China's ASML endeavor and India eyes Taiwan ties
It's been a while since I last visited this vibrant city. That was in spring 2023, shortly after the lifting of COVID quarantine controls. We had a company teambuilding event that almost every overseas correspondent attended. We took a dinner cruise on a traditional boat in Tokyo Bay and later sang karaoke. Touching down in Haneda Airport yesterday reminded me how joyful it is to see colleagues that you work closely with despite living far away.
I am hosting this week's #TechAsia from Tokyo just as our special visual project about extreme ultraviolet lithography machines, the world's most complicated chipmaking equipment, goes online.
The idea for the story actually emerged roughly two years ago from discussion with my colleague Annie Cheng Ting-fang. We decided we should dissect China's efforts to build its own ASML, the Dutch company that is the exclusive maker of EUV machines. However, we were sidetracked by other big projects and major news developments, such as the great nanometer chip race, China's subsea cable drive, Huawei's mission to boost China's tech prowess, not to mention the industrywide earthquake set off by Trump's tariff war since April.
Looking back, however, all these projects are linked to one another, and together they build a sweeping tale about China's tech capabilities under the pressure of U.S. restrictions. Our years of accumulated industry knowledge and the latest scoopy details about little-known Chinese players all became part of this latest story.
I am very happy that we finally told this story, with massive help from our industry sources and analyst friends, as well as our editors and designers. This is a very good read that I'm sure you will enjoy.
Separately, the tech supply chain has been waiting anxiously for the final results of the Trump administration's tariff policy. Without further details, it is impossible for companies to make their next moves.
"The clients have not yet told us what to do or made any order adjustments, as there are so many details not yet disclosed," Jeff Lin, CEO of Wistron, a maker of Nvidia servers and HP and Dell notebooks, told reporters this week. "The market for AI servers would be less impacted due to the continued robust demand, but it is hard to say for consumer electronics products like personal computers and notebooks."
The last, greatest challenge
Ever since Chinese tech champion Huawei was blacklisted by the U.S., China has stepped up efforts to boost its self-sufficiency in tech, particularly in chipmaking equipment, a segment dominated by suppliers from the U.S., the Netherlands and Japan.
Semiconductor Manufacturing International Corp., China's top contract chipmaker, is aggressively expanding the output of 14-nanometer and even 7-nm chips in Beijing, with a mission to even build them entirely with Chinese chipmaking equipment, according to this special project by Nikkei Asia's Cheng Ting-Fang and Lauly Li.
But while China has made progress in almost every chipmaking machine over the past few years, one daunting challenge remains: lithography. This essential step in the manufacturing process determines the ultimate performance of the chip.
The Chinese central government, local governments and top national research institutes are supporting the creation of the country's own supply chain ecosystem for lithography machines, including the development of critical components, optical parts and light sources. Huawei-linked chipmaking equipment supplier SiCarrier, as well as Shanghai Yuliangsheng and Shanghai Micro Electronics Equipment, are among the most eager to see the effort succeed, with the trio's ultimate goal being to build the extreme ultraviolet (EUV) lithography machines.
"It could be in five years, it could be in 10 years, it could be in 15 years. We don't really know," said Didier Scemama, head of EMEA IT hardware research at BofA Global Research. "Is that going to be competitive with what ASML does? [That is] highly unlikely. But it's good enough for China."
Nvidia's aims for China
Nvidia chief Jensen Huang said it would "accelerate the recovery" of its China sales, after a detente between Beijing and Washington allowed the AI chipmaker to resume shipments of a key processor specifically designed for the Chinese market, writes the Financial Times' Eleanor Olcott.
Huang told a press conference in the Chinese capital on Wednesday the company had not yet received export licenses from Washington to restart shipments of its H20 product, but he expected them "to come through very shortly."
Nvidia had reported a $4.5 billion write-down in its April quarter, as the Trump administration tightened export restrictions on advanced chips and it was left with a huge H20 inventory it could no longer ship.
"Some of what we wrote off is hard to recover, but what we put on reserve will not be scrapped permanently," said Huang. The company would make a final decision about whether it needed to restart production of its previous Hopper generation, of which the H20 was part, once customer orders came through, he said.
Huang has met President Donald Trump and policymakers this month, as part of intense lobbying in the U.S. and Chinese capitals by the $4 trillion company. He has warned that America risks forfeiting its leadership in AI to Chinese companies, including Huawei, if it cuts off exports of critical technology.
Beyond tech ties
India, the world's most populous country, is looking to forge deeper economic ties with Taiwan on top of the tech-oriented island's growing manufacturing presence in the South Asian subcontinent, Nikkei Asia's Cheng Ting-Fang and Lauly Li write.
The country sent a ministerial-level delegation to Taipei this week to promote the building of an international financial services hub, the Gujarat International Finance Tech-City. Also nown as GIFT City, the project would, among other things, enable flexibility in financing domestic tech projects.
"We are here to expand the India-Taiwan business relationship, which is very important in this new world order," said K. Rajaraman, the head of the delegation and chairman of the International Financial Services Centers Authority (IFSCA), the body that is overseeing the hub's development and regulation.
"In the Prime Minister [Narendra Modi]'s vision of 2047, one of the most important pillars is technology, and I think Taiwan is the place to be. ... This partnership is completely complementary," Rajaraman said.
There are already more than 250 Taiwanese tech suppliers invested in India, and "all" of them are expanding their footprints, making India one of the key beneficiaries of the supply chain diversification amid the U.S.-China tensions.
China's food fight
China's price war in the food delivery industry continues to spiral out of control, with the three main platforms -- Alibaba Group, Meituan and JD.com -- competing head-to-head to become the ultimate gateway for consumer spending in the world's second-largest market, writes Nikkei Asia's Cissy Zhou.
The battle, ignited by JD, intensified further over the weekend as platforms announced heavier subsidies to woo users, with Alibaba's Taobao pledging to distribute a limited number of coupons worth up to 188 yuan and Meituan trying to match Taobao's offer. JD offered 100,000 servings of premium crawfish for 16.18 yuan, around $2, each to users across the country.
But with the subsidy war lasting longer than expected, it is set to hamper platforms' profits for the second quarter as well as the full fiscal year, analysts warn.
Morgan Stanley, for instance, last week lowered its target price for Alibaba's American Depositary Receipts (ADR) to $150 from $180. The bank noted that Alibaba invested approximately 10 billion yuan ($1.4 billion) in food delivery and instant retail services in the April-June quarter, saying the move has put its short-term profitability under pressure.
South Korea pushes limits of AI in gaming and entertainment
Welcome to the Tech Latest podcast. Hosted by our tech coverage veterans, Katey Creel and Akito Tanaka, every Tuesday we deliver the hottest trends and news from the sector.
In this episode, Katey speaks with Seoul correspondent Kim Jaewon about how South Korea is deploying AI in its gaming and entertainment industries.
Find us on Apple Podcasts | Spotify | Amazon Music | Voicy | YouTube | YouTube Music
Suggested reads
1. Singtel-led group to build 8,900km Asian subsea cable with NEC (Nikkei Asia)
2. US probes imports of drones and critical material in chips and solar panels (FT)
3. How BYD caught up with Tesla in the global EV race (FT)
4. AI will not change humans, says 'Ghost in the Shell' creator (Nikkei Asia)
5. Post Office scandal clouds Fujitsu's AI rally (FT)
6. Panasonic opens second US battery plant in state of Kansas (Nikkei Asia)
7. China approves $35bn Synopsys chip software deal after US eases export curbs (FT)
8. China's top lithium firms trim losses but warn of volatility (Nikkei Asia)
9. US rare-earth refiner bets on chemistry to break China's dominance (Nikkei Asia)
10. China's ecommerce giants battle for instant delivery crown (FT)
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The Diplomat
an hour ago
- The Diplomat
Trump Announces Trade Deal With Philippines, Small Reduction in Tariff Rate
The U.S. leader said that Washington would apply a 19 percent tariff on Philippine imports, while Manila has agreed to remove all of its tariffs on American goods. U.S. President Donald Trump has announced a new 19 percent tariff rate for imports from the Philippines, after a meeting with visiting President Ferdinand Marcos Jr. at the White House. Trump made the announcement in a post on his Truth Social media platform after the meeting with Marcos, calling the Philippine leader a 'very good and tough negotiator.' 'It was a beautiful visit, and we concluded our Trade Deal, whereby The Philippines is going OPEN MARKET with the United States, and ZERO Tariffs. The Philippines will pay a 19% Tariff,' Trump wrote. 'In addition, we will work together Militarily.' Marcos arrived in Washington on Sunday for a three-day trip during which he also met with Defense Secretary Pete Hegseth and Secretary of State Marco Rubio, as well as with U.S. business leaders investing in the Philippines. Speaking to reporters with Marcos, the U.S. leader announced that the two countries were 'very close to finishing a trade deal – a big trade deal, actually.' Trump's announcement comes after he claimed to have finalized similar deals with Vietnam, which negotiated a rate of 20 percent, and Indonesia, whose tariff is now set at 19 percent. (The White House yesterday released more details on the Indonesia agreement, although elements of the agreement with Vietnam have reportedly yet to be finalized.) According to an undated draft of the Philippines-U.S. Agreement on Reciprocal Trade obtained by The Diplomat, the Philippines has agreed to remove nearly all of its tariffs and non-tariff barriers on U.S. imports, including quotas and import licensing requirements, and to bolster intellectual property protections. 'These commitments,' the draft agreement states, 'are intended to enhance reciprocity between the Parties by reducing tariff and non-tariff barriers in the territory of the Philippines and increasing alignment between the United States and the Philippines on economic and national security matters.' The U.S. had a goods trade deficit of $4.9 billion with the Philippines last year, according to the Office of the U.S. Trade Representative. As with the two previous agreements with Indonesia and Vietnam, a higher tariff rate will apply to any goods that are deemed to have been transshipped to the U.S. via the Philippines from any third country (i.e. China). The draft agreement states that the 19 percent rate will not apply in the event that a certain percentage of a good 'originates from certain countries not party to this Agreement.' Neither the exact local content threshold nor the tariff on transshipped goods were finalized in the draft, although Trump announced that the rate for Vietnam has been set at 40 percent. (How transshipped goods are to be identified and verified, and by whom, is yet to be determined in any of these cases.) The draft agreement also contains a number of provisions relating to economics and national security. It states that the Philippines will cooperate with Washington 'to regulate the trade in national security sensitive technologies and goods through existing multilateral export control regimes, align with all unilateral export controls in force by the United States, and ensure that its companies do not backfill or undermine these controls.' The agreement also states that the Philippines 'shall adopt and effectively enforce provisions to combat transshipment and other practices to evade or circumvent duties' and that the U.S. 'shall work with the Philippines to streamline and enhance defense trade.' Most notably, the draft states that the U.S. has the right to terminate the agreement if the Philippines 'enters into a new bilateral free trade agreement or preferential economic agreement' with any 'country of concern.' In light of all of these concessions, and its status as a longstanding and 'ironclad' U.S. security ally, it is surprising that the Philippines was unable to secure a greater reduction in the tariff rate. The 19 percent tariff was marginally lower than the 20 percent threatened by Trump in a letter to Marcos earlier this month, but higher than the 17 percent announced in Trump's 'liberation day' tariff announcement in April. It is also notably worse than the 15 percent rate that Trump announced today with Japan, another U.S. ally. The response on Philippine social media has reportedly been unfavorable to Marcos, with many users calling the Philippine leader 'weak' and stating that the risks of the U.S.-Philippine alliance have not been properly counterbalanced by greater U.S. concessions. In a post on X, Renato Reyes Jr., a member of the left-wing Makabayan political coalition, described the agreement as 'a grossly lopsided 'deal' which is really more of an imposition rather than the outcome of any negotiations' and called on the Marcos administration to 'fully disclose' its terms. The national security analyst Justin Baquisal wrote on X that while it remains to be seen whether these political talking points hurt Marcos' political prospects, 'the lack of better treatment for US allies vs non-aligners (esp compared to the original Liberation Day margins) is not doing anybody favors.' 'Most Reliable Ally' Marcos is the first Southeast Asian leader to visit the White House since the beginning of Trump's second term, a reflection of the warmth of the relationship between the two allies. Speaking to reporters at the start of the meeting in the Oval Office, Marcos described the U.S. as his country's 'strongest, closest, most reliable ally,' while Trump praised the Philippine leader, describing him as coming from a 'great family' with a 'great family legacy.' (Marcos' father, Ferdinand E. Marcos, ruled the Philippines through fear and force for more than two decades, including 14 years under Martial Law.) Aside from the trade issue, security and defense were also on the agenda during the Marcos-Trump meeting. Security cooperation between the two nations has increased markedly in recent years as a result of China's growing maritime power and ambition. During Marcos' three years in office, Beijing has increased the frequency and intensity of its incursions into Philippine-claimed waters, which it claims under its expansive 'nine-dash line' claim, resulting in a string of dangerous encounters between the two nations' coast guards. Under Marcos, the Philippines has opened more of its military facilities to a rotational U.S. presence under the Enhanced Defense Cooperation Agreement, and increased military exercises and joint patrols. The visit did not witness the signing of any new defense cooperation initiatives, but in their meetings with Marcos, both Hegseth and Rubio reaffirmed that the U.S. will come to the Philippines' defense under the Mutual Defense Treaty if its forces, ships and aircraft come under an armed attack, including in the South China Sea – an assurance that has been consistently made since the first Trump administration. Marcos told Hegseth that the assurance of mutual defense 'continues to be the cornerstone' of the U.S.-Philippines relationship and thanked the U.S. for support 'that we need in the face of the threats that we, our country, is facing.' Speaking alongside Trump, Marcos said that 'we are essentially concerned with the defense of our territory and the exercise of our sovereign rights,' adding, 'Our strongest, closest, most reliable ally has always been the United States.' As the AFP news agency reported, Trump 'devoted much of the appearance to attacks on his Democratic predecessors Biden and Barack Obama.' In a possibly significant aside, Trump address relations with China, saying that he would 'probably' visit the country 'in the not-too-distant future.' While taking credit for 'untilt[ing]' the Philippines away from China (the shift in Manila's policy took place under the Biden administration), he said that the Philippines was independent in its dealings with Beijing. 'Do whatever you need to do,' Trump told Marcos, the Associated Press reported. 'But your dealing with China wouldn't bother me at all.'
Asahi Shimbun
an hour ago
- Asahi Shimbun
Asian markets gain, with Japan's Nikkei up 3.5%, lifted by deal on Trump's tariffs
A currency trader watches monitors near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, July 23, 2025. (AP Photo) Asian shares rallied on Wednesday, with Tokyo's benchmark Nikkei 225 index up 3.5% after Japan and the U.S. announced a deal on President Donald Trump's tariffs. The agreement as announced calls for a 15% import duty on goods imported from Japan, apart from certain products such as steel and aluminum that are subject to much higher tariffs. That's down from the 25% Trump had said would kick in on Aug. 1 if a deal was not reached. 'This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it,' Trump posted on Truth Social, noting that Japan was also investing 'at my direction' $550 billion into the U.S. He said Japan would 'open' its economy to American autos and rice. Japan's benchmark Nikkei 225 gained 3.5% in afternoon trading to 41,171.32. Hong Kong's Hang Seng jumped 1.4% to 25,470.25, while the Shanghai Composite index was little changed, gaining less than 0.1% to 3,582.30. Australia's S&P/ASX 200 edged up 0.7% to 8,737.20 and the Kospi in South Korea edged 0.4% higher to 3,183.77. 'President Trump has signed two trade deals this week with the Philippines and Japan which is likely to keep market sentiment propped up despite deals with the likes of the EU and South Korea remaining elusive, for now at least,' Tim Waterer, chief market analyst at Kohle Capital Markets, said in a report. There was a chorus of no comments from the Japanese automakers, despite the latest announcement, including Toyota Motor Corp., Honda Motor Co and Nissan Motor Corp. Japanese companies tend to be cautious about their public reactions, and some business officials have privately remarked in off-record comments that they hesitate to say anything because Trump keeps changing his mind. The Japan Automobile Manufacturers' Association also said it had no comment, noting there was no official statement yet. Japan's Prime Minister Shigeru Ishiba welcomed the agreement as beneficial to both sides. Toyota stock jumped 14% in Tokyo trading, while Honda was up nearly 11% and Nissan added 8%. In other sectors, Nippon Steel, which is acquiring U.S. Steel, rose 2.4% while video game maker and significant exporter Nintendo Co. added 0.7%. Sony Group surged 4.6%. Wall Street inched to another record on Tuesday following some mixed profit reports, as General Motors and other big U.S. companies gave updates on how much Trump's tariffs are hurting or helping them. The S&P 500 added 0.1% to the all-time high it had set the day before, closing at 6,309.62. The Dow Jones Industrial Average rose 0.4% to 44,502.44. The Nasdaq composite slipped 0.4% from its own record, to 20,892.68. So far, the U.S. economy seems to be powering through the uncertainty created by Trump's on-and-off tariffs. Many of Trump's proposed taxes on imports are currently on pause, and the next big deadline is Aug. 1. Talks are underway on possible trade deals with other countries that could lower the stiff proposals before they kick in. Trump said he reached a trade agreement with the Philippines following a meeting Tuesday at the White House, that will see the U.S. slightly drop its tariff rate for the Philippines without paying import taxes for what it sells there. In the bond market, Treasury yields sank as traders continue to expect the Federal Reserve to wait until September at the earliest to resume cutting interest rates. The yield on the 10-year Treasury eased to 4.34% from 4.38% late Monday. In other dealings early Wednesday, U.S. benchmark crude oil gained 15 cents to $65.46 a barrel. Brent crude, the international standard added 16 cents to $68.74 a barrel. In currency trading, the U.S. dollar rose to 146.78 Japanese yen from 146.64 yen. The euro cost $1.1740, down from $1.1754.
Nikkei Asia
2 hours ago
- Nikkei Asia
India to resume issuing tourist visas to Chinese citizens
Ties between China and India have gradually improved, with Chinese President Xi Jinping, right, and Indian Prime Minister Narendra Modi meeting in Russia in October last year. © Reuters HONG KONG (Reuters) -- India will resume issuing tourist visas to Chinese citizens from July 24 this year, its embassy in China said on Wednesday, the first time in five years as both countries move to repair their rocky relationship. Tensions between the two countries escalated following a 2020 military clash along their disputed Himalayan border. In response, India imposed restrictions on Chinese investments, banned hundreds of popular Chinese apps and cut passenger routes. China suspended visas to Indian citizens and other foreigners around the same time due to the COVID-19 pandemic but lifted those restrictions in 2022, when it resumed issuing visas for students and business travelers. Tourist visas for Indian nationals remained restricted until March this year, when both countries agreed to resume direct air service. Relations have gradually improved, with several high-level meetings taking place last year, including talks between Chinese President Xi Jinping and Indian Prime Minister Narendra Modi in Russia in October. China's Foreign Ministry spokesperson Guo Jiakun said on Wednesday that Beijing had noted the positive move. "China is ready to maintain communication and consultation with India and constantly improve the level of personal exchanges between the two countries," he said. India and China share a 3,800 km (2,400-mile) border that has been disputed since the 1950s. The two countries fought a brief but brutal border war in 1962 and negotiations to settle the dispute have made slow progress. In July, India's foreign minister told his Chinese counterpart that both countries must resolve border friction, pull back troops and avoid "restrictive trade measures" to normalize their relationship.
