Ukraine war to have ‘long-term impact’ on chip industry

Hello everyone, Nian here in Beijing. Without significant progress in peace talks, inflation caused by the war in Ukraine could have long-term effects on the booming chip industry (The Big Read). Ukraine is also asking Japan for satellite imagery to help resist Russian invasion (Nian’s top 10). China’s actions to contain a new round of Covid-19 outbreaks continue to impact the global supply chain, prompting multinationals to diversify sourcing beyond the country (Our Take). Have fun while reading!

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The Big Story – Exclusive

The war in Ukraine is expected to be a “long-term effect“ about the chip industry, says a leading Taiwanese industrialist. Inflation, which is already gaining momentum in Europe, is a major risk as it may affect consumer spending power.

Important Developments: “We are already seeing a significant increase in energy prices in Europe, which will affect the purchasing power of consumers there. I don’t expect anything from it [inflationary pressures] return immediately even if the war ends soon,” said Arthur Chiao Yu-cheng, chairman of Winbond Electronics, a Taiwanese memory chip maker and key supplier to Apple and Samsung.

“This will likely have long-term implications,” he added.

Chiao’s comments come as the chip industry is in the midst of a super cycle, a period of sustained expansion fueled by robust demand. At the same time, the disruptions caused by Covid-19 have led to widespread cost increases in everything from logistics to raw materials. The sudden outbreak of the Ukraine war has increased inflationary pressures.

Result: Chiao’s comments are significant because they add a touch of caution to the general bullish sentiment on the outlook for chip demand in the current super cycle.

Nian’s top 10

  1. Exclusive: Ukraine searches high res Satellite images from Japan to understand better Russian troop movements. (Nikkei Asia)

  2. of India trust takes over more than 800 branches of local retail chain Future and meets Amazon’s ambitions in the country. (FT)

  3. the Philippines should enable foreign companies to do this fully owned companies in key sectors such as telecoms and airlines. (Nikkei Asia)

  4. Japan plans his Air Taxi Debut with eight routes and 20 flights per hour at Osaka World Expo 2025. (Nikkei Asia)

  5. Singapore and Hong Kong But now they all have their SPAC entries Investors remain cautiousStop Asia from recreating a US Boom. (Nikkei Asia)

  6. of China Alibaba Share buyback increased $25 billion plan to boost investor confidence and save share price. (FT)

  7. South Korea Avikus develops navigation systems for self-propelled boats, promising security improvement. (Nikkei Asia)

  8. Japanese Auto parts maker Sumitomo Electric wants relocate production from Ukraine to Romania and Morocco. (Nikkei Asia)

  9. Burma Military approve deal that allows Norwegian Telecom operator Telenor to exit the country. (Nikkei Asia)

  10. FT’s Tim Harford on what kind abusive chatbot can tell us something about the art of conversation. (FT)

Air taxi operators for Osaka World Expo will be selected as early as fiscal year 2022. German start-up Volocopter is among those looking to go live with a local partner in Japan © Guglielmo Mangiapane/Reuters

Our opinion

When Apple providers Foxconn In the past week, production has been suspended at several plants in Shenzhen. Some workers in online chat groups hailed the rare three-day break.

The seemingly brief disruption sparked by Shenzhen’s citywide lockdown amid a spate of Covid-19 cases could see Foxconn’s revenue shrink by as much as 3 percent this year. What’s more, it means customers in the US and Europe may have to wait even longer for their new iPhones and MacBooks.

As the rest of the world gradually lifts Covid restrictions, China’s adherence to a strict “zero Covid” policy has become one of the biggest threats to already strained global supply chains.

In January, Volkswagen and Toyota closed its factories in Tianjin for more than a week to comply with the city’s Covid control measures. Now the same situation is happening at their factories in the northeast city of Changchun. Samsung and micronMemory chip production in Xi’an was also halted earlier this year when the city’s 13 million residents were ordered to stay home for a month.

Analysts warn that companies will look to diversify their supply chains from China if restrictions continue, a trend that has already started with the US-China decoupling. Since 2020, Japan has been paying its tech companies billions of dollars to build local supply chains or shift manufacturing from China to ASEAN countries.

For example, Murata manufacture – the world’s largest capacitor manufacturer and an Apple supplier – opens a new plant in Thailand In the next year, it could one day match its factory in China in size. The company generates more than half of its sales in Greater China, but now expects that share to decline.



© Kyodo/Reuters Connect

Taro Shimada, the new President of Toshiba, delivered with typically Japanese modesty: “I’m the first president to understand digital technology,” he said this month.

But investors will want to see action, not just words, from Shimada, a relative newcomer to the company who joined the company in 2018 after working for foreign multinationals, including a German competitor Siemens.

Shimada sees the Japanese company as a “treasure chest” of technology and data that, if deployed, “will once again show the world Toshiba’s brilliance.”

Observers say this could be the last chance to stage a comeback after missteps and clashes with shareholders.

Toshiba’s commitment to enterprise customers and its willingness to bend down for it Holdings of Tokyo Electric Power Co and others may have prevented it from furthering its own digital development for years. A corporate culture of subservience to top management must also change so that new ideas can emerge in the company.

When wise speak

  • Gregor Arcuri and Samantha Lu give this analysis one of the hottest topics in geopolitics right now: how Taiwan’s dominance of semiconductor supply chains might influence China’s calculus of conquering the island.

  • Rebekah Arcesati of Merics explores what China is like export his vision for the digital transformation and e-governance in the world, especially in the Global South.

art of the deal

Flying cars are becoming less futuristic by the day. A deal from Suzuki engine work together with a Tokyo-based start-up Sky Drive aims to make vertical takeoff and landing (VTOL) aircraft a reality.

The companies will consider collaborating on research and development and the development of mass production capabilities. They will also consider a joint venture into India, Suzuki’s largest market.

The trading company SkyDrive, founded in 2018, counts Itochu among its investors. It is one of Japan’s leading VTOL players and held a public demonstration of manned VTOL flight in 2020.

SkyDrive is currently working on a two-seater model and aims to offer a flying car service at Osaka Expo in 2025 (see Nian’s top 10). Other Japanese automakers are also making inroads into VTOLs. Honda engine aims to commercialize a hybrid model with a range of around 400 km in the 2030s that could be used to transport passengers between cities in North America. Toyota engine invested $394 million in a US start-up Joby aviation in 2020.

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Ukraine war to have ‘long-term impact’ on chip industry Source link Ukraine war to have ‘long-term impact’ on chip industry

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