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Tag: computer equipment

  • US is reviewing Huawei export license policy amid rising congressional scrutiny of China | CNN Business

    US is reviewing Huawei export license policy amid rising congressional scrutiny of China | CNN Business

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    Washington
    CNN
     — 

    The US government is reviewing a policy that permits certain US exports to continue to Huawei, despite an overall push by the Trump and Biden administrations to block the Chinese telecommunications giant from receiving American technology.

    Alan Estevez, a Commerce Department official, told lawmakers Tuesday that the policy is “under assessment” as the agency conducts a “top-to-bottom review of our export control policies related to the [People’s Republic of China].”

    Estevez testified before the House Foreign Affairs Committee, which was holding a hearing to scrutinize China’s impact on US national security.

    In 2019, Huawei was one of a number of Chinese companies placed on the Commerce Department’s Entity List, which prohibits US companies from trading specified items with entities named on the list unless they obtain a license to do so.

    US officials have expressed concerns that Huawei’s 5G wireless networking gear could allow the Chinese government to spy on American communications. Huawei has denied that it poses a security risk, and its founder has said the company would resist any Chinese government effort to obtain its data.

    According to Foreign Affairs Committee chairman Michael McCaul, between January and March of 2022 the Commerce Department approved more than $23 billion in license applications to trade with Chinese-affiliated companies on the Entity List. Confronting Estevez at Tuesday’s hearing, McCaul asked the Commerce Department to square the license approvals with the US government’s wider effort to sideline Huawei and similar companies.

    “A licensing rule of the previous administration that still stands for Huawei allows things below 5G, below cloud-level to go,” Estevez said, “and I will say that all those things are under assessment.”

    Entity List restrictions do not provide for a “blanket embargo” on exports generally, Estevez added, but rather reflect specific rules about particular exports.

    Separately, in 2020 the Commerce Department moved to prevent Huawei’s suppliers from selling the company semiconductor chips made by US-built software and equipment, unless those suppliers also obtained a license.

    Other parts of the US government have also moved against Huawei. The Federal Communications Commission has prohibited US wireless carriers from using federal funding to purchase Huawei networking gear, and last year also banned future approvals of Huawei equipment for sale in the United States, in the first use of the FCC’s equipment authorization authority for a national security purpose.

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  • Biden administration launches new semiconductor push amid ‘very heated global competition with China’ | CNN Politics

    Biden administration launches new semiconductor push amid ‘very heated global competition with China’ | CNN Politics

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    CNN
     — 

    Commerce Secretary Gina Raimondo is launching the Biden administration’s high-priority effort to out-compete China in a key sector: Semiconductor chips.

    And amid tensions with China marked by the dramatic downing of a spy balloon and new warnings that Beijing is considering providing lethal aid to Russia, Raimondo’s sales pitch these days is simple: Making chips is core to US national security.

    “It’s no secret that we are in a global – very heated global competition with China. And technology is at the crux of that competition,” Raimondo told CNN in an interview. “Right now, we are much too reliant upon Taiwan for leading edge chips. So, a big part of our strategy around being a global leader is investing in America: In our people, in our capacity to out innovate China and the rest of the world.”

    As the Commerce Department on Tuesday launches its application for billions of dollars in semiconductor subsidies, Raimondo said she wants to be “crystal clear” that the program is “a national security initiative.” But reaching those national security goals, she said, will require developing a US workforce that can meet the moment.

    “We simply will not be successful in achieving the national security goals of the CHIPS initiative unless we invest in our workforce, period. Full stop,” Raimondo said. “For decades, we’ve taken our eye off the ball with manufacturing, which means the worker supply of people with the skills to do super technical manufacturing has withered. And so, we need to be honest about that, but also embrace it as an opportunity to come up with creative solutions.”

    To that end, the Commerce Department is asking every company vying for a share of the $39 billion in direct funding for semiconductor manufacturing to develop and outline plans for how they plan to build a skilled and diverse workforce, including by working with high schools and community colleges.

    Companies applying for the funding will need to lay out strategies and commitments for training workers and coordinating with educational and other community institutions to meet their workforce goals.

    As part of Raimondo’s initiative to bring one million women into the construction industry over the next decade, applicants will also need to detail steps they will take to recruit and train a diverse construction workforce, including efforts to recruit women to the field. Raimondo said she expects building new chips manufacturing hubs will require 120,000 to 140,000 construction workers.

    Applicants seeking over $150 million in funding will also need to lay out how they will provide its workforce with access to childcare, including through on-site childcare or by subsidizing the cost of childcare.

    Some of these initiatives – recruiting more women and people of color into specialized fields or ensuring that high school and community college graduates can receive technical training – are ideas that the Biden administration has touted in other contexts throughout the president’s first two years in office. But one senior administration official insisted that the applications would be “seriously vetted and pressure-tested,” saying that if their workforce plans do not clear the bar, “we will not sign off on the funding.”

    Raimondo, for her part, acknowledged that senior executives at chips manufacturing companies have questioned whether the US workforce is up to the task.

    “They say, ‘America doesn’t manufacture anymore. America hasn’t manufactured chips in a really long time at scale, you don’t have the talent supply. How are we going to be successful?’” Raimondo said.

    She also suggested to CNN that there is a unique opportunity to make real headway on these goals in the context of semiconductors – precisely because there are such serious national security imperatives at stake.

    “If we don’t recruit more people, including women, into the construction trades, these projects won’t be built on time and on budget. And then we won’t as a nation hit our national security goal,” Raimondo said. “Same thing for engineers. Same thing for technicians.”

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  • Warren Buffett’s company sells major stake in Taiwanese chip giant TSMC | CNN Business

    Warren Buffett’s company sells major stake in Taiwanese chip giant TSMC | CNN Business

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    Taipei/Hong Kong
    CNN
     — 

    Shares in Taiwan Semiconductor Manufacturing Company fell as much as 4% on Wednesday, after Warren Buffett’s Berkshire Hathaway disclosed that it had sold most of its holdings in the chip giant.

    In a Tuesday filing with the United States’ Securities and Exchange Commission, Berkshire Hathaway

    (BRKA)
    said it had about 8.3 million American depository shares of TSMC worth $618 million, having sold 86% of its shares. Just months before, in November, the company held about 60 million American depository shares of TSMC worth $4.1 billion, according to an SEC filing.

    Berkshire Hathaway did not provide a reason for the sale and did not immediately respond to a CNN request for comment. TSMC had no comment on the share sale.

    Shares in TSMC, which accounts for an estimated 90% of the world’s super-advanced computer chips, ended Wednesday more than 3% lower.

    Last month, the chipmaker posted strong quarterly and annual earnings, but gave a muted forecast on prospects for 2023 given the global slump in electronics demand because of rising inflation.

    Due to TSMC’s record earnings in 2022, its board approved on Tuesday the distribution of $121 billion New Taiwan Dollars ($4 billion) in performance-related bonuses and profit sharing to employees based in Taiwan.

    With nearly 65,000 employees on the island as of the end of last year, that would work out as an average of $62,000 per employee – if distributed equally.

    The board also approved a plan to inject up to $3.5 billion into the company’s subsidiary in Arizona, which will be part of a previously announced investment of $40 billion in the United States. TSMC announced last year that it’s building a second semiconductor factory in Phoenix and increasing its investment there.

    The world’s most important chipmaker, highly sought after by governments globally, is considering opening its first plant in Europe and a second one in Japan. TSMC’s global expansion comes as political tension has heightened between Washington and Beijing.

    Earlier this month, US Secretary of State Antony Blinken postponed a planned trip to China in response to the flying of a suspected Chinese spy balloon over the United States.

    In October, President Joe Biden’s administration imposed sweeping new curbs designed to curtail China’s access to technology critical to its growing military power.

    Last month, a Dutch maker of semiconductor equipment, ASML, told CNN that “rules are being finalized” on export controls to China, amid reports that the Netherlands and Japan have joined the United States in restricting sales of some computer chip machinery to the country.

    A few days later, multiple media outlets reported that Washington was moving to further restrict sales of American technology to Chinese tech giant Huawei.

    – CNN’s Chris Isidore and Michelle Toh contributed to this report

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  • ASML says ‘rules are being finalized’ on chip export controls to China | CNN Business

    ASML says ‘rules are being finalized’ on chip export controls to China | CNN Business

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    Hong Kong
    CNN
     — 

    ASML, a Dutch maker of semiconductor equipment, says “rules are being finalized” on export controls, amid reports that the Netherlands and Japan have joined the United States in restricting sales of some computer chip machinery to China.

    “It is our understanding that steps have been made towards an agreement between governments which, to our understanding, will be focused on advanced chip manufacturing technology, including but not limited to advanced lithography tools,” the company told CNN late Friday in response to questions about export controls to China.

    “Before it will come into effect it has to be detailed out and implemented into legislation which will take time.”

    ASML is known for its prowess in making lithography machines, which uses light to print patterns on silicon. The firm says that step is crucial in the mass production of microchips.

    The company’s response came as Bloomberg, the Wall Street Journal and the Financial Times reported over the weekend that the United States had persuaded the Netherlands and Japan to agree to curb exports of certain chipmaking equipment to China, citing anonymous sources.

    A deal was reached at the White House on Friday, though it was not officially announced, partly due to “concerns by Japan and Netherlands about potential retaliation by China,” according to the Journal, which cited a person familiar with the matter.

    Bloomberg reported that the deal “would extend some export controls the US adopted in October” to Dutch and Japanese companies, including ASML

    (ASML)
    , Nikon

    (NINOY)
    and Tokyo Electron.

    The Biden administration had banned Chinese companies from buying advanced chips and chipmaking equipment without a license. It also restricted the ability of American citizens to provide support for the development or production of chips at certain manufacturing facilities in China.

    The White House did not immediately respond to a request for comment outside US business hours. Nikon and Tokyo Electron declined to comment.

    On Saturday, Japan’s Economy and Trade Minister Yasutoshi Nishimura told reporters that he would “refrain from commenting on diplomatic negotiations.”

    Asked about the three-way talks in Washington, Nishimura said “we would like to respond appropriately while taking into consideration the regulatory trends in each country.”

    Because of its dominance in the market, ASML has been cited by experts as a bellwether of the growing rift between China and the West over access to advanced technology.

    In recent months, the Dutch government has faced pressure from the United States to limit chip-related exports to China, particularly from ASML, according to Xiaomeng Lu, director of geo-technology at the Eurasia Group.

    In its Friday statement, the company said that based on what has been said by government officials and current market conditions, it did not expect any material impact on its financial projections for 2023.

    But ASML said its knowledge of the new rules was still limited, making it difficult to map out “the medium and long-term financial, organizational and global industry-wide impact of new export control rules.”

    “While these rules are being finalized, ASML will continue to engage with the authorities to inform them about the potential impact of any proposed rule in order to assess the impact on the global semiconductor supply chain,” it said.

    It noted that it mainly sold “mature” products to China, and its most advanced lithography technology had already been restricted since 2019.

    Those machines had been prohibited from being sent to China because the Dutch government had “refused to grant it a license under US pressure,” Lu previously told CNN.

    — CNN’s Emiko Jozuka contributed to this report.

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  • Asia’s richest man Gautam Adani is addicted to ChatGPT | CNN Business

    Asia’s richest man Gautam Adani is addicted to ChatGPT | CNN Business

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    New Delhi
    CNN
     — 

    Asia’s richest man Gautam Adani says he is addicted to ChatGPT, the powerful new AI tool that interacts with users in an eerily convincing and conversational way.

    In a LinkedIn post last week, the 60-year-old India tycoon said that the release of ChatGPT was a “transformational moment in the democratization of AI given its astounding capabilities as well as comical failures.”

    The billionaire admitted to “some addiction” to ChatGPT since he has started using it.

    The tool, which artificial intelligence research company OpenAI made available to the general public late last year, has sparked conversations about how “generative AI” services — which can turn prompts into original essays, stories, songs and images after training on massive online datasets — could radically transform how we live and work.

    Some claim it will put artists, tutors, coders, and writers out of a job. Others are more optimistic, postulating that it will allow employees to tackle to-do lists with greater efficiency.

    “But there can be no doubt that generative AI will have massive ramifications,” Adani wrote in his post, adding that generative AI holds the “same potential and danger” as silicon chips.

    “Nearly five decades ago, the pioneering of chip design and large-scale chip production put the US ahead of rest of the world and led to the rise of many partner countries and tech behemoths like Intel, Qualcomm, TSMC, etc,” Adani, who has businesses in sectors ranging from ports to power stations, wrote.

    “It also paved the way for precision and guided weapons used in modern warfare with more chips mounted than ever before,” he added. The race in the field of generative AI will quickly get as “complex and as entangled as the ongoing silicon chip war,” he said.

    Chipmaking has emerged recently as a new flashpoint in US-China tensions, with Washington blocking sales of advanced computer chips and chip-making equipment to Chinese companies. Some Chinese investments in European chipmaking have also been blocked.

    The Indian infrastructure magnate believes that China has an edge over the United States in the AI race because Chinese researchers published twice as many academic papers on the subject as their American counterparts in 2021, he wrote in the post published on Friday after attending the World Economic Forum in Davos.

    Back home, Adani is also considering taking five new businesses to the stock market in the next five years, according to his conglomerate’s chief financial officer Jugeshinder Singh.

    Speaking to reporters on Saturday in the western Indian city of Ahmedabad — where the Adani empire is headquartered — Singh said the group’s metals and mining, energy, data center, airports, and roads businesses will likely be spun off between 2025 to 2028.

    Adani Enterprises, the conglomerate’s flagship company, functions as an incubator for Adani’s businesses. Once they have matured, they are often given their independence via a stock market listing. Many of Adani companies have become leading players in their respective sectors.

    Later this month, Adani Enterprises is also raising 200 billion rupees ($2.5 billion) by issuing new shares. It would be India’s biggest ever follow-on public share offering.

    A college dropout and a self-made industrialist, Adani is worth over $120 billion, making him the world’s third richest man, ahead of Jeff Bezos and Bill Gates.

    Shares of Adani’s seven listed companies — in sectors ranging from ports to power stations — have seen turbocharged growth in the last few years. But some analysts fear that this growth comes at a huge risk as Adani’s $206 billion juggernaut has been fueled by a $30 billion borrowing binge, making his business one of the most indebted in the country.

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  • The Federal Reserve is testing how climate change could hurt big banks | CNN Business

    The Federal Reserve is testing how climate change could hurt big banks | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    The largest six banks in the United States have been given until July to show the Federal Reserve what effects disastrous climate change scenarios could have on their bottom lines.

    Noting the risks could be “material,” the Fed said the banks will have to show how their finances fare under a number of climate stress tests, including heat waves, wildfires, floods and droughts, according to details of a new Fed pilot program released on Tuesday.

    “The pilot exercise includes physical risk scenarios with different levels of severity affecting residential and commercial real estate portfolios in the Northeastern United States and directs each bank to consider the impact of additional physical risk shocks for their real estate portfolios in another region of the country,” wrote the Fed.

    The Federal Reserve first announced the pilot program in September, noting that Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo would participate.

    Climate activists said that the project was long overdue (Federal Reserve Chair Jerome Powell has been questioned about it multiple times over the last year), and that other central banks are far ahead of the Fed on climate risk assessments. The Bank of England ran a similar exercise in 2021.

    They also said the proposal lacked any real teeth. In its announcement the Federal Reserve stressed that the exercise “is exploratory in nature and does not have capital consequences.” It also said that it would not publish individual banks’ results.

    San Francisco Federal Reserve President Mary Daly told CNN in October Thursday that this was a learning and exploratory exercise for the Federal Reserve. It would be “incredibly premature to jump to the conclusion that any new policies or programs would come out of it,” she said.

    The other side: Critics of the pilot program have argued that the Federal Reserve was overstepping its boundaries and that they might soon begin to enforce financial penalties.

    “The Fed’s new ‘pilot’ program is the first step toward pressuring banks into limiting loans to and investments in traditional energy companies and other disfavored carbon-emitting sectors,” wrote former Republican Senator Pat Toomey, then a ranking member of the Senate Banking Committee. “The real purpose of this program is to ultimately produce new regulatory requirements.”

    Powell said last week that the central bank would not become a “climate policymaker.”

    “Today, some analysts ask whether incorporating into bank supervision the perceived risks associated with climate change is appropriate, wise, and consistent with our existing mandates,” Powell said last Tuesday. “In my view, the Fed does have narrow, but important, responsibilities regarding climate-related financial risks. These responsibilities are tightly linked to our responsibilities for bank supervision. The public reasonably expects supervisors to require that banks understand, and appropriately manage, their material risks, including the financial risks of climate change.”

    The discovery, movement and use of oil has played an outsized role in shaping geopolitics over the past century and a half. But over the next 50 years, global interaction and wealth are more likely to be influenced by microchips, Intel CEO Pat Gelsinger told CNN Tuesday.

    “Where the technology supply chains are, and where semiconductors are built, is more important for the next five decades,” Gelsinger said in an interview with CNN’s Julia Chatterley at the World Economic Forum in Davos, Switzerland.

    Intel (INTC) is betting those predictions prove true. The company announced in 2021 it would invest $20 billion to build two new US chipmaking facilities, as well as up to $90 billion in new European factories, aimed at reasserting its position as the leader of the semiconductor industry, reports my colleague Clare Duffy.

    Gelsinger said the company’s investment in new manufacturing facilities in the United States, Europe and elsewhere is important not only for the company’s future, but for the “globalization of the most critical resource to the future of the world.”

    “We need this geographically balanced, resilient supply chain,” he said.

    The announcements also came amid concerns about the concentration of manufacturing for chips, in Asia, particularly China and Taiwan, during the Covid-19 pandemic and as geopolitical tensions grew. Issues in the chip supply chain in recent years have caused shortages and shipping delays of everything from desktop computers and iPhones to cars.

    “If we’ve learned one thing from the Covid crisis and this multi-year journey that we’ve been on it’s we need resilience in our supply chains,” Gelsinger said, adding that Intel’s manufacturing investments are aimed at “leveling that playing field so that good investment decisions can be made.”

    The years following the peak of the Covid pandemic have not been good for wealth equality.

    The world’s wealthiest residents have been getting far richer, far faster than everyone else over the past two years, reports my colleague Tami Luhby.

    The fortune of the 1% soared by $26 trillion during that period, while the bottom 99% only saw their net worth rise by $16 trillion, according to Oxfam’s annual inequality report released Sunday.

    And the wealth accumulation of the super-rich accelerated during the pandemic. Looking over the past decade, they netted just half of all the new wealth created, compared to two-thirds during the last few years.

    Meanwhile, many of the less fortunate are struggling. Some 1.7 billion workers live in countries where inflation is outpacing wages. And poverty reduction likely stalled last year after the number of global poor skyrocketed in 2020.

    “While ordinary people are making daily sacrifices on essentials like food, the super-rich have outdone even their wildest dreams,” said Gabriela Bucher, executive director of Oxfam International.

    “Just two years in, this decade is shaping up to be the best yet for billionaires — a roaring ’20s boom for the world’s richest,” she said.

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  • Intel CEO: Chip supply chains will shape geopolitics more than oil over the next 50 years | CNN Business

    Intel CEO: Chip supply chains will shape geopolitics more than oil over the next 50 years | CNN Business

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    New York
    CNN
     — 

    Global politics will be dominated by the availability, trade and investment in microchips for the next several decades, Intel CEO Pat Gelsinger told CNN Tuesday.

    The location of “oil reserves [has] defined geopolitics for the last five decades,” Gelsinger said in an interview with CNN’s Julia Chatterley at the World Economic Forum in Davos. “Where the technology supply chains are, and where semiconductors are built, is more important for the next 5 decades.”

    Gelsinger said the company’s investment in new manufacturing facilities in the United States, Europe and elsewhere is important not only for the company’s future, but for the “globalization of the most critical resource to the future of the world.”

    “We need this geographically balanced, resilient supply chain,” he said.

    Intel

    (INTC)
    said last year it would invest $20 billion to build two new US chipmaking facilities, as well as up to $90 billion in new European factories, aimed at reasserting its position as the leader of the semiconductor industry. The announcements also came amid concerns about the concentration of manufacturing for chips, in Asia, particularly China and Taiwan, during the Covid-19 pandemic and as geopolitical tensions grew. Issues in the chip supply chain in recent years have caused shortages and shipping delays of everything from desktop computers and iPhones to cars.

    “If we’ve learned one thing from the Covid crisis and this multi-year journey that we’ve been on it’s we need resilience in our supply chains,” Gelsinger said, adding that Intel’s manufacturing investments are aimed at “leveling that playing field so that good investment decisions can be made.”

    Gelsinger — who took over as Intel’s chief executive two years ago during a difficult period for the company — acknowledged that the company’s investments in a decades-long strategy are coming during a difficult economic period.

    “It’s a touch economic environment in the near term — Covid and China, Ukraine and energy in Europe, inflation in the US — you look across that and ask, ‘Where’s the good news?’” he said. “But at the same time, we need to make long-term investments, three quarter economic environments cannot dictate five- and six-year capital investment cycles … It’s a challenge to be a CEO these days.”

    A US law passed last year to boost domestic chipmaking should help. The CHIPS and Science Act will invest more than $200 billion to help companies grow US domestic chip-making and research.

    Now, Gelsinger said, Intel and other chipmakers are just waiting for the funds from the law to get dispersed, after President Joe Biden last year directed a steering committee including Commerce Secretary Gina Raimondo to determine how to implement the law and deploy the funds.

    “We expect we’ll see those this year,” Gelsinger said of the CHIPS Act funds. “I’m investing, please show up with the money. Because we’re assuming they’ll help us make these massive investments.”

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  • World’s top chip maker mulls global expansion with plants in Europe, Japan | CNN Business

    World’s top chip maker mulls global expansion with plants in Europe, Japan | CNN Business

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    New Delhi
    CNN
     — 

    Semiconductor giant Taiwan Semiconductor Manufacturing Company (TSMC) may expand its global manufacturing footprint even further.

    The company is considering opening its first plant in Europe and a second one in Japan, its CEO CC Wei said in an earnings call on Thursday.

    TSMC, which produces an estimated 90% of the world’s super-advanced chips, has already upped its investment in the United States. The company announced last year that it’s building a second semiconductor factory in Arizona and raising its investment there from $12 billion to $40 billion.

    Speaking about TSMC’s new plans on Thursday, Wei said that in Europe “we’re engaging with customers and partners to evaluate the possibility of building a specialty fab, focusing on automotive-specific technologies, based on the demand from customers and level of government support.”

    A fab refers to a semiconductor fabrication plant.

    The company is also considering building a second fab in Japan, “as long as the demand from customers and the level of government support makes sense,” he said.

    These plans come amidst falling demand for semiconductors because of a weakening global economy.

    “In the first half of 2023, we expect our revenue to decline [by] mid- to high single-digit percent over the same period last year in US dollar terms,” Wei said, adding that he expects revenue to increase in the second half of the year.

    “For the full year of 2023, we forecast the semiconductor market, excluding memory, to decline approximately 4%,” he added.

    TSMC is considered a national treasure in Taiwan and supplies tech giants including Apple and Qualcomm. It mass produces the most advanced semiconductors in the world, components that are vital to the smooth running of everything from smartphones to washing machines.

    The company is perceived as being so valuable to the global economy, as well as to China — which claims Taiwan as its own territory despite having never controlled it — that it is sometimes even referred to as forming part of a “silicon shield” against a potential military invasion by Beijing.

    TSMC’s presence gives a strong incentive to the West to defend Taiwan against any attempt by China to take it by force, analysts say.

    The company’s international expansion has caused deep unease in Taiwan.

    Apart from the risk that TSMC will take its most advanced technology with it — stripping Taiwan of one of its unique assets and reducing employment opportunities locally — there are fears that a diminished presence for the company could expose Taipei, Taiwan’s capital, to greater pressure from Beijing.

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  • Why Apple may finally be embracing touchscreen laptops | CNN Business

    Why Apple may finally be embracing touchscreen laptops | CNN Business

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    CNN
     — 

    Over the years, Apple has added touchscreens to almost every computing device imaginable, from phones and tablets to smartwatches, but it has refrained from bringing the feature to its Mac product line – even as a long list of rivals did so with their laptops and desktops.

    In 2010, Apple co-founder Steve Jobs described the concept of a computer with a touchscreen – then an emerging trend among the company’s competitors – as “ergonomically terrible.” Two years later, CEO Tim Cook reiterated the sentiment during an earnings call. And Craig Federighi, Apple’s senior VP of software engineering, said in 2018 that “lifting your arm up to poke a screen is pretty fatiguing to do.”

    But now, Apple may be rethinking its stance. On Wednesday, Bloomberg reported Apple engineers are developing a touchscreen for the MacBook Pro with an expected launch date of 2025, citing unnamed sources familiar with the matter. The company did not immediately respond to a request for comment.

    While it’s unclear if the touchscreen laptop will see the light of day, introducing the product could accomplish two important things for Apple: adapting to shifting consumer expectations and supercharging sales for its Mac product line.

    Microsoft, HP, Samsung and Dell, have long offered computers with touchscreens, and more consumers have come to expect they can tap on a computer screen just as they do on their phones. (If you have a MacBook, you may have already had the experience of a friend or relative touching your screen reflexively thinking it would do something.)

    At the same time, interest in Apple computers is booming, thanks in part to Apple’s inclusion of its new in-house processor that improved battery life and offered better performance. Mac revenue increased 14% in Apple’s 2022 fiscal year to $40.1 billion. Apple’s iPad business, on the other hand, saw sales decline from the prior year.

    Apple has previously kept the touchscreen away from its Mac lineup to prevent it from cannibalizing iPad sales. Instead, Apple added a narrow touch bar to its MacBook keyboard to provide easy access to shortcuts, emoji and other features, but ultimately it did away with the tool after it was panned by users and critics.

    Now, however, Apple could use a Mac touchscreen to incentivize consumers to upgrade their computers and keep Mac sales momentum growing.

    David McQueen, research director at ABI Research, said the lines are increasingly blurred between higher-end iPads and Macs, thanks to new chips, battery life and slim design. He noted that when a 12.9-inch iPad Pro is attached to a Magic Keyboard with use of an Apple Pencil, there is “not much to tell it apart from a laptop experience.”

    “The market has embraced 2-in-1 laptop-tablet hybrids and maybe now Apple sees the rationale for also adding one to its armory,” he added.”

    Apple, for its part, has softened its stance on Mac touchscreens more recently. When asked at a conference last fall if Apple will add a touchscreen to Macs, Federighi responded: “Who’s to say?”

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  • Samsung estimates quarterly profit sank to 8-year low on demand slump | CNN Business

    Samsung estimates quarterly profit sank to 8-year low on demand slump | CNN Business

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    Seoul
    Reuters
     — 

    Samsung Electronics flagged on Friday its quarterly profit tumbled to an eight-year low as a weakening global economy hammered memory chip prices and curbed demand for electronic devices.

    Profits at the world’s largest memory chip, smartphone and TV maker are expected to shrink again in the current quarter, analysts said, after Samsung announced its October-December operating profit likely fell 69% to 4.3 trillion won ($3.37 billion) from 13.87 trillion won a year earlier.

    It was Samsung

    (SSNLF)
    ’s smallest quarterly profit since the third quarter of 2014 and fell short of a 5.9 trillion won Refinitiv SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate.

    “All of Samsung’s businesses had a hard time, but chips and mobile especially,” said Lee Min-hee, analyst at BNK Investment & Securities.

    Quarterly revenue likely fell 9% from the same period a year earlier to 70 trillion won, Samsung said in a short preliminary earnings release. Asia’s fourth-biggest listed company by market value is due to release detailed earnings later this month.

    Rising global interest rates and cost of living have dampened demand for smartphones and other devices that Samsung makes and also for the semiconductors it supplies to rivals including Apple

    (AAPL)
    .

    “For the memory business, the decline in fourth-quarter demand was greater than expected as customers adjusted inventories in their effort to further tighten finances,” Samsung said in the statement.

    Its mobile business’ profit declined in the fourth quarter as smartphone sales and revenue decreased due to weak demand resulting from prolonged macroeconomic issues, Samsung added.

    “Memory chip prices fell in the mid-20% during the quarter, and high-end phones such as foldable didn’t sell as well,” said BNK Investment’s Lee.

    Three analysts said they expected Samsung’s profits to dive again in the current quarter, with a likely operating loss for the chips business as a glut drives a further drop in memory chip prices.

    Samsung shares rose 0.3% in Friday morning trade, underperforming a 0.6% rise in the wider market. Shares of rival memory chip maker SK Hynix rose 1%.

    “The reason shares are rising despite the poor earnings result is… investors are hoping Samsung will need to reduce production, like Micron or SK Hynix said they would, which would help the memory industry overall,” said Eo Kyu-jin, an analyst at DB Financial Investment.

    Samsung had said in October that it did not expect much change to its 2023 investments. Analysts said that Samsung has a history of not announcing production cuts in memory chips, but could organically adjust investment by delaying bringing in equipment or through other ways.

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  • Taiwan’s military has a problem: As China fears grow, recruitment pool shrinks | CNN

    Taiwan’s military has a problem: As China fears grow, recruitment pool shrinks | CNN

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    Taipei, Taiwan
    CNN
     — 

    Taiwan has noticed a hole in its defense plans that is steadily getting bigger. And it’s not one easily plugged by boosting the budget or buying more weapons.

    The island democracy of 23.5 million is facing an increasing challenge in recruiting enough young men to meet its military targets and its Interior Ministry has suggested the problem is – at least in part – due to its stubbornly low birth rate.

    Taiwan’s population fell for the first time in 2020, according to the ministry, which warned earlier this year that the 2022 military intake would be the lowest in a decade and that a continued drop in the youth population would pose a “huge challenge” for the future.

    That’s bad news at a time when Taiwan is trying to bolster its forces to deter any potential invasion by China, whose ruling Communist Party has been making increasingly belligerent noises about its determination to “reunify” with the self-governed island – which it has never controlled – by force if necessary.

    And the outlook has darkened further with the release of a new report by Taiwan’s National Development Council projecting that by 2035 the island can expect roughly 20,000 fewer births per year than the 153,820 it recorded in 2021. By 2035, Taiwan will also overtake South Korea as the jurisdiction with the world’s lowest birth rate, the report added.

    Such projections are feeding into a debate over whether the government should increase the period of mandatory military service that eligible young men must serve. Currently, the island has a professional military force made up of 162,000 (as of June this year) – 7,000 fewer than the target, according to a report by the Legislative Yuan. In addition to that number, all eligible men must serve four months of training as reservists.

    Changing the mandatory service requirement would be a major U-turn for Taiwan, which had previously been trying to cut down on conscription and shortened the mandatory service from 12 months as recently as 2018. But on Wednesday, Taiwan’s Minister of National Defence Chiu Kuo-cheng said such plans would be made public before the end of the year.

    That news has met with opposition among some young students in Taiwan, who have voiced their frustrations on PTT, Taiwan’s version of Reddit, even if there is support for the move among the wider public.

    A poll by the Taiwanese Public Opinion Foundation in March this year found that most Taiwanese agreed with a proposal to lengthen the service period. It found that 75.9% of respondents thought it reasonable to extend it to a year; only 17.8% were opposed.

    Many experts argue there is simply no other option.

    Su Tzu-yun, a director of Taiwan’s Institute for National Defense and Security Research, said that before 2016, the pool of men eligible to join the military – either as career soldiers or as reservists – was about 110,000. Since then, he said, the number had declined every year and the pool would likely be as low as 74,000 by 2025.

    And within the next decade, Su said, the number of young adults available for recruitment by the Taiwanese military could drop by as much as a third.

    “This is a national security issue for us,” he said. “The population pool is decreasing, so we are actively considering whether to resume conscription to meet our military needs.

    “We are now facing an increasing threat (from China), and we need to have more firepower and manpower.”

    Taiwan’s low birth rate – 0.98 – is far below the 2.1 needed to maintain a stable population, but it is no outlier in East Asia.

    In November, South Korea broke its own world record when its birth rate dropped to 0.79, while Japan’s fell to 1.3 and mainland China hit 1.15.

    Even so, experts say the trend poses a unique problem for Taiwan’s military, given the relative size of the island and the threats it faces.

    China has been making increasingly aggressive noises toward the island since August, when then-US House Speaker Nancy Pelosi controversially visited Taipei. Not long after she landed in Taiwan, Beijing also launched a series of unprecedented military exercises around the island.

    Since then, the temperature has remained high – particularly as Chinese leader Xi Jinping told a key Communist Party meeting in October that “reunification” was inevitable and that he reserves the option of taking “all measures necessary.”

    Chang Yan-ting, a former deputy commander of Taiwan’s air force, said that while low birth rates were common across East Asia, “the situation in Taiwan is very different” as the island was facing “more and more pressure (from China) and the situation will become more acute.”

    “The United States has military bases in Japan and South Korea, while Singapore does not face an acute military threat from its neighbors. Taiwan faces the greatest threat and declining birth rate will make the situation even more serious,” he added.

    Roy Lee, a deputy executive director at Taiwan’s Chung-hua Institution for Economic Research, agreed that the security threats facing Taiwan were greater than those in the rest of the region.

    “The situation is more challenging for Taiwan, because our population base is smaller than other countries facing similar problems,” he added.

    Taiwan’s population is 23.5 million, compared to South Korea’s 52 million, Japan’s 126 million and China’s 1.4 billion.

    Besides the shrinking recruitment pool, the decline in the youth population could also threaten the long-term performance of Taiwan’s economy – which is itself a pillar of the island’s defense.

    Taiwan is the world’s 21st largest economy, according to the London-based Centre for Economics and Business Research, and had a GDP of $668.51 billion last year.

    Much of its economic heft comes from its leading role in the supply of semiconductor chips, which play an indispensable role in everything from smartphones to computers.

    Taiwan’s homegrown semiconductor giant TSMC is perceived as being so valuable to the global economy – as well as to China – that it is sometimes referred to as forming part of a “silicon shield” against a potential military invasion by Beijing, as its presence would give a strong incentive to the West to intervene.

    Lee noted that population levels are closely intertwined with gross domestic product, a broad measure of economic activity. A population decline of 200,000 people could result in a 0.4% decline in GDP, all else being equal, he said.

    “It is very difficult to increase GDP by 0.4%, and would require a lot of effort. So the fact that a declining population can take away that much growth is big,” he said.

    Taiwan’s government has brought in a series of measures aimed at encouraging people to have babies, but with limited success.

    It pays parents a monthly stipend of 5,000 Taiwan dollars (US$161) for their first baby, and a higher amount for each additional one.

    Since last year, pregnant women have been eligible for seven days of leave for obstetrics checks prior to giving birth.

    Outside the military, in the wider economy, the island has been encouraging migrant workers to fill job vacancies.

    Statistics from the National Development Council showed that about 670,000 migrant workers were in Taiwan at the end of last year – comprising about 3% of the population.

    Most of the migrant workers are employed in the manufacturing sector, the council said, the vast majority of them from Vietnam, Indonesia, Thailand and the Philippines.

    Lee said in the long term the Taiwanese government would likely have to reform its immigration policies to bring in more migrant workers.

    Still, there are those who say Taiwan’s low birth rate is no reason to panic, just yet.

    Alice Cheng, an associate professor in sociology at Taiwan’s Academia Sinica, cautioned against reading too much into population trends as they were affected by so many factors.

    She pointed out that just a few decades ago, many demographers were warning of food shortages caused by a population explosion.

    And even if the low birth rate endured, that might be no bad thing if it were a reflection of an improvement in women’s rights, she said.

    “The educational expansion that took place in the 70s and 80s in East Asia dramatically changed women’s status. It really pushed women out of their homes because they had knowledge, education and career prospects,” she said.

    “The next thing you see globally is that once women’s education level improved, fertility rates started declining.”

    “All these East Asian countries are really scratching their head and trying to think about policies and interventions to boost fertility rates,” she added.

    “But if that’s something that really, (women) don’t want, can you push them to do that?”

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  • China challenges US chip curbs at WTO, citing ‘trade protectionism’ | CNN Business

    China challenges US chip curbs at WTO, citing ‘trade protectionism’ | CNN Business

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    Hong Kong
    CNN
     — 

    China has challenged a move by the United States to block sales of advanced computer chips and chip-making equipment to Chinese companies by launching a trade dispute at the World Trade Organization, calling the measures “trade protectionism.”

    The country’s commerce ministry filed a formal complaint against the United States with the WTO on Monday, according to a statement. The two countries are both members of the trade body, which has a mechanism for resolving disputes.

    “China’s filing of a lawsuit at the WTO is to resolve China’s concerns through legal means and is a necessary way to defend its legitimate rights and interests,” the ministry said.

    On October 7, the Biden administration unveiled a sweeping set of export controls that ban Chinese companies from buying advanced chips and chip-making equipment without a license. The rules also restrict the ability of US citizens or green card holders to support the “development or production” of chips at certain manufacturing facilities in China.

    The commerce ministry blasted the US move as threatening global supply chain stability and called it “a typical practice of trade protectionism.” The complaint is the first action China has taken at the global trade body against the US chip sanctions.

    US officials say the export controls were intended to protect national security interests.

    Analysts widely consider the measures to be a major threat to China’s tech ambitions, as the global semiconductor industry is heavily dependent on the United States and countries aligned with it for chip design, the tools that make them, and fabrication. It also comes as the United States is looking to bolster its domestic chip manufacturing abilities, after chip shortages earlier in the pandemic highlighted the country’s dependence on imports from abroad.

    Washington has also pressured its security partners to comply with chip-related curbs on China. Jake Sullivan, the White House national security adviser, said on Monday that Washington had spoken with its partners including Japan and the Netherlands to tighten chip-related exports to China, according to Reuters.

    Beijing has tried to push back against the sanctions. Last month, Chinese President Xi Jinping met with leaders from South Korea and the Netherlands, both key to the global chip-making supply chain, at the G20 summit in Bali, Indonesia. He called for both countries to boost cooperation in high-tech manufacturing and avoid “the politicization of economic and trade issues.”

    Chips are a growing source of tension between the United States and China. In recent years, Washington has turned up the pressure on China’s tech sector by limiting access to cutting-edge chip components and machinery.

    Before the October sanctions, the US government had already banned sales of certain tech products to specific Chinese companies, such as Huawei. It also ordered top chipmakers Nvidia and AMD to halt their shipments to China.

    To secure its own chip supplies, Beijing has stepped up efforts to boost domestic semiconductor production in recent years.

    In November 2018, just months after Washington hit Chinese telecoms giant ZTE Corp with an export ban, the Chinese government set up an industry alliance of companies and research institutes as part of efforts to design advanced chips. The group’s focus is on developing Risc-V, an open-source chip design architecture that has increasingly become a rival to Softbank

    (SFTBF)
    ’s Arm, the current global leader. Members of the consortium include the Chinese Academy of Sciences, Alibaba

    (BABA)
    , Tencent

    (TCEHY)
    , and Baidu

    (BIDU)
    .

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  • As the world courts TSMC, Taiwan worries about losing its ‘silicon shield’ | CNN Business

    As the world courts TSMC, Taiwan worries about losing its ‘silicon shield’ | CNN Business

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    Hong Kong
    CNN
     — 

    Semiconductor giant TSMC was feted this week by US President Joe Biden and Apple CEO Tim Cook during a ceremony to unveil its $40 billion manufacturing site in Arizona — a huge investment designed to help secure America’s supply of the most advanced chips.

    But back home in Taiwan, there is deep unease over the growing political and commercial pressure being applied to the world’s most important chipmaker to expand internationally. The company is building a facility in Japan and considering investing in Europe.

    “They’re like the Hope Diamond of semiconductors. Everybody wants them,” said G. Dan Hutcheson, vice chair of TechInsights, a research organization specializing in chips. (The Hope Diamond is the world’s largest blue diamond, which now resides at the Smithsonian Institute’s National Museum of Natural History in Washington.)

    “Customers in China want them to build there. Customers in the US want them there. And customers in Europe want them there too,” he added.

    Apart from the risk that TSMC will take its most advanced technology with it — stripping Taiwan of one of its unique assets and reducing employment opportunities locally — there are fears that a diminished presence for the company could expose Taipei to greater pressure from Beijing, which has vowed to take control of the self-ruled island, by force if necessary.

    TSMC is considered a national treasure in Taiwan and supplies tech giants including Apple

    (AAPL)
    and Qualcomm

    (QCOM)
    . It mass produces the most advanced semiconductors in the world, components that are vital to the smooth running of everything from smartphones to washing machines.

    The company is perceived as being so valuable to the global economy, as well as to China — which claims Taiwan as its own territory despite having never controlled it — that it is sometimes even referred to as forming part of a “silicon shield” against a potential military invasion by Beijing. TSMC’s presence gives a strong incentive to the West to defend Taiwan against any attempt by China to take it by force.

    “The idea is that if Taiwan became a powerhouse in semiconductors, then America would have to support and defend it,” said Hutcheson. “The strategy has been super successful.”

    A day before Tuesday’s Phoenix ceremony Chiu Chenyuan, a lawmaker with the opposition Taiwan People’s Party, grilled Foreign Minister Joseph Wu about whether there is a “secret deal” with the United States to disadvantage Taiwan’s chip industry.

    Chiu claimed that the chip giant was under political pressure to move its operations and its most advanced technology to the US. He cited the transfer of 300 people, including TSMC engineers, to the Arizona plant. In response, Wu said there was no secret deal, nor was there any attempt to diminish the importance of Taiwan to TSMC.

    Patrick Chen, the Taipei-based head of research at CL Securities Taiwan, said there was a common concern on the island about TSMC’s growing international importance, the pressure it is facing to expand, and what that means for Taiwan.

    “It is similar to what happened in the US in the 70s and 80s when manufacturing jobs were being shifted away from the States into other countries. Many local jobs were lost and cities bankrupted,” he said.

    CNN has asked TSMC for comment about its expansion plans.

    Its CEO, CC Wei, had previously said: “Every region is important to TSMC,” adding that it would “continue to serve all the customers all over the world.”

    Founded in 1987 by Morris Chang, TSMC is not a household name outside Taiwan, even though it produces an estimated 90% of the world’s super-advanced computer chips.

    Semiconductors are an indispensable part of just about every electronic device. They are difficult to make because of the high cost of development and the level of knowledge required, meaning much of the production is concentrated among a handful of suppliers.

    Concerned about losing access to crucial chips, particularly as tension has escalated between China and the United States, as well as between Beijing and Taipei, governments and major consumer-facing companies like Apple have asked semiconductor companies to localize their operations, according to experts.

    “TSMC’s decision to expand its Arizona investment is evidence that politics and geopolitical risks will play a bigger role than previously in supply chain decisions,” said Chris Miller, author of “Chip War: the Fight for the World’s Most Critical Technology”.

    “It also suggests that TSMC’s customers are asking for more geographic diversification, which is something that wasn’t previously a key concern of major customers.”

    On Tuesday, TSMC said it was increasing its investment in the US by building a second semiconductor factory in Arizona and raising its total investment there from $12 billion to $40 billion.

    Chang had previously said its plant in Arizona would produce 3-nanometer chips, the company’s most advanced technology, as advances in chip manufacturing require etching ever-smaller transistors onto silicon wafers.

    These announcements alarm politicians like Chiu of the Taiwan People’s Party’s. He frets about the island losing out as TSMC is courted globally.

    Chen of CL Securities said national security concerns among governments globally are driving TSMC’s expansion. But he believes the company will continue to manufacture its most advanced technology at home.

    “This would make economic sense given [the] lower salaries [and] higher quality of Taiwanese engineers,” he said, adding that the company needs the approval of the Taiwan Ministry of Economic Affairs to move its most advanced technologies abroad, which it was unlikely to give.

    Many experts believe that by the time 3-nanometer chips are being made in Arizona, TSMC’s Taiwan operations would be producing even smaller, more advanced chips.

    Hutcheson also believes TSMC will keep its most cutting-edge development teams in Taiwan.

    “Once you have a team of people doing development work, they work very closely together. You don’t want to disrupt that. It’s not an easy thing to do,” he said.

    — CNN’s Wayne Chang contributed to this report.

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  • TSMC ups its Arizona chipmaking investment to $40 billion ahead of Biden’s visit | CNN Business

    TSMC ups its Arizona chipmaking investment to $40 billion ahead of Biden’s visit | CNN Business

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    New York
    CNN Business
     — 

    Taiwan Semiconductor Manufacturing Company is upping its investment in the United States, announcing Tuesday that it’s building a second semiconductor factory in Arizona and raising its investment there from $12 billion to $40 billion.

    TSMC’s plans come as tensions between Washington and Beijing are rising over chips, with President Joe Biden imposing a sweeping set of controls on the sale of advanced chips and chip-making equipment to Chinese firms.

    Biden visited the manufacturer’s site in Phoenix and spoke about bringing jobs and investment to Arizona, calling TSMC’s $40 billion commitment “the largest foreign investment in the history of this state.” Other lawmakers and business leaders also attended the event, including Apple CEO Tim Cook.

    “American manufacturing is back, folks,” Biden said at the event. “These are the most advanced semiconductor chips on the planet, chips that will power iPhones and MacBooks, as Tim Cook can attest … It could be a game changer.”

    In his remarks, Cook said: “As many of you know, we work with TSMC to manufacture the chips that help power our products all over the world, and we look forward to expanding this work in the years to come as TSMC forms new and deeper roots in America.” He added that with the opening of the new facility, Apple’s own Silicon chips “can be proudly stamped ‘Made in America.’”

    TSMC previously announced that it was building a $12 billion facility in Arizona that will eventually manufacture 3-nanometer chips, TSMC’s most advanced technology. Between the two factories, thousands of “high-paying high-tech jobs” will be added to the state and 600,000 wafers per year will be produced, the company said.

    TSMC accounts for an estimated 90% of the world’s super-advanced computer chips, supplying tech giants including Apple

    (AAPL)
    and Qualcomm

    (QCOM)
    .

    Chips are an indispensable part of everything from smartphones to washing machines — but are also difficult to make because of the high cost of development and the level of knowledge required, meaning much of the production is concentrated among a handful of suppliers.

    The White House is touting the new investments as a direct result of Biden’s economic plan, including the $200 billion CHIPS and Science Act. Biden has been visiting communities where companies like TSMC and Intel have announced new investments since the passage of the law this summer.

    “It means more workers in these major factories, but it also means more opportunities for suppliers and contractors, good paying construction jobs, opportunities for small and medium sized manufacturers and suppliers,” National Economic Council Director Brian Deese told reporters in a call on Monday. “It means economic opportunity for communities that have often been left behind in economic cycles, including traditional energy communities that have powered our nation for generations and tribal nations.”

    The global chip shortage first surfaced at the beginning of the pandemic, which upended supply chains and changed consumer shopping patterns. Automakers cut back on their orders for chips while tech companies, whose products were boosted by lockdown living, snapped up as many as they could.

    The facility Biden will visit Tuesday in Phoenix is slated to begin producing chips in 2024. The new facility should start production in 2026.

    – CNN’s Nikki Carvajal, Wayne Chang, Clare Duffy and Diksha Madhok contributed to this report.

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  • The US-China chip war is spilling over to Europe | CNN Business

    The US-China chip war is spilling over to Europe | CNN Business

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    Hong Kong
    CNN Business
     — 

    Two European chip deals have run into trouble over their links with China, a sign of concern spreading in the West over potential Chinese control of critical infrastructure.

    Last week, the new owner of Britain’s biggest chipmaker was ordered to unwind its takeover, just days after another chip factory sale was blocked in Germany. Both transactions were hit by national security concerns, and had involved acquisitions by Chinese-owned companies.

    In the United Kingdom, Nexperia, a Dutch subsidiary of Shanghai-listed semiconductor maker Wingtech, was told by the government to sell at least 86% of its stake in Newport Wafer Fab, more than a year after taking control of the factory. Staffers have since been protesting the decision, saying it puts nearly 600 jobs at risk.

    In Germany, the economic ministry barred Elmos Semiconductor, an automotive chipmaker, from selling its factory in the city of Dortmund to Silex, a Swedish subsidiary of China’s Sai Microelectronics.

    Chipmaking was already emerging as a new front in US-China tensions. Now the two troubled deals illustrate how the pressure is also rising in Europe, particularly as Western officials face calls for key sectors to be kept out of Chinese control.

    “These decisions mark a shift towards tougher stances regarding Chinese investment in critical industries in Europe,” said Xiaomeng Lu, director of geo‑technology at Eurasia Group.

    “US pressure definitely contributed to these decisions. [A] growing sense of technology sovereignty also likely prompted these moves — governments around the world are increasingly [viewing the] semiconductors industry as a strategic resource and seek to protect them from foreign takeovers.”

    Legal experts said the two decisions were notable because each deal was initially thought to have been cleared.

    The Newport Wafer case is “the first completed acquisition” that needs to be unwound under a UK national security and investment (NSI) act, which took full effect in January, according to Ian Giles, head of antitrust and competition for Europe, the Middle East and Asia for Norton Rose.

    Nexperia said last week that it was “shocked” by the decision, and that “the UK government chose not to enter into a meaningful dialogue with Nexperia or even visit the Newport site.”

    The company added that it had offered to avoid “activities of potential concern, and to provide the UK government with direct control and participation in the management of Newport,” a 28-acre site in south Wales.

    The factory makes silicon wafers, the basis for making computer chips. Many of its products eventually power cars and medical equipment. Nexperia has indicated that workers at the facility now face an uncertain future.

    In an open letter to the UK government last Thursday, the Nexperia Newport Staff Association said that it was “in disbelief” that employees’ livelihoods had been “put in jeopardy in the run-up to Christmas.”

    “This is clearly a deeply political decision,” the group wrote, rejecting the idea that the deal would undermine British security. “You must see sense and protect our jobs by allowing Nexperia to keep their Newport factory.”

    For Elmos, German authorities had initially indicated that they would issue a conditional approval, and even shared a draft approval after an intense review process lasting about 10 months, the company said in a statement following the injunction.

    Tim Schaper, head of antitrust and competition for Germany at Norton Rose, said government intervention was also significant given that “Elmos’ technology is said to be quite old, state of the art in the 1990s, and allegedly not of great industrial importance.”

    “The transaction became the plaything of a public debate about Chinese investors’ acquiring stakes in key German technologies,” he said.

    A company sign of Elmos Semiconductor, seen on Nov. 9 in the German city of Dortmund.

    It’s possible that regulators were concerned about an outflow of technical know how, according to Alexander Rinne, the Munich-based head of international law firm Milbank’s European antitrust practice.

    “Elmos is known for making chips for the automotive sector, which is Germany’s core industry and the pride of the country,” he said in an interview.

    Elmos and Nexperia both declined interview requests. A Nexperia spokesperson told CNN Business on Tuesday that it was “considering its options regarding the UK government’s decision.”

    Chips are a growing source of tension between the United States and China. Washington has declared a shortage of the materials a national security issue, and highlighted the importance of remaining competitive in advanced technology capabilities.

    This year, the United States ramped up its own restrictions and pressed allies to enact their own, according to Lu. In August, the US government ordered two top chipmakers, Nvidia

    (NVDA)
    and AMD

    (AMD)
    , to halt exports of certain high-performance chips to China.

    Two months later, the Biden administration unveiled sweeping export controls that banned Chinese companies from buying advanced chips and chip-making equipment without a license. The rules also restricted the ability of American citizens or US green card holders to provide support for the development or production of chips at certain manufacturing facilities in China.

    The pressure is mounting. On Monday, NATO Secretary General Jens Stoltenberg urged the West to “be careful not to create new dependencies” on China. Speaking at a NATO parliamentary assembly in Madrid, Stoltenberg said he was seeing “growing Chinese efforts” to control Western critical infrastructure, supply chains, and key industrial sectors.

    “We cannot give authoritarian regimes any chance to exploit our vulnerabilities and undermine us,” he said.

    China has pushed back on the handling of the two European semiconductor cases.

    “We firmly oppose the UK’s move, and call on the UK to respect the legitimate rights and interests of Chinese companies and provide a fair, just, and (a) non-discriminatory business environment,” Chinese Foreign Ministry Spokesperson Mao Ning told a press briefing last Friday when asked about the Newport Wafer order. “The UK has overstretched the concept of national security and abused state power.”

    Zhao Lijian, another Chinese Foreign Ministry spokesperson, called on Germany and other countries to “refrain from politicizing normal economic and trade cooperation” at a press conference earlier this month, without addressing Elmos specifically.

    Germany has shown greater scrutiny of Chinese buyers this year. Last month, a bid by Chinese state shipping giant Cosco for a stake in a Hamburg port terminal operator sparked similar controversy. Under pressure from some members of the government, the size of the investment was later limited.

    Attorneys say if the chipmakers appeal, they could face an uncertain battle that may drag on for years.

    In each case, they would need to file a challenge in court within roughly a month of regulators’ decisions, barring exceptional circumstances, according to Norton Rose.

    Both Britain and Germany have recently added rules that expand government oversight over such decisions, making outcomes harder to predict. In Germany, a change to foreign direct investment rules in 2020 meant the government can intervene in prospective deals “if there is a ‘probable impairment of public order and security,’” said Schaper.

    Previously, by contrast, it could only impose restrictions “if there was an ‘actual, sufficiently serious threat to public order and security,’” he told CNN Business.

    In the UK, the ability of the government to retroactively review deals under the NSI Act “was really something that was considered surprising and far-reaching,” said Andrea Hamilton, a London-based partner at Milbank.

    “If challenged, as Nexperia apparently intends, it will also become a test case as to [the] extent of the NSI Act’s limits,” she said.

    Elsewhere, attention is shifting to the Netherlands. The Dutch government is currently facing pressure from the United States to limit exports to China, particularly from ASML

    (ASML)
    , a semiconductor equipment maker that holds a dominant position in the lithography machine market, according to Lu at Eurasia Group.

    “It will become the next case study,” she told CNN Business.

    The Netherlands has made clear it will form its own position.

    Asked about the issue this month, Dutch Minister for Foreign Trade Liesje Schreinemacher said the country would “not copy the US export restrictions for China one-to-one.”

    “We make our own assessment,” she said in an interview with Dutch newspaper NRC.

    — CNN’s Zahid Mahmood, Rose Roobeek-Coppack and Laura He contributed to this report.

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  • UK orders Chinese-owned company to sell Britain’s biggest chipmaker | CNN Business

    UK orders Chinese-owned company to sell Britain’s biggest chipmaker | CNN Business

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    Hong Kong
    CNN Business
     — 

    The UK government has ordered a Chinese-owned company to unwind its takeover of Britain’s biggest chipmaker, citing national security concerns.

    Nexperia, a Dutch subsidiary of Shanghai-listed semiconductor maker Wingtech, was told to sell “at least 86%” of its stake in Newport Wafer Fab by UK Secretary of State for Business, Energy and Industrial Strategy Grant Shapps, more than a year after taking control of the factory.

    Shapps said in a statement that he was concerned that the company could start working on more advanced so-called “compound” semiconductors at the Newport site and about “the potential for those activities to undermine UK capabilities.”

    Shapps also cited the location of the factory, which is part of an industrial cluster of highly specialized tech firms in Newport, a city in south Wales. “The links between the site and the cluster may prevent the cluster being engaged in future projects relevant to national security,” the government said.

    The UK move illustrates growing concern in the West over Chinese links to critical technologies and infrastructure. Last week, the German government blocked the sale of a semiconductor factory to a Chinese-owned tech firm, citing national security concerns. The United States in August ordered two of its top chipmakers, Nvidia

    (NVDA)
    and AMD

    (AMD)
    , to halt exports of certain high performance chips to China.

    Nexperia said in a statement Wednesday that it was “shocked” by the decision and would appeal. It cited “two previous security reviews” that it said had already cleared the acquisition.

    “Nexperia does not accept the potential national security concerns raised,” it said. “The far-reaching remedies which Nexperia offered to fully address the government’s concerns have been entirely ignored.”

    The company added that it had offered “not to conduct” the “activities of potential concern, and to provide the UK government with direct control and participation in the management of Newport.”

    Nexperia’s UK manager, Toni Versluijs, said the company would fight to overturn the order, suggesting that it could put more than 500 jobs at risk.

    “This decision sends a clear signal that the UK is closed for business,” he added.

    Newport Wafer bills itself as the UK’s largest semiconductor facility, making more than 35,000 wafer starts a month. The factory has a background in supplying components to automotive and medical companies, according to Nexperia.

    Nexperia is a semiconductor manufacturer based in Nijmegen, the Netherlands. It obtained full ownership of the Newport site in July 2021, after previously working with its former owners as a customer and as its second largest shareholder.

    “We rescued an investment-starved company from collapse,” it said. “Those who sold the business to us agreed that it was the only viable solution, and the deal was publicly welcomed by the Welsh government.”

    While terms of the deal were not disclosed, the transaction was valued at £63 million (approximately $75 million), according to a UK parliament report.

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  • Germany blocks sale of chip factory to China over security fears | CNN Business

    Germany blocks sale of chip factory to China over security fears | CNN Business

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    London/Berlin
    CNN Business
     — 

    The German government has blocked the sale of one of its semiconductor factories to a Chinese-owned tech company because of security concerns.

    Germany’s economic ministry said in a statement that it had prohibited Elmos Semiconductor, which makes chips for the automotive industry, from selling its factory in Dortmund to Silex, a Swedish subsidiary of China’s Sai Microelectronics.

    The decision had been taken “because the acquisition would have endangered the public order and safety of Germany,” the ministry said in a statement.

    Silex announced in December that it had signed an agreement with Elmos to buy the factory for €85 million ($85.4 million).

    Silex did not immediately respond to CNN Business’ request for comment. Elmos said in a statement that both companies regretted the government’s decision.

    “The transfer of new micromechanics technologies … from Sweden and significant investments in the Dortmund location would have strengthened semiconductor production in Germany,” Elmos said, adding that it was considering whether to take legal action.

    Sia Microelectronics said in a statement Thursday that it “deeply regretted” the decision by the German government. Its shares fell more than 9% in Shenzhen.

    “We have to take a close look at company acquisitions when important infrastructure is involved or when there is a risk of technology flowing to acquirers from non-EU countries,” German economy minister Robert Habeck said at a press conference.

    He added that the semiconductor industry in Europe, in particular, needed to guard its “technological and economic sovereignty.”

    The planned deal had rattled German authorities concerned that Chinese investment in its critical infrastructure could compromise its intellectual property and leave it exposed to political pressure from Beijing.

    Similar concerns motivated the German government to intervene in plans by Chinese shipping giant Cosco to buy a 35% stake in the operator of a Hamburg port terminal last month.

    Officials limited the planned investment in Hamburger Hafen und Logistik to 24.9%. Several government ministers, including Habeck, has pushed for the deal to be blocked entirely.

    The tensions have arisen at a difficult time for the German economy, which is sliding into a recession triggered by the crisis over Russian energy. Germany’s manufacturers and exporters are eager to maintain their close relationship with China.

    Only last week, Chancellor Olaf Scholz met with Chinese leader Xi Jinping in the first visit by a G7 leader to Beijing in roughly three years, a trip designed to shore up export markets as Germany’s ties with Russia — once its biggest supplier of natural gas — continue to unravel.

    A delegation of top industry CEOs, including the bosses of Volkswagen

    (VLKAF)
    , Siemens

    (SIEGY)
    and chemicals giant BASF

    (BASFY)
    , traveled with Scholz to Beijing to meet with Chinese business executives.

    But Habeck struck a note of caution on Wednesday. Addressing the blocked chip deal, he stressed that “Germany is and will remain an open investment location” but that it was not “naive”.

    The visit came just a month after the United States introduced stringent controls on chip exports to China, a move designed to protect its national security and bolster its domestic semiconductor industry.

    In early October, the Biden administration banned Chinese firms from buying advanced chips and chip-making equipment without a license.

    The rules threaten to strike a huge blow to China’s ambitions to become a tech superpower as they not only bar exports of chips made anywhere in the world using US technology, but also the export of the tools used to make them.

    Laura He contributed reporting.

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  • US curbs on microchips could throttle China’s ambitions and escalate the tech war | CNN Business

    US curbs on microchips could throttle China’s ambitions and escalate the tech war | CNN Business

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    Hong Kong
    CNN Business
     — 

    Chinese leader Xi Jinping’s push to “win the battle” in core technologies and bolster China’s position as a tech superpower could be severely undermined by Washington’s unprecedented steps to limit the sale of advanced chips and chip-making equipment to the country, analysts say.

    On October 7, the Biden administration unveiled a sweeping set of export controls that ban Chinese companies from buying advanced chips and chip-making equipment without a license. The rule also restricts the ability of “US persons” — including American citizens or green card holders — to provide support for the “development or production” of chips at certain manufacturing facilities in China.

    “The US moves are a major threat to China’s technological ambitions,” said Mark Williams and Zichun Huang, analysts at Capital Economics, in a recent research report. The analysts pointed out that the global semiconductor industry is “almost entirely” dependent on the United States and countries aligned with it for chip design, the tools that make them, and fabrication.

    “Without these,” the analysts said, “Chinese firms will lose access not only to advanced chips, but to technology and inputs that might over time have allowed domestic chipmakers to climb the ladder and compete at the cutting edge.” They added: “The US has chopped the rungs away.”

    Chips are vital for everything from smartphones and self-driving cars to advanced computing and weapons manufacturing. US officials have talked about the move as a measure to protect national security interests. It also comes as the United States is looking to bolster its domestic chip manufacturing abilities with heavy investments, after chip shortages earlier in the pandemic highlighted the country’s dependance on imports from abroad.

    Arthur Dong, a teaching professor at Georgetown University’s McDonough School of Business, described the recent US sanctions as “unprecedented in modern times.”

    Previously, the US government has banned sales of certain tech products to specific Chinese companies, such as Huawei. It has also required some major US chip-making firms to halt their shipments to China. But the latest move is much more expansive and significant. It not only bars the export to China of advanced chips made anywhere in the world using US technology, but also blocks the export of the tools used to make them.

    With its Made in China 2025 road map, Beijing has set a target for China to become a global leader in a wide range of industries, including artificial intelligence (AI), 5G wireless, and quantum computing. At the Communist Party Congress earlier this month, where he secured a historic third term, Xi highlighted that the nation will prioritize tech and innovation and grow its talent pool to develop homegrown technologies.

    “China will look to join the ranks of the world’s most innovative countries by 2035, with great self-reliance and strength in science and technology,” Xi said in the party congress report, released on October 16.

    Dong said the latest US sanctions will make it harder for China to advance in AI as well as 5G, given the role advanced chips play in both industries.

    “In any circumstances,” Williams from Capital Economics said, “China would find achieving global tech leadership hard to achieve.”

    One dramatic, and potentially disruptive aspect of the rules is the ban on American citizens and legal residents working with Chinese chip firms.

    Dane Chamorro, a partner at Control Risks, a global risk consultancy based in London, said such measures are usually “only enacted against ‘rogue regimes’” such as Iran and North Korea. The decision to use this against China is “unprecedented,” Chamorro said.

    Many executives working for Chinese firms may now have to choose between keeping their jobs or acting as lawful US residents. “You can’t do both,” Chamorro said.

    The ban could lead to a mass resignation of top executives and core research staff working at Chinese chip firms, which will hit the industry hard, Dong from Georgetown University said.

    So far it’s not clear exactly how many American workers there are in China’s domestic chip industry. But an examination of company filings indicates that more than a dozen chip firms have senior executives holding US citizenship or green cards. At Advanced Micro-Fabrication Equipment China (AMEC), one of the country’s largest semiconductor equipment manufacturers, at least seven executives, including founder and chairman Gerald Yin, hold US citizenship, the latest company documents show.

    A woman inspects the quality of a chip at a manufacturer of IC encapsulation in Nantong in east China's Jiangsu province Friday, Sept. 16, 2022.

    Other examples include Shu Qingming and Cheng Taiyi, who currently serve as vice chairman and deputy general manager, respectively, at GigaDevice Semiconductor, an advanced memory chip firm. The Financial Times report said in a recent report that Yangtze Memory Technologies has already asked American employees in core tech positions to leave, citing anonymous sources. But it’s unclear how many.

    AMEC, GigaDevice Semiconductor, and Yangtze Memory Technologies didn’t respond to requests for comments.

    If these senior executives depart, “this will create a leadership and technological void within China’s chipmaking industry,” Dong said, as the country loses executives with years of chipmaking experience in an industry with “one of the most complex manufacturing processes known to mankind.”

    While much of the world’s chip manufacturing is centered in East Asia, China is reliant on foreign chips, especially for advanced processor and memory chips and related equipment.

    It is the world’s largest importer of semiconductors, and has spent more money buying them than oil. In 2021, China bought a record $414 billion worth of chips, or more than 16% of the value of its total imports, according to government statistics.

    But some Western suppliers have already started preparing to halt sales to China in response to the US export curbs.

    ASM International

    (ASMIY)
    , the Dutch semiconductor equipment supplier, said Wednesday that it expected the export restrictions will affect more than 40% of its sales in China. The country accounted for 16% of ASML’s equipment sales in the first nine months of this year.

    Lam Researc

    (LRCX)
    h, which supplies semiconductor equipment and services, also flagged last week that it could lose between $2 billion and $2.5 billion in annual revenue in 2023 as a result of the US export curbs.

    The party congress, which recently wrapped up, has slowed China’s response to latest US export controls, analysts said. But as Beijing starts assessing the significance of the measures, it might retaliate. Xi is “concerned” about US plans to bolster domestic chip production as his administration moves to restrict China’s ability to make them, said US President Joe Biden in a speech on Thursday.

    “This conflict is just beginning,” said Chamorro.

    Chamorro said the most valuable “card” in China’s hand might be the supply of processed rare earth minerals, which Beijing could embargo. Rare earth minerals are important materials in electric vehicle production, battery making and renewable energy systems.

    “These are not easily or quickly replaced and China dominates the processing and supply chain,” Chamorro said.

    The Biden administration, meanwhile, is also weighing further restrictions on other technology exports to China, a senior US Commerce Department official said Thursday, according to the New York Times.

    If either country takes these steps, it could shift the tech arms race between the United States and China to a whole new level.

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  • The US is spending billions to boost chip manufacturing. Will it be enough? | CNN Business

    The US is spending billions to boost chip manufacturing. Will it be enough? | CNN Business

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    CNN
     — 

    The United States government is pulling out all the stops to boost domestic semiconductor manufacturing, injecting billions of dollars into the beleaguered sector and flexing all policy muscles available to give it a leg up over competition from Asia.

    When the pandemic hit in 2020, firms initially curtailed orders for these micro building blocks needed for smartphones, computers, cars and many other products. Then, as people began working from home, demand soared for information and communication technology – and the chips that power them. A chip shortage ensued, and auto plants had to stop production because they could not obtain chips. This contributed to skyrocketing new and used vehicle prices, a major driver of the painful inflation Americans were feeling.

    In a statement earlier this year, Commerce Secretary Gina Raimondo dubbed the semiconductor shortage a “national security” issue because it exposed the dependency of US manufacturing on imports of semiconductors from abroad. Chips also serve critical military applications and are necessary for cybersecurity tools.

    The Biden administration and lawmakers rallied in response, passing the CHIPS and Science Act into law in August. The legislation includes $52 billion to strengthen semiconductor manufacturing in the United States. Of this, $39 billion is earmarked for manufacturing incentives, $13.2 billion for research and development and workforce training, and $500 million for international information communications technology security and semiconductor supply chain activities.

    Against that backdrop, several prominent companies have announced significant investments in US manufacturing. Taiwan Semiconductor Manufacturing Company (TSMC), a powerhouse in the industry committed at least $12 billion to build a semiconductor fabrication plant in Arizona, with production expected to begin in 2024. At the start of the year, Intel said it planned to build a $20 billion semiconductor manufacturing plant in Ohio, and groundbreaking for the new chip plant took place just last month. And this month, Micron said it would invest up to $100 billion over the next two decades to build a massive semiconductor factory in upstate New York.

    In a flurry of tweets earlier this month President Joe Biden pledged: “America is going to lead the way in microchip manufacturing.”

    But the US has much catching up to do. US-based fabs, or chip manufacturing plants, currently only account for 12% of the world’s modern semiconductor manufacturing capacity, according to data from the Semiconductor Industry Association trade group. Some 75% of the world’s modern chip manufacturing is now concentrated in East Asia – a majority of that in geopolitically-vulnerable Taiwan. And even with these renewed efforts, the United States does not currently have the same talent and supply chain pipeline as some Asian markets do to support a robust homegrown industry.

    To complicate matters, the surge in public and private investments comes at a questionable time, as concerns over the global chip supply shortage have eased. Pandemic-related supply chain blockages are letting up somewhat and a worsening economic outlook has hampered demand.

    In an earnings call last week, TSMC CEO C.C. Wei warned it expects the “semiconductor industry will likely decline” in 2023. “TSMC also is not immune,” Wei added, but said it expects “to be more resilient than the overall semiconductor industry.”

    Promoting semiconductor manufacturing in the United States now may risk leading to overcapacity and excess supply. And with demand weakening, it isn’t immediately clear if government subsidies will be enough to overcome other obstacles the country faces in developing a competitive semiconductor manufacturing hub.

    To understand the latest US efforts, it’s important to be clear on where the country stands – not just in the overall chip industry, but in relation to specific, valuable pockets of it.

    “The US is very unlikely to increase its share of global production because even as the US brings online more fab capacity; TSMC, Intel and others are announcing fabs in other places and building them even more quickly,” said Scott Kennedy, a senior adviser at the Center for Strategic and International Studies.

    “But I don’t necessarily think that’s really a huge problem,” he added. He noted that measuring manufacturing based on pure output lumps together the lower-end chips and the cutting-edge, higher-end chips that are a more realistic and significant measure of chip manufacturing success. “The US does need to expand chip production for a specific kind of chips, that are directly related to American national security,” he said.

    The Biden administration last Friday imposed sweeping new export curbs designed to restrict China’s access to advanced semiconductors made with US equipment, in a move that targets the manufacturing of advanced weapons systems.

    While only “about 10% to 14% of chips sold [globally] come from US manufacturing facilities,” according to Columbia Business School professor Dan Wang, the United States does have other strengths. “In terms of design expertise, a lot of that still resides in the U.S.”

    Technicians inspect a piece of equipment during a tour of the Micron Technology automotive chip manufacturing plant Feb. 11, 2022, in Manassas, Va.

    Still, the shortcomings are real. “When it comes to foundries, which are the manufacturing side of semiconductors, the U.S. has not really been a major player for many, many years,” said Wang. While it very much used to be, manufacturing began migrating to Asia during the 1980s and ’90s, Wang said. “One of the big reasons for this is that the cost of labor is lower, and it’s just far cheaper to produce at a very massive scale, integrated circuits and chips, in those parts of the world,” Wang added. Morris Chang, the founder of TSMC, said that it costs 50% more to manufacture chips in the U.S. than in Taiwan.

    Now, simply having the facilities already set up to produce or expand chip manufacturing gives Asia a big advantage. Wang said he thinks that might be why you see the U.S. “axe-throwing so much money at companies to set up plants in the United States.” It’s not just to respond to demand and become more self-reliant, “but also because you need to get these things up and running very, very quickly, in order to even be in the race at all.”

    Building new chip fabs itself is a costly and time-consuming endeavor. “A modern fab is something like half a million square feet,” said Bob Johnson, an analyst at Gartner, and requires “monstrous clean rooms that have massive air handling capabilities.” He added that these massive buildings require “exceptionally strong foundations.” As he put it, “you cannot have any vibration in the fab because it can wreck the manufacturing process.”

    In addition, a single extreme ultraviolet lithography machine, required to map out the circuitry of chips, costs about $150 million, and Reuters reports “a cutting-edge chip plant needs 9-18 of these machines.”

    Moreover, the manufacturing of semiconductors requires a range of specialized inputs, including pure chemicals such as fluorinated polyimide, and etching gas, chip etching machines, and more. In places like Taiwan and Fukuoka, Japan, supply chains have developed where the providers of these products are located close to the semiconductor factories. There are also one or two companies that produce vital inputs and that have been trustworthy suppliers to companies in Asia for a long time. This is not yet the case in places like Arizona and Ohio, where plans to build massive chip manufacturing plants are already underway.

    You also need a labor force willing and able to do the work.

    In the United States, there is both a shortage of new graduates and experienced workers with the technical and engineering knowledge necessary to manufacture semiconductors. Many of those who might have the right experience instead prefer to work in trendier industries, according to Kennedy.

    “If we were to today, snap our fingers and have ten new fabs with the world’s leading chips, we probably wouldn’t have enough people to staff them,” Kennedy said. “That’s the biggest bottleneck to the expansion of America’s fab capacity, not capital.”

    Intel has tried to establish close relations with Arizona State University to recruit engineers, but it is unclear whether it and other companies building fabs in America will be able to hire enough trained engineers and technicians. If not, even the billions of dollars committed by the private and public sector may not be enough to reshore semiconductor manufacturing.

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  • Micron to invest up to $100 billion to build chip factory in upstate New York | CNN Business

    Micron to invest up to $100 billion to build chip factory in upstate New York | CNN Business

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    CNN
     — 

    Micron on Tuesday said it would invest up to $100 billion over the next two decades to build a massive semiconductor factory in upstate New York. The move comes in the wake of US government efforts to boost domestic chip production.

    The Idaho-based firm said it plans to build the “largest semiconductor fabrication facility in the history of the United States” in Clay, New York. Micron said the new facility, about 15 miles from Syracuse, will create nearly 50,000 New York jobs over the next two decades.

    The initial investment of $20 billion is planned “by the end of this decade,” the company said. Site preparation work will start in 2023, with construction slated to begin in 2024 and production output expected to “ramp up in the latter half of the decade, gradually increasing in line with industry demand trends,” according to the company.

    Shares for Micron rose nearly 5% Tuesday after the news was announced.

    In August, President Joe Biden signed into law the CHIPS and Science Act, which aimed to boost American chip manufacturing with a more than $200 billion investment over the next five years. The package included some $52 billion for chip manufacturing and research, providing companies incentives to build, expand and modernize US facilities and equipment. The legislation aimed to lessen a US dependency on offshore chip production from Asia, and came in the wake of a global shortage of these building blocks required for smartphones, autos and computers.

    In a statement Tuesday, Micron President and CEO Sanjay Mehrotra said he is “grateful to President Biden and his Administration for making the CHIPS and science Act a priority.”

    “This historic leading-edge memory megafab in Central New York will deliver benefits beyond the semiconductor industry by strengthening U.S. technology leadership as well as economic and national security, driving American innovation and competitiveness for decades to come,” Mehrotra added. (A fab refers to a semiconductor fabrication plant).

    The company said that the $5.5 billion in incentives from the state of New York over the life of the project, alongside anticipated federal grants and tax credits from the CHIPS and Science Act, “are critical to support hiring and capital investment.”

    New York Governor Kathy Hochul touted Micron’s investment in a statement, saying it “marks the start of something transformative in scale and possibility for our state’s economic future.” She added that this investment, which is the largest private-sector investment in state history, will help “usher the state into another Industrial Revolution.”

    Getting new semiconductor factories up and running in the US can take years. Ahead of the CHIPS legislation, the Taiwan Semiconductor Manufacturing Company committed at least $12 billion to build a semiconductor fabrication plant in Arizona, with production expected to begin in 2024.

    Intel announced plans to build a $20 billion semiconductor manufacturing plant in Ohio at the beginning of the year, but then warned that this project could be delayed if lawmakers did not pass the CHIPS legislation. Groundbreaking for the new Intel chip plant took place just last month. Biden traveled to Ohio to celebrate the occasion.

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