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Intel to Invest $7 Billion in New Chip-Packaging Factory in Malaysia, Creating 9,000 Jobs

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By Reuters | Updated: 16 December 2021

Intel will invest more than $7 billion (roughly Rs. 53,380 crore) to build a new chip-packaging and testing factory in Malaysia, Chief Executive Pat Gelsinger said on Thursday, expanding production in the country following a global shortage of semiconductors.

The new advanced packaging facility in Malaysia is expected to begin production in 2024, he said.

The MYR 30 billion (roughly Rs. 54,140 crore) investment is expected to create over 4,000 Intel jobs and more than 5,000 construction jobs in the country, the Malaysian government said.

“This undertaking is indeed timely given the bullish global demand driven by the chip shortages and the potential challenges arising from the recovery of the pandemic globally,” Malaysian Minister of International Trade and Industry Mohamed Azmin Ali said in a statement.

A global shortage of semiconductor chips, caused partly by a pandemic-fuelled demand for electronics and disruptions in supply chains has seen car makers cut production and delays in smartphone deliveries at companies including Apple.

Malaysia’s chip assembly industry, accounting for more than a tenth of a global trade worth over $20 billion, has warned that shortages will last at least two years.

Intel’s Gelsinger said he expected the chip shortages to last into 2023.

“Overall the semiconductor industry this year will grow more than it has in the last two to three decades. But still, the gaps are large … and I predict that the limitations of the shortages will persist into 2023,” he said.

Intel hoped to announce the next locations in the US and Europe early next year, he added.

Intel opened its first production facility outside the US at a 5-acre assembly site in the Malaysian state of Penang in 1972. By 1975, it employed about 1,000 people and had become a crucial part of the company’s manufacturing chain, its website said.

Last month, the US and Malaysia said they plan to sign an agreement by early next year towards improving transparency, resilience and security in the semiconductor and manufacturing sector supply chains.

© Thomson Reuters 2021

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Facebook-Parent Meta Creates AI Research SuperCluster Supercomputer, Touted to Be World’s Fastest

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By Associated Press | Updated: 25 January 2022

Facebook’s parent company Meta on Monday said it has created what it believes is among the fastest artificial intelligence supercomputers running today.

The social media giant said it hopes the machine will help lay the groundwork for its building of the metaverse, a virtual reality construct intended to supplant the Internet as we know it today.

Facebook said it believes the computer will be the fastest in the world once it is fully built around the middle of the year.

Supercomputers are extremely fast and powerful machines built to do complex calculations not possible with a regular home computer. Meta did not disclose where the computer is located or how much it is costing to build.

The computer, which is already up and running but is still being built, is called AI Research SuperCluster. Meta says it will help its AI researchers build “new and better” artificial intelligence models that can learn from “trillions” of examples and work across hundreds of different languages simultaneously and analyse text, images and video together.

The way Meta is defining the power of its computer is different from how conventional and more technically powerful supercomputers are measured because it relies on the performance of graphics-processing chips, which are useful for running “deep learning” algorithms that can understand what’s in an image, analyse text, and translate between languages, said Tuomas Sandholm, a computer science professor and co-director of the AI center at Carnegie Mellon University.

“We hope RSC will help us build entirely new AI systems that can, for example, power real-time voice translations to large groups of people, each speaking a different language, so they can seamlessly collaborate on a research project or play an AR game together,” Meta said in a blog post.

The company said its supercomputer will incorporate “real-world examples” from its own systems into training its AI. It says its previous efforts used only open-source and other publicly available data sets.

“They are going to, for the first time, put their customer data on their AI research computer,” Sandholm said. “That would be a really big change to give AI researchers and algorithms access to all that data.”

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Intel Said to Plan $20-Billion Chip Manufacturing Site in Ohio

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By Reuters | Updated: 21 January 2022

Intel on Friday is set to announce it will invest $20 billion (roughly Rs. 1,48,850 crore) in a massive new manufacturing site near Columbus, Ohio to develop and manufacture advanced semiconductor chips, sources briefed on the matter told Reuters.

The planned investment includes 3,000 permanent jobs on the 1,000-acre site in New Albany, Ohio. Time magazine, which first reported the news, said Intel will build at least two semiconductor fabrication plants.

US President Joe Biden is making remarks Friday on the US government’s efforts “to increase the supply of semiconductors, make more in America, and rebuild our supply chains here at home,” the White House said earlier.

Intel Chief Executive Pat Gelsinger is set to appear with Biden on Friday at the White House, sources told Reuters. The White House did not respond to a request for comment.

The initial $20 billion (roughly Rs. 1,48,850 crore) is the first step of what could be an eight-factory complex costing tens of billions of dollars.

Intel declined to comment on its plans but said in a statement that Gelsinger would disclose details Friday of “Intel’s latest plans for investment in manufacturing leadership” as it works “to meet the surging demand for advanced semiconductors.”

Chipmakers are scrambling to boost output after manufacturers around the world, from autos to consumer electronics, faced shortages of chips. Intel also is trying to win back its position as maker of the smallest and fastest chips from current leader TSMC, which is based in Taiwan.

Gelsinger last fall also said he planned to announce another US campus site before the end of the year that would eventually hold eight chip factories.

He told the Washington Post the complex could cost $100 billion (roughly Rs. 7,44,125 crore) over a decade and eventually employ 10,000.

Gelsinger is driving Intel plans to expand, especially in Europe and the United States, as it seeks to heat up competition with global rivals and respond to a worldwide microchip shortage.

Intel and Italy are intensifying talks over investments expected to be worth around EUR 8 billion (roughly Rs. 67,490 crore) to build an advanced semiconductor packaging plant, Reuters reported late last year.

The Biden administration is making a big push to convince Congress to approve $52 billion (roughly Rs. 3,86,945 crore) in funding to dramatically increase chip production in the United States. The Senate in June voted 68-32 for the chips funding as part of a broader competitiveness bill, but it has been stalled in the House.

House Speaker Nancy Pelosi said Thursday she hopes to “go to conference” on the chips funding measure soon.

Still, Intel’s plans for new factories will not alleviate the current demand crunch, because such complexes take years to build. Gelsinger previously said he expected the chip shortages to last into 2023.

In September, Intel broke ground on two factories in Arizona as part of its turnaround plan to become a major manufacturer of chips for outside customers. The $20 billion (roughly Rs. 1,48,850 crore) plants will bring the total number of Intel factories at its campus in the Phoenix suburb of Chandler to six.

Intel told Time it considered 38 sites before picking New Albany, Ohio in December. Ohio has agreed to invest $1 billion (roughly Rs. 7,440 crore) in infrastructure improvements to facilitate the factory, Time said.

© Thomson Reuters 2022

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US Federal Trade Commission Sues to Block Nvidia-Arm Deal

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By Reuters | Updated: 3 December 2021

The US Federal Trade Commission on Thursday sued to block US chip company Nvidia’s more than $80 billion (roughly Rs. 5,99,760 crore) planned acquisition of British chip technology provider Arm, adding to already significant global regulatory challenges of the deal.

The FTC said the proposed deal would give one of the largest chip companies control over computing technology and designs that competitors rely on to develop their own competing chips.

The deal has been widely expected to fall apart after facing opposition in the chip industry. British regulators said last month they would launch an in-depth probe of the deal, and it is also under scrutiny in the European Union.

Arm licenses its chip architecture and blueprints to major chipmakers Apple, Qualcomm, and Samsung, underpinning the global smartphone ecosystem. Arm was sold to Japan’s SoftBank in 2016.

Nvidia said it would “work to demonstrate that this transaction will benefit the industry and promote competition.”

Arm declined to comment.

The stock-heavy deal has more than doubled in value since it was announced in September 2020 as Nvidia shares have risen on the performance of its data centre business. Nvidia will owe only a $1.25 billion (roughly Rs. 9,370 crore) breakup fee if the deal does not close, and its shares closed up 2.2 percent at $321.26 (roughly Rs. 24,090) on Thursday.

“Nobody thinks the deal is going to close,” said Stacy Rasgon, an analyst with Bernstein. “The data centre story has been really playing out. The software narrative has become a bigger piece of the story. I would love to see this deal, but I don’t think they need it.”

Before Nvidia’s offer, SoftBank had planned to file for an initial public offering for Arm. While Arm’s revenue is growing briskly, rising 56.3 percent to $1.46 billion (roughly Rs. 10,945 crore) in the six months ended September 30, it is unclear whether Arm, in an IPO, would fetch anything close to the $80 billion (roughly Rs. 5,99,760 crore) in value offered by Nvidia.

That would be a new blow for the Japanese conglomerate whose Vision Fund assets sank by $10 billion (roughly Rs. 74,970 crore) last month, driven by plummeting valuations for investments in Chinese e-commerce firm Alibaba and ride-hailing service Didi Global.

The FTC, which is made up of two Republicans and two Democrats, voted 4-0 to approve the challenge to the planned merger.

‘Higher prices and less choice’

The FTC alleged “the proposed merger would give Nvidia the ability and incentive to use its control of this technology to undermine its competitors, reducing competition and ultimately resulting in reduced product quality, reduced innovation, higher prices, and less choice, harming the millions of Americans who benefit from Arm-based products.”

The FTC added the combined firm “would have the means and incentive to stifle innovative next-generation technologies, including those used to run datacentres and driver-assistance systems in cars.”

Some semiconductor firms such as MediaTek and Broadcom have voiced support for the deal. But other firms such as Qualcomm have opposed it over concerns that Nvidia would have a first look at key technologies that they depend on and could then have better insights into their future products.

Qualcomm did not immediately respond to a request for comment.

Nvidia’s chief executive, Jensen Huang, made a biting comment at an industry dinner last month, saying that Qualcomm Chief Executive Cristiano Amon, who recently took the helm of an industry trade group, had proven to be a master advocate in the battle over Arm. Qualcomm had its own extensive battles with global regulators, including the FTC, which Qualcomm prevailed over after the regulator brought an antitrust lawsuit against it.

“He’s the perfect person to advocate for our industry,” Huang said from a stage as Amon sat in the audience. “I was trying to figure out, how is it possible that Cristiano knew every single regulator on the planet, and by the time I got there to tell them about my story on Arm, he was already there advocating against it?” Huang said, to stunned laughter from the crowd.

The FTC said it has cooperated closely with staff of the competition agencies in the European Union, United Kingdom, Japan, and South Korea.

© Thomson Reuters 2021

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Bosch to Invest More Than EUR 400 Million in Chip Production in Germany, Malaysia Next Year

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By Reuters | Updated: 29 October 2021

German technology group Robert Bosch has earmarked more than EUR 400 million (roughly Rs. 3,490 crore) for investments in microchip production in Germany and Malaysia next year to ease a global shortage.

A lack of chips for automakers has disrupted vehicle production around the world, with suppliers relying almost exclusively on chips from only a few manufacturers in Asia and the United States.

The largest part of Bosch’s budget will be spent on a faster expansion of its Dresden, Germany factory for 300-millimeter wafers, which the group inaugurated in June, it said in a statement on Friday.

About EUR 50 million (roughly Rs. 436 crore) will be invested at a site in Reutlingen near Stuttgart making 200-millimeter wafers, said the company, which also makes car parts and factory automation systems.

Another project to be funded will be the construction of a semiconductor testing facility in Penang, Malaysia, it added, without specifying the level of investment.

Intel, the biggest maker of processor chips for PCs and data centres, said last month it could invest up to EUR 80 billion (roughly Rs. 698 crore) in Europe over the next decade.

© Thomson Reuters 2021

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Intel Teams With Google Cloud to Develop ‘Mount Evans’, a New Class of Data Centre Chip

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By Reuters | Updated: 28 October 2021 

Intel and Alphabet’s Google Cloud on Wednesday said they have worked together to create a new category of chip that Intel hopes will become a major seller in the booming cloud computing market.

The new chip, which is called Mount Evans and will be sold to others beyond Google, reflects the way that cloud computing providers operate. They build huge data centers full of powerful physical computers and sell virtual slices of those machines to other businesses, who in turn get better bang for the buck than building the machines themselves.

For cloud providers, tasks like setting up the virtual machines and getting customer data to the right place are essentially overhead costs. The Mount Evans chip, which Google and Intel have dubbed an “infrastructure processing unit” (IPU), separates those tasks out from the main computing tasks and speeds them up. Doing so also helps ensure the safety of those functions against hackers and adds flexibility to the data centre.

“We see this as strategically vital. It’s an extremely important area for us and for the data centre,” Nick McKeown, senior vice president of the network and edge group at Intel, told Reuters.

Intel is not the only player making infrastructure chips. Nvidia and Marvell Technology have similar but slightly different offerings.

But Intel and Google are working together on a set of software tools that will be released for free in hopes of making Intel’s version of the chip a broader industry standard used beyond Google’s data centres.

Amin Vahdat, a Google fellow and vice president of engineering, said Google is hoping to spur a technology trend that makes it easier for all data centre operators to be more flexible about how they slice up their physical computer servers into virtual ones to suit whatever computing task is at hand.

“The basic question of what is a server is going to go beyond what’s inside the sheet metal. The IPU is going to play a central role there,” Vahdat told Reuters.

© Thomson Reuters 2021

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Microsoft Rides Cloud Computing Boost to Nearly Overtake Apple as Most Valuable Company

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By Reuters | Updated: 28 October 2021

A surge in Microsoft’s shares nearly unseated Apple Inc as the world’s most valuable company on Wednesday, a day before the iPhone maker reports its quarterly results.

Fuelled by strong quarterly growth in its Azure cloud-computing business, Microsoft’s shares jumped 4.2 percent to end at a record $323.17 (roughly Rs. 24,225), elevating the software maker’s market capitalisation to $2.426 trillion (roughly Rs. 1,81,86,020 crore), just short of Apple’s $2.461 trillion (roughly Rs. 1,84,45,070 crore) valuation, according to Refinitiv data.

Apple’s shares dipped 0.3 percent ahead of its report due after the bell on Thursday, with investors focused on how the global supply-chain crisis is challenging the company’s ability to meet demand for its iPhone models.

Microsoft’s stock has rallied 45 percent this year, with pandemic-induced demand for its cloud-based services driving sales. Shares of Apple have climbed 12 percent in 2021.

Apple’s stock market value overtook Microsoft’s in 2010 as the iPhone made it the world’s premier consumer technology company. The two companies have taken turns as Wall Street’s most valuable company in recent years, with Apple holding the title since mid-2020.

In its report late on Tuesday, Microsoft forecast a strong end to the calendar year thanks to its booming cloud business, but it warned that supply-chain woes will continue to dog key units, such as those producing its Surface laptops and Xbox gaming consoles.

Analysts on average expect Apple to report September-quarter revenue up 31 percent to $84.8 billion (roughly Rs. 6,35,560 crore) and adjusted earnings per share of $1.24 (roughly Rs. 90), according to Refinitiv.

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