Hello everybody, that is Lauly, sending greetings from wet and windy Taipei.
It’s been two weeks because the US presidential election, and but the commonest matter of dialog amongst Asia’s tech suppliers remains to be President-elect Donald Trump’s return to the White Home.
An govt with a server and pocket book laptop provider informed me that the very first thing his American shopper requested him days after the election was: “Are you prepared?”
Peter Chen, chair of Taiwanese electronics maker Qisda, informed an traders convention that his “coronary heart began to fret” and that he nonetheless remembered the 4 years below the Trump administration earlier than and through Covid.
Moreover, at a latest media dinner with a tech provider, one of many executives half-jokingly stated the occasion was speculated to be celebratory however the temper was now clouded by uncertainty in regards to the future.
Most tech suppliers Nikkei Asia reporters have been in contact with are bracing for increased tariffs on China or elevated strain to spend money on the US However the good factor is: this time, they’re higher ready. After years of a Washington-Beijing commerce struggle, a good portion of tech manufacturing capability has been shifted from China to south-east Asia, India and North America.
An govt at a provider to Apple and Microsoft informed me his firm has drafted “contingency plans for 18 situations” ought to the commerce struggle between the world’s two largest economies escalate. Whereas he might have been exaggerating for impact, he was severe when he stated his firm can rapidly add extra capability outdoors of China if wanted, which is totally totally different than when the commerce struggle began six years in the past.
However even when suppliers can alter manufacturing capability on the fly, the know-how race between the 2 superpowers guarantees to carry much more challenges. All eyes, particularly within the semiconductor trade, will likely be on how tensions play out after January.
We’ve already seen the Biden administration rush to finalise $6.6bn in Chips Act money for Taiwan Semiconductor Manufacturing Co, the world’s largest contract chipmaker, forward of Trump’s return to workplace. That announcement additionally got here with considerably shocking information that TSMC would ultimately produce its upcoming A16 chips, essentially the most cutting-edge providing in its product highway map, in Arizona, too.
China, in the meantime, not too long ago launched an in depth set of export control regulations overlaying many chemical substances, uncooked supplies, tools and metals which are generally used within the international tech provide chain, defence tools, aviation and spacecraft.
As an Apple provider govt as soon as informed me: “There’s no crystal ball to foretell the long run. However what is certain is that we have to buckle up and brace for a bumpy highway forward.”
Additionally, ensure that to hitch us on November 28 for a webinar with Chris Miller, creator of Chip Battle, Yeo Han-koo, former commerce minister of South Korea, and our personal chief tech correspondent Cheng Ting-Fang as we delve into this ever-changing trade. Register here and remember to submit your questions for the panel forward of time.
Photo voltaic eclipse
China’s full line-up of cost-competitive photo voltaic vitality merchandise have develop into a simple reply for Asian governments and firms seeking to obtain formidable inexperienced vitality objectives. Such provide chain dominance, overlaying every of the important thing sectors in photo voltaic vitality infrastructure, is difficult to interrupt, write Nikkei Asia’s Cheng Ting-Fang and Lauly Li.
This tech function begins with a walk through a solar energy farm nestled amid the durian and pine bushes of Kulim, Malaysia, and continues on a journey by means of the availability chain of photo voltaic panels, inverters, chip supplies and extra. Interviews with shoppers and opponents reveal how Chinese language gamers have come to dominate the worldwide trade, regardless of US tariffs and different commerce limitations.
Washington has accused Beijing of unfairly subsidising its photo voltaic trade, however whether or not the incoming Trump administration will take the identical strategy is an open query.
Reaching out
Main Chinese language tech firms try to poach high US synthetic intelligence expertise that may assist them speed up the race to revenue from generative AI, writes the Monetary Occasions’ Eleanor Olcott.
Alibaba, ByteDance and Meituan have all been constructing their AI teams in California in latest months, regardless of Washington’s efforts to curb China’s growth of the cutting-edge know-how.
Chinese language tech teams are banned from importing the highest-end Nvidia AI chips to China, however there are not any restrictions towards them from accessing the silicon to energy model-training within the US.
Alibaba is recruiting an AI crew in Sunnyvale in California’s San Francisco Bay Space and has approached engineers, product managers and AI researchers who’ve labored at OpenAI and the most important US tech teams, in response to three folks aware of the matter.
ByteDance has essentially the most established AI footprint in San Jose, with a number of groups engaged on totally different initiatives, together with one targeted on integrating AI options into TikTok.
However these firms face an uphill battle in convincing high expertise to leap ship, even with enticing compensation packages and guarantees of extra obligations. Trade insiders stated that American tech staff who help Chinese language AI growth danger getting caught up in geopolitical tensions and Washington’s elevated scrutiny of Chinese language tech teams.
Getting ready for strain
China is accelerating efforts to boost domestic chip production amid an anticipated improve in strain from the US below a second Trump administration, Nikkei’s Shunsuke Tabeta writes.
The Chinese language self-sufficiency fee in semiconductors has risen from round 14 per cent in 2014 to 23 per cent in 2023 and is predicted to achieve 27 per cent in 2027, in response to information from Canadian analysis agency TechInsights.
The state-backed China Built-in Circuit Trade Funding Fund, or the Huge Fund, as it’s generally identified, has performed a vital function on this progress. The fund’s first part launched in 2014 with registered capital of Rmb138.7bn ($19.2bn at present charges). The second part adopted in 2019 with Rmb204bn, then a 3rd this Could with Rmb344bn.
However Chen Nanxiang, chair of China’s main reminiscence chipmaker Yangtze Reminiscence Applied sciences Co (YMTC), has warned that “adjustments and dangers” within the international atmosphere and tighter restrictions on China’s entry to US know-how are anticipated.
$3bn, 480 petaflops, one objective
Taiwan plans to spend roughly $3bn over the following three years on synthetic intelligence information centres and purposes to cement the democratically dominated island’s main place within the international tech provide chain, the federal government’s high science official informed Nikkei Asia’s Thompson Chau, Cheng Ting-Fang and Lauly Li in an unique interview.
Wu Cheng-wen, minister of science and know-how, stated the federal government plans to price range about $1bn annually to bolster Taiwan’s AI prowess. This features a objective of accelerating the federal government’s whole computing functionality from 20 petaflops to 480 petaflops over the following 4 years so as to improve “AI sovereignty”, or the flexibility of a state to develop and management the know-how.
Petaflops are a unit of measurement used for calculating computing efficiency. One petaflop is equal to 1,000tn floating-point operations per second.
Wu stated the Lai Ching-te administration can also be eager to strengthen co-operation with the US below Trump, and that Taiwan is keen to share know-how with international democratic allies, together with the US, Japan and Germany. Such a collaborative strategy will permit Taiwan to “foster mutual progress with pleasant nations”, Wu stated.
Prompt reads
-
EU to demand technology transfers from Chinese companies (FT)
-
Robots and rails give Vietnam supply chains facelift (Nikkei Asia)
-
Japan proposes $1.3bn investment in Rapidus (Nikkei Asia)
-
LG adds software jobs in Vietnam as country moves up value chain (Nikkei Asia)
-
China’s smartphone makers head upmarket in European push (FT)
-
Xiaomi’s EV success clouded by shrinking smartphone margins (Nikkei Asia)
-
EV batteries are getting cheaper, but can they be safe too? (Nikkei Asia)
-
TSMC secures $11.6bn in funding as US Chips Act faces uncertain future (FT)
#techAsia is co-ordinated by Nikkei Asia’s Katherine Creel in Tokyo, with help from the FT tech desk in London.
Enroll here at Nikkei Asia to obtain #techAsia every week. The editorial crew might be reached at techasia@nex.nikkei.co.jp.
