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TSMC Said to Plan Doubling Down on US Chip Factories as Talks in Europe Falter

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By Reuters | Updated: 14 May 2021

Taiwan Semiconductor Manufacturing Co is weighing plans to pump tens of billions of dollars more into cutting-edge chip factories in the US state of Arizona than it had previously disclosed, but is cool on prospects for an advanced European plant, people familiar with the matter told Reuters.

TSMC is the world’s most advanced chip-maker, and its investment plans are being closely watched amid a global chip shortage and new initiatives in the US and Europe to subsidise semiconductor production. TSMC announced last year that it would invest $10 billion (roughly Rs. 73,320 crores) to $12 billion (roughly Rs. 88,000 crores) to build a chip factory in Phoenix.

Reuters this month reported that previously disclosed factory could be the first of up to six planned plants at the site. Now, company officials are debating whether the next plant should be a more advanced facility that can make chips with so-called 3-nanometre chipmaking technology compared to the slower, less-efficient 5-nanometre technology used for the first factory.

The more advanced 3-nanometre plant could cost $23 billion (roughly Rs. 1,68,640 crores) to $25 billion (roughly Rs. 1,83,300 crores), one person familiar with the matter told Reuters. Details of TSMC’s plans for the additional factories at the Arizona site have not been previously reported.

Officials have also sketched out plans for TSMC to make next-generation 2-nanometre and smaller chips as the Phoenix campus is built out the next 10 to 15 years, the person said.

In building the plants, TSMC is likely to compete against Intel and Samsung for subsides from the US government. President Joe Biden has called for $50 billion (roughly Rs. 3,66,610 crores) in funding to support domestic chip manufacturing, and the US Senate could take action on that as early as this week.

Some government officials worry that subsidies for TSMC could help Taiwan, where the company would likely continue to conduct research and development, more than the US. But the US subsidy plan does not exclude foreign firms.

Government and industry officials say a strong domestic chip-making sector is critical for the economy and national security. Although US chip firms such as Qualcomm and Nvidia dominate their markets globally, most of their chips are manufactured in Asia.

Intel has also committed to two more new fabrication plants, or fabs, in Arizona, while Samsung is planning a $17 billion (roughly Rs. 1,24,640 crores) factory adjacent to an existing facility in Austin, Texas.

A debate over how to boost chip-making is also playing out in the European Union. Intel has shown serious interest in those efforts, with chief executive Pat Gelsinger pitching a subsidy that could amount to $9 billion (roughly Rs. 66,000 crores) for a proposed “Eurofab” during a trip to Brussels last month.

EU industry commissioner Thierry Breton, who has championed the Eurofab idea, also spoke with TSMC’s Europe president, Maria Marced, last month. Although Breton publicly called the TSMC talk a “good exchange,” a second person familiar with the matter said the TSMC talks in Europe have gone “very poorly.”

A TSMC spokeswoman said that the company has not ruled out any possibilities, but that there are no plans for a plant in Europe.

European chip and auto companies, for their part, are mostly lined up against the idea. They would prefer subsidies for the older-generation chips that are heavily used by car manufacturers and are in short supply.

Many of TSMC’s most lucrative customers, such as Apple, are US-based, while its European customer base is made up of mostly of automakers buying less-advanced chips. In the first quarter, clients based in Europe and the Middle East only accounted for 6 percent of TSMC’s revenue, far outpaced by the by 67 percent of sales from North America and 17 percent from Asia Pacific.

Sources said TSMC has not ruled out building an older-generation chip plant in Europe to serve auto customers.

Poaching from Intel

TSMC this year hired Benjamin Miller, a 25-year Intel veteran, as its head of human resources in Arizona. The company says that it has hired 250 engineers there and that about 100 of them, along with their families, have been sent to Tainan, Taiwan, where they will complete a 12- to 18-month training programme before returning to Arizona.

TSMC declined to comment on specific details of its Arizona plans, but its Chief Executive CC Wei last month said that “further expansion is possible” after an initial phase. He said the company would gauge efficiency at the site and customer demand and decide on the next steps.

TSMC chairman and founder Morris Chang, warned last month of higher operating costs and a thin talent pool for the US plans in a rare public speech attended by Wei and chairman Mark Liu.

“In the United States, the level of professional dedication is no match to that in Taiwan, at least for engineers,” Chang said. He warned that “short-term subsidy can’t make up for long-term operational disadvantage.”

TSMC’s first Arizona factory will be relatively small, with a projected output of 20,000 wafers – 12-inch silicon discs that can each contain thousands of chips – per month. By contrast, TSMC’s “gigafabs” in Taiwan can produce 100,000 wafers per month.

But TSMC leaders are taking a long view, starting with mature technology and ramping up volume while gradually introducing the most advanced processes, a third person familiar with the matter said. Like the others, the person declined to be identified because of the sensitivity of the matter.

“You just don’t go into Phoenix, 10,000 miles away, and start fabricating on the leading edge,” the person said.

© Thomson Reuters 2021

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Greek Government Rocked by Resignations Amid Long-Simmering Surveillance Scandal

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By Agence France-Presse | Updated: 6 August 2022

Greece’s conservative government was rocked Friday by a long-simmering surveillance scandal after its intelligence chief and a close aide to Prime Minister Kyriakos Mitsotakis resigned in the space of an hour. Panagiotis Kontoleon offered his resignation due to management “errors” during his time in the role, Mitsotakis’ office said in a statement.

The announcement that Kontoleon had resigned from his position at the head of national intelligence service EYP came less than an hour after the secretary general of the prime minister’s office, Grigoris Dimitriadis, also quit.

The resignations came a week after the leader of the country’s Socialist opposition party, Nikos Androulakis, filed a complaint with the supreme court over “attempted” spying on his mobile phone using Predator malware.

Two Greek journalists have also taken legal action this year after they claimed to have been victims of surveillance.

Androulakis on Friday called for a special investigation by parliament into the incident.

“I never expected the Greek government to spy on me using the darkest practices,” he said.

Two Greek journalists have also taken legal action this year after they claimed to have been victims of surveillance.

Androulakis on Friday called for a special investigation by parliament into the incident.

“I never expected the Greek government to spy on me using the darkest practices,” he said.

The government has consistently denied any state involvement, saying it had not bought software of that type, but the rows have sparked an outcry in the country.

Government spokesman Yiannis Economou has said it was “plausible” that individuals used Predator to spy and that all of Europe faced surveillance threats.

In November, Greek minister of state George Gerapetritis had insisted to AFP that there is “no surveillance of journalists in Greece” by the state.

“Greece fully adheres to the values of democratic society and rule of law, especially pluralism and the freedom of the press,” Gerapetritis said.

As such, he argued there was “no need for further action” to verify the alleged monitoring of investigative journalist Stavros Malichudis.

Kontoleon, who was appointed EYP head in 2019 after Mitsotakis’s conservative party won power that year, had implied while in that role that the journalists had been targeted on the order of foreign intelligence services.

Investigative websites Reporters United and Inside Story have accused Dimitriadis — a nephew of Mitsotakis — of being linked to the alleged spying scandals involving Androulakis and Greek financial journalist Thanasis Koukakis.

Dimitriadis on Friday threatened to sue Reporters United and leftist daily Efsyn unless they withdraw a story on the case. Koukakis was also warned to refrain from retweeting the story.

In one of his first acts upon assuming power in 2019, Mitsotakis raised eyebrows by attaching the national intelligence service to his office.

The main opposition party, the left-wing Syriza, called the affair “a huge scandal”. Its leader, former premier Alexis Tsipras, said the resignation of Dimitriadis was “an admission of guilt” and that Mitsotakis himself bore some of the responsibility.

“Mr Mitsotakis must give explanations to the Greek people over his own Watergate,” Tsipras said.

A dystopian, Orwellian reality

Experts note that Predator, originally developed in North Macedonia and subsequently in Israel, can access both messages and conversations.

“A few days ago I was informed by the European Parliament that there was an attempt to bug my mobile phone with Predator surveillance software,” Androulakis told the media as he left a court in Athens on July 26.

“Finding out who is behind these harmful practices is not a personal matter but a democratic duty,” he added.

The European Parliament set up a special service for MEPs to check their phones for illegal surveillance software following hacks using a spyware similar to Predator called Pegasus.

Androulakis used the service for “a precautionary check of his phone on June 28, 2022”.

“From the first check, a suspicious link related to the Predator surveillance tool was detected,” his PASOK party said in a statement.

The software can infiltrate mobile phones to extract data or activate a camera or microphone to spy on their owners.

“Predator is among the most expensive spyware and is out of reach for individuals,” cybersecurity specialist Anastasios Arampatzis told AFP, saying only a state would need its sophisticated security features.

“Security and the protection of one’s private life must be guaranteed by any democratic regime. If a state spies on its citizens, we’re heading towards a dystopian, Orwellian reality.”

Spain’s intelligence chief was sacked earlier this year after it emerged that top politicians — including Prime Minister Pedro Sanchez and Catalan separatists — had been targeted by phone hacking.

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Apple Asks Suppliers to Follow China Customs Rules Amid Sino-US Tensions: Report

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By Reuters | Updated: 5 August 2022

Apple has asked suppliers to ensure that shipments from Taiwan to China comply with the latter’s customs regulations to avoid them from being held for scrutiny, according to a Nikkei report on Friday. Sino-US trade tensions have escalated following US House of Representatives Speaker Nancy Pelosi and a congressional delegation’s visit to Taiwan. The iPhone maker told suppliers that China had started enforcing a long-standing rule that Taiwanese-made parts and components must be labeled as made either in “Taiwan, China” or “Chinese Taipei”, the report added, citing sources familiar with the matter.

Apple did not immediately respond to a Reuters request for comment.

Apple iPhone assembler Pegatron said its mainland China plant is operating normally, in response to a media report that shipments to Pegatron’s factory in China were being held for scrutiny by Chinese customs officials.

Taiwanese supply and assembly partners Foxconn and Pegatron are ramping up manufacturing efforts as Apple is set to launch its new iPhone in September.

Meanwhile, Pelosi’s trip To Taiwan coincided with US efforts to convince TSMC – the world’s largest chip manufacturer, on which the US is heavily dependent – to establish a manufacturing base in the US and to stop making advanced chips for Chinese companies.

US support for Taiwan has historically been based on Washington’s opposition to communist rule in Beijing, and Taiwan’s resistance to absorption by China. But in recent years, Taiwan’s autonomy has become a vital geopolitical interest for the US because of the island’s dominance of the semiconductor manufacturing market.

Recently, the US Congress has passed the Chips and Science Act, which provides $52 billion (roughly Rs. 4,11,746 crore) in subsidies to support semiconductor manufacturing in the US. But companies will only receive Chips Act funding if they agree not to manufacture advanced semiconductors for Chinese companies.

© Thomson Reuters 2022

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Apple Reportedly Accused of Mishandling Sexual Misconduct Complaints by Women Workers

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By Agence France-Presse | Updated: 5 August 2022

Over a dozen women accused Apple of mishandling sexual misconduct claims they lodged while working for the iPhone maker, according to a Financial Times report out Thursday.

The 15 current and former employees of the Silicon Valley giant reported either being retaliated against or getting a disappointing or counterproductive response from the company.

Apple did not immediately reply to a request for comment, but told the newspaper it works hard to investigate misconduct complaints and added it would make changes to its training processes.

Sexual harassment or discrimination scandals have rocked Silicon Valley in the wake of the #MeToo movement, which spurred action over the tech industry’s male-dominated culture, attitudes and behaviour.

One of the women cited in the story, Megan Mohr, was inspired by #metoo to report to Apple in 2018 that a male colleague had removed her shirt and bra and photographed her after a night out drinking together while Mohr briefly fell asleep.

After speaking with human resources about her claim, the company noted the worker’s conduct was potentially criminal but didn’t violate any policy in the context of his work at Apple, the story reported.

She quit her job in January, after 14 years at the firm, and is now asking the company to take a hard look at its policies, the report went on to say.

The women interviewed for the story make up a fraction of the some 165,000 people the firm employs globally.

Another woman cited in the story, Jayna Whitt, penned a blog post in which she said a romantic relationship with a fellow Apple attorney had gone bad and become dangerous.

She said the man was unstable, physically violent and emotionally abusive, but when Whitt told Apple, the firm advised her to call the police if she felt unsafe.

Her complaint to the company about the man’s behaviour eventually resulted in her being reprimanded for allowing a personal relationship to interfere with her work, Whitt’s blog post says.

Apple is not the only big tech firm to face accusations about abuse or handling of misconduct claims, game studio Activision Blizzard and Elon Musk’s Tesla have both been roiled by lawsuits.

Six women sued Tesla in December, alleging a culture of sexual harassment at the electric carmaker’s California plant and other facilities that included unwanted touching, catcalls and retaliation for those who complained.

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Oppo, Vivo India and Xiaomi Under Government Scanner in India as ED Takes Action

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By ANI | Updated: 4 August 2022

It’s a perfect storm for Chinese mobile manufacturing companies operating in India.

The Indian government is looking into cases of alleged tax evasion by three major Chinese mobile companies — Oppo, Vivo India and Xiaomi — and notices have been issued to them, respectively. The cases slapped against these companies range from allegations in what the government termed as income tax evasion and customs violations to fraud and money laundering.

Union Finance Minister Nirmala Sitharaman on Tuesday informed the Upper House of the Parliament that the Department of Revenue Intelligence (DRI) issued notice to Oppo for a total customs duty of Rs. 4,389 crore on the grounds of misdeclaration of certain goods, leading to a short payment in duties. Duty evasion, Sitharaman said, is about Rs. 2,981 crores.

Separately, ED had reportedly conducted searches at more than 40 locations including Uttar Pradesh, Madhya Pradesh and some southern states in connection in connection with a money laundering case registered against Chinese smartphone manufacturer Vivo.

Earlier in July, the ED reportedly blocked nearly 119 bank accounts linked to Vivo’s India that were holding several hundred crores as part of a probe into alleged money-laundering which the enforcement agency termed a “heinous economic offence”. In response, the mobile company moved to Delhi High Court seeking permission to operate its bank account to which the Court allowed the company to operate the bank accounts subject to furnishing a bank guarantee of Rs. 950 crores.

The latest, the Directorate of Revenue Intelligence (DRI) again on Wednesday said it detected customs duty evasion of around Rs. 2,217 crore by Vivo Mobile India.

Coming to Xiaomi, three showcase notices have been issued and their approximate duty liability is about Rs 653 crore, of which it had deposited only Rs 46 lakh, Sitharaman on Tuesday said.

ED in late April reportedly seized Rs. 5,551.27 crore of Xiaomi Technology India Pvt Ltd– a wholly-owned subsidiary of the China-based Xiaomi group– under the Foreign Exchange Management Act (FEMA) in connection with illegal remittances made by the firm in February this year.

The seized amount of Rs. 5,551.27 crore, it had alleged, was lying in the bank accounts of Xiaomi Technology India Pvt Ltd, which started its operations in India in 2014 and started remitting the money in 2015.

After the ED’s crackdown, Chinese telecom firm Xiaomi said it was committed to working closely with the government authorities to clarify what it termed as “misunderstandings”.

“As a brand committed to India, all our operations are firmly compliant with local laws and regulations. We have studied the order from government authorities carefully,” a Xiaomi spokesperson had then said, adding that it believed the company’s royalty payments and statements to the bank were all “legit and truthful”.

Also, ED had reportedly summoned Manu Kumar Jain, a former head of Xiaomi’s India unit, in the case in mid-April this year.

It doesn’t stop there.

Minister Sitharaman on Tuesday also said the ED was looking at 18 companies that were established by Vivo, where they have voluntarily remitted Rs. 62,000 crores as deposits.

Upon repeated charges against the Chinese companies related to serious economic offences, Beijing responded by saying it was closely following developments besides stressing on the matter that the Chinese government has always asked the companies to abide by laws and regulations when doing business overseas.

China also expressed hope the Indian authorities will abide by laws as they carry out the investigation and enforcement activities and provide a truly fair business environment.

“We hope the Indian authorities will abide by laws as they carry out the investigation and enforcement activities and provide a truly fair, just and non-discriminatory business environment for Chinese companies investing and operating in India,” a Chinese Foreign Ministry spokesperson had said.

According to the Indian foreign ministry spokesperson, companies who operate here need to follow the law of the land and it believes that the authorities are taking steps as per law.

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Samsung Production Slowdown Due to Cut in Global Demand Affects Workers in Vietnam

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By Reuters | Updated: 4 August 2022

Samsung Electronics Ltd has scaled back production at its massive smartphone plant in Vietnam, employees say, as retailers and warehouses grapple with rising inventory amid a global fall in consumer spending.

America’s largest warehouse market is full and major US retailers such as Best Buy and Target Corp warn of slowing sales as shoppers tighten their belts after early COVID-era spending binges.

The effect is acutely felt in Vietnam’s northern province of Thai Nguyen, one of Samsung’s two mobile manufacturing bases in the country where the world’s largest smartphone vendor churns out half of its phone output, according to the Vietnam government.

Samsung, which shipped around 270 million smartphones in 2021, says the campus has the capacity to make around 100 million devices a year, according to its website.

“We are going to work just three days per week, some lines are adjusting to a four-day workweek instead of six before, and of course no overtime is needed,” Pham Thi Thuong, a 28-year-old worker at the plant told Reuters.

Reuters could not immediately establish whether Samsung is shifting production to other manufacturing bases to make up for reduced output from the Vietnamese factory. The company also makes phones in South Korea and India.

Samsung told Reuters it has not discussed reducing its annual production target in Vietnam.

The South Korean tech giant is relatively optimistic about smartphone demand in the second half, saying on its earnings call last week that supply disruptions had mostly been resolved and that demand would either stay flat or even see single-digit growth.

It is aiming for foldable phone sales to surpass that of its past flagship smartphone, the Galaxy Note, in the second half. It is expected to unveil its latest foldables on August 10.

But a dozen workers interviewed by Reuters outside the factory almost all said business is not good.

Thuong and her friends who have been working for Samsung for around five years said they had never seen deeper production cuts.

She said managers had told workers inventories were high and there were not many new orders.

Research firm Gartner expects global smartphone shipments to decline by 6 percent this year due to consumer spending cuts and a sharp sales drop in China.

Samsung is Vietnam’s biggest foreign investor and exporter, with six factories across the country, from northern industrial hubs Thai Nguyen and Bac Ninh where most phones and parts are manufactured, to Ho Chi Minh City’s plant making fridges and washing machines.

The South Korean company has poured $18 billion (roughly Rs. 1,43,190 crore) into Vietnam, powering the country’s economic growth. Samsung alone contributes one fifth of Vietnam’s total exports.

Its arrival nearly a decade ago in Thai Nguyen, about 65km (40 miles) from the capital Hanoi, transformed the area from a sleepy farming district into a sprawling industrial hub that now also manufactures phones for Chinese brands including Xiaomi Corp.

Generous benefits including subsidised or free meals and accommodation have lured tens of thousands of young workers to the region, but reduced workhours have now left many feeling the pinch.

“My salary was cut by half last month because I just worked four days and spent the remaining week doing nothing,” said worker Nguyen Thi Tuoi.

Job cuts are on some workers’ minds but so far none have been announced.

“I don’t think there will be job cuts, just some working hour cuts to suit the current global situation,” said one worker, declining to be named because she did not want to risk her team leader role.

“I do hope that the current cut will not last long and we will soon be back to normal pace.”

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Vivo India Accused of Rs. 2,200 Crore Tax Evasion by Directorate of Revenue Intelligence: Details

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By Agencies | Updated: 3 August 2022

The Directorate of Revenue Intelligence has accused Chinese-owned Vivo Mobile of evading taxes worth Rs. 2,200 crore, it said in a statement. The tax evasion allegation is the country’s second this week against a Chinese phone-maker. The DRI detected customs duty evasion, following which it has issued a show cause notice to Vivo India, the statement said.

A show cause notice is a formal demand for an accused party to justify themselves.

The DRI’s investigation led to the finding of “incriminating evidence indicating wilful mis-declaration in the description of certain items imported,” the statement said.

Vivo India did not immediately respond to a Reuters request for comment.

Last month, it was reported that the financial crime-fighting agency, the Enforcement Directorate, had raided Vivo’s properties in the country.

On Tuesday, the DRI issued a show-cause notice to Oppo, another Chinese phone-maker, demanding duty of Rs. 4,400 crore.

Finance Minister Nirmala Sitharaman on Tuesday said that the government is looking into cases of alleged tax evasion by three mobile companies from China — Oppo, Vivo India and Xiaomi — and notices have been issued to them.

“The Department of Revenue Intelligence (DRI) has issued notice to Oppo, the mobile company, for a total customs duty of Rs 4,389 crore, and these are on the grounds of misdeclaration of certain goods, leading to a short payment in customs duty. That duty evasion, we think, is about Rs 2,981 crores,” Sitharaman said in the Rajya Sabha in response to a question by BJP member Sushil Modi.

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