ReportWire

Tag: CHIP

  • This L.A. startup uses SpaceX tech to cool data centers with less power and no water

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    As the artificial intelligence industry heats up, Karman Industries is trying to cool it down.

    The Signal Hill startup says it has developed a cooling system that uses SpaceX rocket engine technology to rein in the environmental impact of data centers, chilling them with less space, less power and no water.

    It recently raised $20 million and expects to start building its first compressors in Long Beach later this year.

    “Our high-level thesis is we could build the best compressor out there using the latest and greatest technology,” said David Tearse, chief executive of Karman. “We want to reduce that electrical consumption of cooling so that you have the most efficient way to cool these chips.”

    The high-end, expensive chips that power AI can slow down or shut off when they overheat. They can reach more than 200 degrees, but need to be below 150 degrees to work best.

    Cooling warehouses packed with tens of thousands of them can require fields full of equipment and huge quantities of water.

    Karman has developed a cooling system similar to the heat pumps in the average home, except its pumps use liquid carbon dioxide as refrigerant, which is circulated using rocket engine technology rather than fans. The company’s efficient pumps can reduce the space required for data center cooling equipment by 80%.

    Over the years, data centers have used fans and air conditioning to blow cold air on the chips. Bigger facilities pass cold liquid through tubes near the chips to absorb the heat. This hot liquid is sent outside to a cooling yard, where sprawling networks of pipes use as much water as a city of 50,000 people to remove the heat.

    A 50 megawatt data center also uses enough electricity to power a mid-sized city.

    As AI has super-sized data centers, adding more and more chips, they have needed increasing amounts of space and power for cooling.

    “It’s kind of a losing battle, especially when you keep densifying your chips,” said Tearse.

    Cooling systems account for up to 40% of a data center’s power consumption and an average midsized data center consumes more than 35,000 gallons of water per day.

    Nearly 100 gigawatts of new data center capacity will be added by 2030 and energy constraints have become the biggest barrier for expansion. U.S. data centers will consume about 8% of all electricity in the country by 2030, according to the International Energy Agency.

    Communities across the U.S. have begun protesting data center construction, fearing that the power and water needs could strain infrastructure and boost costs to consumers. The cooling systems are projected to use up to 33 billion gallons of water by 2028 per year.

    Big tech companies and venture capital investors are spending billions of dollars to replace old-school technologies with energy-efficient solutions. Microsoft announced a new data center design that uses zero water for cooling. It recently vowed to ensure its data centers don’t increase the electricity costs or deny water to nearby communities.

    The data center-cooling market is projected to grow from about $11 billion in 2025 to nearly $25 billion by 2032.

    To serve this seemingly insatiable market, Karman has developed a rotating compressor that spins at 30,000 revolutions per minute — nearly 10 times faster than traditional compressors — to move heat.

    “Three or four years ago, it was very challenging to do just because the motors didn’t exist. Automotive components are getting up to those speeds,” said Chiranjeev Kalra, co-founder and chief technology officer of Karman.

    About a third of Karman’s 23-person team came from SpaceX or Rocket Lab, and they co-opted technologies from aerospace engineering and electric vehicles to design the mechanics for the high-speed motors.

    The system uses a special type of carbon dioxide under high pressure to transfer heat from the data center to the outside air. Depending on the conditions, it can do the same amount of cooling using less than half the energy.

    Karman’s heat pump can either reject heat to air, or route it into extra cooling, or even power generation.

    One of the potentially biggest selling points for the systems is that they don’t require water, which will enable data centers in spots where water is scarce.

    In really hot places such as Texas and Arizona, cooling systems struggle, either using excessive water to cool or having to throttle the chips to stop them from overheating.

    Karman’s latest funding round brings the total money raised to more than $30 million. Major participants included Riot Venture, Sunflower Capital, Space VC, Wonder Ventures, and former Intel and VMware CEO Pat Gelsinger.

    Karman said it will begin customer deliveries in the summer of 2026 from its Los Angeles manufacturing facility that is designed to make 100 units per year. The plan is to eventually quadruple capacity.

    If successful, Karman could dent the market share of Trane Technologies and Schneider Electric, the leaders in heat rejection systems.

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    Nilesh Christopher

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  • President Trump says Intel agreed to give US a stake in its company

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    President Donald Trump on Friday announced the U.S. government has secured a 10% stake in struggling Silicon Valley pioneer Intel in a deal that was completed just a couple weeks after he was depicting the company’s CEO as a conflicted leader unfit for the job.“The United States of America now fully owns and controls 10% of INTEL, a Great American Company that has an even more incredible future,” Trump wrote in a post.The U.S. government is getting the stake through the conversion of $11.1 billion in previously issued funds and pledges. All told, the government is getting 433.3 million shares of non-voting stock priced at $20.47 apiece — a discount from Friday’s closing price at $24.80. That spread means the U.S. government already has a gain of $1.9 billion, on paper.The remarkable turn of events makes the U.S. government one of Intel’s largest shareholders at a time that the Santa Clara, California, company is i n the process of jettisoning more than 20,000 workers as part of its latest attempt to bounce back from years of missteps taken under a variety of CEOs.Intel’s current CEO, Lip-Bu Tan, has only been on the job for slightly more than five months, and earlier this month, it looked like he might be on shaky ground already after some lawmakers raised national security concerns about his past investments in Chinese companies while he was a venture capitalist. Trump latched on to those concerns in an August 7 post demanding that Tan resign.But Trump backed off after the Malaysian-born Tan professed his allegiance to the U.S. in a public letter to Intel employees and went to the White House to meet with the president, leading to a deal that now has the U.S. government betting that the company is on the comeback trail after losing more than $22 billion since the end of 2023. Trump hailed Tan as “highly respected” CEO in his Friday post.In a statement, Tan applauded Trump for “driving historic investments in a vital industry” and resolved to reward his faith in Intel. “We are grateful for the confidence the President and the Administration have placed in Intel, and we look forward to working to advance U.S. technology and manufacturing leadership,” Tan said.Intel’s current stock price is just slightly above where it was when Tan was hired in March and more than 60% below its peak of about $75 reached 25 years ago when its chips were still dominating the personal computer boom before being undercut by a shift to smartphones a few years later. The company’s market value currently stands at about $108 billion – a fraction of the current chip kingpin, Nvidia, which is valued at $4.3 trillion.The stake is coming primarily through U.S. government grants to Intel through the CHIPS and Science Act that was started under President Joe Biden’s administration as a way to foster more domestic manufacturing of computer chips to lessen the dependence on overseas factories.But the Trump administration, which has regularly pilloried the policies of the Biden administration, saw the CHIPs act as a needless giveaway and is now hoping to make a profit off the funding that had been pledged to Intel.”We think America should get the benefit of the bargain,” U.S. Commerce Secretary Howard Lutnick said earlier this week. “It’s obvious that it’s the right move to make.”About $7.8 billion had been been pledged to Intel under the incentives program, but only $2.2 billion had been funded so far. Another $3.2 billion of the government investment is coming through the funds from another program called “Secure Enclave.”Although U.S. government can’t vote with its shares and won’t have a seat on Intel’s board of directors, critics of the deal view it as a troubling cross-pollination between the public and private sectors that could hurt the tech industry in a variety of ways.For instance, more tech companies may feel pressured to buy potentially inferior chips from Intel to curry favor with Trump at a time that he is already waging a trade war that threatens to affect their products in a potential scenario cited by Scott Lincicome, vice president of general economics for the Cato Institute.“Overall, it’s a horrendous move that will have real harms for U.S. companies, U.S. tech leadership, and the U.S. economy overall,” Lincicome posted Friday.The 10% stake could also intensify the pressure already facing Tan, especially if Trump starts fixating on Intel’s stock price while resorting to his penchant for celebrating his past successes in business.Nancy Tengler, CEO of money manager Laffer Tengler Investments, is among the investors who abandoned Intel years ago because of all the challenges facing Intel.“I don’t see the benefit to the American taxpayer, nor do I see the benefit, necessarily to the chip industry,” Tengler said while also raising worries about Trump meddling in Intel’s business.“I don’t care how good of businessman you are, give it to the private sector and let people like me be the critic and let the government get to the business of government.,” Tengler said.Although rare, it’s not unprecedented for the U.S. government to become a significant shareholder in a prominent company. One of the most notable instances occurred during the Great Recession in 2008 when the government injected nearly $50 billion into General Motors in return for a roughly 60% stake in the automaker at a time it was on the verge of bankruptcy. The government ended up with a roughly $10 billion loss after it sold its stock in GM.The U.S. government’s stake in Intel coincides with Trump’s push to bring production to the U.S., which has been a focal point of the trade war that he has been waging throughout the world. By lessening the country’s dependence on chips manufactured overseas, the president believes the U.S. will be better positioned to maintain its technological lead on China in the race to create artificial intelligence.Even before gaining the 10% stake in Intel, Trump had been leveraging his power to reprogram the operations of major computer chip companies. The administration is requiring Nvidia and Advanced Micro Devices, two companies whose chips are powering the AI craze, to pay a 15% commission on their sales of chips in China in exchange for export licenses.

    President Donald Trump on Friday announced the U.S. government has secured a 10% stake in struggling Silicon Valley pioneer Intel in a deal that was completed just a couple weeks after he was depicting the company’s CEO as a conflicted leader unfit for the job.

    “The United States of America now fully owns and controls 10% of INTEL, a Great American Company that has an even more incredible future,” Trump wrote in a post.

    The U.S. government is getting the stake through the conversion of $11.1 billion in previously issued funds and pledges. All told, the government is getting 433.3 million shares of non-voting stock priced at $20.47 apiece — a discount from Friday’s closing price at $24.80. That spread means the U.S. government already has a gain of $1.9 billion, on paper.

    The remarkable turn of events makes the U.S. government one of Intel’s largest shareholders at a time that the Santa Clara, California, company is i n the process of jettisoning more than 20,000 workers as part of its latest attempt to bounce back from years of missteps taken under a variety of CEOs.

    Intel’s current CEO, Lip-Bu Tan, has only been on the job for slightly more than five months, and earlier this month, it looked like he might be on shaky ground already after some lawmakers raised national security concerns about his past investments in Chinese companies while he was a venture capitalist. Trump latched on to those concerns in an August 7 post demanding that Tan resign.

    But Trump backed off after the Malaysian-born Tan professed his allegiance to the U.S. in a public letter to Intel employees and went to the White House to meet with the president, leading to a deal that now has the U.S. government betting that the company is on the comeback trail after losing more than $22 billion since the end of 2023. Trump hailed Tan as “highly respected” CEO in his Friday post.

    In a statement, Tan applauded Trump for “driving historic investments in a vital industry” and resolved to reward his faith in Intel. “We are grateful for the confidence the President and the Administration have placed in Intel, and we look forward to working to advance U.S. technology and manufacturing leadership,” Tan said.

    Intel’s current stock price is just slightly above where it was when Tan was hired in March and more than 60% below its peak of about $75 reached 25 years ago when its chips were still dominating the personal computer boom before being undercut by a shift to smartphones a few years later. The company’s market value currently stands at about $108 billion – a fraction of the current chip kingpin, Nvidia, which is valued at $4.3 trillion.

    The stake is coming primarily through U.S. government grants to Intel through the CHIPS and Science Act that was started under President Joe Biden’s administration as a way to foster more domestic manufacturing of computer chips to lessen the dependence on overseas factories.

    But the Trump administration, which has regularly pilloried the policies of the Biden administration, saw the CHIPs act as a needless giveaway and is now hoping to make a profit off the funding that had been pledged to Intel.

    “We think America should get the benefit of the bargain,” U.S. Commerce Secretary Howard Lutnick said earlier this week. “It’s obvious that it’s the right move to make.”

    About $7.8 billion had been been pledged to Intel under the incentives program, but only $2.2 billion had been funded so far. Another $3.2 billion of the government investment is coming through the funds from another program called “Secure Enclave.”

    Although U.S. government can’t vote with its shares and won’t have a seat on Intel’s board of directors, critics of the deal view it as a troubling cross-pollination between the public and private sectors that could hurt the tech industry in a variety of ways.

    For instance, more tech companies may feel pressured to buy potentially inferior chips from Intel to curry favor with Trump at a time that he is already waging a trade war that threatens to affect their products in a potential scenario cited by Scott Lincicome, vice president of general economics for the Cato Institute.

    “Overall, it’s a horrendous move that will have real harms for U.S. companies, U.S. tech leadership, and the U.S. economy overall,” Lincicome posted Friday.

    The 10% stake could also intensify the pressure already facing Tan, especially if Trump starts fixating on Intel’s stock price while resorting to his penchant for celebrating his past successes in business.

    Nancy Tengler, CEO of money manager Laffer Tengler Investments, is among the investors who abandoned Intel years ago because of all the challenges facing Intel.

    “I don’t see the benefit to the American taxpayer, nor do I see the benefit, necessarily to the chip industry,” Tengler said while also raising worries about Trump meddling in Intel’s business.

    “I don’t care how good of businessman you are, give it to the private sector and let people like me be the critic and let the government get to the business of government.,” Tengler said.

    Although rare, it’s not unprecedented for the U.S. government to become a significant shareholder in a prominent company. One of the most notable instances occurred during the Great Recession in 2008 when the government injected nearly $50 billion into General Motors in return for a roughly 60% stake in the automaker at a time it was on the verge of bankruptcy. The government ended up with a roughly $10 billion loss after it sold its stock in GM.

    The U.S. government’s stake in Intel coincides with Trump’s push to bring production to the U.S., which has been a focal point of the trade war that he has been waging throughout the world. By lessening the country’s dependence on chips manufactured overseas, the president believes the U.S. will be better positioned to maintain its technological lead on China in the race to create artificial intelligence.

    Even before gaining the 10% stake in Intel, Trump had been leveraging his power to reprogram the operations of major computer chip companies. The administration is requiring Nvidia and Advanced Micro Devices, two companies whose chips are powering the AI craze, to pay a 15% commission on their sales of chips in China in exchange for export licenses.

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  • Delay to Nvidia’s new AI chip could affect Microsoft, Google, Meta, the Information says

    Delay to Nvidia’s new AI chip could affect Microsoft, Google, Meta, the Information says

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    (Reuters) – Design flaws could cause a delay of three months or more in the launch of chip giant Nvidia’s upcoming artificial-intelligence chips, tech-focused publication the Information said on Friday.

    The setback could affect customers such as Meta Platforms, Alphabet’s Google and Microsoft, which have collectively ordered tens of billions of dollars’ worth of chips, it said, citing people who help produce chip and server hardware for Nvidia.

    The AI chip company unveiled its Blackwell chip series in March, succeeding its earlier flagship AI chip, the Grace Hopper Superchip, that was designed to speed generative AI applications.

    “As we’ve stated before, Hopper demand is very strong, broad Blackwell sampling has started, and production is on track to ramp in the second half,” an Nvidia spokesperson said in an emailed statement in response to the report.

    Microsoft said it had nothing to add, while Meta and Google did not immediately respond to requests for comment.

    Nvidia informed Microsoft and another major cloud service provider this week of a delay in the production of its most advanced AI chip in the Blackwell series, the Information said, citing a Microsoft employee and another person with knowledge of the matter.

    (Reporting by Surbhi Misra in Bengaluru; Editing by Clarence Fernandez, William Mallard and Matthew Lewis)

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  • New York’s Chip City Cookies Will Soon Open Its First Chicago Location

    New York’s Chip City Cookies Will Soon Open Its First Chicago Location

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    Late this month, a New York-based cookie chain is opening its first Chicago location. Chip City, which debuted seven years ago in Queens, New York, will debut in late April in Gold Coast. The chain also has plans for Lincoln Park, Wicker Park, and Lakeview, according to a news release.

    The chain has 35 locations in New York, New Jersey, and Florida, and last year it arrived in the Washington, D.C. area. Started by friends Peter Phillips and Teddy Gailas in 2017, the expansion has been funded, in part, by a $10 million investment by New York restaurateur Danny Meyer. Meyer, the founder of Union Square Hospitality, is perhaps best known around Chicago for his investment in Shake Shack and GreenRiver, a shuttered Streeterville restaurant that earned a Michelin star. His fingerprints are seen elsewhere in the expansions of chains such as Tacombi, a casual Mexican restaurant with a West Loop location with a Wicker Park outlet on its way.

    A rendering of Chip City Gold Coast.
    Chip City

    Chip City goes through more than 40 flavors each year with options like peanut butter & jelly, oatmeal apple pie, and cannoli, and blueberry cheesecake. Other than cookies, there’s also a new “Chip Crookie” — a croissant stuffed with cookie dough.

    In 2022, another New York chain, Levain Bakery, opened a Chicago location. With contenders like Levain, Insomnia, and Crumbl, the world of cookie chains has come a long way since Mrs. Fields debuted in the late ‘70s. Getting cookies delivered via a third-party company has its charm, but true Chicagoans just want a true Maurice Lenell comeback.

    Chip City Chicago, 55 E. Chicago Avenue, scheduled for opening on Friday, April 26, 2024

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    Ashok Selvam

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  • Dog Feels Like Everyone Looking At Him Differently Ever Since He Swallowed Chipmunk Whole

    Dog Feels Like Everyone Looking At Him Differently Ever Since He Swallowed Chipmunk Whole

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     MARYVILLE, TN—Noting a marked shift in vibe, local dog Bailey confirmed Monday that he felt like everyone was looking at him differently ever since he swallowed a chipmunk whole. “I don’t know why, but it just seems like ever since I downed that chipmunk in one bite everyone has been super weird with me,” said the Labrador mix, claiming that his owners were more on edge around him and less likely to cuddle after he polished off the rodent with a single gulp. “They have no reason to act so uneasy. I only ate the chipmunk because they hadn’t fed me yet that day, and I was a bit hungry. It’s not that big of a deal. I mean, no one said anything when I ate an entire bird.” At press time, Bailey vomited up the chipmunk’s half-digested body in hopes it would make everyone more comfortable around him.

    This Week’s Most Viral News: June 9, 2023

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  • Semron wants to replace chip transistors with ‘memcapacitors’ | TechCrunch

    Semron wants to replace chip transistors with ‘memcapacitors’ | TechCrunch

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    A new Germany-based startup, Semron, is developing what it describes as “3D-scaled” chips to run AI models locally on smartphones, earbuds, VR headsets and other mobile devices

    Co-created by Kai-Uwe Demasius and Aron Kirschen, engineering graduates from the Dresden University of Technology, Semron’s chips use electrical fields to perform calculations instead of electrical currents — the medium of conventional processors. This enables the chips to achieve higher energy efficiency while keeping the fabrication costs to produce them down, Kirschen claims.

    “Due to an expected shortage in AI compute resources, many companies with a business model that rely on access to such capabilities risk their existence — for example, large startups that train their own models,” Kirschen told TechCrunch in an email interview. “The unique features of our technology will enable us to hit the price point of today’s chips for consumer electronics devices even though our chips are capable of running advanced AI, which others are not.”

    Semron’s chips — for which Demasius and Kirschen filed an initial patent in 2016, four years before they founded Semron — tap a somewhat unusual component known as a “memcapacitor,” or a capacitor with memory, to run computations. The majority of computer chips are made of transistors, which unlike capacitors can’t store energy; they merely act like “on/off” switches, either letting an electric current through or stopping it.

    Semron’s memcapacitors, made out of conventional semiconductor materials, work by exploiting a principle known in chemistry as charge shielding. The memcapacitors control an electric field between a top electrode and bottom electrode via a “shielding layer.” The shielding layer, in turn, is controlled by the chip’s memory, which can store the different “weights” of an AI model. (Weights essentially act like knobs in a model, manipulating and fine-tuning its performance as it trains on and processes data.)

    The electric field approach minimizes the movement of electrons at the chip level, reducing energy usage — and heat. Semron aims to leverage the heat-reducing properties of the electric field to place as as many as hundreds of layers of memscapacitors on a single chip — greatly increasing compute capacity.

    A schematic showing Semron’s 3D AI chip design.

    “We use this property as an enabler to deploy several hundred times the compute resources on a fixed silicon area,” Kirschen added. “Think of it like hundreds of chips in one package.”

    In a 2021 study published in the journal Nature Electronics, researchers at Semron and the Max Planck Institute of Microstructure Physics successfully trained a computer vision model at energy efficiencies of over 3,500 TOPS/W — 35 to 300 times higher than existing techniques. TOPS/W is a bit of a vague metric, but the takeaway is that memcapacitors can lead to dramatic energy consumption reductions while training AI models.

    Now, it’s early days for Semron, which Kirschen says is in the “pre-product” stage and has “negligible” revenue to show for it. Often the toughest part of ramping up a chip startup is mass manufacturing and attaining a meaningful customer base — albeit not necessarily in that order.

    Making matters more difficult for Semron is the fact that it has stiff competition in custom chip ventures like Kneron, EnCharge and Tenstorrent, which have collectively raised tens of millions of dollars in venture capital. EnCharge, like Semron, is designing computer chips that use capacitors rather than transistors, but using a different substrate architecture.

    Semron, however — which has an 11-person workforce that it’s planning to grow by around 25 people by the end of the year — has managed to attract funding from investors including Join Capital, SquareOne, OTB Ventures and Onsight Ventures. To date, the startup has raised 10 million euro (~$10.81 million).

    Said SquareOne partner Georg Stockinger via email:

    “Computing resources will become the ‘oil’ of the 21st century. With infrastructure-hungry large language models conquering the world and Moore’s law reaching the limits of physics, a massive bottleneck in computing resources will shape the years to come. Insufficient access to computing infrastructure will greatly slow down productivity and competitiveness both of companies and entire nation-states. Semron will be a key element in solving this problem by providing a revolutionary new chip that is inherently specialized on computing AI models. It breaks with the traditional transistor-based computing paradigm and reduces costs and energy consumption for a given computing task by at least 20x.”

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    Kyle Wiggers

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  • Huawei is allegedly building a self-sufficient chip network using state investment fund

    Huawei is allegedly building a self-sufficient chip network using state investment fund

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    We’ve seen Huawei’s surprising strides with its recent smartphones — especially the in-house 7nm 5G processor within, but apparently the company has been working on something far more significant to bypass the US import ban. According to a new Bloomberg investigation, a Shenzhen city government investment fund created in 2019 has been helping Huawei build “a self-sufficient chip network.”

    Such a network would give the tech giant access to enterprises — most notably, the three subsidiaries under a firm called SiCarrier — that are key to developing lithography machines. Lithography, especially the high-end extreme ultraviolet flavor, would usually have to be imported into China, but it’s currently restricted by US, Netherlands and Japan sanctions. Huawei apparently went as far as transferring “about a dozen patents to SiCarrier,” as well as letting SiCarrier’s elite engineers work directly on its sites, which suggests the two firms have a close symbiotic relationship.

    Bloomberg’s source claims that Huawei has hired several former employees of Dutch lithography specialist, ASML, to work on this breakthrough. The result so far is allegedly the 7nm HiSilicon Kirin 9000S processor fabricated locally by SMIC (Semiconductor Manufacturing International Corporation), which is said to be about five years behind the leading competition (say, Apple Silicon’s 3nm process) — as opposed to an eight-year gap intended by the Biden administration’s export ban.

    Huawei’s Mate 60, Mate 60 Pro, Mate 60 Pro+ and Mate X5 foldable all feature this HiSilicon chip, as well as other Chinese components like display panels (BOE), camera modules (OFILM) and batteries (Sunwoda). Huawei having its own network of local enterprises would eventually allow it to rely less on imported components, and potentially even become the halo of the Chinese chip industry — especially in the age of electric vehicles and AI, where more chips are needed than ever (as much as NVIDIA would like to deal with China). That said, Huawei apparently denied that it had been receiving government help to achieve this goal.

    Given Huawei’s seeming progress, and the fact that China has been pumping billions into its chip industry, the US government will just have to try harder.

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  • Chip wars: How ‘chiplets’ are emerging as a core part of China’s tech strategy

    Chip wars: How ‘chiplets’ are emerging as a core part of China’s tech strategy

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    July 13 (Reuters) – The sale of struggling Silicon Valley startup zGlue’s patents in 2021 was unremarkable except for one detail: The technology it owned, designed to cut the time and cost for making chips, showed up 13 months later in the patent portfolio of Chipuller, a startup in China’s southern tech hub Shenzhen.

    Chipuller purchased what is referred to as chiplet technology, a cost efficient way to package groups of small semiconductors to form one powerful brain capable of powering everything from data centers to gadgets at home.

    The previously unreported technology transfer coincides with a push for chiplet technology in China that started about two years ago, according to a Reuters analysis of hundreds of patents in the U.S. and China and dozens of Chinese government procurement documents, research papers and grants, local and central government policy documents and interviews with Chinese chip executives.

    Industry experts say chiplet technology has become even more important to China since the U.S. barred it from accessing advanced machines and materials needed to make today’s most cutting edge chips, and now largely underpins the country’s plans for self-reliance in semiconductor manufacturing.

    “U.S.-China competition is on the same starting line,” Chipuller chairman Yang Meng said about chiplet technology in an interview with Reuters. “In other (chip technologies) there is a sizeable gap between China and the United States, Japan, South Korea, Taiwan.”

    Barely mentioned before 2021, Chinese authorities have highlighted chiplets more frequently in recent years, according to a Reuters review. At least 20 policy documents from local to central governments referred to it as part of a broader strategy to increase China’s capabilities in “key and cutting-edge technologies”.

    “Chiplets have a very special meaning for China given the restrictions on wafer fabrication equipment,” said Charles Shi, a chip analyst for brokerage Needham. “They can still develop 3D stacking or other chiplet technology to work around those restrictions. That’s the grand strategy, and I think it might even work.”

    Beijing is rapidly exploiting chiplet technology in applications as diverse as artificial intelligence to self-driving cars, with entities from tech giant Huawei Technologies to military institutions exploring its use.

    More major investments in the area are on the way, according to a review of corporate announcements.

    CHINA’S CHIPLET ADVANTAGE

    Chiplets, or small chips, can be the size of a grain of sand or bigger than a thumbnail and are brought together in a process called advanced packaging.

    It is a technology the global chip industry has increasingly embraced in recent years as chip manufacturing costs soar in the race to make transistors so small they are now measured in the number of atoms.

    Bonding chiplets tightly together can help make more powerful systems without shrinking the transistor size as the multiple chips can work like one brain.

    Apple’s high-end computer lines use chiplet technology, as do Intel and AMD’s more powerful chips.

    About a quarter of the global chip packaging and testing market sits in China, according to Dongguan Securities.

    While some say this gives China an advantage in leveraging chiplet technology, Chipuller chairman Yang cautioned the proportion of China’s packaging industry that could be considered advanced was “not very big”.

    Under the right conditions, chiplets that are personalised according to the needs of the customer can be completed quickly, in “three to four months, this is the unique advantage China holds,” according to Yang.

    Needham’s Shi said according to import data published by China’s customs agency, China’s purchase of chip packaging equipment soared to $3.3 billion in 2021 from its previous high of $1.7 billion in 2018, although last year it fell to $2.3 billion with the chip market downturn.

    Since early 2021 research papers on chiplets started surfacing by researchers of the Chinese military People’s Liberation Army and universities it runs, and state-run and PLA-affiliated laboratories are looking to use chips made using domestic chiplet technology according to six tenders published over the past three years.

    Public documents by the government also show millions of dollars worth of grants to researchers specializing in chiplet technology, while dozens of smaller companies have sprouted throughout China in recent years to meet domestic demand for advanced packaging solutions like chiplets.

    CHIPLETS ON THE TABLE

    Against the backdrop of escalating U.S.-China tension, Chinese company Chipuller acquired 28 patents either owned by zGlue or invented by people whose names are on zGlue’s patents, according to an analysis using IP management technology firm Anaqua’s Acclaim IP database.

    The acquisition was through a two-step transfer, first through British Virgin Islands-registered North Sea Investment Co Ltd, according to documents seen by Reuters and confirmed by Yang.

    The Committee on Foreign Investment in the United States (CFIUS), a powerful Treasury-led committee that reviews transactions for potential threats to U.S. security, did not respond to a Reuters request for comment about whether such sales would require their approval.

    CFIUS lawyers Laura Black at Akin’s Trade Group, Melissa Mannino at BakerHostetler and Perry Bechky at Berliner Corcoran & Rowe say patent sales alone would not necessarily give CFIUS authority over the deal, as it depends whether the assets purchased constitute a U.S. business.

    Representative Mike Gallagher, an influential lawmaker whose select committee on China has pressed the Biden administration to take tougher stances on China, told Reuters zGlue’s case highlights the “urgent need to reform CFIUS”.

    “(People’s Republic of China) entities should not be able to act with impunity to take advantage of distressed U.S. firms to transfer their IP to China,” he said in an emailed statement.

    Chipuller’s Yang said zGlue’s lawyer communicated with both CFIUS and the Department of Commerce to ensure the sale to North Sea would not fall foul of export controls.

    These discussions did not include mention of Chipuller or the possibility of a Chinese entity ending up in possession of the patents, according to a Chipuller spokesperson.

    “Everything was done very transparently and in accordance with (U.S.) law,” Yang said.

    Yang said he considered himself a founder of zGlue as he became an investor in the company in 2015, soon after its formation, and later became a director and chairman.

    CFIUS visited zGlue offices in 2018 to conduct an investigation because the company’s largest non-U.S. investor, Yang, was from China, the chairman said.

    “So we have spent a lot of time communicating with CFIUS,” Yang said, adding that Chipuller currently does not supply any Chinese military or U.S.-sanctioned entities.

    Chipuller isn’t the only firm with chiplet technology.

    Huawei, China’s tech and chip design giant that has been put on the U.S.’s most restricted list, has been actively filing chiplet patents.

    Huawei published over 900 chiplet-related patent applications and grants last year in China, up from 30 in 2017, according to Anaqua’s director of analytics solutions Shayne Phillips.

    Huawei declined to comment.

    Reuters identified over a dozen announcements over the past two years for new factories or expansions of existing ones from companies using chiplet technology in manufacturing across China’s tech sector, representing an investment totalling over 40 billion yuan.

    They include domestic giants TongFu Microelectronics (002156.SZ) and JCET Group (600584.SS), as well as fast-growing startups such as Beijing ESWIN Technology Group, which spent 5.5 billion yuan on a factory for its chiplet-focused subsidiary that began operating in April.

    One article published in May by an outlet run by China’s Ministry of Industry and Information Technology (MIIT) urged big Chinese tech firms the use of domestic packaging companies such as TongFu to help build China’s self-sufficiency in computing power.

    “Use Chiplet technology to break through the United States’ siege of my country’s advanced process chips,” it said.

    MIIT did not respond to a request for comment.

    Chipuller chairman Yang puts it this way: “Chiplet technology is the core driving force for the development of the domestic semiconductor industry,” he said on the company’s official WeChat channel. “It is our mission and duty to bring it back to China.”

    ($1 = 7.2205 Chinese yuan renminbi)

    Reporting by Jane Lanhee Lee and Eduardo Baptista; Additional reporting by Echo Wang and Stephen Nellis; editing by Kenneth Li, Brenda Goh and Lincoln Feast.

    Our Standards: The Thomson Reuters Trust Principles.

    Reports on global trends in computing from covering semiconductors and tools to manufacture them to quantum computing. Has 27 years of experience reporting from South Korea, China, and the U.S. and previously worked at the Asian Wall Street Journal, Dow Jones Newswires and Reuters TV. In her free time, she studies math and physics with the goal …

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  • Analysis: China’s massive older chip tech buildup raises U.S. concern

    Analysis: China’s massive older chip tech buildup raises U.S. concern

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    OAKLAND, Calif./SHANGHAI/WASHINGTON Dec 13 (Reuters) – China’s largest chip maker SMIC (0981.HK) is ramping up production of a decade-old chip technology, key to many industries’ supply chains, setting off alarm bells in the United States and prompting some lawmakers to try to stop them.

    The United States and allied nations could further step up restrictions if China announces a trillion yuan ($144 billion) support package for its chip industry, as Reuters exclusively reported on Tuesday, said TechInsights’ chip economist Dan Hutcheson.

    Starting with the Trump administration, the United States has been tightening the noose around China’s high-tech ambitions. It cut off the world’s largest telecommunications firm Huawei Technologies from the U.S. market and technologies, as well as cut off air supply to China’s advanced chip making through a series of rules this year.

    But why worry about older chip technology?

    China, which in 2020 had 9% of the global chip market, has a track record of dominating key technologies by flooding the market with cheaper products and wiping out global competition, say China watchers.

    They did it with solar panels and 5G telecom equipment, and could do it with older technology chips, said Matt Pottinger, former Deputy National Security Advisor of the United States during the Trump administration who has been studying chip policy at the Hoover Institution.

    “It would give Beijing coercive leverage over every country and industry – military or civilian – that depend on 28 nanometer chips, and that’s a big, big chunk of the chip universe,” he said.

    “28 nanometer” refers to a chip technology commercially used since 2011. It is still widely used in automotive, weapons and the explosive category of internet of things gadgets, said Hutcheson.

    Hutcheson, who has been monitoring chip production capacity for four decades, said the concern is that Semiconductor Manufacturing International Corp (0981.HK) and other chipmakers in China could use government subsidies to sell chips at a low price. And a possible new round of financial support from Beijing would increase chip production even further.

    “The Chinese could just flood the market with these technologies,” he said. “Normal companies can’t compete, because they can’t make money at those levels.”

    U.S. LAWMAKERS PUSHING AGAINST SMIC

    Those concerns have pushed some lawmakers to use legislation for setting the defense budget hold back SMIC.

    While the measure is weaker than what was initially proposed, this week U.S. Senators are expected to pass the annual National Defense Authorization Act 2023 that includes a section barring the U.S. government from using chips from SMIC and two other Chinese memory chip makers. It is not clear what impact the restriction, which kicks in five years after it becomes law, will have on SMIC.

    Founded in 2000 with backing from Beijing, SMIC has long struggled to break into the ranks of the world’s leading chip manufacturers.

    But it is a giant in older technology, including chips that regulate power flows in electronics. And its revenue was close to $2 billion in the third quarter this year, roughly double the same period last year on the back of the global chip shortage.

    SMIC FILLING SUPPLY GAP

    With U.S. export controls making it impossible to produce advanced chips, SMIC is doubling down on mature technology chips and has announced four new facilities, or fabs, since 2020. When those come online, it would more than triple the company’s output, estimates Samuel Wang, Gartner chip analyst. He said there is a huge ramp up in new chip fabs across China.

    “All this will start to have an impact from early 2024 and will be full blown by 2027,” said Wang, adding the chip supply increase will put downward pressure on chip prices.

    The importance of older chip technology hit the industry in the face in 2021 as a shortage of those chips prevented manufacturing of millions of cars and consumer electronics.

    Mark Li, Bernstein Research’s chip analyst in Asia, said the company is becoming a formidable competitor to Taiwan’s UMC Microelectronics Corp (6615.T) and U.S.-headquartered GlobalFoundries Inc (GFS.O).

    “SMIC has been much more willing to add capacity than other fabs at the low-end, and especially in this shortage we’ve seen in the past two years,” he says. “It’s not an issue now…but who knows, maybe in a few years there will be another shortage and capacity will be a big problem.”

    ($1 = 6.9430 Chinese yuan renminbi)

    Reporting By Jane Lanhee Lee in Oakland, Calif and Josh Horwitz in Shanghai, and Alexandra Alper in Washington D.C.; Editing by Josie Kao

    Our Standards: The Thomson Reuters Trust Principles.

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  • Exclusive: U.S. to remove some Chinese entities from red flag list soon, U.S. official says

    Exclusive: U.S. to remove some Chinese entities from red flag list soon, U.S. official says

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    WASHINGTON, Dec 14 (Reuters) – The Biden administration plans to remove some Chinese entities from a red flag trade list, a U.S. official told Reuters on Wednesday amid closer cooperation with Beijing.

    The plan to remove them soon from the so-called “unverified” list is thanks to greater willingness from the Chinese government to permit U.S. site visits, the person said.

    The Commerce Department declined to comment.

    Reuters could not determine the number or names of entities designated for removal.

    The decision signals a degree of renewed cooperation between Washington and Beijing, the world’s largest economies which are locked in a heated trade and technology war.

    The decision, which mean U.S. exporters will no longer have to conduct additional due diligence before sending goods to the Chinese entities, may not herald a broader thaw.

    Asked about the decision at a Chinese foreign ministry briefing on Thursday, spokesman Wang Wenbin said they urged the United States to stop taking unfair and discriminatory practices against certain Chinese companies.

    “China will continue to uphold the legitimate and justified interests of Chinese companies,” he said.

    The Biden administration is also expected to add Chinese memory chipmaker YMTC to a tougher export control list as soon as this week, according to another person familiar with the matter.

    YMTC did not immediately respond to a request for comment.

    Companies are added to the unverified list because the United States cannot complete on-site visits to determine whether they can be trusted to receive sensitive U.S. technology exports. Such U.S. inspections in China require the approval of China’s commerce ministry.

    Under new rules announced in October, if a government prevents U.S. officials from conducting site checks at companies on the unverified list, Washington may after 60 days add them to the entity list, which means much tougher penalties.

    “The goal of (that rule) was to drive better behavior from countries that were not allowing end-use checks,” U.S. export control chief Alan Estevez said at an event earlier this month. “We are seeing better behavior,” he said, specifically singling out Beijing.

    In October, YMTC was added to the unverified list along with dozens of other Chinese entities, fueling widespread speculation that the company would be added to the entity list. Suppliers are barred from shipping U.S. technology to entity-listed companies unless the suppliers can attain a difficult-to-obtain license.

    A person familiar with the matter said YMTC was among some companies that received site visits in late November, suggesting that the chipmaker’s expected addition to the entity list may be related to other matters.

    YMTC was already under investigation by the Commerce Department over allegations it violated U.S. export rules by supplying chips to entity-listed Chinese telecoms equipment giant Huawei without a license.

    U.S. lawmakers from both political parties have called on the Biden administration to add YMTC to the list. Its planned addition was first reported by the Financial Times.

    Reporting by Alexandra Alper and Karen Freifeld; Additional reporting by Eduardo Baptista in Beijing; Editing by Chris Sanders, Howard Goller and Raissa Kasolowsky

    Our Standards: The Thomson Reuters Trust Principles.

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  • Biden predicts Democrat midterms win, says economy improving

    Biden predicts Democrat midterms win, says economy improving

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    ROSEMONT, Ill., Nov 4 (Reuters) – U.S. President Joe Biden, battling to show restive voters he has boosted the economy, touted his economic policies on Friday and said he planned to talk with oil companies about high prices and record profits, as he predicted Democrats will prevail in Tuesday’s midterms despite polls showing Republican gains.

    On a three-day, four-state campaign swing, Biden stopped at Viasat Inc. (VSAT.O), a U.S. communications firm in Carlsbad, California, to tout efforts to increase semiconductor chip production and resolve supply chain issues that erupted early in his presidency.

    With some Republican support, Biden signed into law in August the Chips and Science Act to jumpstart domestic semiconductor production in response to slowed production of automobiles and high-tech products like those built by Viasat.

    At Viasat, Biden said the government’s latest jobs report showing the U.S. economy added 261,000 jobs last month was a sign of progress.

    He said he planned to have a “come to the Lord” talk with U.S. oil companies soon to complain about their record profits at a time when Americans are paying high prices at the pump.

    The meeting is not yet set up, Biden clarified to reporters after the speech, and the White House said the president was just making clear that he was serious about forcing companies to change their behavior.

    Biden left California to attend a Chicago-area fundraiser on Friday night for two Democratic Illinois House members, Representatives Lauren Underwood and Sean Casten, both at risk of losing their seats if Republicans do well in midterm elections on Tuesday.

    “I’m not buying the notion that we’re in big trouble” Biden told donors gathered at the event before adding that he believes Democrats will keep the house and senate

    [1/3] U.S. President Joe Biden delivers remarks on the CHIPS and Science Act at Viasat Inc., a technology company that will benefit from the passage of the CHIPS and Science Act, in Carlsbad, California, U.S., November 4, 2022. REUTERS/Mike Blake

    Earlier in the day, Biden declared inflation was his number one priority, stressing he was taking Americans’ economic concerns seriously as voters go to the polls on Tuesday to decide whether he and his Democrats hang on to control of the U.S. Congress.

    “Folks, our economy continues to grow and add jobs even as gasoline prices continue to come down,” he said. “We also know folks are struggling from inflation.” But he said there are “bright spots” where the country is rebounding.

    Forecasts show Republicans are poised to take control of the U.S. House of Representatives and perhaps the Senate as well, which would give them the power to block Biden’s legislative agenda for the next two years.

    The party in the White House historically loses control of Congress during the first half of a new president’s term.

    However, Biden said he thought Democrats might buck the trend this time. “We’re going to win this time around. I feel really good about our chances,” he said, adding Democrats have a good chance of winning the House of Representatives.

    Biden’s campaign swing will conclude with a joint appearance in Philadelphia on Saturday with former President Barack Obama.

    Democrats’ electoral hopes have been hammered by voter concerns about high inflation, and Biden’s public approval rating has remained below 50% for more than a year, coming in at 40% in a recent Reuters/Ipsos poll.

    Biden has also warned of what Democrats say are the dangers that Republicans backed by former President Donald Trump pose to U.S. democracy.

    Reporting by Trevor Hunnicutt, Andrea Shalal and Steve Holland; Additional reporting by Daniel Trotta; Editing by Kim Coghill, Josie Kao and Michael Perry

    Our Standards: The Thomson Reuters Trust Principles.

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  • Dow posts record closing high, stocks gain for 3rd week; dollar dips

    Dow posts record closing high, stocks gain for 3rd week; dollar dips

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    • S&P 500, Nasdaq end session lower
    • Evergrande averts default with surprise interest payment
    • U.S. 10-year yields lower

    NEW YORK, Oct 22 (Reuters) – The Dow Jones industrial average registered a record closing high on Friday and major equity indexes posted a third straight week of gains while the U.S. dollar slipped.

    On the day, MSCI’s broadest gauge of global shares (.MIWD00000PUS) was flat, and the S&P 500 (.SPX) and Nasdaq (.IXIC) ended lower.

    Stocks came under pressure after Federal Reserve Chair Jerome Powell said the U.S. central bank was “on track” to begin reducing its purchases of assets. read more

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    Intel’s stock (INTC.O)fell 11.7% and was among the biggest drags on the S&P 500. Late Thursday, Intel reported sales that missed expectations and pointed to shortages of chips holding back sales of its flagship processors. read more

    American Express Co’s stock (AXP.N) gained, boosting the Dow after the company beat profit estimates for the fourth straight quarter.

    Next week brings reports from several key mega-cap names including Amazon (AMZN.O). read more

    The dollar pared losses after Powell’s comments, but the dollar index was last down 0.10% at 93.64, and is off from a one-year high of 94.56 last week. read more

    “There’s a bit of a positioning unwind taking place. We’ve obviously seen a firmer dollar since the September” Fed meeting, said Mazen Issa, senior FX strategist at TD Securities in New York. “That also dovetails with the seasonal tendency for the dollar to soften into the end of the month.”

    Investors also digested news that China Evergrande Group (3333.HK) appeared to avert default with a source saying it made a last-minute bond coupon payment. read more

    The Dow Jones Industrial Average (.DJI) rose 73.94 points, or 0.21%, to 35,677.02, the S&P 500 (.SPX) lost 4.88 points, or 0.11%, to 4,544.9 and the Nasdaq Composite (.IXIC) dropped 125.50 points, or 0.82%, to 15,090.20.

    The pan-European STOXX 600 index (.STOXX) rose 0.46% and MSCI’s gauge of stocks across the globe shed 0.03%.

    The MSCI index posted gains for a third straight week along with the three major U.S. stock indexes.

    In the U.S. bond market, yields on longer-dated U.S. Treasuries slid.

    The yield on 10-year Treasury notes was down 1.6 basis points to 1.659% after rising to a five-month high of 1.7064% late Thursday.

    Oil rose and ended up for the week, near multi-year highs. Brent crude futures rose 92 cents to settle at $85.53 a barrel, and registered its seventh weekly gain. U.S. crude futures gained $1.26, to settle at $83.76, and rose for a ninth straight week. read more

    Spot gold was up 0.6% at $1,793.82 per ounce.

    Among cryptocurrencies, bitcoin last fell 2.21% to $60,841.96.

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    Additional reporting by Simon Jessop in London, and Karen Brettell, Sinead Carew and Herbert Lash in New York and Kevin Buckland in Tokyo
    Editing by Hugh Lawson Mark Potter and David Gregorio

    Our Standards: The Thomson Reuters Trust Principles.

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