Hi there everybody, that is Cissy in Hong Kong.
Donald Trump has signed a flurry of government orders since being sworn in as US president final month, and it’s driving many individuals all over the world loopy.
Simply prior to now week, sellers on Chinese language cross-border ecommerce platforms like Temu, Shein and AliExpress had been racing into the unknown as Trump put his stamp on commerce and customs coverage. First, he eradicated the de minimis rule that allowed objects valued beneath $800 to enter the US with out tariffs, then he paused the repeal as packages piled up on the US customs.
The US Postal Service stoked additional chaos when it suspended inbound parcels from China and Hong Kong, however once more a reversal got here, this time the exact same day. A number of sellers on these Chinese language platforms informed me they’ll’t imagine how fickle the US authorities is changing into and that they’ve seen gross sales drop as much as 30 per cent since Trump’s actions towards these on-line retailers. Some mentioned they’re even excited about shifting to completely different platforms, together with Amazon.
Though Trump paused his “stunning” tariffs on Mexico and Canada, Chinese language corporations which have crossed the Pacific prior to now three years to arrange factories alongside the US-Mexico border to keep away from tariffs could need to rethink their provide chains as soon as once more as geopolitical tensions unfold past simply Washington and Beijing.
Provide chain relocation spurred by geopolitical tensions at all times pursuits me. It additionally jogs my memory of a humorous encounter with Terry Gou, the founding father of Foxconn, Apple’s largest contract producer, in early 2020 after I was in Taiwan masking the presidential election within the self-ruled island. I doorstepped Gou at a polling station and requested him if he would think about transferring Foxconn’s Chinese language services out of China amid geopolitical tensions. He didn’t reply my query and appeared indignant. “Which media outlet are you from?” he requested me. His spouse Delia Tseng was very pleasant, although, as she tried to consolation me by patting my head and saying, “It’s OK, it’s OK.”
Apple, Foxconn’s largest consumer, is not any stranger to political tensions, having shifted a good portion of manufacturing from China to different Asian international locations in recent times. Now it’s contemplating additional diversification amid native regulatory strain.
Made in Indonesia?
Apple has been talking with suppliers concerning the feasibility of establishing iPhone last meeting in Indonesia, because the US tech big works to carry a authorities gross sales ban on the iPhone 16 collection, sources informed Nikkei Asia’s Lauly Li and Cheng Ting-Fang.
If the transfer is realised, it will mark Apple’s first iPhone meeting within the south-east Asian nation, which at present lacks a sturdy provide chain for the gadget. Indonesia banned gross sales of the iPhone 16 final yr after Apple failed to fulfill the requirement that no less than 35 per cent of a smartphone’s parts be domestically made. Apple has been locked in months-long negotiations with Indonesia because the ban.
One iPhone assembler has arrange a subsidiary in Batam significantly for Apple and has began hiring engineers as a part of the preparation, based on one supply. One other supply mentioned it will take no less than a yr to construct an iPhone facility in Batam if the choice is finalised.
Though Apple’s smartphone market share in Indonesia is barely about 1 per cent, the potential for progress is important given the slowdown in international gross sales and hurdles within the Chinese language market amid tensions with the US
Memorable progress
China’s main producer of reminiscence chips is quickly gaining international market share on the expense of South Korean opponents, strengthening Beijing’s drive to cut back its dependence on overseas know-how, write the Monetary Instances’ Christian Davies, Track Jung-a and Zijing Wu.
CXMT — ChangXin Reminiscence Applied sciences — elevated its share of the $90bn international DRam reminiscence market from near zero in 2020 to five per cent final yr, based on Shenzhen-based consultancy Qianzhan.
The corporate can also be spearheading China’s efforts to interrupt into the marketplace for so-called high-bandwidth reminiscence (HBM), an important part in operating AI programs akin to Open AI’s ChatGPT.
G Dan Hutcheson, vice chair of consultancy TechInsights, mentioned that CXMT’s speedy progress within the extremely commoditised DRam sector was producing a “snowball impact”.
“The extra market share you achieve, the bigger your quantity, the upper your yields go, the decrease your prices and the extra market share you achieve once more,” mentioned Hutcheson. “That’s precisely how the Koreans pushed the Japanese out of the reminiscence sector within the Nineteen Eighties and Nineties.”
Autonomous for all
Tesla could have motive to fret once more. As approval for its FSD (full self-driving) system in China faces delays, its most formidable rival, BYD, has pledged to “democratise” autonomous driving with its newest God’s Eye system, writes Nikkei Asia’s Cissy Zhou.
In a high-profile press convention held at its international headquarters in Shenzhen on Monday evening, BYD founder Wang Chuanfu introduced the corporate would deploy its most superior self-driving system in almost all of its fashions so as to make the know-how accessible to everybody, as good driving is changing into a key battlefield for auto gamers.
At the moment, most automobiles outfitted with autonomous driving know-how are priced above Rmb200,000 ($27,300) within the nation, however most BYD fashions beneath Rmb100,000 would have the know-how.
The Chinese language EV big’s transfer is anticipated to speed up a market shake-up, with smaller automakers already dealing with consolidation. For these nonetheless lagging in good transformation, this isn’t only a check of technological progress however a struggle for survival.
Rockier than feared
The newest US export controls on China’s chip sector are inflicting more disruption than anticipated, as TSMC, the world’s high contract chipmaker, takes a strict compliance strategy, sources informed Nikkei Asia’s Cheng Ting-Fang.
TSMC has knowledgeable Chinese language purchasers utilizing its 16nm or higher manufacturing applied sciences that it can’t ship orders to them until they use chip packaging providers from a US-approved provider. Initially, the trade believed the restrictions focused solely AI chips with over 30bn transistors, however TSMC, after consulting authorized specialists and the US Commerce Division, has prolonged the coverage to all functions.
This transfer is a significant setback for Chinese language chip builders engaged on every thing from cell units to autonomous driving. Firms now face pressing selections: change to accepted packaging suppliers or search US approval to proceed working with TSMC.
Instructed reads
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Is DeepSeek next in line for a TikTok-like US ban? (Nikkei Asia)
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Top China chipmaker SMIC says tariff war sparking ‘rush orders’ (Nikkei Asia)
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Arm’s CEO on the future of AI and why he does not fear DeepSeek (FT)
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Japan Display explores sale of former iPhone LCD plant (Nikkei Asia)
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Modi calls for AI governance and standards at Paris AI summit (Nikkei Asia)
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SoftBank’s Masayoshi Son and OpenAI’s Sam Altman bet on AI — and each other (FT)
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Taiwan and TSMC rush to head off Donald Trump’s tariff threat (FT)
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SoftBank falls to $2.4bn loss amid plans for huge AI investments (FT)
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China’s tech stocks enter bull market after DeepSeek breakthrough (FT)
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From Toyota to Nissin, Japan companies open spigot on US investment (Nikkei Asia)
#techAsia is co-ordinated by Nikkei Asia’s Katherine Creel in Tokyo, with help from the FT tech desk in London.
Join here at Nikkei Asia to obtain #techAsia every week. The editorial staff might be reached at techasia@nex.nikkei.co.jp.
