China's solar stranglehold and Taiwan's AI goals

Hello everyone, that is Lauly, sending greetings from rainy and windy Taipei.

It's been two weeks because the US presidential election, and yet essentially the most common topic of conversation amongst Asia's technology suppliers continues to be President-elect Donald Trump's return to the White House.

An executive at a server and notebook vendor told me that the very first thing his American customer asked him days after the election was, “Are you ready?”

Peter Chen, chairman of Taiwanese electronics maker Qisda, told an investor conference that his “heart began to fret” and that he still remembered the 4 years under the Trump administration before and through Covid.

Additionally, at a recent media lunch with a technology supplier, one in all the executives said half-jokingly that the event was imagined to be a celebration, however the mood was now clouded by uncertainty concerning the future.

Most technology suppliers contacted by Nikkei Asia reporters expect higher tariffs on China or increased investment pressure within the US. But the nice thing is: This time they’re higher prepared. After years of trade war between Washington and Beijing, a significant slice of China's technology production capability has shifted to Southeast Asia, India and North America.

A manager at a supplier to Apple and Microsoft told me his company has drawn up “contingency plans for 18 scenarios” if the trade war between the world's two largest economies escalates. While he could have been exaggerating, he was serious when he said his company could quickly construct more capability outside China if needed, which is totally different than it was in the beginning of the trade war six years ago.

But even when suppliers can adapt their production capacities on the fly, the technology race between the 2 superpowers guarantees to bring much more challenges. All eyes, particularly within the semiconductor industry, shall be on how tensions develop after January.

We have already seen the Biden administration rush to finish it $6.6 billion in Chips Act funds for Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker, before Trump's return to office. This announcement also brought somewhat surprising news that TSMC would eventually produce its upcoming A16 chips, essentially the most advanced offering in its product roadmap, in Arizona.

China, meanwhile, recently released an in depth sentence Export control regulations It covers many chemicals, raw materials, equipment and metals commonly utilized in the worldwide technology supply chain, defense equipment, aerospace industries.

An Apple supplier executive once told me, “There is not any crystal ball to predict the longer term. But one thing is definite: we’d like to buckle up and prepare for the bumpy road ahead.”

Also join us on November 28 for a webinar with Chris Miller, writer of , Yeo Han-koo, former trade minister of South Korea, and our own chief tech correspondent Cheng Ting-Fang as we navigate this ever-changing world Situation concern industry. Register here and be certain that you submit your questions on time for the panel.

Solar eclipse

China's complete range of low-cost solar energy products has grow to be a simple answer for Asian governments and corporations in search of to realize ambitious green energy goals. Such dominance in the availability chain, which covers all key sectors of the solar energy infrastructure, shall be difficult to interrupt, write Nikkei Asia Cheng Ting Fang And Lauly Li.

This technical function begins with a walk through a solar energy park Nestled amongst durian and pine trees in Kulim, Malaysia, we proceed on a journey through the availability chain of solar panels, inverters, chip materials and more. Interviews with customers and competitors show how Chinese firms dominate global industries despite US tariffs and other trade barriers.

Washington has accused Beijing of unfairly subsidizing its solar industry, but whether the brand new Trump administration will take the identical approach is an open query.

Reach out

Leading Chinese technology firms try to poach top artificial intelligence talent within the US that may also help them speed up the race to profits through generative AI, writes the Financial Times. Eleanor Olcott.

Alibaba, ByteDance and Meituan have all built their very own AI teams in California in recent months despite Washington's efforts to curb China's development of advanced technology.

Chinese tech firms are banned from importing the highest-end Nvidia AI chips into China, but there aren’t any restrictions against accessing the silicon to power model training within the US.

Alibaba is recruiting an AI team in Sunnyvale, California's San Francisco Bay Area, and has reached out to engineers, product managers and AI researchers who’ve worked at OpenAI and the most important U.S. tech firms, in accordance with three people aware of the matter.

ByteDance has essentially the most established AI presence in San Jose. Multiple teams are working on various projects, including one focused on integrating AI features into TikTok.

However, these firms face an uphill battle in convincing top talent to leap ship, even with attractive compensation packages and the promise of more responsibility. Industry insiders said American tech employees supporting Chinese AI development risk being caught in geopolitical tensions and Washington's increased control of Chinese tech firms.

Preparation for printing

China is accelerating its efforts to spice up domestic chip production amid an expected increase in pressure from the US under a second Trump administration, Nikkei's Shunsuke Tabeta writes.

According to Canadian research firm TechInsights, China's semiconductor self-sufficiency rate rose from around 14 percent in 2014 to 23 percent in 2023 and is predicted to achieve 27 percent in 2027.

The state-backed China Integrated Circuit Industry Investment Fund, or Big Fund because it is usually known, has played an important role on this growth. The first phase of the fund began in 2014 with registered capital of 138.7 billion RMB (19.2 billion US dollars at current prices). The second phase followed in 2019 with Rmb204 billion, then a 3rd in May this yr with Rmb344 billion.

But Chen Nanxiang, chairman of China's top memory chip maker Yangtze Memory Technologies Co (YMTC), warned that “changes and risks” in the worldwide environment and tighter restrictions on China's access to US technology are to be expected.

$3 billion, 480 petaflops, one goal

Taiwan plans to spend about $3 billion on data centers and artificial intelligence applications over the subsequent three years to cement the democratically ruled island's leading position in the worldwide technology supply chain, the federal government's top science official told Nikkei Asia Thompson Chau, Cheng Ting Fang And Lauly Li in an exclusive interview.

Wu Cheng-wen, Minister of Science and Technology, said the federal government plans a budget of about $1 billion per yr to strengthen Taiwan's AI capabilities. This features a goal of accelerating the federal government's total computing capability from 20 petaflops to 480 petaflops over the subsequent 4 years to enhance “AI sovereignty,” or a state's ability to develop and control the technology.

Petaflops are a unit of measurement for calculating computing power. One petaflop is such as 1,000 trillion floating point operations per second.

Wu said the Lai Ching-te government was also all in favour of strengthening cooperation with the US under Trump and that Taiwan was willing to share technology with global democratic allies including the US, Japan and Germany. Such a collaborative approach will allow Taiwan to “promote mutual growth with friendly countries,” Wu said.

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