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TSMC Reports 80 Percent Year-on-Year Surge in Quarterly Profit, Strongest Growth in 2 Years

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By Reuters | Updated: 14 October 2022

TSMC shares jumped more than 4 percent on Friday morning, outperforming the broader market, after the Taiwanese chipmaker announced a forecast-beating third-quarter profit, though it struck a more cautious note on upcoming demand.

Taiwan Semiconductor Manufacturing Company (TSMC), a major Apple supplier and the world’s largest contract chipmaker, posted on Thursday an 80 percent on-year surge in profit for the July-September period of 2022, the strongest growth in two years.

However, the company also trimmed capital spending by at least 10 percent for this year. TSMC, Asia’s most valuable listed company, said it was being more conservative in planning investments for 2023, but still expected “a growth year”.

Analysts at Daiwa Capital Markets said investors should take advantage of the cheap stock — TSMC shares have fallen more than 30 percent so far this year — and noted the company had given “intact” guidance for the fourth quarter and 2023, despite cutting capex to optimise capacity amid a broad inventory correction.

“Although this correction will likely result in suboptimal loading for TSMC in 1H23, it is well in our expectation and, more importantly, we stick with our view that TSMC this time will be counter-cyclical, weathering better than peers through this correction into 2023,” it said.

Morningstar said in a research note that TSMC shares were cheap on long-term computing growth, especially growth for artificial intelligence, Internet of Things, and high-performance computing “may last for decades”.

Shares in TSMC’s smaller Taiwanese competitor, United Microelectronics, were also up more than 4 percent on Friday morning. It reports third-quarter earnings on October 26.

© Thomson Reuters 2022

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US Senators Lobbying for Ban on Government Deals With Chinese Chipmakers: Report

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By Reuters | Updated: 18 November 2022

US Senate Majority Leader Chuck Schumer and Republican Senator John Cornyn are lobbying hard for a ban on government business with Chinese chipmakers, Politico reported on Thursday, citing three people familiar with the matter. The senators want to get their amendment which blocks federal access to semiconductor products and services made by Chinese firms into the final version of this year’s National Defense Authorization Act (NDAA), the report said.

The measure would broaden provisions in Section 889 that already prohibit government agencies from doing business with Chinese telecommunications companies or contractors who use their technologies, according to a report by Politico.

Schumer and Cornyn got their proposal added to the Senate NDAA last month in the October managers package and are now working to convince their colleagues, the report added.

The fiscal 2023 NDAA must pass the Senate and House of Representatives later this year before it can be sent to the White House for US President Joe Biden to sign into law.

Last month, the Biden administration published a sweeping set of export controls, including a measure to cut off China from certain semiconductor chips made anywhere in the world with US tools.

On August 9, Biden signed a landmark bill to provide $52.7 billion (roughly Rs. 430 crore) in subsidies for US semiconductor production and research and to boost efforts to make the US more competitive with China’s science and technology efforts.

At the time, Biden had touted investments that chip companies are making even though it remains unclear when the US Commerce Department will write rules for reviewing grant awards and how long it will take to underwrite projects.

The legislation authorises $200 billion (roughly Rs. 16,34,700 crore) over 10 years to boost US scientific research to better compete with China. Congress would still need to pass separate appropriations legislation to fund those investments.

© Thomson Reuters 2022

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Nvidia Working With Microsoft to Build ‘Massive’ Cloud AI Computer Using Several Thousand GPUs

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By Reuters | Updated: 17 November 2022

US chip designer and computing firm Nvidia on Wednesday said it is teaming up with Microsoft to build a “massive” computer to handle intense artificial intelligence computing work in the cloud.

The AI computer will operate on Microsoft’s Azure cloud, using tens of thousands of graphics processing units (GPUs), Nvidia’s most powerful H100 and its A100 chips. Nvidia declined to say how much the deal is worth, but industry sources said each A100 chip is priced at about $10,000 (roughly Rs. 8,15,400) to $12,000 (roughly Rs. 9,78,500), and the H100 is far more expensive than that.

“We’re at that inflection point where AI is coming to the enterprise and getting those services out there that customers can use to deploy AI for business use cases is becoming real,” Ian Buck, Nvidia’s general manager for Hyperscale and HPC told Reuters. “We’re seeing a broad groundswell of AI adoption … and the need for applying AI for enterprise use cases.”

In addition to selling Microsoft the chips, Nvidia said it will partner with the software and cloud giant to develop AI models. Buck said Nvidia would also be a customer of Microsoft’s AI cloud computer and develop AI applications on it to offer services to customers.

The rapid growth of AI models such as those used for natural language processing have sharply boosted demand for faster, more powerful computing infrastructure.

Nvidia said Azure would be the first public cloud to use its Quantum-2 InfiniBand networking technology which has a speed of 400 gigabits per second. That networking technology links servers at high speed. This is important as heavy AI computing work requires thousands of chips to work together across several servers.

© Thomson Reuters 2022

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Micron Begins Mass Production of Advanced DRAM Memory Chip in Japan

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By Reuters | Updated: 16 November 2022

Memory chip maker Micron on Wednesday kicked off mass production of its new high-capacity low-power 1-beta dynamic random access memory (DRAM) chips at its plant in Hiroshima, Japan. Both the US Ambassador to Japan, Rahm Emanuel, and Japanese officials attended a ceremony in Hiroshima to mark the start of the large-scale output, highlighting the growing political importance of semiconductors for the two allies.

Earlier this month, Micron said it started shipping samples of its most advanced DRAM chip based on the LPDDR5X, low-power double data rate 5X, standard to smartphone makers to test out.

At the time, the company said it was able to get to the 1-beta manufacturing technology without using the expensive extreme ultraviolet, or EUV, lithography tools, which are used in the latest processor chips in top-end smartphones.

The production of Micron’s most advanced chip, which can store a third more data than older chips, comes as Japan tries to revive and modernise its once-mighty chip industry.

Emanuel said on Twitter that Wednesday’s launch was an example of how the two countries “are committed to strengthening semiconductor supply chains” and national security together.

The former Chicago mayor who has focused on bolstering commercial ties between both countries to safeguard supply chains and cut reliance on China.

Tokyo worries that growing trade friction between the United States and China could cause shortages of semiconductors needed by automakers and other manufacturers.

The Japanese government in September offered Micron a JPY 46.5 billion (roughly Rs. 2,709 crore) to boost production capacity at its plant.

In July it gave a JPY 93 billion (roughly Rs. 5,417 crore) subsidy to rival memory chip makers Kioxia and Western Digital to help it expand output at their joint factory in Japan.

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

© Thomson Reuters 2022

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Mahindra Q4 Profit Up 46 Percent as Vehicle Sales Soar 75 Percent YoY to Over 1.7 Lakh Units

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By Reuters | Updated: 11 November 2022

Mahindra reported a better-than-expected second-quarter profit on Friday, driven by strong demand for its passenger vehicles and farm equipment. The Indian automaker posted a sharp 46 percent jump in profit as total vehicles sold soared 75 percent from a year ago to 174,098 units, while it had open bookings for more than 260,000 sports utility vehicles. Mahindra reported a profit after tax of 20.9 billion Indian rupees for the three months ended September 30, up from 14.33 billion a year earlier.

Analysts were expecting a profit of Rs, 1,988 crore, according to Refinitiv IBES data.

The company’s farm equipment sector saw the highest second-quarter volume while the auto segment achieved the highest-ever quarterly volume, Mahindra said in a statement, adding that exports for both vehicles and tractors remained strong.

Mahindra reported a better-than-expected second-quarter profit on Friday, driven by strong demand for its passenger vehicles and farm equipment. The Indian automaker posted a sharp 46 percent jump in profit as total vehicles sold soared 75 percent from a year ago to 174,098 units, while it had open bookings for more than 260,000 sports utility vehicles. Mahindra reported a profit after tax of 20.9 billion Indian rupees for the three months ended September 30, up from 14.33 billion a year earlier.

Analysts were expecting a profit of Rs, 1,988 crore, according to Refinitiv IBES data.

The company’s farm equipment sector saw the highest second-quarter volume while the auto segment achieved the highest-ever quarterly volume, Mahindra said in a statement, adding that exports for both vehicles and tractors remained strong.

Earlier, rival Maruti Suzuki India reported a four-fold jump in quarterly profit, while Tata Motors saw its loss narrowing from a year ago on strong demand.

Meanwhile, German-based Mutares has offered to acquire a controlling stake of 80 percent in Mahindra-owned Peugeot Motocycles, the companies said on Thursday.

Earlier this week, Mahindra announced that it has tied up with three electric vehicle infrastructure partners – Jio-bp, Statiq, and Charge+Zone – to offer charging solutions for its upcoming range of passenger electric vehicles. With these partnerships, Mahindra EV users will get seamless access to a robust fast charging infrastructure and e-mobility solutions spanning across discovery, availability, navigation and transactions, the Mumbai-based automaker said.

© Thomson Reuters 2022

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Rapidus Project Gains Japanese Government Backing Ahead of Goal to Mass Produce Advanced Chips by 2027

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By Agence France-Presse | Updated: 11 November 2022

The Japanese government will pour half a billion dollars into a new project to develop and make next-generation microchips, chief cabinet secretary Hirokazu Matsuno said Friday.

Eight major companies including Sony, SoftBank, Toyota, and telecoms giant NTT have joined forces for the venture, Japanese media reports said.

The new firm, named Rapidus, will develop and mass produce next-generation semiconductors by 2027, according to major media outlets including national broadcaster NHK and the Mainichi Shimbun.

The pandemic has fuelled a global shortage of memory chips, with governments scrambling to secure supplies as carmakers and tech companies have been forced to make production cuts.

Each company has invested around JPY one billion (roughly Rs. 57 crore), with MUFG Bank investing JPY 300 million (roughly Rs. 17 crore), according to the industry ministry.

The investor companies are expected to officially announce the project later on Friday.

The ministry will grant JPY 70 billion (roughly Rs. 4,000 crore) to Rapidus to lead a research and development project for next-generation semiconductors, Matsuno said without elaborating.

“Semiconductors are a key technology that supports digitalisation and decarbonisation,” Matsuno said at a regular briefing.

“We hope these steps will help improve the competitiveness of our country’s semiconductor industry.”

The chip shortage has prompted calls for the government and businesses to secure semiconductor supplies for Japan’s economic security, as geopolitics become increasingly volatile – especially concerning Taiwan, which has a huge chip-producing capacity.

The United States recently introduced new measures to limit China’s access to high-end semiconductors with military uses, a move that has wiped billions from chip companies’ valuations worldwide.

The German economy ministry also has recommended that the sale of a chip factory to a Chinese-owned firm should be blocked as it poses a security threat, government sources said Tuesday.

Last year, Taiwanese chip giant TSMC and Sony said they would tie up on a new $7 billion (roughly Rs. 400 crore) plant in Japan.

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IBM Osprey Quantum Computer With 433 Qubits Launched: All You Need to Know

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By Reuters | Updated: 10 November 2022

International Business Machines (IBM) on Wednesday said it launched its most powerful quantum computer to date called the Osprey, a 433-qubit machine that has three times the number of qubits than its Eagle machine announced last year.

The number of qubits, or quantum bits, are an indication of the power of the quantum computer which uses quantum mechanics, although different quantum computer companies make different claims about the power of their qubits which can be created in many different ways.

Quantum computers are one day expected to speed up certain calculations millions of times faster than the fastest supercomputers today.

Dario Gil, IBM’s director of research, said IBM is still on track to launch a computer with over 1,000 qubits but for further scaling was working on a new approach.

“As we push the limits of the size of the Osprey chip that we’re announcing, if you look at it, it’s really big already. Next year, 1,000 is going to be very big,” he said. “So after that, we have been designing and engineering the whole architecture for quantum computing based on modularity.”

IBM is calling the modular system Quantum System Two.

“Quantum System Two is the first truly modular quantum computing system so that you can continue to scale to larger and larger systems over time,” Gil told Reuters ahead of the IBM Quantum Summit this week. “Modularity means the chips themselves are going to have to be interconnected to one another.”

IBM said it is targeting this system to be online by end of next year and it would be the building blocks for “quantum-centric supercomputing” by connecting multiple Quantum System Twos. IBM said it could build a system with up to 16,632 qubits by linking three of these systems.

IBM has over 20 quantum computers around the world, and customers can access them through the cloud.

© Thomson Reuters 2022

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