Hello everybody! This is Ting-Fang from Taiwan. I got a call over the weekend from a real estate agent I interviewed a few months ago about the construction boom near Taiwan Semiconductor Manufacturing Co.’s proposed chip fab in the southern city of Kaohsiung.
The agent asked if I was interested in investing in property there and indicated that there was some flexibility in pricing. Her stance was in stark contrast to our last conversation, when she said that “no discount is possible” for presale high-rise apartments.
This exchange is just a small expression of how optimism about the chip industry is gradually cooling. After nearly two years of rapid growth, chipmakers are facing growing concerns about inflation, slowing consumer demand and a possible recession.
Stock prices are another sign of this new gloom. TSMC’s share price is down about 30 percent year-to-date, while top chipmakers like Nvidia and MediaTek are down nearly 50 percent.
Meanwhile, US memory chipmaker Micron is cautious about the outlook for the second half of 2022, while smaller rival Nanya Tech has signaled a slowdown in demand for cloud computing and servers, once its strongest segments.
Hungry for CHIPS
Against this bleak backdrop stand CEOs of major companies from Intel to TSMC and Amazon to GM pressure on the US government Pass the $52 billion CHIPS bill before the end of July Yifan Yu writes with Nikkei Asia.
The US has been the most vocal of global economies calling for more chip manufacturing to be brought ashore. The CHIPS law was introduced over two years ago with the aim of boosting investment and innovation in the domestic semiconductor industry through tax breaks and other incentives. But it has suffered without funding as strained domestic politics hampers progress.
Now both American and Asian chipmakers are warning that unless Washington pulls together, they will have to delay or scale back investment in the US. These include Intel and GlobalFoundries from the USA as well as GlobalWafers from Taiwan, the world’s third largest supplier of wafer material.
“We have all eyes on the CHIPS Act and all related investment incentives and support,” said Doris Hsu, Chair and CEO of GlobalWafers. “That would really help us offset the high cost of production in the US.”
Hopes are high that the law will pass this month before Congress goes on its month-long hiatus in August.
Hsu, whose company plans to build a $5 billion plant in Texas, spoke for many in the industry when she explained her impatience to act: “We have promises to our customers and we can’t wait forever!”
TSMC has launched its largest recruitment drive yet to ensure it has enough engineers and technicians to keep its historic $100 billion expansion plans on track. Since 2019, the world’s largest semiconductor company by market cap has increased its workforce by 27 percent to more than 65,000.
But attitude is only half the battle. TSMC demonstrated this to be the case in its most recent annual ESG report Difficulty retaining new employees As an all-out battle for chip talent rages on in Taiwan and beyond, Nikkei Asia’s Cheng Tingfang and Lauly Li write. The chip titan’s turnover rate for new hires rose to 17.6 percent in 2021, far exceeding the company’s overall revenue of 6.8 percent. It was also a sharp increase from a 13.4 percent new hire turnover rate in 2019, despite the company’s stated goal of bringing it down to 10 percent by 2030.
Chinese students have been enticed to work for a secretive tech company accused by the US of conducting cyberespionage on behalf of Beijing’s intelligence agency, according to the Financial Times. Eleanor Olcott and Helen Warell write.
The FT contacted 140 foreign language graduates who appeared on a leaked list of Hainan Xiandun applicants compiled by security officials in the region to confirm the authenticity of the applications. The company was accused in a 2021 US federal indictment of being a cover for the Chinese hacking group APT40.
The students applied to Hainan Xiandun, based on the southern island of Hainan, after the company solicited applications on university application pages without making clear the nature of the work or the potential risks involved.
Some people on the list shared their experiences with the hiring process, which included translation tests of sensitive documents obtained from US government agencies and research directions from people at Johns Hopkins University.
APT40 is known to appeal to western biomedical, robotics and maritime research institutions. Hacking on this scale requires a huge workforce of English speakers who can help identify hacking targets, cyber technicians who can access adversaries’ systems, and intelligence officers to analyze the stolen material.
Even after the US tried to disrupt the group’s activities last year by indicting several figures linked to Hainan Xiandun, a second company, Hainan Tengyuan, continued soliciting recruits for cyberespionage work.
A deeper rift?
Beijing proposes national technology standards that would effectively serve foreign technology manufacturers a blatant choice: Increase local sourcing of key components for products sold in China or exit the world’s largest market, Nikkei’s Shunsuke Tabeta writes.
Office equipment such as printers and multifunction copiers would be the first products to fall under the new regulations, which could come into effect as early as next year. The proposed rules, which have been under review since April, require key components and parts such as chips to be designed, developed and produced in China. Providers of critical information infrastructures are also asked to procure products that comply with national standards.
China’s move to establish stricter national technology standards goes beyond a previous focus on protecting security technology, a move aimed at creating a self-contained domestic supply chain. These new rules would likely increase the market share of Chinese-made tech components, but more worryingly, they indicate ongoing pressure to “decouple” US and Chinese supply chains as geopolitical tensions continue to simmer.
Nomura and SBI plan to launch digital token operations (Nikkei Asia)
#techAsia is coordinated by Katherine Creel of Nikkei Asia in Tokyo, with support from the FT Tech Desk in London.
Waiting on Washington and China’s unwitting hackers Source link Waiting on Washington and China’s unwitting hackers