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Tag: Computer components

  • Alibaba CEO warns of being ‘displaced’ if the Chinese tech giant doesn’t keep up in AI

    Alibaba CEO warns of being ‘displaced’ if the Chinese tech giant doesn’t keep up in AI

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    Signage at the Alibaba Group Holding Ltd. booth at the Smart China Expo in Chongqing, China, on Monday, Sept. 4, 2023.

    Qilai Shen | Bloomberg | Getty Images

    Alibaba needs to be “user first” and “AI-driven,” new CEO Eddie Wu told employees on Tuesday, as he laid out the strategic priorities for the Chinese tech giant.

    Wu, who is just three days into the job as Alibaba chief executive, called for the e-commerce firm to “adopt a start-up mindset” as he looks to steer the company back to growth following one of the most tumultuous times in its 24-year history.

    “Times are changing, and so must Alibaba! As the world progresses, Alibaba needs to evolve even faster!,” Wu said in a letter to employees that was seen by CNBC.

    Wu, one of Alibaba founder Jack Ma’s close confidants, started as CEO on Sept. 10, taking over from Daniel Zhang, who stepped down from the role to focus on heading up the cloud computing business. However, in a surprise move, Zhang this week quit as CEO of the cloud business with Wu taking over in the interim.

    It comes months after Alibaba split its company into six different business groups, the biggest shakeup in its history.

    Wu said Alibaba’s two main strategic focuses will be “user first” and “AI-driven.” The company will “reinforce” its strategic investments in three areas.

    The first it calls “technology-driven internet platforms.” Wu said that Alibaba’s business should “seek out the most open and collaborative relationships,” even with competitors. This is a different approach from Alibaba which has tended to try to keep users within its ecosystem of products.

    Wu also touted the need to invest in artificial intelligence. Alibaba’s cloud unit has tried to position itself as a leader in AI inside China as it looks to reignite growth in the business.

    “Each of our businesses generates massive numbers of use cases; therefore, we must transform these use cases into applications for AI technology, driving breakthrough user experience and business models through technology innovation,” Wu said.

    “If we don’t keep up with the changes of the AI era, we will be displaced.”

    Alibaba Cloud has its large language model called Tongyi Qianwen, released earlier this year. An LLM is an AI model trained on huge amounts of data and underpins chatbot applications. It’s the same type of model that OpenAI’s ChatGPT is based on.

    Wu also said Alibaba needs to continue to invest in “globalization.”

    Alibaba will also look to promote younger talent. Within the next four years, the company will promote those born after 1985 and the 1990s “to form the core of our business management teams,” Wu said.

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  • Japan, Belgium to cooperate in chip production, development

    Japan, Belgium to cooperate in chip production, development

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    TOKYO — A newly founded Japanese semiconductor company aiming to revive Japan’s chip industry signed an agreement on Tuesday to collaborate with a Belgian research organization in developing next-generation chips for production in Japan.

    Economy and Industry Minister Yasutoshi Nishimura told reporters that the new company, Rapidus, which was launched last month by eight Japanese corporate giants including automakers, electronics and chip manufacturers, is teaming up with Imec, a Leuven, Belgium-based research organization known for nanoelectronics and digital technologies key to developing next-generation chips.

    “Cooperation with Imec in the area of semiconductor production at its international research facility, which ranks as one of Europe’s best, is extremely meaningful,” Nishimura told reporters.

    The deal was signed by Rapidus President Atsuyoshi Koike and Imec President and CEO Luc Van den hove, who is in Japan as part of a business delegation led by Belgium’s Princess Astrid.

    Masakazu Tokura, the chairman of Keidanran, an influential Japanese business organization, told the Belgian delegation that the two countries should expand their cooperation as the global security and economic environment becomes increasingly unstable. Tokura said he hopes to expand cooperation in green technology, cybersecurity and next-generation semiconductors.

    Imec, or Interuniversity Microelectronics Center, is known for its expertise and technology needed to make advanced chips that require miniaturization and extremely thin circuitry. The collaboration is aimed at helping Rapidus develop and mass produce 2-nanometer chips by 2027. The tie-up is the first known deal for Rapidus.

    The Japanese consortium was founded with the aim of boosting homemade chip production to reduce Japan’s heavy reliance on imported chips as part of the government’s push to strengthen economic security. Its members include automaker Toyota Motor Corp., electronics makers Sony Group Corp. and NEC Corp., SoftBank Corp., Nippon Telegraph and Telephone Corp. and computer memory maker Kioxia.

    Japan’s government is spending 70 billion yen ($510 million) on measures to promote domestic manufacturing of chips, while working closely with its ally the United States.

    Once a global leader in semiconductor development and production, Japan was slow to collaborate with foreign companies in developing more advanced technologies and fell behind global competitors including the U.S., Taiwan, South Korea and some European countries.

    Rapidus plans to send engineers to Imec and forge ties with other research labs and companies outside Japan.

    The pandemic and escalating U.S.-China tensions have highlighted the risks of Japan’s reliance on foreign suppliers, especially China, prompting the country to focus on building up its own manufacturing capacity.

    Nishimura said at the signing event that he expects the deal will “contribute to establish designs and a manufacturing production base for next-generation semiconductors in the late 2020s, and strengthen semiconductor supply chain resiliency in like-minded countries and regions.”

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  • Biden to visit Arizona computer chip site, highlight jobs

    Biden to visit Arizona computer chip site, highlight jobs

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    President Joe Biden on Tuesday plans to visit the building site for a new computer chip plant in Arizona, using it as a chance to emphasize how his policies are fostering job growth in what could be a challenge to the incoming Republican House majority.

    Biden has staked his legacy in large part on major investments in technology and infrastructure that were approved by Congress along bipartisan lines. The Democratic president maintains that the factory jobs fostered by $52 billion in semiconductor investments and another $200 billion for scientific research will help to revive the U.S. middle class.

    “This is actually about building an economic strategy that goes beyond semiconductors,” said Brian Deese, director of the White House National Economic Council. “This is a marked departure from the economic philosophy that has governed for much of the last 40 years in this country, which was a sort of trickle-down economic strategy.”

    But there are signs that past moments of bipartisanship on economic matters may be harder to replicate after November’s midterm elections, in which Republicans won a House majority. Biden still pitches the investments as a sign of what happens when lawmakers partner with each other, but Republican House Leader Kevin McCarthy, who could be the next speaker, attacked the government investments as a “blank check” and “corporate welfare.”

    Biden is visiting a plant under construction by the Taiwan Semiconductor Manufacturing Co. that was announced in 2020 during Donald Trump‘s presidency. TSMC will also announce a second plant in Arizona on Tuesday. Biden administration officials said the two TSMC plants as well as new factories by Intel, Micron, Wolfspeed and others could give a decisive edge to the American military and economy at time when competition with China is heating up.

    The White House has simultaneously launched a video campaign to highlight the array of non-tech jobs associated with the semiconductor industry. Biden has visited four other computer chip sites since September, with the highly paid factory jobs promising spillover hiring for construction, janitorial services and other businesses.

    Featured in the video campaign is Paul Sarzoza, president and CEO of Verde Clean. Sarzoza founded the company in 2019. It won a contract to clean TSMC’s construction site, accounting for a third of its 150 jobs. Sarzoza’s company will clean the semiconductor plant, with workers wearing what’s known as a “bunny suit” to prevent any contamination from hair and skin.

    The government’s investment was key for his company’s growth, and he expects to add 150 to 200 more employees next year.

    “It’s one step at a time,” Sarzoza said. “But it’s a tremendous opportunity for us.”

    Computer chip company Intel has also invested in Arizona, which has become a microcosm of the nation’s broader political divides. The state on Monday certified the results of this year’s elections, a process drawn out by many GOP officials who falsely claim the 2020 election, in which Biden beat Trump, was rigged.

    Republican Arizona Gov. Doug Ducey will attend the event, as will his newly elected Democratic successor, Katie Hobbs, Arizona’s current secretary of state.

    Biden uses his visits to chip plants to talk about the jobs he expects will come to those regions, a process that could take a decade or longer to come to full fruition. Companies could face a challenge in finding educated workers for jobs with incomes averaging over $100,000 a year, according to Labor Department figures.

    Ronnie Chatterji, White House coordinator for the chip investments, said these investments will shape entire regions of the country in ways that are overlooked now.

    “Ten years from now we’ll be talking about all the jobs in Arizona,” Chatterji said in an interview. “You won’t be able to talk about that part of Arizona without thinking about the impact of those companies.”

    But Biden might need to thread a needle and preserve a sense of bipartisanship for the long-term investments to succeed, said Keith Krach, a business executive who as an under secretary of state in the Trump administration helped bring TSMC to Arizona.

    He said the investments will rival NASA’s Apollo Program, which didn’t just land men on the moon but also made the U.S. a leader in micro electronics, software, computers and aerospace.

    Krach said that preserving political unity is key and the way to do that is for political leaders to stress how the chip plants can keep the U.S. ahead of China.

    “It’s unifying,” Krach said, because Chinese President Xi Jinping “is terrified of the United States having a Sputnik moment, which I think this really represents, and declaring a moonshot.”

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  • South Korean chipmaker SK Hynix worries about China future

    South Korean chipmaker SK Hynix worries about China future

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    SEOUL, South Korea — South Korean computer chipmaker SK Hynix said Wednesday it might be forced to sell its manufacturing operations in China if a U.S. crackdown on exports of semiconductor technology and manufacturing equipment to China intensifies.

    SK Hynix’s chief marketing officer, Kevin Noh, raised those concerns during a conference call on Wednesday after the company reported its operating profit dropped 60% in the last quarter from 2021, a decline it blamed on a deteriorating business environment.

    Global inflation amplified by Russia’s war on Ukraine and rising interest rates imposed by central banks to counter surging prices have slowed consumer spending on the kinds of high-tech products requiring computer chips. SK Hynix and other semiconductor makers are also navigating new U.S. restrictions on exports of advanced semiconductors and chipmaking equipment to China. Such limits were in part imposed to prevent use of American advanced technology in China’s military development.

    SK Hynix said this month that the U.S. Department of Commerce granted the company a one-year exemption from such requirements, allowing it to provide equipment and other supplies to its Chinese factories making memory chips.

    Other major chip and chip-manufacturing equipment makers like Samsung and Taiwan’s TSMC are thought to have also gotten exemptions.

    SK Hynix may find it difficult to equip its manufacturing line in the eastern Chinese city of Wuxi with the most advanced chipmaking machines, including extreme ultraviolent lithography (EUV) systems, Noh said. He said SK Hynix doesn’t expect major disruptions at the plant at least until the late 2020s, but things could quickly turn for the worse if Washington refuses to extend temporary exemptions at some point and begins to fully enforce its export controls.

    “If it becomes a situation where we would have to obtain (U.S.) license on a tool-by-tool basis, that will disrupt the supply of equipment … and we could face difficulties in operating (Chinese) fabrication facilities at a much earlier point than the late 2020s,” Noh said.

    “If we face problems that make it difficult for us to operate our Chinese fabrication facilities including the Wuxi plant, we are considering various scenarios, including selling those fabrication facilities or their equipment or bringing them to South Korea,” Noh said.

    He said those contingency plans would apply to a “very extreme situation,” and the company hopes to avoid such problems and operate as normal.

    Citing an “unprecedented deterioration” in market conditions, SK Hynix said it would cut its investment next year by more than 50% as it anticipates supply will continue to exceed demand for the time being. The country’s operating profit for the three months through September was at 1.65 trillion won ($1.16 billion), compared to 4.17 trillion won ($2.92 billion) during the same period last year. Revenue fell 7% to 10.98 trillion won ($7.7 billion).

    Some experts say that the U.S.-China technology standoff could force SK Hynix and Samsung Electronics, another major South Korean chipmaker, to significantly modify their Chinese operations over the next few years.

    According to market analysis firm TrendForce, SK Hynix’s Wuxi plant accounts for about 13% of the world’s total DRAM production capacity. About 40% of Samsung’s NAND flash chips are reportedly produced from its factory in the Chinese city of Xi’an, accounting for around 10% of global production.

    “The existing (principles) we accepted as common sense, such as finding a certain region where we could produce most efficiently at the cheapest cost and shipping those products globally, are becoming increasingly uncertain as (our) decision making is being influenced by various layers of factors beyond just business,” Noh said.

    Samsung, the world’s largest provider of memory chips, is widely believed to have received a similar exemption from the U.S. restrictions, although the company has not publicly confirmed it. Noh during the call said SK Hynix’s “competitors” have also been granted the U.S. waivers, in a possible reference to Samsung and Taiwan’s TSMC.

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  • Commerce tightens export controls on high end chips to China

    Commerce tightens export controls on high end chips to China

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    The Commerce Department is tightening export controls to limit China’s ability to get advanced computing chips, develop and maintain supercomputers, and make advanced semiconductors

    The Commerce Department is tightening export controls to limit China‘s ability to get advanced computing chips, develop and maintain supercomputers, and make advanced semiconductors.

    The department said Friday that its updated export controls are focusing on these areas because China can use the chips, supercomputers and semiconductors to create advanced military systems including weapons of mass destruction; commit human rights abuses and improve the speed and accuracy of its military decision making, planning, and logistics.

    Commerce said the updates are part of ongoing efforts to protect U.S. national security and foreign policy interests.

    “The threat environment is always changing, and we are updating our policies today to make sure we’re addressing the challenges posed by (China) while we continue our outreach and coordination with allies and partners,” Under Secretary of Commerce for Industry and Security Alan Estevez said in a statement.

    Commerce said it consulted with close allies and partners on its control efforts.

    Thursday, at an event in upstate New York, President Biden predicted a $20 billion investment by IBM in New York’s Hudson River Valley will help give the United States a technological edge against China. The investment is spurred by this summer’s passage of a $280 billion measure intended to boost the semiconductor industry and scientific research. That legislation was needed for national and economic security, Biden said in Poughkeepsie, adding that “the Chinese Communist Party actively lobbied against” it.

    Tensions have been rising between the U.S. and China over technology and security. Last month the Chinese government called on Washington to repeal its technology export curbs after California-based chip designer Nvidia said a new product might be delayed and some work might be moved out of China.

    Washington has tightened controls and lobbied allies to limit Chinese access to the most advanced chips and tools to develop its own. China is spending heavily to develop its fledgling producers but so far cannot make high-end chips used in the most advanced smartphones and other devices.

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  • Japan to pay up to $320M for US company’s chip production

    Japan to pay up to $320M for US company’s chip production

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    TOKYO — Japan is providing a major U.S. chipmaker a subsidy of up to 46.6 billion yen ($322 million) to support its plan to produce advanced memory chips at a Hiroshima factory, the Japanese trade minister said Friday.

    The announcement to subsidize Micron Technology comes on the heels of U.S. Vice President Kamala Harris’ visit in Japan as the two countries step up cooperation on expanding manufacturing and supply chains for critical materials.

    “I hope the deal will contribute to further expansion of cooperation between Japan and the United States in the area of semiconductors,” Japan’s Economy and Trade Minister Yasutoshi Nishimura said.

    He said the government approved the deal Friday under a law related to economic security.

    Japan has set up its own fund to support semiconductor production, and Friday’s agreement is its third deal.

    During her trip to Asia this week, Harris met with Japanese officials and semiconductor company executives to seek greater cooperation in strengthening semiconductor development and production amid China’s growing influence.

    Micron was among the companies that participated in the meeting with Harris, along with Tokyo Electron, Nikon, Hitachi High-Tech Group, Fujitsu Ltd.

    Micron said in a statement it will use the subsidy to strengthen production capacity and speed up development of the company’s 1-beta DRAM — memory chips that are key to advanced data facilities — as well as technology for a 5G network upgrade and artificial intelligence.

    The United States is working to solidify its technology cooperation with Japan, South Korea and Taiwan, while trying to increase its domestic semiconductor manufacturing, amid China’s own investment in computer chips.

    The deal Friday “symbolizes the investment and integration of our two economies and supply chains,” said U.S. Ambassador to Japan Rahm Emanuel, who has been promoting economic security between the two allies. “And that will only accelerate from here forward.”

    Nishimura has stressed the U.S.-Japan alliance on semiconductors, energy and other areas.

    Japan was once a world leader in computer chip manufacturing, but its status has eroded over the last two decades, and the country is increasingly worried about falling behind.

    Japan has allocated 476 billion yen ($3.3 billion) in subsidies for a new factory in Japan’s southern prefecture of Kumamoto being built in a partnership between the Taiwan Semiconductor Manufacturing Co., Sony Group and Denso Corp.

    Japan is also providing up to 92.9 billion yen ($644 million) to another facility in central Japan’s Mie prefecture jointly built by Western Digital Corp. and Kioxia Corp.

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