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Nikkei Asia
3 days ago
- Politics
- Nikkei Asia
TSMC's rosy outlook and Huawei's investment web
Hello everyone, this is Cissy from Hong Kong. This week, the Hong Kong police are on high alert again as Wednesday marked the 36th anniversary of Beijing's bloody crackdown on pro-democracy demonstrators in and around Tiananmen Square in the Chinese capital. Although public mourning over the tragedy has diminished since the implementation of the National Security Law in 2020, some pro-democracy individuals still have been trying in their own ways to commemorate those who were killed. For example, one shop was selling white candles -- like those traditionally used for candlelight vigils to mark the anniversary -- for 6.40 Hong Kong dollars each. Some individuals stopped by Victoria Park, where people had gathered to commemorate the victims of the crackdown for 30 years, with white flowers, but they were soon escorted away by the police. In Causeway Bay, the usual starting point for most protests over the past 30 years, a performance artist chewing gum with her hands in pockets was searched by police and then escorted to a subway station. Even more upsetting is the case of the owner of a white Porsche with the license plate "US 8964." The driver was pulled over and detained by police on June 4 in both 2023 and 2024, and he told local media this week that he has shipped the car outside Hong Kong after his family was harassed and intimidated by unknown individuals over the past year. From its population structure to daily consumption patterns, Hong Kong has changed a lot in the past five years. As I was casually watching the street on Wednesday, I briefly counted the car brands passing me at an intersection in the central business district. In the space of about 5 minutes, the majority of cars that passed by were Tesla, Toyota or Mercedes-Benz. I also saw five Maxus, a brand under the state-owned SAIC, one BYD, one Xpeng and one Zeekr, as EV brands from mainland China are increasingly seen in Hong Kong's streets, while they are caught up in an increasingly ugly war at home as their pricing and inventory tactics draw scrutiny from regulators. Expecting a record Despite geopolitical tensions, tariffs and volatile exchange rates looming over the semiconductor market, the world's largest chip foundry is confident that it will log a record profit this year as AI demand remains strong, writes Nikkei Asia's Cheng Ting-Fang. TSMC Chairman and CEO C.C. Wei said during the company's annual general meeting on Tuesday that tariffs would drive up prices and potentially suppress demand, and that the only thing he fears is a global economic slowdown. Still, he noted that AI chip demand continues to exceed supply, and his recent discussions with Nvidia CEO Jensen Huang have centered on quickly boosting production capacity to address this shortfall. Wei also talked about his company's fresh $100 billion investment in the U.S., saying he announced the total all at once because a smaller figure "wouldn't even make Trump open his eyes." And while he did try to explain to the president how challenging it would be to achieve that five-year plan, Trump -- who Wei described as "warm" -- simply replied, "Do your best!" In the crosshairs Electronics giant Xiaomi is among the Chinese tech groups hit hardest by Donald Trump's latest crackdown on the semiconductor supply chain, write the Financial Times' Zijing Wu and Eleanor Olcott. The U.S. president announced a directive last month instructing electronic design automation (EDA) groups to stop supplying their technology to China. That move will hit a number of Chinese groups that use the American-made software to design their own advanced chips before manufacturing the processors in Taiwan. And Xiaomi is first in line to be affected, according to people with knowledge of the matter. The company unveiled a breakthrough self-designed mobile processor in May. Its chip is on a leading-edge 3-nanometer node of miniaturization and is made in Taiwan with a mix of licenses and tools from now-restricted U.S. EDA companies. Other Chinese groups also using American EDA tools and TSMC's contract manufacturing for their self-designed chips include the world's biggest computer maker Lenovo and bitcoin mining specialist Bitmain, according to industry insiders. Huawei's investment strategy Since Huawei was sanctioned by the U.S. in 2019, the Chinese tech giant has invested in more than 60 chip companies in China to foster its own supply chain, Nikkei's Itsuro Fujino reports. Huawei has been ramping up its investments through Hubble, a wholly owned investment arm established in 2019. Since its inception, Hubble has backed companies spanning chip design, materials, manufacturing and testing. In the majority of these deals, Hubble holds a stake of less than 10%. In addition to its investments through Hubble, Huawei maintains close ties with chip equipment maker SiCarrier. The Shenzhen-headquartered company develops and produces equipment primarily for the front-end process of creating fine circuits on wafers. The company reportedly spun off from Huawei following U.S. sanctions and now operates under the umbrella of the Shenzhen city government. Half the power, just as strong SoftBank and Intel are partnering to develop an advanced AI-specific memory chip that promises a substantial reduction in power usage. The plan involves creating a novel stacked DRAM chip that is distinct from current high-bandwidth memory (HBM) and is expected to halve power consumption, according to Nikkei's staff writers. The project is spearheaded by Saimemory, a newly formed company, leveraging Intel's technology alongside patented innovations from Japanese institutions, including the University of Tokyo. The goal is to complete a prototype within two years, after which a decision will be made on mass production. Targeting commercialization within the 2020s, the project is estimated to cost about $70 million. 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, our host Katey speaks with Seoul correspondent Kim Jaewon about how tech and AI startups are transforming legal services in South Korea -- and the friction this sometimes creates with long-standing industry practices. Suggested reads 2. Indian tech fund sees domestic opportunity akin to 1990s Silicon Valley (FT) 3. Myanmar startup looks to bring 'affordable housing' to Bhutan, India (Nikkei Asia) 4. Cooking robots from Japan to serve US restaurants short on labor (Nikkei Asia) 6. Can the Gulf really become an AI superpower? (FT) 8. The West fears AI's threat to jobs. In Japan, it might save them (Nikkei Asia) 10. The VC industry needs a geopolitical reboot (FT)
Nikkei Asia
29-05-2025
- Business
- Nikkei Asia
Huawei's chemical push and Asia eyes Harvard talent
Hi everyone! This is Cheng Ting-Fang, your techAsia host for this week. I just got back to Taipei from a weekend trip to Singapore to take in the tropical sea views and a Lady Gaga concert -- and for a brief, refreshing break after the Computex trade fair. A news alert this month caught my eye: Zhao Weiguo, former chairman of Tsinghua Unigroup and a prominent figure in developing China's semiconductor industry, was handed a suspended death sentence for corruption. This news triggered a vivid memory of my meeting with Zhao years ago, held in a high-ceilinged meeting room furnished with leather chairs. I still remember the way he swaggered into the room and how he chain-smoked four or five cigarettes. During our hourlong conversation, I found myself surrounded by a haze of white smoke that blurred my eyes as he passionately shared his ambitions for turning China's chip industry into a global player. If Taiwan and South Korea can develop a competitive industry, he said, "China can, too. It just needs time." Tsinghua Unigroup spearheaded the establishment of many chip plants in Nanjing, Chengdu and Chongqing. Zhao himself not only inked a deal to acquire a stake in leading storage player Western Digital, but also announced his company was buying 25% stakes in three leading Taiwanese chip packaging houses. He also secured an investment from Intel for Tsinghua's mobile chip design unit, and even boasted that he would acquire top U.S. memory chipmaker Micron. However, none of Zhao's ambitions materialized before he came under investigation in 2022. Many chipmaking projects were simply scrapped due to a lack of tech and talent, and the Intel-linked venture was terminated. Some chip industry executives even suggested that Zhao's aggressive global shopping spree indirectly contributed to heightened global scrutiny of China's chip and tech ambitions. Such flamboyant aggression stands in stark contrast to the humble attitude of the chip engineers featured in the upcoming documentary "A Chip Odyssey." I attended an advance screening last week of the film, which is slated to go online in mid-June. It highlights Taiwan's semiconductor industry and the engineers who would go on to found the island's leading chipmakers: TSMC, UMC and MediaTek. They recounted Taiwan's transformation from an obscure, internationally isolated island into one of the world's top chip economies. The documentary is filled with people who spent decades working with quiet dedication, away from the spotlight. Indeed, a prevailing view in the chip industry has always been that action speaks louder than words and that success relies entirely on meticulous execution built on years of commitment, rather than flashy presentations or empty promises. However, humility and flawless execution alone are no longer enough to navigate the new challenges facing the chip industry, namely geopolitics and U.S. President Donald Trump. I recently spoke with Arthur Chiao, chairman of memory chipmaker Winbond, whose insights were quite illuminating. "Regionalization" and "customization," he said, will be crucial for securing business in this rapidly changing world. As such, his company's chip design affiliate, Nuvoton, is considering opening new design centers in Canada and India. When asked about the outlook for 2025, however, he had some more immediate advice. "There are some rush orders currently, and we are trying to enjoy this exact moment now. We truly don't know what will happen tomorrow or next month." The only thing to do for now, he added, is "live one day at a time!" Huawei's chemical romance Huawei is a prime example of a company quietly dedicating time and energy to developing cutting-edge technologies. Now, the Chinese tech giant is branching into a new area: chipmaking chemicals. The company, which the U.S. views as a security threat, is supporting a venture that aims to produce "end-to-end" solutions for vital materials and chemicals, Nikkei Asia's Cheng Ting-Fang reports. This includes making a push into the high-end photoresist market, which has long been dominated by Shin-Etsu, JSR and TOK of Japan. Photoresists are used in the process of printing integrated circuits, a key step in chip production. The new venture, called Zhuhai Cornerstone Technologies, has hired experienced professionals from Japan, South Korea and Taiwan over the past two years, and boasts production lines and R&D centers across China, including in Shenzhen and Zhuhai. Chip materials and chemicals need to be of the highest grade and purity, and are just as critical as chipmaking equipment in determining the overall quality of chip production. India investment Apple's main contractor in India is setting up a $1.5 billion component plant near Chennai, despite escalating criticism from President Donald Trump, who wants the company to make iPhones in the U.S., write the Financial Times's John Reed and Tim Bradshaw. Foxconn, which has assembled Apple's devices in India for years, is setting up a display module assembly unit a short drive from another plant in Tamil Nadu state where the Taiwanese company assembles iPhones. The investment would boost Apple's Indian operations, which assemble devices mostly from imported components. Tamil Nadu officials approved the 131.8 billion rupee ($1.5 billion) investment by Foxconn's Indian unit Yuzhan Technology India back in October -- before Trump was reelected -- saying the new display unit would create about 14,000 jobs. Foxconn last week announced a $1.5 billion investment in Yuzhan in a London Stock Exchange filing, but did not say what it was for. This is likely because Apple's pivot from China to India is so sensitive, due to Trump's tariff war and pressure on companies to "reshore" manufacturing back to America. A few hours after the FT's report, Trump threatened Apple and Samsung with 25% tariffs unless they shifted production to the U.S. Xiaomi dips into chips There are other newcomers to the chip war. Xiaomi, the top smartphone maker in China and third largest in the world, is designing its own smartphone chipsets, an area in which only a handful of players remain due to years of consolidation and massive investment. Founding Chairman Lei Jun said only with its own chips can Xiaomi be called a great tech company and touted its new chip as being on par with Apple's offerings. Xiaomi setting its sights on Apple is not the only example of U.S.-China rivalry in consumer tech. Tech giants in both countries, including Google, Microsoft, Alibaba and Tencent, have released a series of more powerful and efficient AI models. The key questions, however, may no longer be whose AI is more powerful, but whose is more useful, Nikkei Asia's Yifan Yu and Cissy Zhou write. The rise of AI agents -- digital assistants capable of performing complex tasks for users -- has become a focal point of the AI race, especially as investors become more anxious to see massive investments in chips and data infrastructure pay off. Asia eyes Harvard talent Many universities in Asia saw an unexpected opportunity to attract top global talent when the Trump administration took steps to dismantle Harvard University's ability to enroll international students, writes Nikkei Asia's Yifan Yu. Leading schools in the region, such as the Hong Kong University of Science and Technology (HKUST) and the University of Tokyo, quickly said that they were considering or open to enrolling Harvard students affected by the move. Adding to the uncertainty, the Trump administration is exploring the possibility of revoking international students' eligibility to seek employment in the U.S. after graduation. Given that Asian students accounted for more than 70% of all international students in the U.S. for the 2023-2024 academic year, these new policies could cause massive disruptions in the flow of global talent. Suggested reads 3. Nvidia chief Jensen Huang condemns US chip curbs on China as 'a failure' (FT) 4. Mitsubishi Electric weighs 'painful' exit from businesses worth $5.5bn (Nikkei Asia) 5. US wins if DeepSeek runs on American AI chips, Nvidia CEO says (Nikkei Asia) 8. (Nikkei Asia) 9. BYD price bombshell raises specter of wider China EV consolidation (Nikkei Asia) 10. Trump's Middle East dealmaking could reshape the global AI race (FT)
