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As Japan and the United States place fresh curbs on Chinese technology firms, local investors are scooping up shares of those firms and state companies, and reaping handsome rewards. New fund launches will potentially channel money into China's technology and chipmaking leaders, including ZTE Corp (000063.SZ), Unisplendour Co (000938.SZ), Montage and Cambricon Technologies (688256.SS). Cutting-edge innovation requires huge and long-term investment, which is beyond the ability of private companies, "but SOEs can do it," Yang said. For example, China's chipmaking sector is now trading at 60 times earnings, compared with 16 for the broad market. But "China needs high valuation in some sectors ... Why don't you put down your wager, while also supporting the country's development?"

☆ Using frozen Russian money for Kyiv is barmy
▼ + stars: | 2023-05-25 | by ( ) www.reuters.com time to read: +2 min

European officials are still discussing options to use the proceeds of Russia’s frozen funds to help Ukraine. Yet funnelling the money to the war-torn country, which looks justifiable on moral grounds, would set a bad precedent. Euroclear, the Belgium-based settlement house, is sitting on some 180 billion euros of Russian central bank reserves – part of the 280 billion euros Ukraine’s allies froze last year after Russia’s invasion. The clearing firm also holds another 17 billion euros from sanctioned Russian individuals. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Embracer gaming deal flub leaves credibility wound
▼ + stars: | 2023-05-24 | by ( ) www.reuters.com time to read: +3 min

LONDON, May 24 (Reuters Breakingviews) - A communications glitch is raising credibility questions at video game giant Embracer (EMBRACb.ST). Gaming companies occasionally make games in partnership with media giants that control popular intellectual property – like film, TV or comic book characters – but lack the knowhow to create video games. Conversely, a hot developer may sign a deal to produce exclusive content for a specific video game marketplace, like the Epic Games Store. It said on Wednesday that adjusted operating profit for the current financial year would likely be between 7 billion and 9 billion Swedish crowns ($650 million and $840 million), from 10.3 billion to 13.6 billion Swedish crowns previously. Among those is Savvy Games, owned by Saudi Arabia’s Public Investment Fund, which bought a roughly 8% stake for 103 Swedish crowns a share in June last year, versus a share price of roughly 23 Swedish crowns on Wednesday morning.

☆ China's internet giants bet big on A.I. as Beijing looks to rival U.S. on tech 'paradigm shift'
▼ + stars: | 2023-05-23 | by ( Ryan Browne | ) www.cnbc.com time to read: +6 min

"This kind of computing power needs to be provided as a kind of public service or infrastructure. China, specifically, "has some of the most advanced AI tech in the world," he added. "We believe this is a Game of Thrones also playing out in the China Tech market as the gloves are on for this battle," Ives said. Many innovative vendors are going after this market and China tech is now in the midst of a secular shift around AI." The comments from some of China's top tech companies last week hint at how Beijing is seeking to ramp up its rivalry with the U.S. on AI.

Persons: BABA BABA, Robin Li, Baidu, Ernie Bot, OpenAI's ChatGPT, Tencent, Martin Lau, Lau, Alibaba, Daniel Zhang, Dan Ives, Ives, Hao Hong, CNBC's, —, Tencent's Lau, Baidu's Li, Didi, Meituan Organizations: HK, Microsoft, Google, Wedbush Securities, CNBC, China Tech, Big Tech, Baidu, U.S, Nvidia, chipmaker Micron, Grow Investment Locations: China, Beijing, U.S, Alibaba

☆ Canceled TV deal cuts one loan cord
▼ + stars: | 2023-05-23 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, May 23 (Reuters Breakingviews) - Banks can tune out one painful summer rerun. Television broadcaster Tegna (TGNA.N) on Tuesday terminated its sale to hedge fund Standard General, letting banks off the hook for $8.2 billion in debt backing the deal. As a result, Standard General couldn’t finance its transaction. Chipping away at the $25 billion-plus pile of hung loans potentially frees banks up to start fresh. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ JPMorgan finds jewels in US banking ashes
▼ + stars: | 2023-05-22 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, May 22 (Reuters Breakingviews) - JPMorgan (JPM.N) boss Jamie Dimon didn’t buy First Republic Bank in a crisis-hewn weekend deal just for the fuzzy glow from helping to stabilize the U.S. banking system. The giant lender laid out some of the impact of acquiring First Republic out of receivership in its investor day on Monday. There’s the $3 billion of contribution to net interest income from the deal, boosting this year’s expected total to $84 billion. More enticing, perhaps, is the $200 billion in wealth-management money the bank has taken from its defunct rival, along with roughly 200 advisers. JPMorgan is so big, with nearly $4 trillion of assets, it’s hard to move the needle in regular banking.

☆ Chinese chipmakers' shares rise after China fails Micron in security review
▼ + stars: | 2023-05-22 | by ( ) www.reuters.com time to read: 1 min

SHANGHAI, May 22 (Reuters) - Shares in some Chinese memory chipmaking-related companies opened up on Monday after China failed Micron Technology (MU.O) in a security review. China's cyberspace regulator said on Sunday that products made by Micron had failed its network security review, and it would bar operators of key infrastructure from buying from the company. China's memory chipmaking-related firms gigadevice semiconductors (603986.SS), ingenic semiconductor (300223.SZ), shenzhen kaifa technology (000021.SZ) opened up between 3% and 8%. Reporting by Jason Xue and Brenda Goh; Editing by Kim CoghillOur Standards: The Thomson Reuters Trust Principles.

☆ Samsung, SK Hynix shares rise after China fails U.S. rival Micron in security review
▼ + stars: | 2023-05-22 | by ( ) www.reuters.com time to read: 1 min

SEOUL, May 22 (Reuters) - Shares in South Korea's Samsung Electronics <005930.KS> and SK Hynix (000660.KS) rose in morning trade on Monday after China failed U.S. memory chip rival Micron Technology (MU.O) in a security review. China's cyberspace regulator said on Sunday that products made by Micron had failed its network security review, and it would bar operators of key infrastructure from buying from the company. Samsung shares were up 0.7%, while SK Hynix shares rose 1.1% versus the wider market's (.KS11) 0.8% gain. China had announced its review of Micron's products in late March, after Washington imposed a series of export controls on chipmaking technology to China. SK Hynix had no comment.

☆ Analysis: China's Micron ban highlights chipmakers' dilemma as Sino-U.S. tensions grow
▼ + stars: | 2023-05-22 | by ( Joyce Lee | ) www.reuters.com time to read: +5 min

SEOUL, May 22 (Reuters) - China's ban on the use of U.S.-based Micron Technology's (MU.O) chips in certain sectors, announced on Sunday, is a stark reminder of risks facing the global chip industry as it braces for escalating Sino-U.S. trade tensions. China's move against Micron, the biggest U.S. memory chipmaker, was widely seen as retaliation for Washington's efforts to restrict Beijing's access to key technology. Such tit-for-tat policies will make investment decisions difficult for all chipmakers, said Kim Sun-woo, analyst at Meritz Securities in Seoul. Analysts recommended accepting the rounds of Sino-U.S. trade war as status quo, while roundabout ways of importing memory chips may emerge in response to any further geopolitical pressure. "(Korean chipmakers) are stuck in the middle and being bothered by all sides," said Kim at Meritz.

☆ China fails Micron's products in security review, bars some purchases
▼ + stars: | 2023-05-21 | by ( ) www.reuters.com time to read: +2 min

According to China's broad definition of critical information infrastructure, this could include sectors ranging from transport to finance. "The review found that Micron's products have serious network security risks, which pose significant security risks to China's critical information infrastructure supply chain, affecting China's national security," the Cyberspace Administration of China (CAC) said in a statement. China announced its review of Micron's products in late March. The larger chunk of Micron's products flowing into China are being purchased by non-Chinese firms for use in products manufactured there, according to analysts. China in September 2021 imposed rules aimed at protecting critical information infrastructure, which require their operators to comply with stricter requirements around areas such as data security.

☆ China says Micron's products fail security review, bars some purchases
▼ + stars: | 2023-05-21 | by ( ) www.reuters.com time to read: +2 min

"The review found that Micron's products have serious network security risks, which pose significant security risks to China's critical information infrastructure supply chain, affecting China's national security," the Cyberspace Administration of China (CAC) said in a statement. Operators of critical information infrastructure will be required to stop procuring from Micron, the CAC added. According to China's broad definition of critical information infrastructure, this could include sectors ranging from transport to finance. The CAC did not detail what risks it had found nor what Micron products this would impact. China in September 2021 imposed rules aimed at protecting critical information infrastructure, which require their operators to comply with stricter requirements around areas such as data security.

☆ China's tech feud with the US is heating up
▼ + stars: | 2023-05-21 | by ( Joe Mcdonald | Associated Press | ) www.businessinsider.com time to read: +4 min

China is clamping down on the use of computer chips from US tech giant Micron Technologies. China's government claims Micron products have unspecified "serious network security risks." It's the latest development in the United States' tech feud with China. They import more than $300 billion worth of foreign chips every year. Beijing is pouring billions of dollars into trying to accelerate chip development and reduce the need for foreign technology.

☆ Britain inches towards right chipmaking niche
▼ + stars: | 2023-05-19 | by ( ) www.reuters.com time to read: +2 min

LONDON, May 19 (Reuters Breakingviews) - Prime Minister Rishi Sunak is taking a small step in the right direction. After much hesitation, Britain announced on Friday it would invest 1 billion pounds in its domestic semiconductor industry, with a focus on chip designs. Britain plays a relatively insignificant role in chip manufacturing, which is dominated by Taiwanese giant Taiwan Semiconductor Manufacturing Company (TSMC) (2330.TW). With over 110 semiconductor design firms, Britain can probably claim to be Europe’s leader in the segment. Under Sunak’s plan, Britain will invest 200 million pounds by 2025, with the full 1 billion pounds achieved over the next decade.

☆ China's economy is growing again. So why are investors dumping stocks?
▼ + stars: | 2023-05-19 | by ( Laura He | ) edition.cnn.com time to read: +7 min

Investors trimmed their exposure to China amid economic uncertainty in the country, rising geopolitical tensions and Beijing’s crackdown on international consulting firms. The Nasdaq Golden Dragon China Index has lost more than 5% since April 18. Another concern for global investors is the country’s “fundamental investability,” he said, referring to geopolitical and Chinese policy risks. Ontario Teachers’ Pension Plan, one of the world’s largest pension funds, has closed its Hong Kong-based China equity investment team. “The more cracks appear in Western economies,” the more global investors will need to put money into Chinese assets, he added.

☆ Supreme Court gifts Big Tech best kind of boring
▼ + stars: | 2023-05-19 | by ( ) www.reuters.com time to read: +2 min

WASHINGTON, May 19 (Reuters Breakingviews) - American tech giants have two new things to celebrate, and one less thing to worry about. The U.S. Supreme Court on Thursday unanimously protected Twitter from being sued for militant-group content on its platform. Together, the rulings reinforce internet platforms’ legal shield and kick a regulatory crackdown further down the road. With the Supreme Court siding in their favor, Big Tech can breathe a sigh of relief. The Supreme Court ruling leaves that debate stuck in Congress, exactly where tech giants want it.

☆ Britain launches $1.2 billion semiconductor plan after U.S. and EU splurge on chips
▼ + stars: | 2023-05-19 | by ( Ryan Browne | ) www.cnbc.com time to read: +5 min

Semiconductor bosses in the U.K. had expressed frustration with the lack of a concrete strategy from the government on semiconductors. watch now"By increasing the capabilities and resilience of our world-leading semiconductor industry, we will grow our economy, create new jobs and stay at the forefront of new technological breakthroughs," he added. Instead, they are focusing on other parts of the semiconductor industry, such as intellectual property and design and producing non-silicon chips. A U.K. semiconductor strategy was expected to come out last year. Semiconductor bosses in the country had expressed frustration with the lack of a concrete strategy from the government on semiconductors.

☆ Micron to invest $3.7 bln in Japan for new DRAM chips
▼ + stars: | 2023-05-18 | by ( ) www.reuters.com time to read: +1 min

May 17 (Reuters) - Micron Technology Inc (MU.O) said on Wednesday it plans to invest up to 500 billion yen ($3.70 billion) in extreme ultraviolet (EUV) technology over the next few years with support from the Japanese government. The latest extreme ultraviolet lithography (EUV) chipmaking machines will be used to make 1-gamma chips, which can be used for mass production of material required in complex applications such as image processing networks. Micron will be the first semiconductor company to bring EUV technology to Japan for production, the company said, adding that it expects to ramp EUV into production on the 1-gamma node in Taiwan and Japan from 2025 onwards. The announcement comes after the U.S. memory chip maker kicked off mass production of its new high-capacity low-power 1-beta dynamic random access memory (DRAM) chips at its plant in Hiroshima last year. DRAM chips are memory chips that lose the memory when the power is off.

☆ Micron poised to get $1.5 bln from Japan for next-gen chips - Bloomberg News
▼ + stars: | 2023-05-18 | by ( ) www.reuters.com time to read: +1 min

May 17 (Reuters) - Micron Technology Inc (MU.O) is poised to get about 200 billion yen ($1.48 billion) in financial incentives from Japan to help it make next-generation memory chips in the country, Bloomberg News reported on Wednesday, citing people familiar with the matter. Micron will use the funding to install advanced, extreme ultraviolet (EUV) chipmaking equipment from ASML Holding NV (ASML.AS) at its Hiroshima facility to fabricate DRAM chips, the report said. DRAM chips are memory chips that lose the memory when the power is off. Micron is also expected to contribute its own capital to the Hiroshima expansion with some support from the city, Bloomberg added. Micron, ASML and Japan's Ministry of Economy, Trade and Industry did not immediately respond to Reuters requests for comment.

May 18 (Reuters) - Semiconductor manufacturing tools maker Applied Materials Inc (AMAT.O) forecast third-quarter revenue above market estimates on Thursday, as governments around the world pour funding into chip factories. Chief Executive Officer Gary E. Dickerson said the company believes about $400 billion in government funding is supporting the chip industry. Applied Materials forecast third-quarter revenue of $6.15 billion, plus or minus $400 million, compared with analysts' estimates of $6.02 billion, according to Refinitiv IBES data. The company posted second-quarter revenue of $6.63 billion, compared with estimates of $6.38 billion. On an adjusted basis, the company earned $2 per share in the second quarter, beating estimates of $1.84 according to Refinitiv IBES data.

☆ China's biggest chipmaker posts first quarterly revenue fall in 3 years as semiconductor woes persist
▼ + stars: | 2023-05-12 | by ( Arjun Kharpal | ) www.cnbc.com time to read: +1 min

However, China's biggest chipmaker still faces a challenge catching up with rivals such as TSMC. China's biggest semiconductor manufacturing firm SMIC on Friday posted its first decline in quarterly revenue in more than three years as a glut in chips and lack of demand continues to hit the industry. SMIC or Semiconductor Manufacturing International Co., posted revenue of $1.46 billion in the first quarter of the year, down 20.6% year-on-year. Despite the headwinds, SMIC posted record revenue for the whole of 2022. Over 50% of SMIC's revenue comes from making chips that go into smartphones and other consumer electronics.

☆ Tech group urges Biden administration to keep child care requirement for chips funding
▼ + stars: | 2023-05-01 | by ( Lauren Feiner | ) www.cnbc.com time to read: +4 min

Standing against conservative critiques of the Biden administration's conditions on computer chip-manufacturing funding, the tech industry group Chamber of Progress urged the government to maintain its requirements, which include providing child care for workers. MacKenzie said the group aimed to push back on GOP attacks on so-called wokeness in business. But the Commerce Department has maintained that the rules are necessary to protect taxpayer dollars and ensure a stable workforce. "We simply will not be successful in achieving the national security goals of the CHIPS initiative unless we invest in our workforce, period. WATCH: Commerce Department sees more than 200 companies interested in CHIPS Act funds

☆ China investment consensus cracks as politics fuel fears
▼ + stars: | 2023-04-28 | by ( Tom Westbrook | ) www.reuters.com time to read: +5 min

It is unlikely to be resolved quickly even if the markets keep rallying and China economy keeps global growth ticking. Data paints a murky picture, but supports brokers' analysis that the bid from long-only money managers is absent. Allocation analysis from data firm EPFR shows a broad downtrend, especially to U.S.-domiciled China funds. EPFR figures show allocation to China funds outside the U.S. has increased for two years and mainland markets' recent performance has also been encouraging. "Our reservations about China's long-term investment prospects are based on our outlook for returns to capital."

☆ China's top chipmaker will 'struggle' to make cutting-edge chips competitively
▼ + stars: | 2023-04-28 | by ( Sheila Chiang | ) www.cnbc.com time to read: +5 min

China's largest chipmaker SMIC won't be able to produce cutting-edge chips competitively if it continues to be cut off from advanced equipment, analysts told CNBC. Vcg | Visual China Group | Getty ImagesChina's largest chipmaker SMIC won't be able to produce cutting-edge chips competitively if it continues to be cut off from advanced equipment, analysts told CNBC. Following the 2020 sanctions, the U.S. last year introduced sweeping export restrictions aimed at cutting China off from advanced chip tech and equipment. The Netherlands as well as Japan have reportedly followed the U.S. in imposing rules aimed at restricting China from accessing advanced chip tech. "Can SMIC produce in a commercially viable way scaled by the hundreds of thousands or tens of millions in some cases?

☆ Germany may restrict export of chip chemicals to China - Bloomberg
▼ + stars: | 2023-04-27 | by ( ) www.reuters.com time to read: +3 min

April 27 (Reuters) - Germany may limit the export of chemicals to China that are used to manufacture semiconductors as part of the government's efforts to reduce its economic exposure to the Asian economic superpower, Bloomberg news reported on Thursday. It would be the latest in steps under consideration by Germany as it reassesses ties with China. Merck KGaA (MRCG.DE) and BASF (BASFn.DE), two German chemicals majors who could be affected by the export curbs if implemented, declined comment. German Economy Minister Robert Habeck had in March suggested that Berlin could impose export restrictions to China to prevent Germany from losing its technological edge. "Export controls with regard to technology must be constantly checked, constantly expanded and constantly updated," a government spokesperson added at the time.

☆ TSMC aims to get newest chip technology into cars faster
▼ + stars: | 2023-04-26 | by ( Stephen Nellis | ) www.reuters.com time to read: +2 min

Many of the automotive industry's biggest chip suppliers such as NXP Semiconductor (NXPI.O) and STMircoelectronics NV (STM.DE) tap TSMC to make their chips. But automotive chips must meet a higher bar for ruggedness and longevity than the chips that go into consumer electronics. TSMC has special manufacturing processes for the automotive industry that typically arrive a couple years after similar processes for consumer chips. In the past it has then taken automotive chip firms extra time to create chip designs for those specialized manufacturing lines. At a conference in Silicon Valley on Wednesday, TSMC unveiled new software that will enable automotive chip designers to start work on their designs about two years sooner.

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