Julia Chatterley and this is FIRST MOVE and here is what you need to know.

Flooding crisis. More than 100,000 people evacuated as heavy rains hit China.

Olympics underway. The Games finally get started, but COVID forces some athletes to withdraw.

And subscriber struggle. Netflix growth slows as the streaming service moves into gaming.

It is Wednesday. So, let's make a move.

Hello, everyone. A very warm welcome to FIRST MOVE. Great to have you with us this Wednesday.

Now, as global markets continue, of course their recovery from Monday's sharp pullback and what a day that was, maybe we should call it perhaps a

Jeff Bezos like bounce, what goes up must come down; and then right back up again as you can see, the Dow futures up three tenths of a percent, looking

pretty good, a tad looking a bit weak premarket, but we're seeing nice gains for the Dow and the S&P with reopening stocks like airlines set rally

for a second straight session after this disappointed numbers we saw Monday.

Europe has been enjoying a second day of gains as well. Trading may remain volatile as investors assess how really the delta variant will impact

economies. That is the key question.

Meanwhile, the head of the World Health Organization today warning that a new COVID wave is underway globally, but earning season should -- I say

should -- continue to offer support to stocks. It is a busy week for earnings in the United States.

Netflix result disappointed investors after Tuesday's closing bell. We will have much more on that in just a moment. But Dow components, Coca-Cola and

Johnson & Johnson are both raising their four-year forecasts today.

Meanwhile, in Europe, shares of U.K. retailer, Next and the media group, Future are rallying after posting encouraging numbers, too.

Meanwhile, if we have a look at the numbers in Asia, a mixed session there. Chinese stocks seeing the best gains despite ongoing concerns over

Beijing's crackdown on tech. BlackRock says it believes China's Central Bank could announce more stimulus soon, which would be of course a plus for


But let's begin with our drivers in Asia and really the worsening global crisis in Central China. We've seen the heaviest rains on record slamming

Henan Province. Officials say at least 25 people have died and another seven are missing.

Our Kristie Lu Stout has all the details for you.

KRISTIE LU STOUT, CNN CORRESPONDENT: Dramatic images coming out of China's central Henan Province with its capital, Zhengzhou drenched by record

breaking rainfall. Zhengzhou is a City of 12 million situated on the banks of the Yellow River and authorities there say, a year's worth of rain has

fallen on the city in the last three days.

And it's not just Zhengzhou, streets in a dozen cities across China have been severely flooded. Among the devastating scenes out of Central China,

people trying to drive down flooded streets and police helping those who can't make it by raft, by boat, by human chain, rescuers bringing people to


The new reservoirs are at or above capacity, roads impassable, with power lines down and people trapped in subway cars as rushing water fills the


Listen to this passenger who was trapped in a flooded subway car.


UNIDENTIFIED MALE (through translator): The flood was so strong and many people were carried away by that. The remaining few of us including a kid

were so tired and we nearly gave up. We kept holding on tight to the railing and that's why you can see so many bruises on my arms. These are

all bruises. This is one, two, this included, too.

If you don't hold on tight to that railing, it's very easy to be washed away.


LU STOUT: Authorities say more than 500 people who were trapped in Zhengzhou's subways have been rescued, 12 were found dead; and more rain is

expected across Henan Province over the next three days.

Kristie Lu Stout, CNN, Hong Kong.


SOARES: It must have been terrifying for so many of those people there. Thank you to Kristie Lu Stout.

Now, to our second driver on the show today. Pfizer-BioNTech has announced plans to manufacture its vaccine in South Africa. It is partnering with

local pharma company Biovac to produce shots exclusively for the African Union.

David McKenzie has been following this story for us and he joins me now. David, talk me through the details of this deal, and in particular, how

quickly they can start manufacturing the vaccines.

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, it is very good news, say public health officials, Isa, because it means that there will be

mRNA technology vaccines produced on the African continent here in South Africa and then distributed to countries within Africa solely.

Now, that could be up to a hundred million doses. The timeline, Isa, is certainly a few months, and hopefully by 2022, next year that we will get

those doses off the shelves.

But it could make a big difference in a continent where there's very low vaccine coverage -- Isa.

SOARES: Yes, but you know, correct me if I'm wrong, David. Biovac is only handling the final phase of the manufacturing, it will still rely on Pfizer

facilities in Europe to make the vaccine substance and then ship them over to South Africa. What have the negotiations for a waiver at W.T.O. are on

the question of intellectual property? Is this a way to stave off those calls, you think?

MCKENZIE: I think it will be. It certainly is a strategy of the company to try to stave off those costs. Pfizer and other pharmaceutical companies

have been very loathed to obviously have those waivers put in at the W.T.O. because they say they did the research, they spent the money and they came

up with these vaccines, which have been done in record time.

Others, like the governments of South Africa and India say that it's important to waive those intellectual property rights to allow the entire

globe to get vaccines, and there is a huge issue with vaccine inequity. Less than two percent of the African population across the continent has

been vaccinated fully.

So, this seems to be a middle way at this point. The company says that they will get the raw materials for manufacturing the vaccines from Europe, but

then physically make them and manufacture them and use the technology to do it in South Africa and then distributed across the continent.

So, in the medium term, it will make a big difference. In the short term, there are several months that the continent faces of a very difficult COVID


SOARES: Yes, let's talk about those next few months. What happens, David, if wealthy countries, for example, start seeking needing booster shots for

their populations? What kind of impact does that have on the vaccines being made in South Africa?

MCKENZIE: Well, there are still countries that have far more vaccine doses than they actually need. I think, Canada as an example, but there are many,

many examples in wealthy countries that are, according to critics hoarded vaccines.

Now, I think it's important that this facility will be based in South Africa and through a partnership. So, the impact will be I think, nothing

at this point, except if that raw material is needed for those booster shots, and is prioritized, then you could see a situation like we saw

earlier this year with the COVAX facility, the Vaccine Alliance to give poorer countries vaccines when the Indian government stopped the export of

vaccines produced there.

So, it's still tenuous times, and there is a threat if this inequity continues that people who need the vaccines won't get them. But at this

stage, it does appear, it is one avenue that at least in a few months will have a significant impact.

SOARES: Yes, a step in the right direction at least. David McKenzie for us there in Johannesburg. Thanks very much, David. Great to see you.

I want to stay with the COVID-19 crisis, but actually take you to Asia. Indonesia overtaking India really to become the new epicenter in the region

as the delta variant sweeps through the area and Thailand is suffering its worst outbreak of the pandemic.

Anna Coren is live for us in Hong Kong with the very latest.

And Anna, Southeast Asia being hit incredibly hard by the delta variant in particular, Indonesia, as well as South Korea. Talk us through where the

virus is surging and what governments are doing to try to keep literally on the surging cases.

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Isa, let's start with Indonesia because it is the fourth most populous nation in the world. It's

a developing country. It has a high poverty rate. It has an extremely low vaccination rate. It is the perfect breeding ground for COVID, particularly

this highly contagious delta variant.

Last week, they experienced their highest daily records of 56,000 cases. Today, it was down to like 33,000 daily cases, but they did have a record

number of deaths, almost 1,400 deaths and this just seems to be climbing.


COREN: As you mentioned, you know, this is now Asia's epicenter. It is overtaking India as far as the pandemic is concerned. An NGO in Indonesia

accused the government of vastly underreporting the number of deaths.

Now, the national government says they are not to blame, that it is local governments providing inadequate information that death certificates don't

say COVID on them. So, they are not counted as COVID deaths.

Now, this is something that we understand local governments are not doing, hence, the underreporting.

I think it's also important to note, he said that it is 'Eid, Indonesia, being a predominantly Muslim country celebrating this religious holiday,

and even though there are government restrictions in place, curfews in place, people are still gathering, families are still coming together.

So, authorities are concerned that they will see a surge in cases in the coming waves. The health system, Isa, which is already, you know, under

pressure in normal days, and if cases continue, it will be overwhelmed. And once again, more concerns that they won't be able to cope.

The vaccination rate in Indonesia is just six percent, woefully low.

SOARES: Yes, that is staggering. And, you know, I was looking at the numbers, Anna, and I saw Singapore also being slammed by the virus, which

is a major setback for a country that was seen by many as a pandemic success story.

COREN: Yes, look, Singapore and South Korea, both were heralded as countries that were success stories. They got the pandemic under control

very early, very, very early, you know, in the rollout really of this hideous virus.

Singapore, you mentioned, it has been slammed. You know, this is a first world country and they thought they had it under control. They experienced

their highest number of cases from August last year. Today, case numbers were around 179. It may not sound like a lot, but as I say, for a country

that prides itself on reopening and saying that it can live with the virus, you know, this is a massive blow.

It is coming from two major clusters, one from karaoke bars, the other ones from a fisheries port, but that number I gave, 179, this is the third

consecutive day that cases are over 150.

As for South Korea, Isa, you know, they are now experiencing a fourth wave and they had record number of cases today. It was something like 1,700

cases, which once again, is not a number that is acceptable in, you know, developed first world country.

We know that only 13 percent of the population in South Korea has been vaccinated, and that for the past two weeks, they've been experiencing more

than a thousand cases, you know, every single day, and they don't see this going away anytime soon -- Isa.

SOARES: Yes, troubling picture that you are just painting for us there in Southeast Asia. Anna Coren, thank you very much.

Let's turn our attention to business news. Sluggish growth wasn't the story Netflix investors were hoping for. Its stock really took a hit in

afterhours trading on Tuesday, even though revenue jumped by nearly a fifth in the second quarter.

Frank Pallotta joins me now. And Frank, let's start with these really sluggish numbers from Netflix. It did have a breakneck kind of expansion

during the pandemic as more people stayed home and watched Netflix, but then it dropped.

But surely that was always going to be hard to sustain in the first place.

FRANK PALLOTTA, CNN MEDIA WRITER: Yes, and Netflix has said as much yesterday in their earnings report. They said that because of the pandemic,

their growth has been kind of choppy, and it has distorted the comparisons to last year, which was a record year when people were stuck at home, they

watched a lot of Netflix. They watched "Tiger King."

They watched all those shows that we were talking about in the early parts of the pandemic. It looks like that has kind of leveled out. But there's

also some questions on the rivalries that have kind of popped up over the last year from Disney+ to Peacock to our own parent company's streaming

service, HBO MAX has kind of chipped away at this huge growth that Netflix has had over the last decade.

SOARES: So now it's looking, I'm guessing for that extra horsepower. How is it planning to do that? What's the strategy here?

PALLOTTA: So, if you really think about Netflix, their primary revenue driver for years has been subscribers, getting as many subscribers as

possible. And Netflix has gone out of their way to say we really want to do one thing really well, which is give great television shows and films to

our users.

But now, they are kind of expanding into a brand new world, which is video games. They are talking yesterday, they announced and confirmed that they

are expanding to video games that will be a part of the bundle itself, a part of your subscription and that it won't be of any extra charge and will

be kind of focused on mobile gaming.


PALLOTTA: So, you'll pretty much be able to play it on your phone.

But this is a huge moment for Netflix because it shows that they want to kind of expand into a new world and kind of changes what they've been all

of these years, while also giving them another revenue driver to compare with the other companies like Disney that sells Baby Yoda toys, and Comcast

that sells "Jurassic Park" theme park rides.

SOARES: Baby Yoda toys, don't I remember that. Frank Pallotta, great to see you. Thanks very much.

Coming up on FIRST MOVE, how to grow when supplies are scarce. Fishing for chips with the CEO of GlobalFoundries.

Plus, we did it for pop. Jeff Bezos tell us what was behind that giant leap into that space race. We will bring you those stories after a very short



SOARES: Let me bring you up to date with stories making headlines around the world this hour.

The Summer Olympics are underway in Tokyo after being delayed for more than a year. Competition got started a few hours ago even though the opening

ceremony isn't until Friday. Organizers are pushing ahead with The Games despite rising COVID infections in Tokyo.

Let's get more on the story. CNN's Selina Wang is with us from Tokyo. And Selina, we are seeing Olympic related COVID cases, pardon me, continue to

pile up. Give us a sense of what the mood is like and how athletes are feeling?

SELINA WANG, CNN CORRESPONDENT: Well, Isa, certainly not the normal Olympic spirit that you would expect especially given that Tokyo is in a

state of emergency and there's so little interaction between these Olympic athletes and Japanese public here, no cultural exchange, not to mention the

incredible stress that these athletes are under.

They have spent their whole lives, years, training for this Olympic moment and now, a growing number of them are getting their Olympic dreams dashed

because of a positive COVID-19 test.

You have several athletes including tennis star Coco Gauff, as well as U.S. women's basketball player Katie Lou Samuelson that are testing positive for

COVID-19 before they even leave for Japan, getting their dreams completely derailed.

But now, also several athletes testing positive for COVID-19 announcing that they cannot compete after already getting to Japan, so even after

going through all the hoops following all the COVID-19 restrictions, still getting their dreams shattered.

Meanwhile here in Japan, Isa, Tokyo just reported its highest number of COVID-19 cases in six months.


SOARES: Yes, it must be so nerve racking for them, Selina, you know, having -- waiting for these tests, waiting for this moment for their moment

that they were training their whole life.

We're seeing the number of cases rising in the Olympic Village. Has there been any attempts, Selina, to really review their protocols, find out what

is not working.

WANG: So Isa, there are now more than 70 COVID-19 cases in Japan linked to these Olympic Games, just a few of them are athletes in the Olympic

Village. But there is growing concern that this Olympic bubble is actually not working and that these cases could then spill into the broader


One public health expert, Kenji Shibuya told me that this bubble is already broken and he is concerned with just 20 percent of the Japanese population

here, that this could be a major problem.

But these Olympic officials are saying that the fact that they are catching these COVID-19 cases shows that their system is working. They say that more

than 70 COVID-19 cases is potentially even lower than what they expected.

There is a long list of rules that all Olympic participants have to follow, including regular testing, contact tracing, social distancing, the list

goes on and on. But again, this public health expert, Kenji Shibuya, he tells me they aren't enough.

He says it is impossible to completely control the movements of Olympic participants, and to prevent them from interacting with the public here. He

also criticizes the fact that Olympic participants are not required to quarantine for a full 14 days. And Isa, vaccines are not required, even

though most Olympic athletes will be vaccinated. But also they aren't a hundred percent.

We're also seeing several cases of people testing positive for COVID-19, people related to these Games after being fully vaccinated -- Isa.

SOARES: Selina Wang there for us in Tokyo. Thanks very much, Selina.

Now, there is public outrage in India after the government said Tuesday, there had been no documented COVID-19 deaths due to lack of oxygen. CNN has

reported on Indian hospitals experiencing oxygen shortages.

Studies show that India's COVID-19 death toll is up to 10 times higher than the official 400,000 count.

The National Guard in the United States state of Oregon is helping firefighters combat a massive wildfire. The bootleg fire is the largest in

the country right now having consumed more than 150,000 hectares. It is of the more than 80 large fires that have hit 13 U.S. states this fire season.

Let me bring you another check of U.S. stock markets.

The Dow and the s p are set to advance for a second straight session. They have regained virtually all of what they lost during Monday's selloff and

they remain less than two percent so away from record highs.

Benchmark U.S. bond yields are ticking slightly higher, too, after falling to five-month lows earlier this week on, of course, those fresh COVID fears

and what relates to the delta variant. Concern about how Central Banks will deal with rising inflation, as well as ongoing economic uncertainties

remain as you can imagine, front and center for bond investors as well.

And then there is a divided E.C.B., they are meeting tomorrow to discuss the way forward on the question of stimulus. The Fed holds another policy

meeting next week and Fed officials will surely continue the debate on when to dial back bond purchases.

Joining me now is Jeff Kleintop, the Chief Global Investment Strategist at Charles Schwab. Jeff, plenty for us to get our teeth to. Look, let's start

with the stock market. It's been a pretty wild and I think, it's fair to say miserable week so far because of those rising infection numbers and

concerns over the delta variant.

What kind of summer should investors be expecting here given the surge in cases?

JEFF KLEINTOP, CHIEF GLOBAL INVESTMENT STRATEGIST, CHARLES SCHWAB: Well, a volatile one as we've already started to see.

It's hard to expect that the delta variant data that the news flow will get a lot better in the near term, and that really is the key driver in the

market. But not every day is a downside. Obviously, Monday was a terrible day. Interestingly, today we're seeing travel and leisure stocks the best

performers in Europe that could spill over to the U.S. markets as well.

So, we're getting those are the stocks most sensitive to the idea of will we get to the full reopening or will we not? Will we be headed back towards

lockdowns? A clear barometer of that relationship in fact, between airline stocks and internet retailers. Of course, the old pandemic winners will be

that back and forth. I think we're likely to see over the course of this summer.

Ultimately though, Isa, I think the cyclicals will win out. I think the reopening trade, the re-inflation trade will come back to this market maybe

later, maybe in the fall, maybe in the winter. But ultimately, I think the value stock -- the value stocks, those most tied to the reopenings will

ultimately be the winners.

SOARES: Jeff, what's changed between Monday and today? I mean, there's always been a known unknown for some time that, you know, there will be

more variants that will be happening, and so these fears going forward, are they going to be sustained? And if so, what should Central Banks be doing?


KLEINTOP: Well, I think a part of the give and take on a daily basis has to do with whether the case numbers will translate into increased

hospitalizations and deaths. So far, in the U.K., you know, a very vaccinated population, we're seeing they are not and there is that 14 to

15-day lag between new cases and deaths, which we have to watch very closely.

If those deaths and hospitalizations remain low, suggesting the health systems are not being overrun, then that suggests the reopenings may

continue. And that's what I think Central Banks need to focus on. It is very morbid, but they need to take a look at what are the probabilities of

a return to economic restrictions in some way that would in fact, do their work for them in slowing the pace of inflation.

SOARES: Yes, and as you're talking, we're looking at the S&P 500 year-to- date. Just a week ago, we saw the Dow and the S&P at record highs. So, you know, this volatile week that we've seen so far, especially on Monday, we

saw that drop from the Dow. Was this basically a time for a correction?

KLEINTOP: Well, perhaps. I mean, it's been a while since we've had one and they are fairly standard in any given year, and there are certainly

ingredients that would suggest we could be ripe for one now.

But what's been interesting is there have been corrections within the market even though the overall market has continued to make new highs and

is still fairly close to them. Within the market, the rotation has been dramatic, again, as I said between value and growth stocks. There have been

major moves between cyclicals and defensives. There have been major moves, large and smaller cap stocks. And so, there have been mass corrections

within that overall move.

I'm a little cautious that the S&P 500 can continue to move higher on defensive leadership on lockdown arrow winners. I think that's probably at

risk. We've got to see the cyclicals come back to really see the S&P advance to solid mass.

SOARES: What is clear against this backdrop, you know, whether it is policy earnings or economic activity, Jeff, is that the markets are trying

to identify future growth opportunities. Where would you say these are right now, Jeff?

KLEINTOP: One of most attractive areas right now is in green infrastructure, both in the U.S. Biden administration's plan for an

infrastructure spending plan, as we look at the New Green Deal in Europe finally being rolled out and funded and China looking to clean up its

production as well.

You've got a lot of money moving into it, and I mean, billions, perhaps even trillions of dollars moving into green infrastructure. At the same

time, investors are looking at ESG solutions -- environmental, social government solutions to how they invest.

I think a lot of that comes together and creates perhaps the next bubble of this decade only now just starting to inflate.

SOARES: You heard it here first, people. Jeff Kleintop, the Chief Global Investment Strategist at Charles Schwab. Thanks very much. Great to see


KLEINTOP: My pleasure.

SOARES: You are watching FIRST MOVE. The market is open next, which we will bring you the numbers after a very short break.

Do stay right here.



SOARES: Welcome back to FIRST MOVE. Now, U.S. stocks are up and running this Wednesday. Let's have a look at how they are trading, they are faring

this hour. And as expected, we are seeing some positive gains at least for the Dow and the S&P as global stocks continue to recover from Monday's

drubbing. The Dow Jones there four tenths of a percent. That's despite, of course the recent volatility.

The major U.S. averages are still less than two percent away really from all-time highs and are up double digits so far this year, as you can see

there. For the Dow 12 percent, S&P 500, fifteen percent, and the NASDAQ hovering around the same amount.

Netflix shares that we mentioned early in the show beginning the session lower after offering a tepid forecast for subscriber growth. Both Coca-Cola

and Johnson & Johnson are gaining after raising their four-year forecast.

Now, tech investments meantime are monitoring the ongoing flooding crisis in Central Asia. That was our lead this hour. A major Apple contractor,

Foxconn, says its iPhone factory in the region has not been impacted by that.

Meanwhile, at least 25 people have died and tens of thousands have been evacuated in what has been called the worst flooding in the region in

recent history.

Now, German carmaker, Daimler says it won't sell as many cars as it hope this year because it simply cannot get enough semiconductors. The parent

company of Mercedes Benz says demand isn't a problem with economies reopening, but amid a global chip shortage, it can't build vehicles fast


Anna Stewart has been following this and joins me now. And Anna, how badly has Daimler been affected by this chip shortage and chip crisis, and how

long critically does it envisage this to last?

ANNA STEWART, CNN REPORTER: Well, they posted a $4.3 billion quarterly profit, but they've had to very much focus on their higher margin models.

Overall, they have slashed production. They did last year, they have had to do it this year, and they will continue to do so they say until 2022, or

some period within there, and this is due, as you say to a shortage in semiconductors, something that we were talking about well over a year ago,

it continues to loom large over Daimler, and of course the rest of the sector.

The problem, of course is, while last year, demand for new cars had crashed; this year, they are rebounding. So, as you say, the demand is

there, but the shortage in the chips is what is holding us all back. And of course, the nature of the auto industry moving ever closer towards electric

and autonomous vehicles, they are going to need more semiconductors.

And frankly, the capacity of these chip makers around the world are at 100 percent capacity, and they are not increasing it at pace with the

increasing demand. And you know what, the auto sector accounts for just 10 percent of the overall chip market and there aren't very many of them. It's

a really consolidated industry. Many of those chip makers are in Asia. So, this is probably a problem actually beyond the current shortage -- Isa

SOARES: Yes, I'll be speaking to a chip maker in just a moment. But you know, Daimler, I suspect, Anna, from the picture you're painting is not the

only car maker in Europe that has had to cut back production, because of the shortage.

Paint the picture of the toll it has taken on the European auto industry and how they are trying to maneuver and get around this basically?

STEWART: Well, I think has been very interesting that actually Europe and the E.U. Commission in particular are very concerned about security when it

comes to semiconductors, particularly given so many of them are in Asia. There are risks beyond the pandemic, geopolitical risks of China or natural

disasters, particularly given semiconductors are actually made in Taiwan.

So actually, there is a plan from the E.U. Commission to double their market share in the global chip market by 2030. But speaking to analysts,

Isa, that is incredibly ambitious, ludicrously expensive, really considering how few fab facilities there are on the continent.

And also, you've got to consider the entire ecosystem of the semiconductors because it's not just the chip makers themselves. It's of course, all the

supply chains globally, that feed into it. So, speaking to analysts today, that is going to be very difficult, but bolstering security for automakers

is key.


STEWART: And I think we've very much seen in the last few years, any kind of plan to double the market share in Europe will take many years, so it is

not going to help automakers anytime soon -- Isa.

SOARES: It is not a short term solution, is it? Anna Stewart there for us. Thanks very much, Anna.

Well, as a chip crunch stalls, delivery of everything from cars to smartphones, chip makers are racing to boost capacity as Anna was pointing

out. Among them is one of the world's largest suppliers, U.S. manufacturer GlobalFoundries. It has just unveiled plans to build a second New York

plant and says it expects to invest $6 billion worldwide over the next two years.

Joining me is Tom Caulfield, the CEO of GlobalFoundries. Tom, great to have you on the show. I'm not sure whether you could Anna Stewart there talking

about the crisis in terms of chip shortage at Daimler.

I want to get your view, your sense of how hard it has been to keep up with demand.

TOM CAULFIELD, CEO, GLOBALFOUNDRIES: Well, first, good morning, and thanks for having me on the show, Isa.

Well, I listened to all of that. It was spot on, on all the points you made, not only the difficulty with the auto industry, the idea of the

ambitious plans to create a more global footprint, all of that is just spot on.

I think, if I put it in a nutshell to you, the biggest way to think about this problem is, it took 50 years for the semiconductor industry to become

a half a trillion dollars. The demand, we see that society, the economy, humankind needs, needs us to double that in the next five to 10 years.

And so the challenge ahead is, how do you get all that capacity on, given the complexity of technology and capital intensity of the technology?

SOARES: So let's talk about that. Let's talk about how your company can try and address at least this global crisis, global chip shortage? What is

the strategy from your side?

CAULFIELD: You know, I don't know if it's a strategy just for GF. I think it's a strategy for the industry.

The economic model that allowed for a 50-year growth to where we are today will not be the economic model that will allow us to put the kind of

capacity that we need to do and what it means is, it's more about partnership.

You know, governments need to participate in the investments. Customers who rely on this capacity need to participate in those investments. And of

course, manufacturers like GF, we need to do our part, and those three things would need to come together in a way to make sure the economics work

for not only the manufacturing of the chips, but the entire ecosystem and all the components that we need to do what we do, including the equipment,

the raw wafers, the chemicals and gases that are very specialized for our industry.

SOARES: You mentioned the government there, Tom. The U.S. Senate, I believe has authorized more than $52 billion plan for semiconductor

manufacturing for new factories as well as chip research. Do you think that is enough in your view?

CAULFIELD: You know we are asked this question all the time and I think it's a really important perspective. It is a great start, and what you will

find is that the economic benefit of making those investments will make it easy to make the next round of investments.

So instead of debating how much should we do on day one, and is it enough? Let's demonstrate when you start to make these investments and see the

economic activity, that it creates a new economy, that you'll want to make these investments again, because they have great returns.

SOARES: So, let me ask you what the point that Anna was making that we're seeing in Europe is that, you know, Europe wants to see more factories

being built, but building factories, you know, takes time. So, what is the short term plan in trying to deal with this crisis here?

CAULFIELD: Well, first of all, I'm a proponent of setting large ambitious goals, and even if you get most of the way there, it's better than not

doing that. And so I understand why Europe wants to do this. It's important for economic security, sovereign security, and supply chain security.

Now, you know, for GF, we have one of our most largest major facility in Dresden, Germany, and over the next two years, as you talked about that $6

billion, we're spending, you know, a good fraction of that's going into that facility to create in many ways more than double the output from what

we did in 2020, for what we'll be able to do by the end of 2022.

The rate and pace of how capacity gets put on is really a question of how quickly equipment companies can make these very sophisticated and complex

machinery for us. And then for us to install it, qualify it, and start making product.

Typically, this is an 18-month cycle. So, this is not something that is done in a couple of weeks or months, you can correct, but you have to be

very thoughtful, bold, and try to accelerate that as much as possible.

SOARES: You probably don't get asked this very often, but is there anything that is keeping you up at night -- late at night and awake? Do you

worry, Tom, about the growth, you know, it's an incredible pace at the moment for your company, but then the concern of going from boom to bust.

Is this something that worries you?


CAULFIELD: Yes, you know, there are two what I call myths that go around the industry that quite honestly, they just don't resonate with me and I

don't quite get.

We can all believe this industry is going to double over the next eight years. And that somehow, we're going to have too much capacity when we have

to deal what took 50 years in eight years. And while, I think there will be a closing of the gap between demand and supply, especially given some of

the acceleration we're all doing now.

You know, for me, the better part of the next five to eight years is we're going to be more likely chasing supply than we are chasing demand. So,

that's not what keeps me up at night. I think what keeps me up at night is a little bit about how do we keep our customers kind of whole and keeping

the momentum of what society needs in a thoughtful way and make the right allocations of where we have capacity to go help industries. That's the

stuff that keeps me up at night.

It's a lot easier, I think, to run a company where, you know, you control your destiny, and you can fix it. When others are depending on you, and you

can't give them everything they want, it puts a lot more pressure on you. You want to make sure you're not disappointing anybody.

SOARES: It's such a good point. But I imagine with so much demand, and maybe this is a good time for GlobalFoundries to go public. Are you

accelerating your plan?

CAULFIELD: Yes, we get asked that a lot. I should probably have a better answer for this. Look, I think about us about going public. It's not about

a milestone, it's when we get an advantage for doing that. And at some point, it's going to make sense to have access to public markets to

accelerate our growth. We'll need the access to that kind of capital, and at the right time, we'll do that.

Right now, you know, we have a game plan that we're executing with the team of 15,000 employees worldwide in GlobalFoundries. I mean, they do miracles

every day for us. They are focused. We're building work. We're putting more output out than we've ever done in our history and we're accelerating

capacity expansions. And that's job number one for us, to stay focused on doing our mission.

SOARES: And before you go, you know, I would love you to help me to put some rumors to rest. "Wall Street Journal" reporting that Intel is looking

to buy your company for something like $30 billion. Have you been approached?

CAULFIELD: Look, this is what happens. This is all rumor and speculation as chips become more and more in the news every day, right? That's what we

do, but when we don't do enough of it, and GF has a pretty prominent and vital role in all of this. Then all of a sudden, you'll see a lot of

speculation about companies like GF, especially when they are privately held.

I can tell you, we have a game plan. We are focused on where to do all the things we just spoke about.

SOARES: Tom Caulfield, we wish you all the best of luck. The CEO of GlobalFoundries there. Thank you, sir.

CAULFIELD: Thank you.

SOARES: Right after the break, building a road to space, Jeff Bezos tells our Anderson Cooper, why his Blue Origin rocket is more important to the

world than Amazon. You don't want to miss that interview. That's next.




SOARES: So, what's next for billionaire, Jeff Bezos's Blue Origin? Well, after Tuesday's trip to the edge of space, the company is planning two more

flights this year with paying passengers. Bezos did not go alone, aged 82, Wally Funk became the oldest person to go into space.


WALLY FUNK, BLUE ORIGIN CREW: I've been waiting a long time to finally get up there. I felt so charged. I was not nervous. I was just normal, normal

person going up into space and that's what I wanted to feel.


SOARES: I love Wally. I love her energy, too.

Also back on the ground, Jeff Bezos and his brother, Mark spoke to Anderson Cooper about their greatest inspiration. Take a listen.


COOPER: You've been dreaming space your whole life. You spent summers on your granddad's ranch in South Texas, I imagine looking up at the sky and

the stars.


COOPER: What do you think your grandfather would think about you and Mark today?

J. BEZOS: So, we called him "pop" and he was a gigantic figure in our lives. We spent a lot of time with him. I think he would have been -- if he

were here, he would have been the most proud, most excited of all the people present.

So, he had this curiosity about him, and this wonder. When we knew him, he was a rancher, but before that, he had, you know, done a lot of -- he

worked for DARPA, at one point and did other things.

So, he had all this, you know, exploration in him.

COOPER: He might have been in the vehicle with you.

J. BEZOS: He would have. I mean, there's a long line of people trying to stow in our vehicle this morning, including our dad.

MARK BEZOS, BROTHER OF JEFF BEZOS: Yes, we had to check the back --

COOPER: You've called this the most -- you've called Blue Origin the most important thing that you will do in your entire career. I mean, you built

Amazon. That's pretty huge. You employed half a million people.

How can Blue Origin be bigger?

J. BEZOS: Well --

COOPER: Or more important?

J. BEZOS: Well, I think -- yes, I think that the way to think about this is, you know, we need to build a road to space. I mean, build

infrastructure, reusable space vehicles, and so on, so that the next generations can build the future.

COOPER: You talked about the infrastructure you already had in place when you started doing Amazon. You had the Postal Service you had --

J. BEZOS: Exactly. So you know, when I started Amazon, it was -- you know, a young guy. It was his 20s, so almost 30 years ago, and I didn't have to

build a package delivery system, it existed. It was called the Postal Service and UPS and Roll Mail and Deutsche Post and so on, that would have

been hundreds of billions of dollars in capital expense to build.

COOPER: So, if some smart kid in a dorm room right now has a dream for space. They can't do it.

J. BEZOS: They can't do it. That's exactly right. And -- but if we can lay that infrastructure, then do that hard work, then they will be able to be a

bunch of entrepreneurs, maybe that -- the young guy, Oliver, who flew with us today, maybe he will be one of them.

COOPER: What does that look like, though? And what does this road look like? I mean, you've talked about a human presence on the moon.

J. BEZOS: Yes.

COOPER: Obviously, you know, Elon Musk is talking about Mars. What does it look like?

J. BEZOS: There are a couple things. One of the things is that it's really about moving heavy industry. I know this sounds fantastical, and it is

fantastical. But remember, if you went back to the Kitty Hawk era and showed them a 787, they would think that's fantastical.

But we really have to move heavy industry and polluting industry off Earth. The Earth is too small and too fragile.

COOPER: So, move nuclear power plants.

J. BEZOS: Everything.

COOPER: Coal plants.

J. BEZOS: We need to beam the energy down to Earth. We will make it in space with probably solar, we will beam it down. When we make chips and

microchips and everything else, that -- all that dirty polluting stuff, we will make it in space, and do those activities in space. It will be much


This planet is so precious, Anderson and you can see it. What we saw today, we got up there, we looked out, we see when we're on the ground, we think

the atmosphere is big. But really, the atmosphere is tiny. It's this tiny, little fragile, thin layer and we all depend upon it for our lives and

we've got to stop polluting it.

So, that is something -- but that can't be done today. If you try to move heavy industry off Earth today, that's just crazy.

COOPER: So what is the timeline for something like that?

J. BEZOS: Decades, multiple decades. It won't be done in my lifetime. But what I can do, and what we, the whole Blue Origin team can do is lay the

foundation for that work. That's what we mean when we say build a road to space, because then there'll be other people driving on that road, and

they'll do much greater things than we will do.

COOPER: Why do you want to have people on the moon?

J. BEZOS: The moon is a great place for resources. It is close, which is a big advantage. So, one of the great things about the moon is it has very

low gravity, you know, one-sixth gravity. It takes 27 times less energy to lift a pound of material off the moon than it does to lift a pound of

material off the Earth.

And so, if you want to build big structures in space, you want to go get materials from the moon.


COOPER: Obviously, you've stepped down as CEO of Amazon. You'll have a little more time on your hands. Are you going to focus more on Blue Origin?

And how much more -- I know, you've been liquidating like a billion dollars' worth of Amazon stock every year to fund it. Are you going to do

more than that?

J. BEZOS: I don't know. We'll have to wait and see about that. I'm also using a lot of Amazon stock for the Bezos Service Fund. So, the two big

initiatives that I know of right now that I'm going to focus on are Blue Origin the and Bezos Service Fund, which is all about sustainability,

climate change, you know, protecting the natural world, those things that - - we have to work on the here and now of that, too.

So, you know Blue Origin is working on the future, but we have to work on the here and now of that as well.

COOPER: Elon Musk told "The Washington Post," your newspaper that if Blue Origin is to be successful, you should run it full time and he hopes you do


J. BEZOS: Well, Bob Smith is the CEO of Blue Origin, and he is running it amazingly well. He has been here only a few years, he is doing a great job.

I'm not taking Bob's job, but I am going to spend more time on it.

I'm going to have the time to spend on it. So, I'm going to be right in there, you know, rolling up my sleeves deep in it.


SOARES: Jeff Bezos is speaking to Anderson Cooper about his vision, the road to the moon.

You are watching FIRST MOVE. We'll have much more after a very short break.

Do stay right here with CNN.


SOARES: Now, unlocking the massive market in African today's "Connecting Africa," Eleni Giokos sits down with the CEO of Mara Group to discuss its

growing businesses, including smartphones.


ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: I want you to take me back to when you were thinking about Mara Phones microphones and bringing

manufacturing capacity on the continent. You were basically starting from scratch. What does it take to build that kind of capacity from zero?

ASHISH THAKKAR, CEO, MARA GROUP: It was a tough and long journey because putting up assembly is a lot easier, and it's a lot simpler. But in the

true sense, that's not shifting the narrative for our continent. It's not making us a high tech, high precision manufacturing destination like you

and I would like and many others would like.

At the same time, when you think about why that is not happening, there is a psychological block about is it because of human capital? And that's

wrong, because there's loads of amazing electricians and electrical engineers and people hungry to learn.

GIOKOS: Do you think that we're going to go to a point where it will be made in Africa and that Africa can control a large part of global

manufacturing capacity where it will be respected like what we've seen coming through from Asia?

THAKKAR: It is a really good point, Eleni. I think absolutely, eventually, yes, but I think there's a transition to that, right, and the baby steps

are that firstly, we're such huge consumers as a continent.

When you think about over a billion people -- we've got the Africa continental free trade area now making us one market in the true sense.

GIOKOS: To what extent do you think we can truly meet up to that expectation of digitalizing Africa if we don't actually put a smartphone --

a smartphone -- in the hands of people, even in the most remote areas of the continent?


THAKKAR: We need to truly transition people. And frankly networks are there, everything is there, the key element has been affordability and

quality. You can get really cheap phones, but they won't last, and that doesn't help.

GIOKOS: As much as we want to digitalize, we still need, you know, the infrastructure. Are you feeling optimistic that we can get that done and

what does it really take? Because even though you're in the tech space and you're in digitalization, you still need to build a factory.

THAKKAR: When Mara did this, we didn't do it with the intention of making a quick buck. Of course, we're in it for the long run and we are in it to

create a huge amount of value, but practically we did it to shift the narrative. That we, as Africa, can do this, and can do it without

compromising, without cutting corners, without kind of doing it piecemeal.

If we do it, we do it properly, and it is possible.


SOARES: Eleni Giokos there.

Well, that's it for this show for this hour. Thank you very much for watching.

"Connect the World" with Becky Anderson is up next. Do stay right here with CNN.