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Taiwanese Legislators Seek to Pass Bill to Protect ‘Core’ Technologies From Chinese Espionage



By ANI | Updated: 9 May 2022

In order to prohibit Chinese espionage to steal information about Taiwan’s ‘core’ technologies, its legislators are seeking to pass bills for harsher punishments. The amendments would increase prison time and fines for people who work with foreign entities to steal information about ‘core’ technologies, reported Taipei Times.

Legislators aim to pass three readings of draft amendments to the National Security Act and the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area this month, sources said.

A proposed bill to amend the National Security Act, which passed a preliminary review on April 7, would prohibit people from helping China, Hong Kong, Macau, foreign countries or overseas hostile forces, or companies, organizations or people controlled by them, to infringe on the business secrets of the nation’s “core” technologies.

Offenders under the law could face five to 12 years in prison or a fine of New Taiwan dollar (NTD) 5 million to NTD 100 million (roughly Rs. 1.3 crore to Rs. 25 crore).

The amendment would also prohibit people from using and infringing on business secrets of the nation’s core technologies in China, Hong Kong, Macau and foreign countries, adding that offenders could face three to 10 years in prison or a fine of NTD 5 million to NTD 50 million (roughly Rs. 1.3 crore to Rs. 13 crore), reported Taipei Times.

To expedite prosecution, the amendment requires that the High Court hear the first instance of cases concerning national security, and the Intellectual Property and Commercial Court hear the first instance of economic espionage cases.

A draft amendment to the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area, which passed a preliminary review on March 25, would forbid Chinese businesses or Chinese-funded entities based outside China from engaging in business activities in Taiwan without government approval, reported Taipei Times.

Offenders would face up to three years in prison and fines of up to NTD 15 million (roughly Rs. 4 crore), while anyone who allows Chinese-funded businesses to use their name to operate in Taiwan would face fines from NTD 120,000 to NTD 2.5 million (roughly Rs. 3 lakh to Rs. 65 lakh), the draft amendment said.

Under the bill, legal persons, groups, and members of entities commissioned, subsidised, or invested to a certain extent by government agencies to engage in businesses involving the nation’s core technologies would need government approval to travel to China, reported Taipei Times.

The requirement would remain for three years after the commission, subsidy or investment ends, or three years after the person has left their position, and offenders could face fines of NTD 2 million to NTD 10 million (roughly Rs. 50 lakh to Rs. 2.6 crore), it said.

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ASML Shares Fall After Report Suggests US Wishes to Restrict Sales to China



By Reuters | Updated: 6 July 2022

Shares in ASML Holding, a key supplier of equipment to semiconductor makers, fell on Tuesday following a Bloomberg News report that the US government wants to restrict the company from selling equipment to China.

ASML has already been unable to ship its most advanced tools to China, but the report said Washington would also restrict the sale of slightly older machines, citing “people familiar with the matter.”

A spokesperson for ASML said the company was unaware of any policy change.

“The discussion is not new,” the spokesperson said. “No decisions have been made, and we do not want to speculate or comment on rumours.”

ASML’s US shares sank 7.2 percent in the wake of the report.

Other chip gear makers also lost ground, with Lam Research off 3.6 percent and Applied Materials losing 2.4 percent.

China is ASML’s third largest market, after Taiwan and South Korea, representing around 16 percent of 2021 sales, or EUR 2.1 billion (nearly Rs. 17,100 crore).

ASML has a near monopoly on the manufacture of lithography systems, machines vital for chipmakers such as Intel, TSMC and Samsung. Lithography systems cost hundreds of millions of dollars apiece and use focused beams of light to create the circuitry of computer chips.

Lithography and other semiconductor manufacturing equipment require an export license, as computer chips are considered “dual use” technology, with military as well as commercial applications.

Since 2019, the Dutch government, in agreement with the US, has not granted a license for ASML to sell its most advanced machines, which use “extreme ultraviolet,” or EUV, light waves, to Chinese chipmakers.

ASML still sells “deep ultraviolet,” or DUV, machines, to Chinese customers.

The majority of chips worldwide are manufactured with DUV lithography. Restricting their sale to China would be highly damaging for China’s chip industry and would likely worsen a global semiconductor shortage.

In 2021, the US National Security Commission on Artificial Intelligence — led by former Google CEO Eric Schmidt — recommended that the US Departments of State and Commerce should push allies to deny China access to top DUV, EUV and related tools.

© Thomson Reuters 2022

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Intel Demands $624 Million in Interest From EU After Antitrust Fine Win



By Reuters | Updated: 21 June 2022

The US chipmaker Intel has filed a claim for EUR 593 million (nearly $624 million or Rs. 4,800 crore) in interest from the European Commission, five months after it convinced Europe’s second-top court to scrap a EUR 1.06 billion (nearly Rs. 8,600 crore) EU antitrust fine, an EU filing showed on Monday.

Europe’s top court paved the way for such damage demands last year in a landmark ruling which ordered the EU executive to pay default interest on reimbursed fines in annulled antitrust cases.

Judges said late payment of interest will itself incur interest as well.

Intel in its application to the Luxembourg-based General Court said the Commission, which acts as the competition watchdog in the 27-country European Union, had refused to reimburse the company the default interest.

The Commission returned $1.2 billion (nearly Rs. 9,300 crore) to Intel after its court defeat in January this year.

Intel said its claim is based on an interest rate equivalent to the European Central Bank’s refinancing rate of 1.25 percent beginning from May 2009, and that this should be increased to 3.5 percent from August 2009 to February this year when the EU repaid the company fine, minus EUR 38 million (nearly Rs. 310 crore) in an interest amount paid to Intel by the Commission.

Recently, Intel also said to have announced to frozen hiring in the division responsible for PC desktop and laptop chips, according to a memo reviewed by Reuters, as part of a series of cost-cutting measures.

Intel is “pausing all hiring and placing all job requisitions on hold” in its client computing group, according to the memo sent on Wednesday. The memo said that some hiring could resume in as little as two weeks after the division re-evaluates priorities and that all current job offers in its systems will be honoured.

“We believe we are at the beginning of a long-term growth cycle across the semiconductor industry and we have the right strategy in place,” Intel said in a statement. “Increased focus and prioritisation in our spending will help us weather macroeconomic uncertainty, execute on our strategy and meet our commitments to customers, shareholders, and employees.”

© Thomson Reuters 2022

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Adobe Introduces New Updates, Remodels Metaverse Design Tools for Apple’s M Chips



By Reuters | Updated: 15 June 2022

Adobe on Tuesday said it has reworked several of its tools for creating three-dimensional content to make them work well on Apple computers that use the iPhone maker’s proprietary “M” series chips.

Adobe has long been a major player providing software in creative fields like photography, graphic design and film. But Adobe has been working to build out more tools for making the three-dimensional worlds and objects used in video games and, increasingly, the so-called metaverse, where companies like Meta Platforms Inc are hoping to use augmented reality technology to overlay digital content on the real world.

Adobe acquired software tools called Substance 3D in 2019 when it bought French firm Allegorithmic for an undisclosed sum. The tool helps the makers of movies like Frozen 2 and games imbue the digital objects they create with a wide array of lifelike textures, like wood or leather.

Adobe said that it has reworked the software so that it will run on Apple’s proprietary chips, a move that is likely to help Apple gain some ground of its own. While Apple’s laptops and desktop are widely used in some creative fields like music production, game developers tend to still rely on PCs that can be paired with power graphics chips from Nvidia that help graphics look more realistic.

But Apple’s new chips have added new graphics processing power, and Adobe plans to take full advantage of it in the new software, said Francois Cottin, senior director of marketing at Adobe.

“For these kinds of use cases, vertical integration is really key, from the app all the way to the chip,” Cottin said. “We’ve been working very closely with Apple on future-looking use cases. I think Substance 3D definitely represent that.”

Adobe also said Tuesday that it had signed up new customers for its three-dimensional content creation tools, including German fashion brand Hugo Boss and outdoor footwear brand Salomon Group.

© Thomson Reuters 2022

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Micron Downgraded to ‘Underweight’ Rating as PC, Mobile Demand Slows With Inflation



By Reuters | Updated: 4 June 2022

Micron Technology’s stock received a rare “underweight” rating from a brokerage due to the memory-chip maker’s heavy exposure to mobiles and PCs at a time when rising inflation forces consumers to rein in spending.

Micron shares were down about 6 percent at $71.18 (roughly Rs. 5,530) in early trading on Friday.

“With the global economy expected to face headwinds, we are concerned about Micron’s more than 50 percent exposure to consumer-like markets such as PCs, mobile, and other,” Piper Sandler wrote in a note to clients.

The brokerage also expects the company’s chip business that caters to the auto industry to suffer due to rising rates, a slowing economy, and the possibility of an excess inventory build.

Piper Sandler added that the Dynamic Random Access Memory (DRAM) market, which represents over 70 percent of the company’s total revenue, had already started to see price declines for most configurations.

Micron’s DRAM chips are widely used in data centres, personal computers and other devices.

Market research firm Counterpoint reported in April that global PC shipments were down 4.3 percent in the first quarter of 2022, as the war in Ukraine and China’s lockdowns pressured already fragile supply chains and added to shortages of components.

Global smartphone shipments are expected to decline 3.5 percent this year, according to IDC.

“While we do feel the company has done an outstanding job to reduce its cost structure and remain financially disciplined, we continue to view memory as largely a commodity market compared to the rest of our universe. As a result, we do feel Micron is likely to underperform,” Piper Sandler said.

The brokerage, however, expressed confidence in the company’s data centre business, which represents less than 30 percent of revenue.

It cut Micron’s price target by $20 (roughly Rs. 1,550) to $70 (roughly Rs. 5,440).

© Thomson Reuters 2022

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Lenovo China Warns About Shipment Shortage Due to Supply Chain Issues Amid Slow Revenue Growth



By Reuters | Updated: 27 May 2022

China’s Lenovo Group warned on Thursday that shipments would fall in the short term as China’s COVID-19 lockdowns exacerbated shortages of microchips, after posting its slowest quarterly growth in seven quarters.

The world’s largest maker of personal computers (PC) is among many companies facing supply chain headaches that have been worsened by a protracted shortage of chips, business disruptions from the Russia-Ukraine war and China’s efforts to stop the spread of COVID in the country.

“Due to the macro economic headwinds, the shortage is weighing significantly in the very short term,” Luca Rossi, executive vice president of Lenovo, told a post-earnings call.

“Specifically in this quarter, the manufacturing shutdowns will impact the total shipments in basically everywhere, particularly in the People’s Republic of China,” he said, adding that demand was also being curbed by geopolitical tensions and inflationary pressure.

Lenovo’s CFO Wai Ming Wong said the company’s Shenzhen factory operations were impacted during the quarter. The south China city imposed a one-week lockdown in March and conducted multiple rounds of testing after a jump in COVID cases.

The company said it was seeing some easing in supply shortages for the PC segment, but said its smartphone and data centre businesses were still under heavy pressure.

A bellwether for the global PC market, the Beijing-based company led the market with a 23.1 percent share in the January-March period, according to data from research firm Counterpoint.

A rush to buy PCs to work at home during the pandemic culminated in record sales and profit for Lenovo in the December quarter. But sales have begun to lose steam as China, the company’s biggest market, has been hit by the Omicron variant, keeping consumers at home and shutting factories.

The company’s revenue rose to $16.69 billion (roughly Rs. 1,29,559 crore) in the quarter ended March 31 from $15.63 billion (roughly Rs. 1,21,331 crore) a year earlier, below an average estimate of $17.36 billion (roughly Rs. 1,34,799 crore) from 9 analysts, according to Refinitiv. That amounted a 6.8 percent year-on-year rise, its slowest growth in seven quarters.

However, profit attributable to shareholders jumped to $412 million (roughly Rs. 3,199 crore), exceeding analysts’ expectations.

Lenovo also reported the annual result for its fiscal year ending in March. Revenue rose 18 percent to $71.6 billion (roughly Rs. 5,55,970 crore) and profit jumped 72 percent to $2 billion (roughly Rs. 15,530 crore), the highest levels for both since the company went public in 1994.

Counterpoint reported in April that global PC shipments fell 4.3 percent in the first quarter of 2022, as the war in Ukraine and China’s lockdowns pressured already fragile supply chains and added to shortages of components.

© Thomson Reuters 2022

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Vedanta to Finalise Location for $20 Billion Chip, Display Plant by Mid-June, Confirms Chairman Anil Agarwal



By Reuters | Updated: 26 May 2022

Vedanta will finalise a location for its $20 billion (roughly Rs. 1,55,273 crore) semiconductor and display plants in India by mid-June and will have the first chip product ready in two years, its Chairman Anil Agarwal said on Wednesday.

Oil-to-metals conglomerate Vedanta said in February it will diversify into chip manufacturing and announced plans to form a joint venture with Taiwan’s Foxconn to support Prime Minister Narendra Modi’s drive to make India a semiconductor manufacturing hub.

Vedanta has a total planned investment outlay of $20 billion for two separate units for chip and display manufacturing.

“Foxconn is our technical partner. We may not take equity partner for the fab,” Agarwal told Reuters in an interview in Davos, adding that the Apple contract manufacturer will have technical responsibility for the operation, from providing the tech to making semiconductors.

Vedanta is seeking incentives from Modi’s government and is also in talks with several Indian states on the unit’s location.

Agarwal said on the sidelines of the annual World Economic Forum the first phase of Vedanta’s project will entail an investment of $2 billion (roughly Rs.15,523 crore).

Private equity wants to be part of India’s semiconductor expansion and there was no shortage of funds, he said, while adding that Vedanta was yet to hold talks with PE firms.

India estimates its semiconductor market will reach $63 billion (roughly Rs. 4,89,004 crore) by 2026, compared with $15 billion (roughly Rs.1,16,431 crore) in 2020.

“You have to create another Taiwan in India,” Agarwal said, noting that India will have to focus on bringing the entire semiconductor ecosystem locally for it to be a global powerhouse.

The Indian government has said it will expand incentives beyond an initial $10-billion (roughly Rs. 77,621 crore) plan for those investing in semiconductor manufacturing, as it aims to become a key player in the global supply chain for chips.

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