1、Citi is one of the worlds largest financial institutions,operating in all major established and emerging markets.Across these world markets,our employees conduct an ongoing multi-disciplinary conversation accessing information,analyzing data,developing insights,and formulating advice.As our premier

2、thought leadership product,Citi GPS is designed to help our readers navigate the global economys most demanding challenges and to anticipate future themes and trends in a fast-changing and interconnected world.Citi GPS accesses the best elements of our global conversation and harvests the thought le

3、adership of a wide range of senior professionals across our firm.This is not a research report and does not constitute advice on investments or a solicitations to buy or sell any financial instruments.For more information on Citi GPS,please visit our website at GPS:Global Perspectives&Solutions Dece

4、mber 2022DISRUPTIVE INNOVATIONS IXTen More Things to Stop and Think About Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 Nitesh Agarwal CEEMEA Metals&Mining,Chemicals,and Utilities Analyst Citi Research +91-22-4277-5161| Soumava Banerjee Europe Machinery Analyst Citi Research+44-20-79

5、86-4126| Arkady Gevorkyan Global Commodities Strategist Citi Research+1-212-723-1051| Ronit Ghose,CFA Head of Banking,FinTech,and Digital Assets Citi Global Insights +44-20-7986-4028| Amit B Harchandani Head of EMEA Technology Research Citi Research +44-20-7986-4246| Ronald Josey U.S.Internet Analys

6、t Citi Research +1-212-816-4545| Carly Kenselaar U.S.Mid/Small Cap Biotech Team Citi Research +1-212-816-3692| Ryan Levine U.S.Utilities Energy Infrastructure Analyst Citi Research+1-212-816-6555| Shreyas Madabushi EMEA Commodities Research Team Citi Research +91-22-4277-5048| Ashiq Mubarack U.S.Mid

7、/Small Cap Biotech Team Citi Research +1-212-816-7816| Anthony Nemoto U.S.Cable,Satellite&Telecom Services and Communications Infrastructure Analyst Citi Research +1-212-816-4699| Yigal Nochomovitz,Ph.D.U.S.Mid/Small Cap Biotech Analyst Citi Research +1-212-816-1441| Michael Rollins,CFA Communicatio

8、ns and Communications Infrastructure Analyst Citi Research +1-212-816-1116| Thomas A Singlehurst,CFA Head of European Media Research Citi Research+44-20-7986-4051| Adam Spielman Head of Innovation Citi Global Insights +44-20-7986-4211| Sameer S Thakur Europe Capital Goods Team Citi Research +44-20-7

9、508-3975| December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 3 DISRUPTIVE INNOVATION IX Ten More Things to Stop and Think About In our new report,the ninth in our Disruptive Innovations series,we once again look at some of the leading-edge concepts across sectors and identi

10、fy new products,which could ultimately disrupt their marketplace.A few of the“new”concepts are derivatives of innovations we have explored in the past.Technology-related concepts dominate the list this year and span across a range of sectors from retail to education to farming.We start by looking at

11、 the areas where innovation and financing are coming together through the amount of venture capital(VC)funding by theme.Although total growth in venture capital funding increased steadily between 2010 and 2020,investments roughly doubled in 2021 to$723 billion.Despite optimism these levels would con

12、tinue,VC funding has pulled back in 2022.On the sustainability front,we continue to highlight innovations to help reduce global greenhouse gas emissions.Vertical farming,where plants or crops are grown indoors in vertically stacked layers,use less water,fertilizer,and land than conventional farming,

13、leading to lower emissions.The acceleration of automation capabilities in vertical farms has also improved its scalability and profitability.Advancements in sodium-ion batteries,which use sodium instead of metals such as lithium to generate charge,have lower material costs and lower supply chain pre

14、ssures due to the abundance of sodium around the world than current battery technologies.These advantages could drive electric vehicle penetration rates.In terms of power generation,small modular nuclear reactors could be disruptive to global energy markets,stabilizing power prices and shifting ince

15、ntives away from gas and coal power generation throughout the world.Innovations in technology can potentially change the way we shop,access the internet,organize not only data but corporate structures,gain education,and produce high-performing computers.Social commerce is transforming the way shoppe

16、rs interact with merchandise but also how retailers inform their product roadmaps.Households and small businesses may soon be cutting their fixed broadband cords for wireless broadband access that can also expand the addressable market for broadband services.Upskilling through online professional le

17、arning,qualifications,and credentialing could either disrupt universities or help them adapt to changes in learner preferences.From an organizational perspective,the introduction of blockchain-based decentralized autonomous organizations,which are collectively owned and governed with rules set and e

18、xecuted through smart contracts,could enable more individuals to collectively work for themselves through digital community ownership.Data fabric can be used in an organization to simplify access to data across different platforms and high-NA extreme ultraviolet lithography(high-NA EUV)is expected t

19、o lower costs and reduce complexity in the manufacture of semiconductors.Finally,in healthcare,allogeneic cell therapies,which source cells infused into a patient to treat or cure a disease from master cell banks instead of patients themselves,are must less invasive for the patient and can increase

20、the availability of cell therapy.Kathleen Boyle,CFA Managing Editor,Citi GPS Allogeneic cell therapies could deliver safe,effective patient treatmentVertical farms usefaster than autologous therapiesthan conventional farms 2022 CitigroupSpeeding Into The Digital Futurepossible annual revenue opportu

21、nity for fixed wireless broadband$7 billionCollective OwnershipData Fabric 3x-6xless water95%lessland99%less fertilizer70%simplifies data access,management,and usage across an organizations platforms and data typesDecentralized Autonomous Organizations(DAOs)are changing organizational structure topo

22、ssible overall market share of High-NA EUV lithography systems by 2030of new small modular reactor power plants are needed to offset retiring electricity generation assets in the U.S.of U.S.social media users have made a social commerce purchase in 2022Sodium-ion batteries have a raw material costth

23、an lithium-ion batteriescompound annual growth over the coming years20%61%285 GW lowerThe outsourced spend on professional e-Learning could show18%Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 6 Introduction 7 5G Fixed Wireless Broadband 12 Allogeneic Cell Therapy 17 A

24、utomation in Vertical Farming 22 Data Fabric 28 DAOs,Capitalism,and Employment 31 High-NA EUV Lithography 38 Professional Qualifications and Credentialing 43 Small Modular Nuclear Reactors 53 Social Commerce Changes Product Discovery 59 Sodium-Ion Batteries 66 Contents December 2022 Citi GPS:Citi GP

25、S:Global Perspectives&Solutions 2022 Citigroup 7 This is the ninth report in our Disruptive Innovation series,which means we have now published on a total of 90 areas.This raises the question:Which present the most significant opportunities,i.e.,how,for example,does the opportunity in fuel cells com

26、pare to that in wearable tech?This is a BIG question,and a brief introduction cannot possibly hope to provide all the answers.However,we sketched out an approach in a recent report,quantifying the outlook in 100 different areas,or themes as we call them.1 We chose the 100 in the most objective way w

27、e could,leveraging a decades worth of analyses from Citi Research.The final selection is listed in Figure 1.Of the 100 themes,69%come from a Citi Research product called the Global Theme Machine,or GTM,and most of the rest come from the Citi GPS Disruptive Innovation series.About two-thirds are type

28、s of technical innovation(mainly colored black in the table),but 40%also relate to sustainability themes(green),and 11%to growth and prosperity(blue).(This adds up to more than 100%because some of the innovation themes are also classified as related to sustainability and society and are shown in gre

29、en.)Figure 1.100 Themes v Note:GTM=Global Theme Machine,DI=Citi GPS Disruptive Innovation Series,GPS=Other Citi GPS reports,ADD=Additional Source:Citi Global Insights 1 Citi Research,Mapping Innovation:Innovation Is Everywhere;We Compare the Size,Growth,and Opportunities,February 2022.Growth&Prosper

30、itySustainability&SocietyTechnology&InnovationThemeSourceThemeSourceThemeSource1.Aging Demo SpendGTM35.Novel BiothreatsGTM69.ImmunotherapyGTM2.Belt&RoadGTM36.ObesityGTM70.Internet Biz ModelsGTM3.EM ConsumerGTM37.Sharing EconomyGTM71.Internet-of-Things(IoT)GTM4.Global TradeGTM38.Solar EnergyGTM72.Int

31、ernet Protocol(ILP)GTM5.InfrastructureGTM39.Sustainable MaterialsGTM73.IT ServicesGTM6.Luxury SpendGTM40.TimberGTM74.Last-Mile DeliveryGTM7.Medical Tourism GTM41.Waste-to-EnergyDI75.Liquid BiopsyGTM8.Services OffshoringGTM42.WindGTM76.MedTechDI9.TourismGTMTechnology&Innovation77.Mental Health TechGT

32、M10.UrbanizationGTMThemeSource78.MetaverseDI11.U.S.ConstructionGTM43.3D/4D PrintingGTM79.Mining CapexGTMSustainability&Society44.5G NetworkGTM80.Mobile Device DemandGTMThemeSource45.Artificial IntelligenceGTM81.Mobile Network TransitionGTM12.Agriculture DemandGTM46.Auto Electronics GTM82.Mobile Paym

33、entsGTM13.AgTechGTM47.AutomationGTM83.mRNADI14.Alt ProteinsDI48.CannabisAdd84.NanomedicineAdd15.BiofuelsGTM49.Cloud ComputingGTM85.NeurotechnologyDI16.Carbon MarketsDI50.ContactlessGTM86.Non-Fungible Tokens(NFTs)Di17.Clean TechGTM51.CybersecurityGTM87.On-Demand MediaGTM18.Clean WaterGTM52.Dark Kitch

34、ensAdd88.Psychedelic DrugsDi19.Climate ChangeGTM53.Data StorageGTM89.Quantum ComputingDi20.DefenseGTM54.Deepwater DrillingGTM90.Remote WorkingGTM21.De-Polymerizing PlasticsDI55.Digital IdentityGPS91.Robotic SurgeryDi22.E-cigarettesDI56.Digital LeisureGTM92.Software-as-a-Service(SaaS)GTM23.EdTechGTM5

35、7.DNA/GeneticsGTM93.SleeptechAdd24.Energy EfficiencyGTM58.eVehiclesGTM94.Smart GridsGTM25.Energy StorageGTM59.eAircraft/Air TaxiGPS95.SpaceGTM26.Food InnovationGTM60.Edge ComputingDI96.TelemedicineAdd27.Fossil FuelsGTM61.Elder CareAdd97.Video GamesGTM28.Fuel CellsGTM62.eSportsDI98.Virtual RealityGTM

36、29.Health&WellnessGTM63.Experiential CommerceGTM99.Voice-Activated SystemsDI30.Hydro EnergyGTM64.FemtechAdd100.WearablesGTM31.HydrogenGTM65.FinTechGTMTotal GTM=6932.Indoor FarmingDI66.Generics&BiosimilarsGTMTotal Others=3133.Lightweighting of AutosGTM67.Healthcare ITGTM34.Net ZeroGTM68.HyperloopDIIn

37、troduction Adam Spielman Citi Global Insights Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 8 We started with all the themes in Citis Global Theme Machine because they were chosen in a rigorous process involving Citi Research sector heads,strategists,and quantitative a

38、nalysts.The team chose the first set of themes in 2012.Since then,they have re-examined them each year to ensure the list remains fresh,adding a handful most years,merging and renaming others,and occasionally deleting some(e.g.,shale.)We then looked beyond the GTM because it is designed for investor

39、s in public markets,and as a result,one of the criteria for choosing a theme is that there must be around 20 publicly listed companies that offer exposure to the theme.This means that many potentially interesting themes for example,quantum computing are not listed in the GTM.The Disruptive Innovatio

40、n series fills this gap perfectly.How Big Is the Market for Each Theme?After finalizing our list of 100 themes,we sought estimates for each themes global total available market(TAM)and potential growth using just over 100 third-party sources,as set out in Figure 2.For most themes we looked at severa

41、l sources up to nine in the case of Cloud Computing but in a handful we were able to find only one source.Figure 2.Sources for Total Addressable Market Data Source:Citi Global Insights Figure 3 below summarizes the data.It shows both the average estimate for each of the total addressable markets(TAM

42、s)for 2021 and the expected growth for the next five years.What is immediately apparent is the huge variation in the TAMs for 2021:The chart shows that Agricultural Demand spending was about$10 trillion in 2021,whereas Quantum Computing had sales of$0.7 billion more than 30,000 times less.Perhaps th

43、is is not surprising,as some themes are very broad and others refer to nascent technology.360 Research ReportsFortune Business InsightsMarketWatchResearch NesterAbsolute ReportsFutureWise ResearchMarketsandMarkets ResearchRestaurant DiveAcumen Research and ConsultingFuture Market InsightsMarTech Cub

44、eReutersAdroit Market ResearchGartnerMarticulous ResearchS&P Global Market IntelligenceAll The ResearchGlobal Industry AnalystsMcKinseyStatistaAllied Market ResearchGlobal Market InsightsMedgadgetSTL PartnersAmerican Enterprise InstituteGrand View ResearchMillion InsightsStockholm International Peac

45、e Research InstituteBaker McKenzieHelp Net SecurityMordor IntelligenceStratview ResearchBCC ResearchHosting TribunalNational Retail FederationSwissReBioSpaceHumanities&Social Sciences CommunicationsNatureTechnavioBloombergIDCNeuroTech ReportsThe Brainy InsightsBrand Essence ResearchIMARC GroupNextBi

46、gFutureThe Business Research CompanyBrookings InstitutionIndustry ARCOberloThe Geneva AssociationCCS InsightIndustry EuropeOECDTransparency Market ResearchClimate Policy InitiativeInfrastructure OutlookPersistence Market ResearchTVTechnologyData Bridge insight-intelligencePower TechnologyU.K.Parliam

47、entData Library ResearchInstitute for Mergers,Acquisitions and AlliancesPrecedence ResearchValuates ReportsEsticast ResearchInternational Energy AgencyPsychedelic SpotlightVerified Market ResearchFacts&FactorsKBV ResearchPwCVision Research ReportsFemTech AnalyticsKnowledge Sourcing IntelligenceQuart

48、zWild Code SchoolFinancial TimesMarket Data ForecastQuince Market InsightsWorld Resources InstituteFood and Agriculture Org(UN)Market Insight SolutionsRanking The BrandsZion Market ResearchFood NavigatorMarket Reports WorldReports and DataForbesMarket Research FutureResearch and Marketsn=97Forrester

49、 ResearchMarket Study ReportResearch DiveDecember 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 9 There is a wide range of expected growth rates,varying from 50-60%compounded for some of the nascent industries such as Quantum Computing and eAircraft/Air Taxis to the low single

50、digits for some of the big macro themes.It is no surprise that the big,macro-driven themes are growing more slowly.However,in our view,the inverse relationship,i.e.,that smaller,nascent themes are growing faster,is surprisingly weak.A large number of the themes are projected to grow in the single di

51、gits:this is true for several macro themes that are already very large,such as Global Tourism and Net Zero,but also for many that are mid-size,like Deepwater Drilling technology and Waste-To-Energy plants.Many of the themes with small TAMs in the single-digit and double-digit billions are projected

52、to grow only in the teens:Examples include Robotic Surgery,(legal)Psychedelic Drugs,and Remote Working.Consistent growth above 30%is rare.By contrast,a handful of already-big innovations are expected to grow very rapidly in the next five years:5G Networks,the Metaverse,Artificial Intelligence,Mobile

53、 Payments,and Internet Business Models.These are the areas where the trillion-dollar market cap companies already play.Figure 3.Predicted Growth for Themes vs.Current Size(%)Note:Blue dots=Growth&Prosperity,Green=Sustainability&Risk.Total sources listed in Figure 2.Source:Citi Global Insights Figure

54、 4 shows the same data but in a different way:The y-axis shows growth in absolute dollars,not percentages.This chart emphasizes that in absolute dollars,the largest growth will likely come from already-big sectors,which include some of the macro themes like Aging Demographic Spend and Global Tourism

55、.Aging Demo SpendTourismInfrastructureAgriculture DemandClimate ChangeDefenceNet ZeroEnergy EfficiencyEdTechEnergy StorageWaste-to-EnergyE cigarettesObesityFuel CellsCarbon MarketsInternet biz modelsMobile PaymentsMobile Devices DemandIoTSpaceCloud ComputingHealthcare ITE VehiclesAIFinTechTelemedici

56、ne Smart GridsMetaverseDeepwatermRNA5G NetworkFemtechCannabis3D/4D PrintingVirtual RealityExperiential CommerceEdge ComputingRobotic Surgery IPE-Aircraft/Air TaxiMobile Network TransitionPsychedelic Drugs Liquid BiopsyMental Health TechRemote WorkingHyperloop-10%0%10%20%30%40%50%60%1 10 100 1,000 10

57、,000Estimated Growth of TAM(2021-26 CAGR)Estimated 2021 TAM($billions)Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 10 Figure 4.Predicted Growth for Themes in Absolute Dollars vs.Current Size Note:Blue dots=Growth&Prosperity,Green=Sustainability&Risk,Black=Technology.S

58、ee Figure 3 for growth and Figure 2 for all sources.Source:Citi Global Insights Falling Investment in Start-Ups Another important issue is the decline in capital supplied to start-ups.Between the global financial crisis and 2020,venture capital(VC)investment grew strongly,as shown in Figure 5.2021 w

59、as a truly exceptional year,with investments roughly doubling from$340 billion to$723 billion.Figure 5.Global Investment in Private Companies by Venture Capital Firms and Similar($Billions)Source:PitchBook Data Inc.,Citi GPS Aging Demo SpendTourismInfrastructureLuxury SpendUrbanisationAgriculture De

60、mandClimate ChangeDefenceFossil FuelsEnergy EfficiencyFood Innovation EdTechHydrogenWindAgTechWaste-to-EnergyNovel BiothreatsAlt ProteinsObesityFuel CellsCarbon MarketsInternet biz modelsMobile PaymentsIoTMedTechSpaceCloud ComputingHealthcare ITE VehiclesSaaSAIFinTechLast mile delivery Telemedicine

61、MetaversemRNA5G NetworkCannabis3D/4D PrintingVirtual RealityExperiential CommerceEdge ComputingMobile Network TransitionMental Health TechRemote WorkingHyperloop 1 10 100 1,000 10,000 1 10 100 1,000 10,000Est absolute$growth in TAM($billions)Estimated 2021 TAM($billions)December 2022 Citi GPS:Citi G

62、PS:Global Perspectives&Solutions 2022 Citigroup 11 Recently,however,this trend has substantially weakened.In the first quarter of 2022,VC investment was roughly where it had been at the start of 2021.By the third quarter of 2022,it was substantially lower,as shown in Figure 6.VC funding in October a

63、nd November of 2022 fell about 60%from 2021 levels,based on preliminary Crunchbase data.If this rate of decline is repeated in December,the total for the fourth quarter will end up at about$74 billion.Figure 6.Global Investment by Venture Capital Firms by Quarter($Billions)Source:Citi Global Insight

64、s extrapolations,Crunchbase Clearly,the decline in VC funding makes life substantially harder for start-ups trying to bring innovations to market.We are not too pessimistic about the outlook,however,for several reasons.First,it is important to remember that the data shown in Figure 5 and Figure 6 re

65、present primary capital in other words,cash handed over to companies management for investment in developing and marketing new,usually disruptive,products.Companies have had to become much more careful about burning the cash they have,but they still have plenty of resources for innovating.Second,VCs

66、 have close to record amounts of dry powder(i.e.,available capital to invest).This suggests that good ideas are likely to receive backing,even if the valuations are likely to be less generous now than they would have been late last year.Third,the Nasdaq composite has stabilized recently.It fell 30%i

67、n the first half of 2022 but has been effectively unchanged since then.VC funding is a trailing indicator,so it is not surprising to us that it fell in the third quarter.However,the column for pro-forma fourth quarter 2022 shows a much less steep decline.We are hopeful that unless tech stocks taken

68、another leg down,the decline in VC funding will soon be over.0501001502001Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22PFAngel-SeedEarly StageLate StageTech Growth718112216318617216715598918274 Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 12 The broadband

69、 market for homes and small-and medium-sized businesses(SMBs)is facing a new risk of disruption from wireless firms that can now leverage their own networks to offer fifth-generation,or 5G,fixed wireless broadband access.Fixed wireless broadband service connects fixed locations,like homes,businesses

70、,and farms,to the internet through airwaves.The competitiveness of fixed wireless broadband services(even using 5G)is often met with skepticism given the historical advantages of a fixed wired connection for both download and upload speeds.However,the combination of greater spectrum availability,ong

71、oing network densification,and technological advancements is providing a new and compelling opportunity for wireless firms to take share from the$115 billion fixed broadband market and add to the current recurring annual wireless revenue base of over$200 billion.These new capabilities can also expan

72、d the addressable market for fixed broadband services for nomadic applications,especially in business use cases that include temporary work sites and(increasingly popular)pop-up retail locations.By way of background,U.S.consumers and business users spend almost$550 billion annually amounting to arou

73、nd 2.3%of nominal GDP in 2021 on their communication needs for wireless,broadband connections to fixed locations,video consumption,and voice services.The home broadband market within the larger communications market represents over$90 billion of recurring annual revenue,while we estimate business sp

74、ending on communication needs by SMBs represents at least another$25 billion.Historically,broadband service to homes and SMBs was largely served by fixed wires(copper,coaxial,and/or fiber)and generally delivered by two competitors a telecom incumbent and cable firm.The home broadband market was one

75、of the last great duopolies in the communications category,and the absence of greater competition led to outsized annual revenue growth for the category that averaged about 7%annually over the past seven years,relative to the broader broadband category average of about 2%.Meanwhile,broadband adoptio

76、n has soared,with U.S.household penetration reaching a mature 88%this year.Fixed Wireless Access/Broadband Overview Fixed wireless broadband and fixed wireless access(FWA)are used somewhat interchangeably to describe the opportunity to provide homes and SMBs with broadband service over a wireless ne

77、twork.While FWA can trace its roots as far back as AT&Ts Project Angel in 2000,it was only recently,in conjunction with the deployment of mid-band 5G networks,that wireless firms have made more material strides in availability and penetration of the service.By way of background,cable firms offer ent

78、ry-level download speeds of 100 megabits per second(mbps)and can offer speeds as fast as one gigabit per second(gbps),with availability across 84%of the United States.2 Telecommunications companies(telcos)that offer fiber-to-the-home services also offer entry level speeds of at least 100 mbps and ca

79、n offer one gpbs or more,but the coverage is limited to about 36%of the U.S.In contrast,copper-centric digital subscriber line(DSL)services are available in the telco coverage footprints that do not have a fiber option,but the speeds for copper DSL tend to have limited peak download speeds,well belo

80、w the current level of performance on cable and fiber connections.2 Based on previously published Form 477 data from the Federal Communications Commission(FCC)5G Fixed Wireless Broadband Michael Rollins,CFA Communications and Communications Infrastructure Analyst Citi Research Anthony Nemoto U.S.Cab

81、le,Satellite&Telecom Services and Communications Infrastructure Analyst Citi Research December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 13 While fixed wired connections can provide somewhat consistent user experiences,more factors can influence the wireless experience,espe

82、cially as the capacity supplied to homes and businesses is often shared with mobile users.Historically,the balancing act between providing robust mobile service and competitive fixed wireless services was quite difficult to manage.However,the introduction of 5G services,new spectrum bands by the FCC

83、,new software and network management techniques,and ongoing investments by the wireless carriers have opened the door to new and better service levels for fixed wireless applications.Wireless carriers are leveraging the incremental capacity gains from new spectrum and 5G technologies to offer a comb

84、ination of services on the same platform:enhanced mobile,fixed wireless services,and emerging business-to-business(B2B)and Internet-of-Things(IOT)services that are anticipated to ramp in the future.By managing one network with several use cases,carriers are looking to fixed wireless services to acce

85、lerate utilization of the network.Wireless carriers are now advertising download speeds of between 30 mbps and 300 mbps,with T-Mobile and Verizon each targeting over 100 mbps in urban and suburban areas(using mid-band spectrum).These speeds can be competitive with entry-level fixed broadband service

86、s offered by telcos and cable firms.The same wireless firms are also leveraging their networks in more rural areas to offer broadband download speeds of at least 20 mbps to 30 mbps that can be competitive or better than existing DSL services,especially if consumers do not have a competitive cable op

87、tion.Early Momentum Provides a Leading Indicator for Future Disruption Fixed wireless broadband sales have accelerated since mid-2021 and reached over 100%of overall consumer broadband industry net adds during the second and third quarters of 2022,based on our industry analysis.We believe the new fi

88、xed wireless broadband services and the attractive value-based price points are helping to expand the broadband category overall,while also taking share from the broader ecosystem.Figure 7.U.S.Residential Fixed Wireless Net Adds Figure 8.U.S.Residential Fixed Wireless Net Adds Flow Share Note:Reside

89、ntial Fixed Wireless subscriptions in 3Q 22 include AT&T(0.5M),Verizon(0.6M),T-Mobile(2.1M),and Other FWB/WISP providers(0.8M)Source:Company Reports,Citi GPS Source:Company Reports,Citi GPS Cable firms and telcos have each acknowledged varying degrees of impact from the new fixed wireless competitio

90、n,although cable firms remain skeptical of the sustainability of the trend,with one cable executive referring to fixed wireless as a“parking lot”from which cable will eventually grab share.Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 14 Capacity Constraints Need to Be

91、 Actively Managed Wireless spectrum is a scarce resource,and the carriers that are deploying FWA need to actively balance the available capacity for the product against that of their core offering in mobility.In other words,the more FWA traffic is on the network,the less is available for mobile.Give

92、n this,skeptics of FWA are questioning whether fixed wireless broadband services using mid-band spectrum can handle a much larger number of gigabytes per month.To put this into perspective,monthly data consumption in the home is around 600 GB for broadband-only customers,according to the U.S.cable c

93、ompanies;this is 60 times the roughly 10 GB used monthly by wireless subscribers on the mobile network.Through our analysis of wireless capacity and applying a framework previously published by the Federal Communications Commission(FCC),we find the bottleneck for capacity consumption is not gigabyte

94、s per month,but the minimum download speed(i.e.,throughput)that is available to each user during the peak busy hour period of the network.As carriers can allocate more mid-band spectrum to fixed wireless applications,and as additional carriers participate in the opportunity,we believe carrier penetr

95、ation for fixed wireless services can serve an average of 11%-22%of households within each cell site with advertised speeds of at least 100 mbps and applying an over-subscription rate of 5:1.To reflect the likelihood that average cell deployments are in denser areas than the average households per c

96、ell site in the U.S.,we divide our results by a factor of three to be conservative.Figure 9.Summary of Mid-Band Fixed Wireless Broadband Scenarios Source:Company Reports,FCC,Citi GPS As we look forward,we expect fixed wireless opportunities and experiences to improve while carriers continue to satis

97、fy demand from their core mobile users.Within this context,carriers are continuing to increase capacity across their networks by augmenting the amount of spectrum utilized,employing new technology that enhances the amount of available download speed on the network,and using software and new network

98、management techniques to identify when the core mobile usage experience is at risk of underperforming from other demands on the network.Item60100140Total Spectrum available60100140 x%downlink80%80%80%=Downlink spectrum per sector4880112x Average bits per Hz stream(Massive MIMO)272727=Data capacity p

99、er sector(mbps)1,2962,1603,024x Sectors per cell site333=Data capacity per site3,8886,4809,072x Oversubscription rate555=Effective data capacity per site(mbps19,44032,40045,360/minimum data speed per user(mbps)100100100=Maximum households per site194324454/Households per cell site1,7231,7231,723/Den

100、sity multiplier3x3x3x=Carrier penetration opportunity at peak capacity4%6%9%x Number of wireless carriers3.02.52.5=Wireless industry opportunity at peak capacity11%16%22%Mid-Band Spectrum ScenariosDecember 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 15 Marketing Scale Remains

101、 a Question As carriers qualify service addresses for prospective customers,we identify two important questions:First,can wireless firms successfully offer a self-installation that meets customer expectations for performance?A self-installation option offers carriers a cheaper acquisition cost and a

102、 faster way to penetrate the market given that customers do not need to schedule and wait for an expert installation.The challenge with a self-installation option is that the antenna would generally need to be built into the wireless router,requiring the wireless signal to pass through walls and win

103、dows,which can degrade the quality of service relative to an installation that places the antenna on the outside of the home or building.An external antenna can also improve the capacity available for carriers to scale the fixed wireless service across a greater area,resulting in better performance

104、for the customer.We had thought the prevailing installation option for consumers would be a professional installation with an external antenna.However,the surprising strength of fixed wireless installations and customer base growth,even in this early stage,has been encouraging for the performance of

105、 self-installation options with antennas built into the customer premise equipment(CPE).Second,will service availability consistently align with customer demand?As wireless carriers are managing capacity within each cell site,the availability of homes for fixed wireless broadband is apt to be dynami

106、c,especially in urban markets.Within a market or city,there are likely to be homes and locations that do not qualify for service until capacity is augmented.As customers adopt fixed wireless,carriers will also reach a level at which they no longer want to add homes within certain sectors of the mark

107、et.This poses an interesting marketing question will a customers buying decision in a specific home or business location align with the availability of capacity in that specific location?We have anecdotally already witnessed addresses qualify for service upon a wireless carriers announcement of the

108、services availability,but the service became unavailable months later as capacity utilization likely rose in that area,whether from greater mobile usage or fixed wireless adoption.The dynamic nature of demand within a market and the variability of capacity of supply may limit the scale of marketing.

109、In response to the concern,carriers are looking at fixed wireless as an incremental and complementary use case to the core mobile service,rather than as a stand-alone business model.Sizing the Market Opportunity Wireless carriers are not setting overly ambitious targets for future FWA subscriptions,

110、which reflects FWAs positioning as a value-based product with limited network capacity.The two largest U.S.carriers are collectively targeting up to 13 million subscriptions in the 2025-26 timeframe,which would represent about 10%of the broadband market and would be above our current industry estima

111、te of 11.5 million in 2025.Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 16 Our base case outlook is that fixed wireless could be an annual revenue opportunity of at least$7 billion(at a monthly average revenue per user of around$50),which could add roughly 100 basis p

112、oints to annual wireless service revenue growth over the next four years.With AT&T possibly entering into the category,wireless firms taking a greater focus on the SMB market,and carriers eventually deploying additional spectrum for fixed wireless broadband(including millimeter wave spectrum),we cou

113、ld see further upside to the fixed wireless revenue opportunity by 2025 and beyond.December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 17 Cell therapy is a broad term referring to the infusion of living cells into a patient to treat or cure a disease.We believe allogeneic ce

114、ll therapies in which cells are sourced externally from master cell banks rather than being derived from patients are the next major advance in the quest to treat and eventually cure cancer.We predict this novel category will surpass the approximately$8 billion global revenue projection estimated by

115、 2025 for the predecessor class of autologous cell therapies.Allogeneic cell therapies will enable much broader adoption across the healthcare ecosystem than autologous methods and will yield threefold to sixfold faster treatment delivery to the patient without sacrificing efficacy or safety.Below,w

116、e outline the evolution in cancer care over the past 75 or so years culminating with the emergence of cellular therapies and explain why allogeneic cell therapies are poised to disrupt the oncology market over the coming decade.Setting the Stage Over the past 80-plus years,we have seen massive innov

117、ation in the development of therapies for cancer.Chemotherapy,a blunt and highly toxic tool that kills dividing cells,was introduced in the 1940s and was the mainstay of cancer therapy for much of the past century.Then,fast forward 40 years to the early 1980s,monoclonal antibodies,drugs that mimic t

118、he immune systems ability to fight off diseases like cancer,entered the scene and were heralded as the next great advance in cancer treatment.The first monoclonal antibody,Rituxan,was FDA-approved for blood cancer in 1997.In the early 2000s,we saw another wave of innovation in the fight against canc

119、er with targeted small-molecule drugs reaching the market.The first targeted small-molecule drug,called Gleevec,received FDA approval in 2001.Ten years later,the field achieved yet another milestone,as the first antibody drug that leverages a patients own immune system to fight tumors arrived with t

120、he 2011 approval of Yervoy.But just in the last 10 years,novel ways to treat cancer have emerged that do not involve chemotherapy,antibodies,or targeted small molecules.This era ushered in an entirely new domain of treatment called cell therapy,where human cells derived from the cancer patient are e

121、xtracted,modified,and re-introduced into the body to battle the tumor.The first such cell therapy a“CAR-T”therapy called Kymriah that treats pediatric and young adults with a rare blood cancer,acute lymphoblastic leukemia received FDA approval just five years ago.Kymriah and other cell therapies tha

122、t have followed have revolutionized treatment of certain types of blood cancers and have been a disruptive force in the oncology therapeutic landscape,with the promise of a complete cure in the face of a devastating diagnosis with exceedingly high mortality.This sounds amazing,and it is,but it is st

123、ill not enough.We are now in yet another era that is taking cell therapy further,beyond autologous cell therapy derived from patients themselves to the even more cutting-edge allogeneic cell therapy,where cells are sourced from master cell banks.Allogeneic cell therapy has multiple advantages,includ

124、ing:Much faster turnaround time:The turnaround time the harvesting,processing,and reintroduction a patients cells for autologous cell therapy can be as long as four to six weeks.An advantage of allogeneic cell therapy is that it can be manufactured at scale and stored on site for on-demand or“off-th

125、e-shelf”availability(see Figure 10 below).While autologous cell therapy is valuable,when patients are progressing quickly in their disease,oncologists often cannot wait over a month for the cells to be processed.Allogeneic Cell Therapy Yigal Nochomovitz,Ph.D.U.S.Mid/Small Cap Biotechnology Analyst C

126、iti Research Carly Kenselaar U.S.Mid/Small Cap Biotechnology Team Citi Research Ashiq Mubarack U.S.Mid/Small Cap Biotechnology Analyst Citi Research Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 18 Healthier,more potent cells:Unlike immune cells derived from the patien

127、t,allogeneic cells are derived from young,healthy donors,eliminating any co-morbidities associated with the patients underlying disease.Less chance of manufacturing failure:Patient-derived cells may not meet manufacturing specifications given batch-to-batch variability,whereas allogeneic cells are d

128、erived from a uniform master cell bank,nearly guaranteeing adherence to manufacturing quality controls.Much less invasive for the cancer patient:With autologous cell therapy,cells must be harvested from the patient and then re-infused after genetic processing.This requires two invasive procedures.Wi

129、th allogeneic cell therapy,only one invasive procedure,infusing the cells,is needed.Wider access to cell therapy:Currently,autologous cell therapy is restricted to major academic centers in the U.S.given the complexities of the therapy.The adoption of allogeneic cell therapy,in view of its greater s

130、implicity,would expand the market to second-tier urban and even community and regional hospitals.Figure 10.Autologous vs.Allogeneic Cell Therapy Manufacturing Process Source:Citi GPS December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 19 Cell Therapies Are“Living Drugs”In ou

131、r discussion,we will continue to focus on adoptive cell therapy,also known as cellular immunotherapy,which involves harnessing cells from the immune system to battle cancer.As noted above,the immune cells can either be derived from the individual patient(in the case of autologous cell therapy)or fro

132、m a healthy donor(in the case of allogeneic cell therapy)and are often modified ex vivo(i.e.,outside of the body)to enhance their cancer-fighting properties.There are several types of adoptive cell therapy being evaluated in clinical trials,including:CAR T-cell therapy:T cells are a critical type of

133、 white blood cell that helps the body fight off infection.“CAR-T”cell therapy involves reprogramming T cells to enhance their ability to target cancer cells.The T cells are engineered to express specific proteins,called chimeric antigen receptors(CARs),on their surface.When the cells are re-infused

134、into the patient,these new receptors help the T cells recognize,bind to,and attack cancer cells.NK/CAR-NK cell therapy:More recently,scientists have started engineering a different class of immune cells,called natural killer or NK cells,with CARs.This approach is known as CAR-NK cell therapy.TIL the

135、rapy:Tumor-infiltrating lymphocyte(TIL)therapy involves harvesting white blood cells directly from the patients tumor by first obtaining a tumor biopsy.These cells are grown in very large numbers outside the body over several weeks and then re-infused back into the patient.Because TILs are extracted

136、 directly from the tumor,these cells have the natural ability to recognize and destroy the patients cancer cells.TCR T-cell therapy:Engineered T-cell receptor(TCR)therapy is very similar to CAR-T.Both approaches involve modifying the receptors on T cells so they can recognize and attack cancer cells

137、.The main difference between the two is the types of antigens the engineered cells can recognize.CAR T-cell therapy recognizes only extracellular targets on cancer cells,whereas TCR T-cell therapy also recognizes intracellular targets on cancer cells;hence,these two approaches are complementary.Allo

138、geneic Products Could Revolutionize Cell Therapy but Are We There Yet?Of the four approaches listed above,CAR-Ts are the only type of cell therapy on the market today.Since Kymriahs approval in 2017,five other autologous CAR-Ts have received FDA approval for various forms of blood cancer.However,com

139、plex and costly manufacturing has limited their commercial adoption.Despite the appeal of allogeneic cell therapies,their development has lagged autologous approaches.Specific challenges in designing safe and effective allogeneic cell therapies stem from the immunological mismatch between the patien

140、t and the donor.For one,this mismatch creates a risk the infused,donor T cells could recognize the patients cells as“foreign”and attack them,leading to a serious side effect known as graft versus host disease(GvHD).Second,there is the risk the patients immune system may identify the allogeneic cells

141、 as“foreign”and rapidly eliminate them before they have had a therapeutic effect,also known as graft rejection.As a result,the allogeneic cell therapy field has been focused on strategies for improving persistence of the cells,as this should increase the likelihood of seeing durable responses.Citi G

142、PS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 20 Recent advances in gene editing tools,such as CRISPR and Cas9,have enabled development of allogeneic cell therapies designed to overcome the immune rejection and persistence challenges that have historically plagued the field.

143、As shown in Figure 11 below,there are currently around 30 allogeneic cell therapies under evaluation in U.S.clinical trials for various forms of cancer.Figure 11.There Are Around 30 Allogeneic Cell Therapies Currently in U.S.Clinical Trials Source:clinicaltrials.gov,Citi GPS,Company Reports Early cl

144、inical data for several allogeneic cell therapy programs appear promising,showing comparable initial response rates to benchmark autologous programs with manageable safety.The key outstanding question is whether the long-term efficacy(i.e.,duration of responses)of allogeneic cell therapies will matc

145、h that of autologous therapies thus far.To fully answer this question,we will need to see data from larger studies and with longer-term follow-up.Approved Autologous CAR-Ts Alone Are Projected to Reach Nearly$8 Billion in Sales by 2025;Allogeneic Could Be Bigger Despite the shortcomings of autologou

146、s cell therapies,annual sales for the six approved autologous CAR-Ts alone are widely expected to grow from around$1.7 billion in 2021 to nearly$8 billion by 2025(see Figure 12 below).CompanyProgramCell SourceTargetCancer Type(s)Phase 3 AtaraTab-ce 1EBV T cell-EBV+Post-Transplant Lymphoproliferative

147、 DiseasePhase 2 AllogeneALLO-501AT cellCD19Non-Hodgkin Lymphoma CRISPRCTX110T cellCD19Non-Hodgkin Lymphoma TakedaTAK-007NK cellCD19Non-Hodgkin LymphomaPhase 1/2PrecisionAzer-celT cellCD19Non-Hodgkin Lymphoma,B-cell Acute Lymphoblastic LeukemiaPBCAR269AT cellBCMAMultiple MyelomaPhase 1AdicetADI-001y2

148、 T cellCD20Non-Hodgkin LymphomaAllogeneALLO-315T cellCD70Renal Cell CarcinomaALLO-605T cellBCMAMultiple MyelomaALLO-715T cellBCMAMultiple MyelomaCaribouCB-010T cellCD19Non-Hodgkin LymphomaCRISPRCTX130T cellCD70T-cell Acute Lymphoplastic LeukemiaCelyadCYAD-101T cellNKG2DColorectal CancerCYAD-211T cel

149、lBCMAMultiple MyelomaCelularityCYNK-001NK cell-Acute Myeloid Leukemia,Solid TumorsFateFT516NK cell-B-cell Lymphoma,Chronic Lymphocytic LeukemiaFT538NK cell-Acute Myeloid Leukemia,Multiple Myeloma,Solid TumorsFT596NK cellCD19B-cell Lymphoma,Chronic Lymphocytic LeukemiaFT576NK cellBCMAMultiple Myeloma

150、FT536NK cellMICA/BSolid TumorsFT819T cellCD19B-cell Lymphoma,Chronic Lymphocytic Leukemia,Acute Lymphoblastic LeukemiaAthenexKUR-501NKT cellCD19Non-Hodgkin Lymphoma,Acute Lymphoblastic LeukemiaNkartaNKX101NK cellNKG2DAcute Myeloid Leukemia,Myelodysplastic Syndrome,Solid TumorsNKX019NK cellCD19Non-Ho

151、dgkin Lymphoma,Acute Lymphoblastic LeukemiaPoseidaP-MUC1C-ALLO1T cellMUC1Solid TumorsP-BCMA-ALL01T cellBCMAMultiple MyelomaCellectisUCART22T cellCD22B-cell Acute Lymphoblastic LeukemiaUCART123T cellCD123Acute Myeloid LeukemiaDecember 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigrou

152、p 21 Figure 12.Worldwide Autologous CAR-T Sales(Millions,2017-25E)Source:Visible Alpha,Citi GPS With multiple allogeneic programs currently in late-stage clinical trials(Phase 2 or Phase 3),it is reasonable to expect that the first FDA approval of an allogeneic cell therapy could come in the next tw

153、o to three years.If approved,allogeneic cell therapy could not only disrupt the existing autologous CAR-T market but could also expand the size of the pie given its multiple advantages over the autologous process.In other words,we believe allogeneic cell therapy could eventually be bigger than autol

154、ogous cell therapy,which in its own right has been a major disrupter in the world of oncology over the past five years.Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 22 The UN projects that the world population will grow from around 7.5 billion to around 9.7 billion by

155、2050,with two-thirds of the population concentrated in urban areas.According to OurWorldinData.org,about 50%of habitable land is used in agriculture,and the UN predicts that food production must increase by 70%by 2050 to feed the world.3 Rising demand for farmland has led to dangerous deforestation

156、and negatively impacted biodiversity,while soil erosion and the use of pesticides and chemicals in farming has degraded the environment further.Climate change and a shortage of arable land are key structural challenges that could pose a serious threat to food security in coming decades.In addition,c

157、urrent supply chain issues and geopolitical instabilities have contributed to food supply uncertainties.A Brief History of Vertical Farming Vertical farming is the form of agriculture in which plants or crops are grown indoors in vertically stacked layers.Vertical farming incorporates controlled-env

158、ironment agriculture(CEA)in which all parameters such as light;nutrients;and heating,ventilation,and air conditioning(HVAC)are controlled to optimize crop growth.Current techniques are often soilless,such as hydroponics,aquaponics and aeroponics,and instead use a variety of aqueous nutrient solution

159、s or air as a base.Vertical farms generally grow inside buildings but can also be housed in containers,tunnels,and abandoned mines.As they are not dependent on weather,they can run year-round,bolstering their productivity.They also do not need pesticides,herbicides,or chemicals.The farms are general

160、ly built in urban centers close to where crops are consumed,thus reducing the carbon footprint of transporting crops while making fresher produce available to consumers.Figure 13.Vertical Farms Grow Crops Indoors in Vertically Stacked Layers Source:Siemens 3 Hannah Ritchie and Max Roser,“Land Use,”O

161、ur World in Data,September 2019;Tim Searchinger,“World Resources Report:Creating a Sustainable Food Future,”World Resources Institute,July 2019.Automation in Vertical Farming Sameer S Thakur European Capital Goods Team Citi Research Soumava Banerjee Europe Machinery Analyst Citi Research December 20

162、22 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 23 Advanced Automation Plays a Major Role in the Future and Sustainability of the Industry While the modern concept of vertical farming was first introduced in 1999,the acceleration of automation capabilities in the sector such as rob

163、ots,software,digital controls,Internet of Things(IoT),and artificial intelligence(AI)has improved its scalability and profitability.Industry estimates suggest the industrys global market value stood at around$3 billion in 2020 and could reach$7.3 billion by 2025 and$25 billion by 2030,driven by the

164、technological innovations in the sector.With automation innovations,such as those listed above,modern vertical farms claim to use 95%less water than conventional farms in some cases even 99%less.As for land usage,some experts claim vertical farms could potentially use 99%less land compared to conven

165、tional farms,as well as around 70%less fertilizer.Figure 14.Vertical Farming Is Expected to Grow Rapidly Due to Acceleration in Technological Advancements Source:NASA,Citi GPS New technology can help to attain many of the UNs Sustainable Development Goals,such as Goal 2 Zero Hunger and Goal 3 Good H

166、ealth and Well-Being,by providing a means of producing sustainable and nutritious food.By using around 95%less water than traditional farming,vertical farming also furthers Goal 6 Clean Water and Sanitation.It also produces much less food waste than traditional farming,contributing to Goal 12 Respon

167、sible Production and Consumption.By reducing deforestation and soil usage,it can help achieve Goal 13 Climate Action.Apart from these goals it furthers directly,vertical farming also contributes to Goal 11 Sustainable Cities and Communities and Goal 9 Industry,Innovation,and Infrastructure.Advanced

168、Control Systems Are Increasing Efficiency,Scalability,and Profitability Control systems,as the name suggests,control a vertical farms growing conditions,monitor the environment,and leverage AI to make optimal decisions about conditions at various stages of crop growth.The more advanced vertical farm

169、s are fully connected and digitally controlled,just like an advanced automated manufacturing plant.Modern vertical farms claim to use 95%less water in some cases even 99%less than conventional farms,plus up to 99%less land and 70%less fertilizer Vertical farming technology can help with attaining ma

170、ny of the UN SDGs The most advanced vertical farms are fully connected and digitally controlled,just like an advanced automated manufacturing plant Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 24 The control systems integrate hardware,software,automation controls,sens

171、ors,machine vision,machine learning,SCADA(supervisory control and data acquisition)systems,and manufacturing execution systems(MES)to gather data and make intelligent decisions.The systems are therefore comparable to current advanced manufacturing assembly lines,though managing the conditions for li

172、ving organisms is more complex.Current advanced control systems provide critical data on the health of the crops and optimize all the parameters ranging from lighting and nutrients to HVAC.The system controls the intensity of the light and knows the exact spectrum required for optimum growth at diff

173、erent stages.It also changes the course of the nutrient recipes and supplementary CO2 as the crop grows.In the next decade,next-generation vertical farms could be equipped with these integrated control systems,which could further improve energy efficiency and crop yields and drive unit economics and

174、 profitability,which is very important for the future of the industry.Due to technological advancements over the last decade in lighting,HVAC,and automation systems,vertical farming has rapidly evolved and has become commercially viable for certain crops like leafy greens.Notable Practical Developme

175、nts and Initiatives In July of 2022,Dubai opened the largest vertical farm in the world,covering 30,000 square meters and set to produce 900 metric tons of leafy greens annually.It can grow crops ranging from lettuces and mixed salad greens to spinach and arugula.The system uses 95%less water compar

176、ed to the same crops grown in fields.In addition,crops harvested via vertical farming need no washing,as there is no use of chemicals,herbicides,or pesticides.4 A consortium of four British companies is exploring a series of sites between Dumbarton and Dundee as the location for Scotlands next gener

177、ation of vertical farms.The farms would use 100%renewable power and would provide fresh foods like salad and fruit to over 60%of the Scottish population.The Scottish government aspires for the country to produce more fruits and vegetables domestically,and one hectare of vertical farm can provide fre

178、sh produce to a town of 10,000.Each site would also host wind,solar,and energy storage apart from vertical farming to maximally utilize the available land.5 Many other governments want to ensure locally produced,fresh food for their people.For example,in 2015 Qatar announced plans to grow 50%-70%of

179、the countrys vegetables locally by 2023 via vertical farming as part of its National Food Security Strategy.6 4 Victoria Masterson,“Dubai Has the Worlds Largest Vertical Farm Is This the Future of Agriculture?”World Economic Forum,May 13,2022.5 Vertical Farm Daily,“Consortium Plants to Build New Ver

180、tical Farms in Scotland,”April 21,2022.6 Jason Lemon,“Qatar Will Grow 50 to 70 Percent of its Own Vegetables by 2023,”stepFeed,August 26,2015.December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 25 How Much Does It Cost to Automate a Vertical Farm?Research conducted by Cambri

181、dgeHOK estimated the average cost of a level-one vertical farm,which is reliant on manual labor for watering and harvesting,would be around 1,200-1,400(approximately$1,500-$1,700 as of December 9,2022)per square meter for total size of up to 500 square meters.A level-two operation,which uses manual

182、labor for sowing and harvesting but automation for watering and cultivation,would cost 1,400-2,000 per square meter for a total size of 500-2,000 square meters.Meanwhile,a level-three,fully automated vertical farming operation would cost 1,750-2,250 per square meter for a total size of 2,000-10,000

183、square meters.7 Thus,an industrial-sized 10,000-square-meter vertical farm would cost around$2.6 million for level-three full automation.These are indicative costs and vary from case to case.Different Business Models Blooming in the Sector Vertical Farming Technology:Many well-known vertical farming

184、 companies use their own proprietary technologies to produce their own crops to sell to the market.To do this requires investment in R&D and innovation,as well as capital expenditure.Other companies provide the technology to farmers to operate their own vertical farms,eliminating the need for farmer

185、s to invest in innovation and R&D themselves.FaaS(Farming as a Service)is a service framework offering a suite of agricultural management solutions for controlled environment agriculture(CEA)facilities.Services range from providing experts and systems to start a vertical farm,to fully managing onsit

186、e farm operations,including providing control systems.Using a service model allows farmers to swap fixed upfront costs to variable costs while gaining access to the latest technology.Contract-Based R&D Services:Some companies offer contract-based R&D services that provide information on plant-growth

187、 optimization and software for optimizing conditions and collecting plant-growth data.Customization and Premiumization:A survey from Forager found that over three-quarters of respondents were willing to pay a 20%premium for locally grown food,which allows for differentiation premium.8 Innovation in

188、lighting enables customization in texture,crispiness,and flavors,qualities for which premium retailers and restaurants are willing to pay.Thus,even if unit economics in many crops are not yet comparable to traditional farming,customization and premiumization could hold the keys to success.7 Cambridg

189、e HOK,“How Much Does Vertical Farming Cost,”Accessed October 23,2022.8 Isabelle Gustafson,“Consumers Increasingly Value Local Food,”CStoreDecisions,January 30,2020.Complementary business models to vertical farming include technology providers,Farming as a Service(FaaS)companies,and contract-based R&

190、D services Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 26 Vertical Farming Automation Is Still in Its Infancy Though many vertical farms claim to be fully automated,most are not and still need human labor,which forms an important part of the cost.Many vertical farms

191、are still not profitable.But as vertical farming technology advances and more operations are automated,their scale is widely expected to increase,and their costs are expected to fall.While many investors focus on the financials of vertical farm companies,they underappreciate the technology providers

192、 and original equipment manufacturers given the current size of the market compared to other industrial automation markets.Lighting and lighting controls play an important role in increasing the efficiency and productivity of vertical farms.For many industrial lighting companies(outside of startups

193、in agri-lighting),the vertical farming market is a relatively small piece of their businesses,but rapidly growing.Barriers to Adoption:Unit Economics and Number of Crops Need to Increase Automation enables profitable vertical farming but requires capital expenditure.Many vertical farms,barring a few

194、,are still loss-making.Vertical farming is a high-growth industry but needs initial capital and incentivizing policies in place to support sustainable growth.There are only a small number of crops with commercially viable vertical farms based on unit economics.Crops such as herbs and salad leaves ha

195、ve high plant density and short turnover,leading to lower required resources during cultivation.Currently,vertical farming only serves a small portion of traditional crops.Vertical farms are energy intensive.If the energy used comes from fossil fuels,the carbon footprint of vertical farms is greater

196、 than that of conventional farms.Using energy-efficient LEDs and cleaner energy sources can help vertical farms operate more efficiently.Crops that can be stored for many days are much more economical to grow via field farming.Vertical farms,which operate closer to urban centers where most consumers

197、 live,are more valuable for growing more perishable crops.Sectoral Impacts of Advanced Automation in Vertical Farming Sectors that will benefit include:Automation,software,and robotics providers:Traditional industrial automation players also have a presence in this field.Lighting:LED lighting is a v

198、ery important part of vertical farming.Reduced LED prices and an increase in LED lighting efficiency has been a driver of the vertical faming sectors growth.Unlike conventional lighting,LEDs can be effectively controlled with automation,and research is ongoing to increase the efficiency of LED light

199、ing.Specifically,researchers are trying to determine which particular spectrum of light is most efficient at each stage of crop growth;this knowledge could help further reduce the energy consumption of vertical farming.December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 27 S

200、ectors that may suffer include:Pesticides,herbicides,agricultural chemicals,and fertilizers:Though we do not think vertical farming can replace traditional farming,it has the potential to be an important part of the mix.However,as it increasingly takes share from traditional farming in the future,th

201、e demand for pesticides,herbicides,fertilizers,and chemicals will decrease.Farm equipment:The manufacturing of traditional farm equipment,such as tractors,could be at risk if vertical farming becomes a meaningful percentage of the farming industry.Citi GPS:Citi GPS:Global Perspectives&Solutions Dece

202、mber 2022 2022 Citigroup 28 Data fabric is a unified architecture of services that standardizes the way data on a multi-cloud,multi-location,and multi-platform environment is managed.Most organizations today deal with large amounts of data across several business units.A key problem any organization

203、 that stores and uses large amounts of data on its servers will face is accessing that data in a multi-platform architecture.Further complicating the problem is the fact that over the last decade,both structured data sources(i.e.,those with clearly defined data types)and unstructured data sources(i.

204、e.,those that are not typically easily searchable)have increased significantly in number.This has led to the creation within organizations of many data repositories(entities storing large amounts of data for the purposes of data mining,reporting,and analytics)that are not readily accessible to more

205、than one team.Most legacy systems are built in such a way that each line of business in a large organization has its own way of storing and accessing data.But todays systems are more integrated and highly data intensive,making such an approach infeasible and too costly to maintain.They are also extr

206、emely time-consuming considering how quickly the overall amount of data and number of data repositories have increased in businesses over the last few years.What organizations need is to simplify access to data and its management in a heterogeneous way,avoiding duplicating storage and making all dat

207、a available across the entire organization.That is where data fabric comes in.Data fabric is an architectural approach that breaks down the data repositories;enables access to data by users across the organization;and allows mining,integration,and usage of that data across multiple platforms irrespe

208、ctive of the location of the users or the data itself.Data fabric helps with the automation and integration of data from various departments,its delivery,and at times even its analysis.Figure 15.Typical Data Fabric Architecture Source:Gartner,Citi GPS Moreover,different organizations have different

209、sets of platforms where they store and access data.Therefore,a“one design fits all”solution does not apply to data fabric,as the data must be customized per the needs of the business.The purpose of data fabric is to expand the scope of data usage beyond the initial intended use.Data Fabric Nitesh Ag

210、arwal CEEMEA Metals&Mining,Chemicals,and Utilities Analyst Citi Research Data fabric simplifies access to data across platforms,irrespective of data types December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 29 Key Components As outlined by multiple data fabric solution provi

211、ders,including IBM and ScaleFresh,data fabric architecture consists of the main components in Figure 16.These components work together not only to integrate the data and make it accessible,but also to ensure its security and the datas alignment with its expected end use.Figure 16.Key Components of D

212、ata Fabric Source:IBM,ScaleFresh,Citi GPS Data Aggregation and Access:The most important function of data fabric is making data easy to access i.e.,ensuring it is available from all different sources and platforms without the need to copy terabytes of data.Data fabric sits above all the data sources

213、,aggregates access to them,and helps people use the data without moving it from its original source.Even if data copying is necessary,depending on the intended application,data fabric architecture can do it robustly.Moreover,this architecture works with all data types across all sources that store t

214、he data structured and unstructured.Data Processing:This component provides users with a set of applications that help make data available to them for analysis across different platforms,such as Python or Power BI.Data Management:Another aspect of data fabric is ensuring the right users have access

215、to the right data.Not all data should be accessible to all users,and regulatory breaches should be avoided.Metadata can help automate these requirements.Data Orchestration:This involves taking data from different locations,organizing it,and making it available to end-users across the organization.Ci

216、ti GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 30 Data Discovery:This lets users seamlessly identify and mine data from multiple sources,integrate it,and derive patterns from it that they otherwise could not.Data Automation Data fabric architecture can be further expanded

217、 by adding in artificial intelligence and machine learning tools to help automate the fabric and minimize human interference and errors.Status Quo Most organizations globally are still using multiple repositories,including data warehouses,legacy systems,and cloud data stores,among others.These exist

218、ing systems tend to work well with the specific platforms they were designed for,but not across systems.This makes them not only difficult to use,but also costly and slow to work with.Therefore,the need for increased awareness around data solutions,like data fabric,is essential considering the ever-

219、increasing amounts of data companies deal with and the availability of provider-based data fabric solutions.In addition,many businesses are starting to realize the long-term benefits of such architecture and planning to invest in data fabric upgrades in the coming years.Data is at the forefront of a

220、lmost every industry,making this a must-adopt technology for companies around the globe.What Can Go Wrong?There are a few concerns regarding the implementation of data fabric.One is the lack of a one-size-fits-all solution.Every organization has its own challenges around the method,location,and form

221、at of data storage.Therefore,implementing data fabric solutions requires meticulous planning that can be complex and time-consuming depending on how the existing systems are built.Data fabric solutions are not implemented overnight,and implementation requires a deep understanding of an organizations

222、 existing data.Another concern is around the security of company data.In existing legacy systems,datasets are spread across different platforms,making breaching the protection for the entire data set difficult.However,in the case of data fabric,all data is exposed to a single source,necessitating si

223、gnificant investment in upgrading the data fabric security layer.That said,a data fabric solution,if efficiently implemented,can potentially make data more secure.If a data fabric architecture fails for any reason,the issue will have a cascading effect across businesses in the organization.The more

224、complex a system,the more fragile it is.This makes monitoring a data fabric difficult,and failure is a risk if it is not properly monitored.Most organizations are still using legacy systems There is no ready-made,one-size-fits-all solution Data security concerns make data fabric more complex Failure

225、s can cause a cascading effect December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 31 We live in a digital world.Internet-driven business models and communities have reshaped media,communication,shopping,commuting,money,banking and finance,art,and now,virtual worlds.9 These

226、same technological advances are now calling into question the fabric of ownership and employment:How should capital and labor be organized in an internet-and blockchain-driven world?What Are DAOs?A decentralized autonomous organization(DAO)is collectively owned and governed by its members,with rules

227、 set and executed through code(smart contracts).As public limited companies(PLCs)were to the industrial era of the 19th century,DAOs may be to the 21st century internet and blockchain economy.A DAO is enabled by distributed ledger technology(i.e.,blockchain),cryptocurrencies,and smart contracts(self

228、-executing contracts with the terms of the agreement directly written into lines of code).At the technologys core,community members propose and vote upon decisions on-chain to ensure decentralization and transparency.Proposals that achieve consensus are enforced by smart contracts.Profits generated

229、by the DAO are distributed to token holders,either via airdrops to governance token holders or through a staking mechanism.Figure 17.DAO Primitives Note:Heterarchy is an organizational structure where the elements of the organization are unranked(non-hierarchical)or potentially ranked in a number of

230、 different ways.Source:Medium,cdixon.org,Citi GPS The first DAO was built on the blockchain and launched in May 2016 through a crowdfunded token sale,raising around$150 million.The DAOs mission was to fund projects,similar to a VC fund but voted on by its token holders.This first ever DAO quickly ra

231、n into problems.In June 2016,a hacker found a flaw in the smart contract code and began to drain funds from the DAO.This was the beginning of the end of the so-called genesis DAO.9 Citi GPS,Future of Money:Crypto,CBDCs and 21st Century Cash,April 2021;Citi GPS,Metaverse and Money:Decrypting the Futu

232、re,March 2022 DAOs,Capitalism,and Employment Ronit Ghose,CFA Head of Banking,FinTech,and Digital Assets,Future of Finance Citi Global Insights Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 32 Since then,DAOs have proliferated.The exact number of DAOs today is unclear,b

233、ut estimates suggest close to 5,000 exist,with more created but inactive.Their cumulative value,including governance tokens,is almost$10 billion.10 At their core,DAOs are organizations.But unlike traditional ones controlled by a select few leaders,DAOs are much more decentralized in decision-making.

234、Key features of DAOs versus traditional organizations are summarized in Figure 18.Figure 18.Decentralized Autonomous Organization(DAOs)vs.Traditional Organizations Source:Citi GPS DAOs are different,but not an entirely new concept Community-based models have existed for millennia.Early humans worked

235、 in groups to hunt and fish animals or forage for vegetation.Modern co-operatives date back to the 18th century as people moved from farms to cities.By the mid-19th century,several formal co-operatives started out as local community-led groups in Western Europe,North America,and Japan.11 Borrowing t

236、he broader community framework from modern co-operatives,DAOs build on the concept of collective ownership by leveraging distributed ledger technology(DLT)to allocate decision-making,management,and ownership.The funds of a DAO are stored in its own treasury and governed by smart contracts,which mean

237、s DAOs,unlike co-operatives,do not need to rely on banks or external financial institutions to store funds.DAOs also differ from traditional co-operatives in governance,as they usually implement a“one token,one vote”mechanism as opposed to the one member,one vote system found in most traditional co-

238、operatives.Why Do We Need DAOs?Decentralized governance offers the possibility for thousands or even millions of individuals to make decisions collectively at scale,resolve the agent-principal problem(i.e.,a conflict in priorities between a group and the representative authorized to act on their beh

239、alf),and improve transparency.Resolves Agency Problem:DAOs introduce community governance,where stakeholders do not need to trust agents working on their behalf.The 10 DeepDAO,“Organizations,”accessed September 20,2022.11 International Cooperative Alliance,“The History of the Co-Operative Movement,”

240、accessed September 27,2022.December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 33 organizations distribute collective risk and rewards based on programmatically executed rules.Infuses Transparency:All transactions in a DAO occur on-chain and are trackable and observable.The

241、community can review spending,funding allocations,and fulfillment of plans,for example.Figure 19.Prominent Real World Use Cases of DAOs Source:101 Blockchains,Alchemy Blog,Ledger Academy,Citi GPS DAOs:Remaking Shareholder Capitalism into Digital Community Ownership Critics view the shareholder model

242、 of capitalism as providing less power to creators,users,and employees,while maximizing the value for uninvolved shareholders.While this form of capitalism may lead to growth,it can also lead to problems of inequality,social and economic instability,and corruption.DAOs can facilitate inclusive acces

243、s,providing small investors and contributors with access to the DAOs content and a voice in organizational decisions.DAOs can also potentially help unlock access to private investment opportunities previously available only to wealthy investors.But what,specifically,are DAOs best suited to building

244、and operating?DAOs and Ownership-Embedded Employment DAOs enable more individuals to collectively work for themselves as employment styles and structures change:Examples include the rising popularity of portfolio careers,the digital nomad lifestyle,and virtual corporations,which were all accelerated

245、 by high-speed internet as well as greater acceptance of the work-from-home model that COVID-19 turbocharged.Protocol DAOsFocused on governance of decentralized protocols,such as borrow/lending applications and decentralized exchanges.Prominent protocol DAOs include MakerDAO,Uniswap and Yearn Financ

246、e.Investment/Venture DAOsPools capital to invest in early-stage start-ups,protocols,off-chain investments and other DeFi projects.Helps democratize&decentralize investment processes.Popular investment DAOs include MetaCartel Ventures,BitDAO etc.Collector DAOsAimed at NFTs&artists to support ownershi

247、p of art and content.ArtsDAO represents the largest NFT community in the Middle East,composed of investors,artists,creators,collectors,and Web3 developers.Social DAOsFoster communities and personal connections by bringing like-minded people together and coordinating activities via tokens.Many crosso

248、vers from Collector DAOs to Social DAOs such as Board Ape Yacht Club.Philanthropy DAOsFocus on supporting social responsibility initiatives and other community-driven projects.For examples the Big Green DAO focuses on food justice and gardening initiatives.Grant DAOsFund innovative new DeFi projects

249、,based on applications received from start-ups.These DAOs depend on community-based donations to the grant pool,which are then allocated to different projects based on collective votes.E.g.,Aave.Metaverse DAOsMetaverse will be able to operate autonomously,creating a new ecosystem built around tokens

250、.Metaverse could be governed by a DAO,members of which will vote on proposals that affect the metaverses future.Other DAOsIn addition to the prominent DAOs discussed above,other variants could include Media DAOs,Service Guild DAOs,Entertainment DAOs,Gaming DAOs,Operating System DAOs etc.Citi GPS:Cit

251、i GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 34 In a DAO,members vote on the work to be done,unlike in traditional organizations where a manager allocates team tasks.DAOs can help align employee skillsets better with work if a member is not interested in a project,they can choose

252、 not to do it and somebody else can pick it up.More Autonomy,Better Monetization:Increased lifestyle flexibility and control have enabled todays creator economy of artists,vloggers,podcasters and the like to flourish through short-term contracts.As DAOs proliferate,instead of having one employer and

253、 a defined working week,individuals may be able to contribute several hours a week to multiple DAOs,resulting in more autonomy in the monetization and scheduling of work hours.DAOs are likely to attract self-motivated individuals who share an organizations specific vision.Thus,DAOs are well-suited t

254、o strengthen workers engagement by rewarding them with ownership in projects,mitigating the agent-principal dilemma.DAOs could grant more autonomy over where,when,and how an employee works.Freedom to Pursue More Fulfilling Work:According to a report by Gallup,85%of the global workforce today is not

255、engaged or actively disengaged at work.12 DAOs could offer employees freedom to choose projects where:(1)they share the companys mission and vision,(2)the role aligns with their core competences,and(3)talented and like-minded co-workers are present.The technology-centric nature of DAOs may also help

256、 automate trivial tasks using smart contracts that could further free up employee time for more critical and creative work.Different Compensation Streams and Structures:DAOs could enable ownership and governance in an Open Metaverse,driving newer monetization methods for contributors.For instance,a

257、DAO employee can contribute to content moderation of the virtual world where kids play,learn,socialize,and earn native DAO or Metaverse tokens,thereby making the employee the owner and aligning their interests with that of the DAO and the Metaverse.See our Citi GPS report Metaverse and Money:Decrypt

258、ing the Future for more on the Metaverse.Risks and Challenges of DAOs DAOs are still in their infancy and issues related to their effectiveness,governance and technology still need to be addressed.In addition,mainstream adoption of Web3(a third iteration of the internet based on blockchain where ind

259、ividuals have the potential to monetize their own data)which may drive DAO growth depends on the successful resolution of questions related to user experience,security,scalability,and regulatory clarity.Limited Purpose,Short-Lived:Most DAOs tend to be short-lived,focusing on a specific task or proje

260、ct(e.g.,raising funds,agreeing on a proposal)and then ceasing to exist.Unlike traditional companies,DAOs rarely operate with a very long-term view,transcending generations of employees,management,and shareholders.Decentralized Leadership and Execution Challenges:Although DAOs flatten certain hierarc

261、hies and make it easy for members to switch their contribution 12 Gallup,“State of the Global Workplace:2022 Report,”June 2022.December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 35 across projects and tasks,making decisions on transformative ideas in a decentralized communi

262、ty can be challenging.Critics of DAOs may argue that disruptive innovation is often driven by just a handful of visionary leaders.Nascent Technology and Code Vulnerabilities:Smart contracts running a DAO are prone to hacks and exploits.This can result in breakdowns of the mechanism needed to run the

263、 DAO efficiently.For instance,the very first DAO launched in 2016 via a token sale and was hacked for$50 million in the same year via the exploitation of vulnerabilities in its code base.13 Risks From Too Much Transparency:DAOs are fundamentally transparent and public,allowing anyone to see their on

264、-chain activities.While this can be good for building trust,it also reveals details of ongoing projects and activities.This makes DAOs vulnerable to unfair competition practices,and DAO members may be prone to increased risk of social engineering schemes from malicious actors.The question of whether

265、 DAOs are efficient enough to compete with centralized service providers can be answered by the view that DAOs are very good at managing treasury globally.I think it really depends on what a DAO is doing,what objective is,and what it tries to achieve.In my opinion,DAOs are very good at governing pub

266、lic goods or infrastructure that have a greater base than one particular company.But when it comes to actually building something efficient,a DAO might not be very suitable.However,were still in the early stages.We might see a very efficient way of building things through DAOs soon.STANI KULECHOV,FO

267、UNDER AND CEO OF THE AAVE COMPANIES14 Potential for Low Voter Turnout,Minority Holding Majority of Tokens:DAOs assign one vote to each token,not one vote to each token holder.This has led to ongoing debates around the use of other voting methods such as relative quorum voting,which requires a certai

268、n number of members to participate in the voting process.Low voter participation is another concern:On popular decentralized protocol platforms like UniSwap,Decentraland,and Compound,it is often under 5%.15 13 Nathaniel Popper,“A Hacking of More than$50 Million Sashes Hopes in the World of Virtual C

269、urrency,”The New York Times,June 17,2016.14 Citi GPS,Metaverse and Money:Decrypting the Future,March 2022.15 DeepDAO,“Organizations,”accessed September 19,2022.Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 36 Shadow Voting and the Rise of Dark DAOs:Shadow voting occurs

270、 when an individual borrows a governance token,exercises the right to vote without any economic stake in the protocol,and then returns the tokens to the lender.The rising number of Dark DAOs,which buy on-chain votes opaquely,facilitates the purchase of user votes to overwhelm governance systems or e

271、ngage in market manipulation.Identity and Know Your Customer(KYC)Risks:DAO members often choose to remain pseudonymous and are known only by their avatars,posing a challenge for anti-money laundering and KYC policies.No Arbiters:DAOs often do not have an arbitrator or a Human Resources department to

272、 resolve employee conflicts.Lack of Regulations:There is a general lack of regulations around DAOs.So far,only the state of Wyoming in the U.S.formally recognizes DAOs and gives them the same legal power as a limited liability company.The draft Responsible Financial Innovation Act proposes a change

273、to section 7701(a)of the Internal Revenue Code of 1986,adding a section on DAOs in an attempt to define them,but there is currently no mature regulatory framework on how to deal with DAOs.Imperfect Decentralization and Autonomy:The September 2022 Commodity Futures Trading Commission(CFTC)enforcement

274、 action against a DAO called Ooki DAO and its founders,Tom Bean and Kyle Kristner,calls into question the degree to which DAOs are truly decentralized and autonomous.The founders of the DAO were charged as controlling active participating members of the entity and given a$250,000 penalty and a cease

275、-and-desist order.16 Future of DAOs as a Foundation of the Creator Economy DAOs operate on an economic model that grants individuals the flexibility to rent their talent and time to specific projects in order to earn rewards by leveraging fractional ownership in a community-governed ecosystem.DAOs c

276、ould also play a crucial role in the Open Metaverse.Using DAOs,content creators can own their original creations and monetize them,and the value can be manifested as NFTs(non-fungible tokens)or tokens.DAOs can also be used to govern the Open Metaverse,or parts of it.The Metaverse combines the physic

277、al and digital worlds in an immersive manner.While the centralized vision of the Metaverse would likely resemble todays current Web2 internet with platform gatekeepers,user data monetization and embedded advertising,the Open Metaverse would be community-governed and,over time,freely interoperable.Th

278、e Open Metaverse will encapsulate composable DeFi protocols and programmable NFTs governed by DAOs.The economic value of the Open Metaverse could be at least$5 trillion by 2030.IOANA SURPATEANU,WEB3 AND DEFI INVESTOR,ADVISOR,AND ENTREPRENEUR17 16 Commodities Future Trading Commission,“Release Number

279、 8590-22,”September 22,2022.17 Citi GPS,Metaverse and Money:Decrypting the Future,March 2022.December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 37 As Web3 infrastructure proliferates and offers the possibility of redefining traditional paradigms of gaming,social media,money

280、 and finance over the next five to 10 years,we are likely to see more of these communities being governed by DAOs.In the coming years,DAOs could challenge the way we think about organizations by putting emphasis on self-governing businesses.And even if existing corporate structures do not wither awa

281、y,DAOs represent a mindset and an ethos that may influence existing structures to become more participatory.Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 38 The total energy consumption by general-purpose computing continues to grow exponentially,doubling every three y

282、ears.As a result,in the absence of innovation,computing energy needs are predicted to exceed energy production in 15-20 years.The rapid emergence of artificial intelligence(AI)over the past decade and its associated computational power requirements are only making this challenge tougher.In our view,

283、a mission-critical piece of solving this innovation puzzle will be the adoption of a semiconductor process technology referred to as high-NA EUV lithography(high numerical aperture extreme-ultraviolet lithography).Figure 20.More Energy Efficient Computation Required Figure 21.Computational Power Nee

284、ds Accelerating Source:Imec,Semiconductor Industry Association,Citi GPS Source:Imec,Semiconductor Industry Association,Citi GPS For more than 50 years,Moores law,which is the observation that transistor density in integrated circuits(ICs)tends to double every 18-24 months,has set the pace for progre

285、ss for the semiconductor industry.The associated shrink of feature sizes for ICs has resulted in performance leaps and cost declines at the same time,leading to semiconductors playing integral roles today in virtually every aspect of modern life.This shrink of feature sizes has been thanks to advanc

286、es in overall semiconductor production technology and,in particular,the continuous resolution improvements of each generation of lithography systems.Lithography(or more precisely,photolithography)refers to the process of transferring patterns to the surface of a silicon wafer during the semiconducto

287、r fabrication process using light.Hence,it defines the size and shape of all chip components,connections,and contacts.Extreme ultraviolet(EUV)lithography has firmly established itself as the patterning technique of choice today for high-performance computing.High-NA(numerical aperture)EUV refers to

288、the next step on the EUV roadmap.(Numerical aperture describes the range of angles over which the system can accept or emit light.)High-NA EUV uses larger optics(i.e.,mirrors),or optics with high NA.We believe that successful commercialization of high-NA EUV lithography will ensure that Moores law r

289、emains relevant beyond the end of this decade.Analysis so far points towards significant benefits from the transition to high-NA EUV lithography across both major types of integrated circuits:logic and memory.Logic:Logic chips are the“brains”of electronic devices they process information.Through ado

290、ption of high-NA EUV at advanced nodes in the future,Intel anticipates savings of around 20-50%in the relative cost of patterning,as well as a reduction in complexity(measured in terms of process steps)of around 35-60%.High-NA EUV Lithography Amit Harchandani Head of EMEA Technology Research Citi Re

291、search Lithography creates the features of a chip during fabrication and hence is a mission-critical enabler of Moores Law EUV is the leading-edge lithography technique today,and High-NA EUV is the next step on the roadmap High-NA EUV lithography is expected to lower costs and reduce complexity for

292、both major types of semiconductors:logic and memory December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 39 Memory:Memory chips store information.There are two types:DRAM(working or performance memory)and NAND(persistent storage).In the case of DRAM chips,ASMLs simulation of

293、volume production in 2026 suggests that adoption of high-NA EUV could potentially translate into average savings of around 30%and cycle-time reduction of around 10.5 days across all layers.In the subsequent sections,we first take a step back to explain the science behind lithography in general,befor

294、e zooming in on high-NA EUV.We follow this up with an overview of ongoing ecosystem developments.We conclude by outlining our views on the technologys introduction and adoption over the medium-term and the roadmap beyond.Introducing Lithography A lithography system involves the projection of light t

295、hrough a blueprint of a pattern that will be printed.With the pattern encoded in the light,the systems optics shrink and focus the pattern onto a photosensitive silicon wafer.After the pattern is printed,the system moves the wafer slightly and makes another copy on the wafer.The level of shrink or m

296、iniaturization that any lithography system can achieve depends upon the resolution of that tool.Resolution is defined as the minimum feature dimension that can be transferred with high fidelity onto the silicon wafer.It is a function of wavelength of the light source used for imaging and the numeric

297、al aperture(NA)of the optics used,based on an equation called the Rayleigh criterion.In optics,the NA of an optical system is a dimensionless number that characterizes the range of angles over which the system can accept or emit light.As illustrated in the roadmap of lithography systems below,the re

298、solution of these systems has steadily come down over the years.Figure 22.Lithography Process Figure 23.Immersion Lithography System Source:Semiwiki,Citi GPS Source:ASML,Citi GPS Extreme Ultraviolet(EUV)lithography has firmly established itself today as the leading-edge technique of choice today and

299、 represents a significant feat of engineering and science.For example,the production of EUV“light”involves firing 100,000 laser pulses per second to hit tiny droplets of tin twice,heating them to a temperature around 40 times hotter than the surface of the sun.A collector mirror collects this radiat

300、ion and directs it onto the wafer via several highly precise mirrors more accurate than even those used in space telescopes.A lithography system is essentially a projection system The resolution essentially,the level of miniaturization that can be achieved using a lithography system depends on the w

301、avelength of the light source and the numerical aperture of the optics EUV lithography systems today already use mirrors more precise than those used in space telescopes Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 40 Figure 24.First Generation EUV System NXE:3400(Fro

302、nt closed)Figure 25.First Generation EUV System NXE:3400(Front Open)Source:ASML,Citi GPS Source:ASML,Citi GPS High-NA EUV will take this precision of optics even further(with the NA specification moving to 0.55 from 0.33 in case of EUV today,or an increase of around 67%)when it enters volume product

303、ion,which is currently targeted for the middle of this decade.To provide some context,if you were to enlarge the high-NA EUV mirrors to the size of planet Earth,the biggest aberration would be the diameter size of a human hair.The aim is to ultimately produce transistors smaller than a strand of DNA

304、.Ongoing Ecosystem Developments Nanoelectronics research center Imec and lithography systems provider ASML have jointly set up a research laboratory in the Netherlands to further the development of high-NA EUV technology.The integration of the first nigh-NA prototype system in the world is already u

305、nderway at this lab,and this system is scheduled to be operational in early 2023 and made available to customers.This will be followed by shipments of the pre-production(or pilot)high-NA EUV lithography system(EXE:5000)to customer locations around the world in the late-2023 or early-2024 timeframe.W

306、e note that four orders for these pre-production systems were first placed and announced back in 2018.Figure 26.High-NA EUV System EXE:5000 Source:ASML,Intel,Citi GPS High-NA EUV involves pushing the precision of optics further,aiming ultimately to produce transistors smaller than a strand of DNA Th

307、e first high-NA EUV prototype is expected to be operational in 2023 High-NA EUV pre-production systems are targeted to ship in 2023 or 2024 December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 41 In our view,these initial systems will be used to further understand and focus o

308、n improvements across the five broad categories below ahead of the introduction of volume production:Computational Patterning:This involves the study of enhancement techniques to compensate for errors during the imaging process in high-volume production.Scanner Imaging:This involves refining imaging

309、 itself,including minimizing the difference between the intended and the printed features of an IC layout.Masks:Masks refer to the templates used to print the patterns on wafers.The work here revolves around reducing defects and adapting masks to high-NA EUV optics.Materials:The migration to high-NA

310、 EUV involves the development of new materials,particularly photoresist materials,which are used to provide the photosensitive coating.Metrology:Simply put,metrology is the art of measuring structures patterned on the wafer.It intuitively gets harder as high-NA enables further shrink.Adoption Over t

311、he Medium Term and Roadmap Beyond Assuming the prototype and pre-production systems are made available as scheduled,leading semiconductor manufacturers intend to introduce the subsequent high-NA EUV lithography system,EXE:5200,in high-volume manufacturing(HVM)starting in 2025.We note that leading ch

312、ipmakers have already placed multiple orders for these EXE:5200 systems in 2022.As high-NA EUV technology matures in the latter half of this decade,ASML anticipates a potential annual shipment run-rate of up to 20 systems per year and is working with its supply chain to assess the feasibility of thi

313、s.On our estimates,this implies high-NA EUV lithography systems potentially accounting for around 20%of the overall lithography system market by value by the end of this decade.Figure 27.Lithography Systems Market Evolution(By Value,2015-30)Source:Citi GPS Lastly,as we look at the lithography roadma

314、p beyond high-NA EUV,we see two options that could emerge as the likely next steps to lower the resolution of lithography systems further:We see five broad categories of ongoing development across the ecosystem High-NA systems are scheduled to be introduced in volume production in 2025 High-NA EUV c

315、ould potentially account for around 20%of the market by 2030 We see two most likely options beyond high-NA EUV:enhance k1 or increase NA Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 42 Enhance k1:As noted earlier,the resolution of a lithography system is subject to th

316、e Rayleigh criterion and primarily depends upon wavelength and numerical aperture.However,a third factor exists within this criterion that describes the process capabilities of the system;it is represented as“k1.”In the past,the industry successfully lowered k1 by transitioning from dry systems to i

317、mmersion systems.The same option is already being evaluated in research projects today.Increase NA:NA could be increased further yet,from 0.55 in the case of high-NA EUV to 0.70.However,in this process,the masks,which have always been rectangular,might instead be round.That would possibly entail a m

318、ajor upheaval for mask manufacturers,but it could bring benefits by increasing throughput anywhere from 15%-40%,according to Intel.December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 43 At first glance,it may seem strange that we are including Professional Qualifications and

319、 Credentialing as a potentially disruptive innovation in 2022.It is true that the core purpose of professional qualifications namely,to serve as a third-party validation of an individuals acquired skillset is no different than it has been at any point over the past 50 years.This said,how credentiali

320、ng is undertaken increasingly online and the purpose it serves to validate membership in a community as much as to act as a corroboration of skills is rapidly evolving and has the potential to significantly disrupt industry,and even the global economy,much more broadly than the market thinks.Aside f

321、rom upskilling learners,which is what it is conventionally used for,accrediting promises to create indirect disruption as employers use professional learning,qualifications,and credentialing as a benefit to attract and retain the best talent in ever-tighter labor markets.Alongside this,accreditors b

322、enefit from the creation of professional communities who then promote usage of and innovation around their products.This then drives a myriad of opportunities for companies that do the mechanics of assessment and credentialing,as well as for platforms that provide learning services,both physical and

323、 online.Background:Diminishing Returns for Learners and Employers from Traditional Higher Education Over the past two decades,the cost of attaining a tertiary education in both the U.K.and U.S.has risen significantly.Tuition fees in the U.K.rose ninefold to a current maximum of 9,250($11,361 as of D

324、ecember 12,2022)from 1,000 in 2000-01.The U.K.governments student loan forecasts expect students starting in 2020-21 to accumulate an average debt of 45,800;this compares to an average amount owed by the 2009 cohort of 11,800,a 288%increase.18 The U.S.is no exception,with the Consumer Price Index(CP

325、I)index for U.S.college and tuition fees increasing exponentially since the 1980s in comparison to the All Items CPI index,as demonstrated in Figure 29.The average cost for undergraduate tuition in the U.S.for the 2020-21 academic year was$13,677 per year,a 70%increase since 2000-01.19 For every gra

326、duate in the labor force,over$28,000 is owed in student loan debt,compared to$11,504 in 2006.20 18 Paul Bolton,Student Loan Statistics,House of Commons Library,July 2022.19 National Center for Education Statistics,“Digest of Education Statistics,”accessed October 5,2022.20 Federal Reserve Bank of St

327、.Louis,“Is College Still Worth It?,”July 9,2018.Professional Qualifications and Credentialing Thomas A Singlehurst,CFA Head of European Media Research Citi Research Citi GPS:Citi GPS:Global Perspectives&Solutions December 2022 2022 Citigroup 44 Figure 28.Cost of Undergraduate Tuition in the U.S.(Tui

328、tion and Required Fees Only)Figure 29.CPI For All Items vs.CPI For College Tuition and Fees Source:U.S.Department of Education,Citi GPS Source:U.S.Bureau of Labor Statistics,Citi GPS Just as the cost of access to education has gone up,the net benefit of a tertiary education has diminished in the U.K

329、.In 2007,graduate workers could expect to earn a median salary that was 50%more than that of non-graduate earners.21 This premium has eroded to only 38.5%in 2021.The reality is not as bleak in the U.S.,where graduate workers can expect to earn around 80%-82%more than non-graduate workers.However,thi

330、s premium has remained flat despite rising costs since 2010.As a consequence of costs outpacing the net benefits of a tertiary education,we see reduced participation in higher education.The U.S.has experienced a fall in enrollment from 20.1 million in 2010 to 17.1 million in 2021,reversing decades o

331、f increasing participation.22 Although there are potential cyclical reasons for falling student numbers including tight labor markets reducing the numbers of adult learners,as well as some regulatory changes in the market,such as gainful employment regulation that has impacted access to funding we s

332、uspect some of the reduction in participation is structural in nature.21 Gov.uk,“Explore Education Statistics,”accessed September 23,2022.22 National Student Clearinghouse Research Center,“Current Term Enrollment Estimates,”retrieved September 23,2022;National Student Clearinghouse Research Center,“

333、Current Term Enrollment Estimates,”Fall 2012.December 2022 Citi GPS:Citi GPS:Global Perspectives&Solutions 2022 Citigroup 45 Figure 30.U.S.College Income Premium Figure 31.U.K.University Earnings Premium Source:Federal Reserve Bank of St Louis,Citi GPS Source:U.K.Government Graduate Market Statistics,Citi GPS Figure 32.U.S.Enrollment Estimates Source:National Student Clearninghouse Research Center