US-China Tech War:
The technology war between the United States and China has been going on with the roll-out of the 5G next generation broadband wireless technology. China has developed its 5G technology in an attempt to become independent of the technology developed and controlled by companies in the United States and other western nations. US has been actively trying to stop adoption of Chinese company Huawei's 5G technology in Europe, East Asia, Australia and New Zealand. So far, the US has had limited success while China's Huawei is continuing to win customers around the world.
Tech Supply Chain Bifurcation:
President Trump has also attempted to block Chinese companies' access to semiconductor components and software developed and sold by US companies. Both Huawei and ZTE have been riding a roller coaster with President Trump's daily tweets on this issue. It has affected reliable access to communication chips, Android operating systems and Google apps store.
The net result of it is that the Chinese have lost faith in US companies' reliability. They are now seeking to to create their own supply chain free of companies from US and its close allies in Europe, East Asia and elsewhere.
China's Plans:
China is currently a net importer of technology. The country wants to move “up the value chain” from final product assembly using imported components to creating advanced technology in China itself, but imports of chips and technology will be the norm for many years to come, according to a report by James Lewis of Center for Strategic and International Studies (CSIS) based in Washington DC.
As of now, only 16% of the semiconductors used in China are produced domestically, and only half of these are made by Chinese firms. It is dependent on foreign suppliers for advanced chips. China aims to produce 40% of the semiconductors it uses by 2020 and 70% by 2025, according to the CSIS report.
Opportunity For Pakistan:
China will need 500,000 engineers trained in chip development over the next 5 years to meet its goal of producing 70% of semiconductors within the country, according to Pakistani-American entrepreneur Dr. Naveed Sherwani who presented at the Invest in Pakistan Summit in Silicon Valley.
Naveed and his wife Sabahat Rafiq see this as an opportunity to train a significant number Pakistani engineers in semiconductor chip development to meet China's needs. This will help develop Pakistan's tech-oriented human capital and open up the possibility for Pakistan to build its own chip design and development industry.
Sabahat said she is already training some engineers at an institute in Lahore for this purpose. She is hoping to expand it to accommodate more trainees in near future.
Naveed currently heads SiFive, a Silicon Valley startup specializing in RISC V microprocessor cores for customized systems on chip (SoC) development. RISC V is an open source chip architecture developed at UC Berkeley. It is the hardware equivalent of open source Linux OS software. Naveed is promoting SiFive in both China and Pakistan for "low-power embedded microcontrollers (as small as 13.5k gates) to multi-core applications processors".
Cloud Design:
Naveed talked about the availability of cloud-based advanced chip design tools that Pakistani chip designers can take advantage of. Among the top vendors offering such tools is Amazon Web Services (AWS).
AWS says it "offers a secure, agile, and scalable platform with a comprehensive set of services and solutions for high performance design, verification, and smart manufacturing, supporting electronic design automation (EDA) and rapid semiconductor innovation in the cloud. Semiconductor companies, including fabless and integrated device manufacturers, and their IP and foundry partners can benefit from the massive scale of AWS infrastructure to design next gen connected products".
Here's how AWS describes its cloud-based chip design tools offering:
"Semiconductor design simulation, verification, lithography, metrology, yield analysis, and many other workloads benefit from the scalability and performance of the AWS Cloud. For example, compute performance for these applications is enhanced by latest generation EC2 instance types, including the z1d. Run more jobs per core with z1d, the fastest single thread performance of any cloud instance delivering 4GHz sustained CPU, 16 GiB RAM per core, and local NVMe storage. Our virtually unlimited cloud storage and high performance computing (HPC) capability enable you to innovate faster, rapidly design and verify new products, and scale seamlessly to meet increasing demand".
Summary:
US-China technology war has recently been triggered by US President Trump's actions against Chinese technology giants Huawei and ZTE. In response to the US threat to restrict access to American core technology, China is aiming to develop and produce 40% of the semiconductors it uses by 2020 and 70% by 2025, according to the CSIS report. China needs about 500,000 engineers to achieve this goal. Can Pakistan, a reliable ally, train and provide some of these engineers? Pakistani-American entrepreneur Dr. Naveed Sherwani and his wife Sabahat Rafiq believe the answer is an emphatic Yes. This will help develop Pakistan's tech-oriented human capital and open up the possibility for Pakistan to build its own chip design and development industry.
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#China enables #Pakistan to become a #defense exporter. #Technology transfers from China have enabled Pakistan to begin producing #military hardware on its own. It's true with the fighter jet that now forms the backbone of #Islamabad's defense strategy.
ReplyDeletehttps://asia.nikkei.com/Politics/International-relations/China-enables-Pakistan-to-become-a-defense-exporter
When Pakistani Prime Minister Imran Khan began a high-profile trip to Beijing on Tuesday, he was closely shadowed by influential army chief Gen. Qamar Javed Bajwa. But while Khan met with senior Chinese leaders and businessmen, Bajwa was being received by senior army generals, an indication of the close defense ties between the countries.
Those ties are so close, in fact, that China is helping Pakistan become a defense exporter that sells arms to countries like Myanmar and Nigeria.
Pakistan has relied on Chinese military hardware for more than five decades, though Islamabad has used every opportunity to also gain access to Western defense equipment, notably from the U.S.
Pakistan's leaders have long lamented their country's lukewarm ties with the U.S., which have sometimes resulted in reduced arms supplies. This contrasts to the situation with China, which has gradually but consistently nurtured Pakistan as a close ally.
Technology transfers from China have enabled Pakistan to begin producing military hardware on its own. This is true with the fighter jet that now forms the backbone of Islamabad's defense strategy. Pakistan is also increasingly foraying into the production of tanks and other equipment for land forces thanks to technology transfers from China.
Similarly, Chinese hardware is allowing Pakistan to expand its navy.
According to senior government officials who spoke to the Nikkei Asian Review, in the past year Pakistan has redoubled its push to sell batches of JF-17 Thunder fighters that it has built with Chinese assistance. Pakistani government officials said the JF-17 Block III, a version of the JF-17 that will be rolled out in 2020, will include more advanced radar, additional weaponry and other new technologies.
Officials in Islamabad say China has repeatedly helped Pakistan create a more commercially feasible defense industry so that purchasing expensive hardware does not cripple the country's already weak economy.
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"Affordability and high quality are the main selling points of the JF-17," said retired Air Marshal Shahid Latif, a former Pakistan Air Force general previously involved with the JF-17 production project. Encouraged by the publicity given to Myanmar's purchase, Pakistan in the past year has discussed future sales to Malaysia and Azerbaijan as well as sales of additional fighters to Nigeria, which now has three JF-17s.
In the coming years, Pakistan's reliance on Chinese military hardware will grow. China has signed a contract to supply eight new submarines to Pakistan's navy, the largest defense deal ever between the countries. Although neither party has revealed the value of the contract, Western defense analysts say it could be worth from $4 billion to $5 billion depending on weapon systems and other add-ons.
A More Peaceful #Pakistan Puts On An IT Charm Offensive In #SiliconValley. #Technology #Investment via @forbes https://www.forbes.com/sites/dbloom/2019/10/14/a-more-peaceful-pakistan-puts-on-an-it-charm-offensive-in-silicon-valley/#3dd803901841
ReplyDeletePakistan is pushing its IT sector to U.S. companies and investors, hoping international deals will translate to a bottom-line boost for the country’s struggling economy.
The most visible part of this charm offensive came earlier this month with a day-long Silicon Valley conference in San Jose, Calif., backed by the Pakistani government.
“If I were to look at our overall economic performance, the IT sector comes out as one that has performed the best,” said Asad Majeed Khan, the Pakistani ambassador to the United States and one of the conference speakers. “The whole idea of doing the tech summit was to inform the companies in the Silicon Valley about what is our potential and what is it we can do together. ”
More than 200 attendees heard pitches from 14 Pakistani startups seeking venture capital, along with panels on microelectronics, software development, artificial intelligence, gaming, medical innovation, and venture capital funding.
“Over the years, the government has not done as much as it should have in terms of focusing on expanding the IT sector,” Ambassador Khan. “In past two or three years, though, we’ve seen some phenomenal growth.”
In part that’s because the country’s charismatic new prime minister, former international cricket star Imran Khan, has made the economy his top priority.
“The economy is his primary and principal focus,” Ambassador Khan said. “The manner in which he’s approaching foreign policy is rooted in his desire to turn around the economy and provide jobs for the people.”
As part of a broader set of initiatives, the country is trying to grow its already substantial tech sector and attract international investment, especially from the United States and neighboring China, which already has built a vast deep-sea harbor and naval port in Gwadar, on the Arabian Sea, as part of the China-Pakistan Economic Corridor.
Pakistan already generates at least $4 billion a year in IT exports, though the ambassador said the number is likely higher because some IT-related payments get lumped in with international remittances. The biggest areas of operation are software development, Business Processing Offices and call centers. Now, the country hopes to move into more high-end sectors such as AI, gaming and visual effects. One potential opportunity discussed at the San Jose conference is moving into RISC-V microchip fabrication and export.
“Our IT success story is not as widely known and as widely shared as it should be,” Ambassador Khan said. “If you were to only compare the numbers, the actual potential, then Pakistan has really come a long way in terms of harnessing the IT potential.”
Can a Negative Decision at the #FATF Bolster Hardliners in #Pakistan? The country has taken verifiable actions against militant groups, including the Lashkar-e-Taiba (Let) and implemented tough laws to curtail #terror financing. #India
ReplyDelete@Diplomat_APAC https://thediplomat.com/2019/10/can-a-negative-decision-at-the-fatf-bolster-hardliners-in-pakistan/
Later this week, the Financial Action Task Force (FATF) is set to release its findings concerning Pakistan’s case at the forum. Early reports from the ongoing meeting in Paris suggest that the country may evade blacklisting by the forum. However, it’s still expected that Islamabad will come under a lot of pressure as the majority of the recommendations by the FATF have only been implemented partially.
The case’s outcome will have significant implications not only for Pakistan, but also for the region. A critical outcome may prove to be a blow to the country’s moderate voices within the national security establishment and civilian elite that are working to push against the hardliner’s support base within various institutions.
From Islamabad’s perspective, the worst outcome would emerge in the form of the country being placed on the blacklist, which can virtually choke Pakistan’s struggling economy in the coming months. Policymakers in Islamabad believe that they have done enough in the time given to the country and that moving forward, there is a strategy in place to work on the remaining recommendations. Predictably, Pakistan is expecting an appreciation for the country’s compliance with the FATF’s recommendations and other efforts to contain terror financing and militant groups.
Temporarily, the country’s government has been able to contain groups whose politics are tied to the issue of Kashmir. However, it’s unclear what happens in the coming months if Pakistan’s case gets knocked down at the forum. It’s important to note that the current government in Pakistan is trying to implement the FATF’s plan at a time when religious hardliners in the country have everything to gain from what’s happening in the neighborhood, particularly in Jammu and Kashmir.
Over the last year, Pakistan has taken verifiable actions against militant groups, including the Lashkar-e-Taiba (Let) and implemented tough laws to curtail terror financing. All of this has not been verifiable in the past. Moreover, the emerging narrative within Pakistan’s policymaking circles is one that focuses on discouraging and delegitimizing the so-called Afghan or Kashmir focused jihadi groups and their politics. Prime Minister Imran Khan’s recent statements that anyone trying to enter Jammu and Kashmir will be an enemy of Pakistan and Kashmiris are unprecedented and point toward the change that the world has demanded from Islamabad over the last couple of decades.
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Moreover, it is unprecedented that there has not been a single major street protest calling for jihad in the wake of New Delhi’s decision to abrogate Article 370/35A of the Indian constitution – a decision that put Khan in a very tough position domestically. Arguably, even if Pakistan is taking all these actions due to the looming pressure from the FATF, it’s something that is encouraging and shows that such pressure can produce sustainable results.
In the context of these developments, the international community invested in seeing a nuclear Pakistan becoming a democratic and politically stable state, should ensure that Islamabad stays away from the blacklist. The acknowledgment of the country’s efforts will assist in undermining hardliners among the ruling elite and the extremist groups that want to go back to its previous policy of using militants as a tool of foreign policy.
The prospect of Pakistan’s blacklisting may end up reviving far-right religious groups that have called for the revival of the state’s jihad Policy in the region, particularly in Kashmir.
Atoms, shoe #ecommerce #startup founded by #Pakistani husband-wife team of Waqas Ali and Sidra Qasim, nabs $8.1M investment for sneakers you can buy in quarter sizes for each foot. Investors include Reddit co-founder Alexis Ohanian and Kleiner-Perkin. https://techcrunch.com/2019/08/30/atoms-nabs-8-1m-for-shoes-you-can-buy-in-quarter-sizes-and-separate-left-right-measurements/
ReplyDeleteAtoms, makers of sleek sneakers that are minimalist in style — “We will make only one shoe design a year, but we want to make that really well,” said co-founder Sidra Qasim — but not in substance — carefully crafted with comfort and durability in mind, sizes come in quarter increments and you can buy different measurements for each foot if your feet are among the millions that are not exactly the same size — has raised $8.1 million.
The company plans to use the funding to invest in further development of its shoes, and to expand its retail and marketing presence. To date, the company has been selling directly to consumers in the U.S. via its website — which at one point had a waiting list of nearly 40,000 people — and the idea will be to fold in other experiences, including selling in physical spaces in the future.
This Series A speaks to a number of interesting investors flocking to the company.
It is being led by Initialized Capital, the investment firm started by Reddit co-founder Alexis Ohanian and Garry Tan (both had first encountered Atoms and its co-founders, Qasim and CEO Waqas Ali — as mentors when the Pakistani husband and wife team were going through Y Combinator with their previous high-end shoe startup, Markhor); with other backers including Kleiner Perkins, Dollar Shave Club CEO Michael Dubin, Acumen founder and CEO Jacqueline Novogratz, LinkedIn CEO Jeff Weiner, TED curator Chris Anderson, the rapper Chamillionaire and previous backers Aatif Awan and Shrug Capital.
Investors have come to the company by way of being customers. “The thing that I love about Atoms is that it isn’t just a different look, it’s a different feel,” said Ohanian in a statement. “When I put on a pair for the first time, it was a totally unique experience. Atoms are more comfortable by an order of magnitude than any other shoe I’ve tried, and they quickly became the go-to shoe in my rotation whenever I was stepping out. That wouldn’t mean anything if the shoes didn’t look great. Luckily, that’s not a problem, I wear my Atoms all the time and even my fashion designer wife is a fan.”
Even before today’s achievement of closing a Series A, the startup has come a long way on a relative shoestring: with just around $560,000 in seed funding and some of the founders’ own savings, Atoms built a supply chain of companies that would make the materials and shoes that it wanted, and developed a gradual but strong marketing pipeline with influential people in tech, fashion and design. (That success no doubt played a big role in securing the Series A to double down and continue to build the company.)
Within the bigger trend of direct-to-consumer retail — where smaller brands are leveraging advances in e-commerce, social media and wider internet usage to build vertically integrated businesses that bypass traditional retailers and bigger e-commerce storefronts to source their customers and sales more directly — there has been a secondary trend disrupting the very products that are being sold by using technology and advances in manufacturing. Third Love is another example in this category: The company has built a huge business selling bras and other undergarments to women by completely rethinking how they are sized, and specifically by focusing on creating as wide a range of sizes as possible.
So while companies like Allbirds — which itself is very well capitalised — may look like direct competitors to Atoms, the company currently stands apart from the pack because of its own very distinctive approach to building a mass-market business, but one that aims to make its product as individualised as possible.
Unprecedented #cash flow into #Pakistan #bonds as rates hit 13%. Global #investors plowed $642.5 million into local-currency bonds this month alone, more than what they invested in the debt in the past 4 years. https://gn24.ae/9021dbcb1ebf000
ReplyDeleteInterest in the nation’s bonds has surged this year as the State Bank of Pakistan more than doubled its policy rate to 13.25 per cent — the highest in Asia — over 10 meetings to help stabilise the economy. That, along with government efforts to improve public finances with support from the International Monetary Fund, has boosted the allure of the notes as the world’s pool of negative-yielding debt deepened.
Pakistan “stands out” in a low-yield global environment “following the recent rate hikes and currency adjustment — and more broadly, the reform momentum under the IMF,” said Bilal Khan, senior economist at Standard Chartered Plc in Dubai.
Foreign flows in November have all gone into Treasury bills — which have a maximum holding period of 1 year — with 55 per cent of them coming from the UK and 44 per cent from the US, the central bank data showed.
The nation’s local-debt market has not traditionally been a magnet for portfolio flows like other emerging markets and wasn’t attractive for years, said Khan, who visited fund managers in Europe last month inquiring about Pakistan.
Foreign #investors push into #Pakistan’s rupee bonds. One senior official at the central bank said this had contributed to #capital #inflows of about $1 billion, with more likely to arrive in the coming months. https://www.ft.com/content/e2fb378a-1103-11ea-a7e6-62bf4f9e548a via @financialtimes
ReplyDeletePlease use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
https://www.ft.com/content/e2fb378a-1103-11ea-a7e6-62bf4f9e548a
Pakistan is enjoying an unprecedented rush of foreign investment just months after the country secured an IMF bailout package, as fund managers are lured by high interest rates and promises of economic reform.
Benchmark interest rates have stood at 13.25 per cent since the last rise in July. One senior official at the central bank said this had contributed to inflows of about $1bn, with more likely to arrive in the coming months.
Analysts at Karachi-based broker Topline Securities expect inflows to reach a record $3bn by the end of the fiscal year to June 2020.
The central bank has been “pitching the Pakistani bond market directly” to foreign investors, said Saad Bin Ahmed, equity head at brokerage Arif Habib. “There are concerns that this is hot money, and at a single click this money will go out, possibly when the central bank cuts the policy rate. But my expectation, considering the state of the economy, is that they may not even cut the rates until July 2020.”
Stocks have also pushed higher. The main Karachi stock index is up 13 per cent over the past month, making it the best-performing bourse of 94 tracked by Bloomberg. This year, the government in Islamabad reduced withholding taxes for foreign investors, giving a further boost to sentiment.
The inflows come at a time when the central bank is seeking to build up its foreign-exchange reserves. In July, the IMF formally approved a $6bn bailout package to help Pakistan confront a worsening balance-of-payments deficit. Saudi Arabia’s promise in May to defer annual oil payments from Pakistan of up to $3bn for the next three years has helped to ease pressure on its reserves.
Charles Robertson, chief economist at Renaissance Capital, said the case for buying Pakistan’s bonds was straightforward. “Where else can you get double-digit yield on an undervalued currency?”
Mr Robertson noted that the rupee was at its lowest level in 25 years, measured by its real effective exchange rate, meaning foreigners could earn outsized returns on local- currency bonds. This is “the first new emerging market reform story since Egypt in 2016”, he added.
Fidelity International portfolio manager Paul Greer said that despite Pakistan’s large fiscal and current-account deficits, “the economic reform trajectory in the country has been improving of late and the imbalances are now moving in the right direction”.
He added that the country’s relationship with the IMF was “strong at present and the recent programme review illustrated the impressive progress being made”.
But the president of a privately owned Pakistani bank warned that high interest rates were having a “crippling effect” on investment by domestic companies. These rates would need to be brought down to encourage businesses to borrow, he added.
“The problem is that if you bring down interest rates, that may discourage the inflow of foreign money. It’s going to be a very delicate balancing act.”
#Pakistan #exports up by 9.6% in Nov, #imports cut by 17.53%. #Trade #deficit at 34.4% or $4.983 billion in first 5 months of FY 2019-20. Pakistan's current account deficit in FY19-20 stands at $12.75 billion, a 36% reduction from $19.9 billion in FY18-19. https://www.thenews.com.pk/print/577221-pak-exports-up-by-9-6pc-in-nov-imports-cut-by-17-53pc
ReplyDeleteThis increase in exports and cut in imports would improve the trade balance position and ultimately the current account deficit (CAD) that has recently turned into surplus. Economists believe that with the increase in the surpluses in CAD, the country's foreign exchange reserves also get improve.
Meanwhile, Adviser to Prime Minister on Commerce, Textile, Industry & Investment Razzak Dawood said on his twitter account, "Alhamdolillah! Pakistan's exports in November 2019 have once again crossed the USD 2 billion mark. Hats off to our experts and the team at the Ministry of Commerce. Exports have increased by 9.6% as compared to last year." He further said, "As a result of the same policies of the government, the increasing exports are contributing to improvement in our balance of payment position and stabilisation of the economy."
It is worth mentioning that for the first time, in the last four years, the country's current account turned into surplus and was recorded at net positive current account balance of $99 million in October 2019. In September, it was current account was recorded in deficit of $284 million and $1.28 billion in Oct 2018.
Pakistan's current account deficit in FY19 stood at $12.75 bn, a 36 percent reduction from $19.9 bn in FY18.
Besides, the second phase of China-Pakistan Free Trade Agreement (CPFTA) has also come into the effect from Sunday (Dec 1) allowing export of around 313 new Pakistani products on zero duty to the Chinese market. Pakistan is already enjoying zero duty on export of 724 products to China under the first FTA signed between the two countries in 2006. After the implementation of the second FTA, Pakistan has been allowed to export a total of 1047 products to China on zero duty.
The new facility will particularly benefit the textile sector to enhance its export to China as textile exports to China will virtually be duty-free.
There are a number of other items particularly leather and agriculture products as well as confectionery and biscuits, etc, which Pakistani manufacturers can export to China.
Reportedly, with the implementation of the second phase of the trade agreement, Pakistan can now increase its export around $1 billion in the short term while the export of these items are likely to touch $4-5 billion in the medium term after setting up new industry in the special economic zones being constructed in Pakistan under China-Pakistan Economic Corridor (CPEC) flagship project.
After this agreement, Pakistan can enhance its exports to China up to $10 billion in the next few years as the volume of the Chinese import market is around $64 billion. The State Bank of Pakistan has also increased fund limits for traders and manufacturers under export refinance scheme which will help increase the exports.
China’s Digital Silk Road after the Coronavirus
ReplyDeleteApril 13, 2020
The COVID-19 pandemic will be a history-altering event. But where will it take us? In “On the Horizon,” a new CSIS series, our scholars offer their insights into the fundamental changes we might anticipate for our future social and economic world.
https://www.csis.org/analysis/chinas-digital-silk-road-after-coronavirus
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Just a few months ago, China’s technology ambitions appeared imperiled by Covid-19, then raging through the center of the country, bringing its economy to a standstill, and wreaking havoc to global supply chains. But the pandemic is already providing new opportunities for China’s rise as a technology power and global provider of digital infrastructure. Indeed, in the months and years ahead, China’s Digital Silk Road will only accelerate and expand.
Consider the China-Pakistan Economic Corridor (CPEC), which Chinese officials have touted as the BRI’s flagship. Since CPEC was announced five years ago, over 60 percent of its projects have been transportation and energy, and many have been bogged down with delays. While proposed pipeline and railway connections between China and Pakistan remain pipedreams, Huawei was able to lay a fiber-optic cable across their border and deep into Pakistan in under two years. Stretching 820 kilometers, the project cost just $44 million—less than it costs to build only four kilometers of railway in Pakistan. Given Pakistan’s mounting debt, the second phase of CPEC, much like the future of the BRI, will place a greater emphasis on smaller, higher-tech projects.
The less visible nature of digital infrastructure also fits more easily into the geopolitical environment that Chinese firms will face as the Covid-19 crisis abates. Prior to the crisis, China’s approach to delivering large projects in foreign countries, which relies heavily on its own companies and workers, stoked resentment among local communities. In recent years, Chinese workers have been attacked in Bangladesh, Kazakhstan, and Kenya, among other stops along the BRI. Given the source of the outbreak, Chinese workers are more likely to face discrimination abroad. Digital infrastructure projects are typically less visible, and less disruptive, to local communities than large transport and energy projects.
Chinese tech companies also see an opening to pitch their products as part of responding to the current outbreak and preventing future pandemics. Hikvision, Dahua, and other leading surveillance companies have introduced thermal imaging systems to detect fevers. Alipay and Tencent have developed health apps that generate QR codes indicating a user’s health status. Naturally, these companies are looking to sell these products overseas. Alibaba is already offering its cloud services to model regional outbreaks and connect health professionals. These offerings are not unique to Chinese companies, but they often come with fewer privacy protections than their Western counterparts.
China’s largest chipmaker to raise $2.8 billion in listing to boost capabilities amid #trade war. SMIC is part of #China’s push for self-reliance in #semiconductors, a field in which the world’s second-largest economy is seen as far behind #UnitedStates. https://www.cnbc.com/2020/06/02/china-chipmaker-smic-to-raise-2point8-billion-in-shanghai-listing-amid-trade-war.html?__source=sharebar|twitter&par=sharebar
ReplyDeleteChina’s largest contract chipmaker, Semiconductor Manufacturing International Corporation (SMIC), has filed for a listing in Shanghai that will raise 20 billion yuan ($2.8 billion).
The move comes as the company looks to bolster investment in its technology amid the escalating trade tensions between the U.S. and China, which could force SMIC to take on more production.
SMIC is part of China’s broader push for self-reliance when it comes to semiconductors, a field in which the world’s second-largest economy is seen as far behind the U.S.
China’s largest contract chipmaker, Semiconductor Manufacturing International Corporation (SMIC), has filed for a listing in Shanghai that will raise 20 billion yuan ($2.8 billion).
The move comes as the company looks to bolster investment in its technology amid the escalating trade tensions between the U.S. and China, which could force SMIC to take on more production.
SMIC, which is already listed in Hong Kong, has been looking to raise cash to do that. It got a $2.2 billion investment from state investors last month.
The company is part of China’s broader push for self-reliance when it comes to semiconductors, a field in which the world’s second-largest economy is seen as far behind the U.S. But China’s efforts have been given greater impetus as Washington continues its technology war with Beijing.
Huawei has been one of China’s companies targeted by U.S. sanctions. Last year, it was put on a U.S. blacklist called the Entity List which restricted its access to American technology. In May, the Trump administration introduced a rule which requires foreign manufacturers using U.S. chipmaking equipment to get a license before being able to sell semiconductors to Huawei.
That rule is likely to affect Taiwan’s TSMC, which makes most of the chips Huawei designs for devices such as smartphones. If Huawei cannot get hold of semiconductors from TSMC, it may have to look for alternatives such as SMIC. But experts have previously told CNBC that SMIC’s technology is far behind TSMC.
The recent cash injection, therefore, could be a boost for the company as it looks to rapidly expand its capabilities.
In its listing prospectus, SMIC said that the U.S.-China trade frictions and Washington’s latest rules on semiconductors could be headwinds for the company.
#US Congress Push to Invest Billions in #Semiconductor Industry to Counter #China. The future of the #computer #communications #chip industry is particularly significant because it is a foundational #technology that can give nations an edge in innovation https://www.nytimes.com/2020/06/11/business/economy/semiconductors-chips-congress-china.html?smid=tw-share
ReplyDeleteChina’s technological ambitions are eliciting rare bipartisan agreement in Washington, with lawmakers considering investing tens of billions of dollars in America’s semiconductor industry over the next five to 10 years to help the United States retain an edge over Beijing.
A bipartisan measure introduced this week is one of several proposals that would provide substantial funding for the semiconductor industry, which manufactures chips that serve as the tiny brains or memory of electronic devices from smartphones to fitness trackers.
The efforts reflect a shifting consensus in Washington, as lawmakers look to more expansive government intervention in private markets to help American firms compete. That includes Republicans, who have long criticized government-led industrial plans as inefficient and redolent of communism but have watched with dismay as such efforts in China have allowed it to dominate industries from steel and solar panels to shipbuilding.
The future of the semiconductor industry is viewed as particularly significant because it is a foundational technology that can give nations an edge in innovation. China has been shoveling billions into developing its own chip industry, which has long been dominated by the United States and has helped propel a boom in 5G technology, artificial intelligence and robotics.
Semiconductors are still one of America’s largest exports, and American companies that design and sell chips still account for nearly half of global revenue in the sector, the greatest share of any country. But the United States only accounts for around 12 percent of global semiconductor production capacity. Decades ago, domestic designers began turning to foundries in places like Taiwan and South Korea to manufacture their chips.
While past government subsidies have largely focused on chip research, the latest bill puts a heavy emphasis on domestic manufacturing. A centerpiece, which would put more than $22.8 billion toward the industry, is a new trust fund for federal grants to match state subsidies to encourage new factories. As much as $10 billion a year could be placed in the fund, with the money to come from the import tariffs the administration has placed on China, rather than a congressional appropriation.
The legislation is co-sponsored by Senators John Cornyn, Republican of Texas, and Mark Warner, Democrat of Virginia, and Representatives Michael McCaul, Republican of Texas, and Doris Matsui, Democrat of California. It could be rolled into the next economic stimulus package or a defense bill that may be considered this summer.
The measure follows a bill introduced in late May by Senator Chuck Schumer, Democrat of New York and the minority leader, and Senator Todd Young, Republican of Indiana, that would expand the National Science Foundation and increase funding by $100 billion over five years in areas like artificial intelligence, robotics and advanced manufacturing. Senator Tom Cotton, Republican of Arkansas, is also working on a bill to fund the chip industry.
Congress Has Supported Moves To Revive Domestic Semiconductor Manufacturing, Here’s What Needs To Happen Next
ReplyDeletehttps://www.forbes.com/sites/willyshih/2020/07/26/congress-has-supported-moves-to-revive-domestic-semiconductor-manufacturing-heres-what-needs-to-happen-next/#44e4bd184a94
Last week the Senate voted overwhelmingly (96-4) to include an amendment to the National Defense Authorization Act (NDAA) that provided support to the American semiconductor industry. The amendment combined the earlier American Foundries Act and the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act. A nearly identical proposal was included in the House NDAA, so that bodes well as the bill goes into the Conference Committee. But the vote does not authorize or appropriate funding for these policies, it only creates the policy framework.
The pandemic and worsening trade tensions have shined a light on worrisome issues with the supply chains that American industry and consumers depend on. Semiconductors are an area where the U.S. is heavily dependent on Asia. While the U.S. still has most of the leading design companies, we have comparatively few of the leading manufacturing facilities. In that critical sector we trail Taiwan, an island claimed by China that is one quarter the size of the state of Florida, and then South Korea, Japan, and China. The U.S. has gone from being first in manufacturing at the dawn of the industry to fifth, and companies in those countries who are ahead of us are investing aggressively. American makers of the production tools used in semiconductor factories have been moving their manufacturing to Asia as well, because that’s where their customers are.
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If Congress needs any additional impetus, it only needs to look to Intel’s recent announcement that it will delay the launch of its next generation chips, and that it was considering contracting out more of its manufacturing to make up for the delays. This should ring alarm bells for a number of reasons:
Intel has lost ground to AMD in the x86 microprocessor chip market because AMD has well designed products that are manufactured by Taiwan Semiconductor Manufacturing Company (TSMC). Don’t forget – a decade ago when AMD fell behind in manufacturing, it spun off its fabs (which became the foundation for GlobalFoundries) and turned to TSMC to produce its chips. TSMC is able to make AMD’s chips with its most advanced processes which are now even further ahead of Intel. The only place Intel can go to catch up with AMD is TSMC, so the pressure on them to outsource to there (Intel already is an important customer) will be intense.
Apple AAPL -0.2% recently announced that it will shift away from using Intel microprocessors in its Mac computers to chips of its own design that will be fabricated at TSMC. One could argue that Apple was only a small share of Intel’s volume, but don’t forget – the last time Apple shifted its Mac chip supplier – from PowerPC chips made by IBM IBM -1.2% and Motorola/Freescale to Intel – that marked a significant turning point in IBM’s decline and eventual exit from semiconductor manufacturing.
TSMC’s proposed fab in Arizona is only a token investment with insufficient capacity to support even a small fraction of the needs of Apple, Qualcomm QCOM -0.9%, Nvidia NVDA +0.6%, Intel, Amazon AMZN +0.7%, Google GOOGL -0.6%, and other American design shops. The proposed fab has a capacity of 20,000 wafer starts a month, a drop in the bucket compared to ~250,000 wafer starts per month at a single one of TSMC’s Gigafabs in Taiwan. And TSMC has three Gigafabs going on four spread over three science parks on the island.
Inside Intel: A Look At The Mega Chipmaker
ReplyDeletehttps://www.investopedia.com/articles/markets/100214/inside-intel-look-mega-chipmaker.asp
Never has a corporation done so much with something so little. Founded in 1968, Intel Corp. (INTC) has been the world’s leading manufacturer of microprocessors and chipsets almost since its inception. Today Intel is easily the largest semiconductor company in the world, about half again as large as closest competitor, Samsung Electronics Co., Ltd., and more than triple the size of the next-largest domestic producer, Qualcomm Inc. (QCOM).
What separates Intel from most other semiconductor companies is that it fabricates its products in-house. The bulk of semiconductor “manufacturers” farm the actual work of creating the products out to foundries in China. Intel even fabricates chips for other companies, for the most part ones too small to be considered true competitors. Is that a conflict of interest? Not really. Fabrication plants can cost several billion dollars to build, and it makes sense for Intel to keep its busy. (For more, see: The Semiconductor Industry Handbook.)
Intel does indeed assemble chipsets in China, but at Intel-owned facilities. It is received wisdom among some American doomsayers that low labor costs make China the default base of manufacturing operations for U.S. corporations that want to save a few pennies per unit and “ship jobs overseas.” That claim is more accusatory than it is true. At the end of 2016 Intel had a multitudinous workforce of 106,000, approximately half of whom were employed in the United States. Almost half of Intel’s chipsets and microprocessors are manufactured at home, at facilities in the suburbs of Phoenix, Albuquerque, N.M., and Portland, Ore. Outside of China, most of the remaining Intel products are developed in Israel. (For more, see: A Primer for Investing in the Tech Industry.)
The Incestuous World of Chip-sourcing
Even given that Intel fabricates other companies’ chips at its facilities, the business of developing internal computer hardware, selling it, and branding it is more incestuous than you might think. For instance, as of 2007 Apple Inc. (AAPL) began using Intel chips exclusively in its Macs, supplanting the PowerPC CPUs that Apple itself helped develop as part of a consortium. In 2018, it was reported that Apple may use Intel chips exclusively in its new iPhones. By comparison, smaller companies subcontracting to Intel isn’t even that big of a deal.
Moore's Law
Intel’s surviving cofounder, Gordon Moore, lends his name to the most famous observation in all of technology. Formulated in 1965, Moore’s Law states that transistor density doubles every two years. Not only has the observation held ever since, but Intel has officially incorporated the law into its company strategy. The company is behind the development of 450mm wafers, the widest in existence, yet still less than a millimeter thick. Once in production, they should allow the exponential progress of Moore’s Law to continue for at least another generation.
So who’s buying all these Intel chips? In 2008, the answer was unambiguous. Hewlett-Packard Co. (HPQ), Dell and International Business Machines Corp. (IBM), not coincidentally the three-biggest computer manufacturers at the turn of the century, were together responsible for $3 of every $4 Intel took in. A mere six years later, with bulky personal computers no longer the devices of choice for a global clientele that values portability and speed, Intel now has eight major customers that are responsible for 75% of its revenues. In 2016, Intel's three largest customers were responsible for 31% of the firm's accounts receivable. Intel might obey Moore’s Law, but the Pareto Principle (a.k.a the 80/20 rule) is a different story.
With Money, and Waste, China Fights for Chip Independence
ReplyDeleteBeijing’s drive to free itself from reliance on imported semiconductors has lifted start-ups and big firms alike. Some have flamed out. But there has been progress.
https://www.nytimes.com/2020/12/24/technology/china-semiconductors.html
Liu Fengfeng had more than a decade under his belt at one of the world’s most prominent technology companies before he realized where the real gold rush in China was taking place.
Computer chips are the brains and souls of all the electronics the country’s factories crank out. Yet they are mostly designed and produced overseas. China’s government is lavishing money upon anyone who can help change that.
So last year Mr. Liu, 40, left his corporate job at Foxconn, the Taiwanese giant that assembles iPhones in China for Apple. He found a niche — high-end films and adhesives for chip products — and quickly raised $5 million. Today his start-up has 36 employees, most of them in the tech hub of Shenzhen, and is aiming to start mass production next year.
“Before, you might have had to beg Grandpa and call on Grandma for money,” Mr. Liu said. “Now, you just have a few conversations and everyone is hoping projects get started as soon as possible.”
China is in the midst of a mass mobilization for chip mastery, a quest whose aims can seem just as harebrained and impossible — at least until they are achieved — as sending rovers to the moon or dominating Olympic gold medals. In every corner of the country, investors, entrepreneurs and local officials are in a frenzy to build up semiconductor abilities, responding to a call from the country’s leader, Xi Jinping, to rely less on the outside world in key technologies.
Their efforts are starting to pay off. China remains far from hosting real rivals to American chip giants like Intel and Nvidia, and its semiconductor manufacturers are at least four years behind the leading edge in Taiwan. Still, local companies are expanding their ability to meet the country’s needs, particularly for products, such as smart appliances and electric vehicles, that have more modest requirements than supercomputers and high-end smartphones.
The turbocharged chip push could prove one of the most enduring legacies of President Trump’s pugilistic trade policies toward China. By turning the country’s dependence on foreign chips into a cudgel for attacking companies like Huawei, the administration made Chinese business and political leaders resolve never to be caught out that way again.
ImageLiu Fengfeng, Tsinghon’s chief and founder. “Before, you might have had to beg Grandpa and call on Grandma for money,” he said. Now, investors are eager to get involved.
Liu Fengfeng, Tsinghon’s chief and founder. “Before, you might have had to beg Grandpa and call on Grandma for money,” he said. Now, investors are eager to get involved.Credit...Gilles Sabrié for The New York Times
But as Beijing broadens its ambitions in semiconductors, it is also setting itself up for larger potential failures — and dialing up the amount of money it might lose in the process. Several chip projects have run aground recently because of frozen funding and mismanagement. A state-backed chip conglomerate, Tsinghua Unigroup, warned this month that it was in danger of defaulting on nearly $2.5 billion in international bonds.
#Superpower status will depend on #semiconductor chips. #TSMC building world's largest $20 billion fab in #Taiwan to manufacture chips at dimensions of just 3 nanometers that'll power everything from latest iPhones to medical equipment to F-35 fighters. https://www.ft.com/content/44e28cad-55b7-4995-a5c5-6de6f9733747
ReplyDeleteThis vast capital expenditure highlights the near-insatiable demand for computer chips, the dominance of Taiwanese chipmakers and the sophistication of modern manufacturing. TSMC’s chips power everything from Apple’s latest iPhones to medical equipment to F-35 warplanes, accounting for about 55 per cent of global semiconductor sales.
But the manufacture of semiconductors is becoming a geopolitical imperative, too. As part of its squeeze on China’s tech industry, the US has pressured TSMC to stop supplying Huawei, previously one of its biggest customers. China, which spends more on importing computer chips than oil, is developing a semiconductor industry to reduce dependence on overseas suppliers.
Sensing their own vulnerability, the US, Japan and the EU are also stepping up their efforts to develop indigenous semiconductor industries, as their carmakers and computer games companies wail about the lack of supply. Computer chips currently vie with vaccines as must-have resources for any nation state.
If military capability in previous centuries was built on breech-loading rifles, warships or atomic bombs, it may well depend in the 21st century on the smartest use of advanced chips. The centrality of TSMC to the global semiconductor industry is sometimes given as a reason why mainland China might yet invade Taiwan. But far bigger military and political considerations will determine Beijing’s course of action.
By any measure, TSMC is an extraordinary company which is reaping the benefits of out-investing its rivals. It has just announced that its capital spending will further increase to between $25bn and $28bn this year as it struggles to add capacity fast enough to match demand. During an earnings call last month, CC Wei, TSMC’s chief executive, said that surging sales of smartphones and high-performance computers and the adoption of 5G mobile technology were fuelling demand for the company’s leading-edge logic chips. “We believe that 5G is a multiyear megatrend that will enable a world where digital computation is increasingly ubiquitous,” he said.
Most other semiconductor companies have dropped out of the race to manufacture 3nm chips due to the stratospheric costs. It will now be hard for any rival to catch up with TSMC because of its vast capital spending, its technological expertise, its network of suppliers and its support from the Taiwanese government. Only Samsung of South Korea is visible in its rear-view mirror.
“What separates TSMC from other foundries is its appetite to take risks and its ability to execute. It is an incredible business model,” says Brett Simpson, a tech analyst at Arete, an independent research firm. “The market is heading for one dominant player and one subscale player that is hanging in there and executing very well.”
The bigger concern for TSMC is the geopolitical tension between the US and China. With two fabrication plants in China, one in the US state of Washington and another planned in Arizona, TSMC has been hedging its bets. But like many other companies in a fast-polarising world, it is being forced to choose.
Shelley Rigger, a professor at Davidson College in North Carolina and author of Why Taiwan Matters, says that US pressure on China is only reinforcing Beijing’s determination to become self-sufficient in semiconductor manufacturing: “China has infinite money to throw at a problem like this and no scruples about doing what needs to be done.”
Taiwan has long feared that the world could divide into Chinese-dominated red supply chains and US-focused blue supply chains, jeopardising relations with either its biggest trading partner or its main strategic ally. The island’s room for manoeuvre is becoming as thin as TSMC’s wafers.
#Pakistan #Punjab government budgets Rs41.75 million to establish #computer chip design centers at 8 universities, including UET Lahore, the UET Taxila, the ITU Lahore, and the Islamia University Bahawalpur. #semiconductor #technology #Silicon https://www.dawn.com/news/1629534
ReplyDeleteMNS UET Multan, the KF UEIT Rahim Yar Khan, the University of Gujrat, and the University of Chakwal next year.
Integrated Circuits (ICs), commonly known as chips, have radically altered the industry and nanotechnology has greatly contributed to major advances in computing and electronics, leading to faster, smaller, and more portable systems that can process, manage, and store larger and larger amounts of information.
Chip design technology is one of the most important and significant technologies globally in the electronics industry. With the Covid-19 crisis disrupting supply chains and geopolitical tensions increasing, semiconductor companies have become more interested in achieving end-to-end design and manufacturing capabilities for leading edge technologies.
Local universities in Pakistan are not extensively teaching the skills which are flourishing quite rapidly all over the world such as micro and nano-electronics IC design because of a lack of highly-trained faculty and academic resources in these domains.
Punjab Minister for Higher Education Raja Yasir Hamayun took an initiative of skills development in micro and nanoelectronics design technologies in the universities of the province. He constituted a committee led by UET VC Prof Dr Syed Mansoor Sarwar.
The minister says they can’t afford to wait anymore since leading players are already years ahead in technology development. He says the future of the semiconductor industry belongs to advancements in nanoelectronics chip design technologies. He says a project was approved for the provision of software and hardware facilities for Microelectronic Design and Development in eight universities to promote R&D culture and train faculty in the universities.
#Pakistan's #tech ecosystem is finally taking off. In 2021, Pakistani #startups are on track to raise more money than the previous 5 years combined. This capital is coming from investors from #Asia, #MiddleEast & top #SiliconValley VCs.
ReplyDeletehttps://tcrn.ch/2TEwRR0 via @techcrunch
https://twitter.com/haqsmusings/status/1412922307438268416?s=20
Pakistan, the world’s fifth most populous country, has been slow to adapt to the internet economy. Unlike other emerging economies such as China, India and Indonesia, which have embraced digitization and technology, Pakistan has trailed the region in the adoption of technology and startup formation.
Despite this, investors have dreamed for years of the huge opportunities in unlocking Pakistan’s potential as a digital economy. As a country of 220 million people, almost two-thirds of whom are under the age of 30, Pakistan draws natural comparisons to Indonesia — which has rapidly emerged as one of the most vibrant technology ecosystems outside the U.S. and China.
After years of lagging behind, over the course of the past 18 months, Pakistan’s technology ecosystem has come to life in unprecedented fashion. In 2021, Pakistani startups are on track to raise more money than the previous five years combined. Even more excitingly, a large portion of this capital is coming from international investors from across Asia, the Middle East and even famed investors from Silicon Valley.
The rapid emergence of Pakistan’s technology ecosystem on the international stage has been no accident — it’s the result of a confluence of changing facts on the ground and shifting dynamics in the startup and investing world as a result of the pandemic.
The sudden emergence of Pakistan’s tech ecosystem on the international stage has been driven by three major factors: an improving security situation, quickly growing mobile connectivity, and critical legal changes and deregulation.
As a frontline state and coalition partner in the United States’ invasion of Afghanistan, Pakistan saw fatalities from terrorist violence soar from 295 in 2001 to a peak of over 11,000 in 2009. This climate of instability and violence scared away international business and investors from Pakistan for much of the first two decades of the 21st century.
How the West Can Win a Global Power Struggle
ReplyDeleteIn an economic Cold War pitting China and Russia against the U.S. and its allies, one side holds most of the advantages. It just has to use them.
https://www.wsj.com/articles/how-the-west-can-win-a-global-power-struggle-11647615557?mod=Searchresults_pos1&page=1
Of course the East plays a central role in the global economy. As recent market turmoil illustrates, Russia is a key supplier of not just oil and gas but metals such as palladium, used in catalytic converters, and nickel. China dominates manufacturing of countless goods whose value became abundantly clear during the pandemic, when demand for some, such as protective personal equipment, skyrocketed.
To a great extent these strengths reflect Russia’s comparative advantage in geology and China’s in factory labor. The West’s comparative advantage is in knowledge. That’s why Russia and China court Western investment. For example, to develop a complex liquefied natural gas (LNG) project in the Arctic, Russia relied on Norwegian, French and Italian contractors for essential expertise, research firm Rystad Energy notes.
Catching up with the West is no easy task, as semiconductors illustrate. Western companies dominate all the key steps in this critical and highly complex industry, from chip design (led by U.S.-based Nvidia, Intel, Qualcomm and AMD and Britain’s ARM) to the fabrication of advanced chips (led by Intel, Taiwan’s TSMC and South Korea’s Samsung ) and the sophisticated machines that etch chip designs onto wafers (produced by Applied Materials and Lam Research in the U.S., the Netherlands’ ASML Holding and Japan’s Tokyo Electron ).
Russia and China have made efforts to reduce this dependence. Russia developed locally designed microprocessors called Elbrus and Baikal to run data centers, cybersecurity operations and other applications. Though neither has achieved significant market share, they “represent the pinnacle of local design capability,” said Kostas Tigkos, principal at Jane’s, a defense intelligence provider. Russia hoped that they would eventually displace chips made by Intel and AMD, he said. “This would not only have been the foundation for diversifying their installed base, but a stepping stone for exports of those processors to other friendly nations.” But without manufacturers like TSMC to make the chips, Russia is facing “the complete disintegration of their aspirations to develop their own industry.”
China has a much bigger semiconductor industry than Russia, and its partly state-owned national champion, Semiconductor Manufacturing International Co. (SMIC), could in theory make Russia’s chips, but that would take at least a year, Mr. Tigkos said. Moreover, its efforts to catch up to its Taiwanese competitor have been set back by sanctions. In 2020 the U.S. required companies using American technology to obtain a license to sell to SMIC. This effectively limited its ability to acquire advanced equipment from Netherlands’ ASML, which is critical for “any country that wants to have a competitive semiconductor industry,” Mr. Tigkos said.
Why does all this matter to the outcome of the geopolitical contest? Over time economic weight, strength and vitality are what allow countries to sustain military capability, achieve and maintain technological superiority, and remain attractive partners for other countries.
Yet GDP does not automatically equate to strategic influence. To win a Cold War, it’s not enough for the West to hold the best economic cards, it has to know how to play them. Economic statecraft, as this is called, does not come naturally to the West: Its institutions are built on the assumption that companies are private enterprises, not instruments of the state. They do business wherever it’s profitable, regardless of their home countries’ strategic interests.
Chip Sanctions Challenge Russia’s Tech Ambitions
ReplyDeleteLosing access to some top-end chips from Asia over the invasion of Ukraine undercuts efforts to develop advanced weaponry, AI, robotics
https://www.wsj.com/articles/chip-sanctions-challenge-russias-tech-ambitions-11647682202
Taiwan Semiconductor Manufacturing Co., the world’s biggest contract chip maker, said it is committed to complying with the new export-control rules. South Korea’s Samsung Electronics Co., a leading memory-chip maker and an electronics producer, said this month it has suspended shipment of all its products to Russia because of geopolitical developments and is monitoring the situation to determine its next steps.
Russia’s chip-building technology lags behind that of industry leader TSMC by more than 15 years, said Western semiconductor-industry executives who have studied the state of Russia’s industry. The country’s leading chip maker, Mikron Group, has said it is the only local company capable of mass producing semiconductors with 65-nanometer circuitries—a technology introduced to the industry for mass production around 2006. Mikron didn’t respond to a request for comment.
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An international tech blockade threatens to deprive Russia of sophisticated semiconductors needed to power advanced weaponry and cutting-edge technologies like 5G, artificial intelligence and robotics, experts say.
In late February, the U.S. imposed a ban on selling high-tech products including semiconductors and telecommunications systems used by the defense, aerospace and maritime industries to Russia and its ally Belarus, days after Russia invaded Ukraine. The ban also extended to certain foreign items produced with U.S. equipment, software or blueprints.
South Korea and Taiwan, which dominate in high-end chips, and Japan, strong in chip-making materials and tools, have also banned exports of the items that the U.S. has put on its export-control list. Their moves cut off Russia’s access to many top-end chips, and materials and components needed to re-create production of such items locally.
For Russia, the impact from the coordinated sanctions will be significant, said Tom Rafferty, Asia regional director at the Economist Intelligence Unit. “The big export bans are going to be on semiconductors and high-end semiconductors in particular, for which Korea and Taiwan almost monopolize production. So there won’t be supply of that anywhere that Russia can lean on.”
While the sanctions would appear to limit Russia’s access to chip supplies, the actual impact couldn’t fully be determined. Russia’s Ministry of Industry and Trade, and the Ministry of Economic Development didn’t respond to requests for comment.
Russia continues to largely rely on foreign technology to design chips and has limited chip-production capabilities of its own. In 2020, Russia imported roughly $440 million worth of semiconductor devices, including components like diodes and transistors, and around $1.25 billion worth of electronic integrated circuits, or “chips,” built by incorporating various components, according to the United Nations Comtrade database.
While the majority of these imports come from Asian countries that aren’t imposing sanctions, Russia would still be left in the dark on high-end chips or homegrown chips. Taiwan produces most of the world’s cutting-edge semiconductors, with the rest produced in South Korea, data from Washington, D.C.-based trade group Semiconductor Industry Association showed. South Korea also dominates in memory chips, while Japan is a stronghold of semiconductor materials and manufacturing tools, both crucial for chip building.
India Semiconductor Ambitions Are a Heavy Lift
ReplyDeleteGovernments everywhere see both a threat and an opportunity from the current chip shortage. India is no exception.
https://www.wsj.com/articles/india-semiconductor-ambitions-are-a-heavy-lift-11652269561?mod=business_major_pos11
Indian Prime Minister Narendra Modi isn’t known for keeping his head down and working silently on a goal. Fanfare and zealous speeches are more on brand. The latest case in point: his speech at the Semicon India 2022 conference in late April, pitching India as a potential semiconductor manufacturing hub.
This goal, however, may require some humility and patience, particularly when leading economies like the U.S., Germany and Japan have already attracted large investments from top chip makers. And unlike manufacturing powerhouse China, which is also vying to be a serious global chip-making player, India lacks a robust domestic market for chips.
So far, the country has received proposals worth $20.5 billion from five companies. These include Indian oil-and-gas major Vedanta in joint venture with Foxconn, Singapore-based IGSS Ventures Pte, and the ISMC—a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel’s Tower Semiconductor. Noticeably absent are many of the top global chip makers such as Taiwan Semiconductor Manufacturing Co. and Samsung —although Intel is in the process of acquiring Tower Semiconductor.
India has proven itself in smartphone assembly and is now the second-largest smartphone assembler after China. It understandably wants to move up the value chain—but cheap labor won’t be nearly enough. Chip making is a technology- and capital-intensive industry and needs, at a minimum, reliable access to power and water, things that Indian governments have often struggled to supply in the past.
Mr. Modi’s grandiloquence aside, getting on the map in the next 10 years and partly supplying India’s own domestic requirements looks like a reasonable goal to shoot for—in addition to focusing on the chip design and assembling, testing, and packaging aspects of the value chain. It isn’t surprising that the Indian government wants to seize the moment. But here, the adage about walking before running seems apt.
India can aim lower in its chip dreams
ReplyDeletehttps://www.reuters.com/breakingviews/india-can-aim-lower-its-chip-dreams-2023-07-05/
BENGALURU, July 5 (Reuters Breakingviews) - India’s semiconductor dreams are facing a harsh reality. After struggling to woo cutting-edge chipmakers like Taiwan Semiconductor Manufacturing (2330.TW) to set up operations in the country, the government may now have to settle for producing less-advanced chips instead. Yet that’s no mere consolation prize: the opportunity to grab share from China in this commoditised but vital part of the tech supply chain could pay off.
Prime Minister Narendra Modi wants to “usher in a new era of electronics manufacturing” by turning India into a chipmaking powerhouse. So far, the government has dangled $10 billion in subsidies but with little to show for it. Mining conglomerate Vedanta’s $19.5 billion joint venture with iPhone supplier Foxconn (2317.TW) has stalled; plans for a separate $3 billion manufacturing facility appear to be in limbo, Reuters reported in May. In a small win for the government, U.S.-based Micron Technology (MU.O) last week announced it will invest $825 million to build its first factory in India in Modi’s home state of Gujarat, though the facility will be used to test and package chips, rather than to manufacture them.
Even so, the Micron investment could pave the way for the country to move into the assembly, packaging and testing market for semiconductors, currently dominated by firms like Taiwan’s ASE Technology (3711.TW) and China's JCET (600584.SS). It’s not as lucrative as making or designing them but global sales are forecast to hit $50.9 billion by 2028, according to Zion Market Research.
An even bigger opportunity awaits in manufacturing what are known as trailing-edge semiconductors. Recently, New Delhi expanded fiscal incentives for companies to make these lower-end products in the country. It’s a far more commoditised part of the market but there’s much to play for. Analog chips, for example, are vital for electric cars and smartphones. Last year, sales grew by a fifth to $89 billion, per estimates from the Semiconductor Industry Association, outpacing growth for memory, logic and other types of chips.
The majority of the world’s trailing-edge semiconductors are currently made in Taiwan and China. So rising geopolitical tensions between Washington and Beijing, as well as worries of military conflict in Taiwan, will make India an attractive alternative for companies like U.S.-based GlobalFoundries (GFS.O) that specialise in this segment. Booming domestic demand is another factor: the Indian market is forecast to hit $64 billion by 2026, from just $23 billion in 2019.
Aiming lower could be just what India’s chip ambitions need.
Follow @PranavKiranBV on Twitter
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own. Refiles to add link.)
U.S. memory chip firm Micron Technology on June 28 signed a memorandum of understanding with the Indian government to build a semiconductor assembly and testing plant, its first factory in the country.
Construction for the $2.75 billion project, which includes government support, will start in August, according to Ashwini Vaishnaw, India’s minister of electronics and information technology in an interview with the Financial Times published on July 5, with production expected by the end of 2024.
Government to establish 10 IT parks by next year: IT Ministry - Pakistan - Business Recorder
ReplyDeletehttps://www.brecorder.com/news/40304707
The government has announced the establishment of ten new Software Technology Parks across the country by next year, according to Radio Pakistan.
This was stated during a briefing by the Ministry of Information Technology to a high-level meeting chaired by Prime Minister Muhammad Shehbaz Sharif in Islamabad.
The meeting was informed that 100 new e-employment centers will also be set up in the country by next year.
The project of Islamabad IT Park will be completed next year with the cooperation of South Korea. It will provide startups, incubation centers, banks, restaurants, and other facilities.
The meeting was informed that South Korea is also collaborating in establishing an information technology park project near Jinnah International Airport in Karachi which will be completed by 2027.
So far, 43 software technology parks have been established in 29 cities of the country.
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Tech parks for growth
https://www.thenews.com.pk/print/1177295-tech-parks-for-growth
In today’s fast-paced global economy, technology parks play a crucial role in fostering industrial development by providing an ecosystem conducive to innovation, collaboration and entrepreneurship.
These designated areas are often referred to as research and technology parks or science parks. They can serve as catalysts for economic growth, driving technological advancements, attracting investment, and nurturing talent. By bringing together academia, industry, and government, these parks facilitate collaboration and knowledge exchange, leading to breakthrough discoveries and technological advancements.
They are often located within or near universities so that they have ready access to highly trained workers in various fields. In Pakistan, I was involved in establishing a technology park in the National University of Science and Technology in Islamabad as well as setting up several software technology parks in early 2001 in Islamabad, Lahore, Karachi and Peshawar. More recently, an excellent technology park was established under my supervision within the Pak-Austria Fachhochschule (University of Applied Science and Engineering) in Haripur, Hazara.
Technology parks play a crucial role in enhancing the competitiveness of industries by providing access to state-of-the-art infrastructure, specialized facilities, and cutting-edge equipment. Companies located within technology parks benefit from shared resources such as research laboratories, testing facilities, and prototyping centres, enabling them to accelerate the development and commercialization of new products.
Moreover, the clustering effect of technology parks encourages the formation of industry clusters, where companies operating in related sectors can collaborate, share best practices, and access a pool of skilled talent.