China, and Western tech’s Asian supply chain, are in focus today, with Huawei, TSMC and Foxconn in the news.
The US commerce department said on Friday it was cutting off Chinese telecom giant Huawei’s efforts to undermine US export controls on supplying technology to it. It would restrict its ability to use American designs and chipmaking equipment to manufacture semiconductors in overseas foundries.
It’s an extension of US national security concerns about Huawei and also of the Trump administration’s trade war with China. Part of the strategy is to make America less dependent on its Asian supply chain, hence the coming to fruition of Taiwan Semiconductor Manufacturing, the world’s biggest contract chipmaker, announcing plans to build a $12bn foundry in Arizona.
Subsidies have had to be offered as it faces higher costs in being distant from its Taiwanese ecosystem of suppliers, while Lex points out the investment is spread over nine years and small compared against around $15bn in annual capex.
The move echoes Taiwanese contract electronics manufacturer Foxconn agreeing to build a display factory in Wisconsin. Those plans have been beset with problems. On Friday, it reported difficulties in China — profits plunged by almost 90 per cent in the first quarter, as it was hit by supply chain disruptions there, caused by the coronavirus pandemic.
The Internet of (Five) Things
1. Facebook snaps up Giphy, Apple nabs NextVR
Big Tech is bolstering its arsenal with some small acquisitions during the lockdown. Facebook has paid $400m for Giphy, a library of animated images that will be integrated with Instagram. Apple has bought the NextVR start-up to boost a foray into virtual and augmented reality that is expected to lead to a hardware product in the next two years.
2. Singapore’s Temasek backs Libra
Facebook has also been boosted by one of the world’s biggest institutional investors throwing its support behind its digital currency Libra. Temasek’s participation in the Libra Association makes it the first Asia-based member as well as the first state-backed investor to become involved in the project.
3. BT looks to fund broadband with stake sale
The telecoms provider is in talks to sell a multibillion-pound stake in its Openreach infrastructure division to help bankroll a massive upgrade in Britain’s broadband network. Our analysis questions whether it is selling the family silver, while Lex does the sums on a 20 per cent stake sale.
4. Monzo raises cash, WeWork slashes costs
Monzo is raising new cash from investors at an almost 40 per cent discount to the digital bank’s previous fundraising. It is close to a deal that would value it at around £1.25bn, compared to a £2bn valuation last June. Lossmaking office space provider WeWork burnt through $482m of cash in the first three months of the year as new management worked to cut expenses before coronavirus upended its business. The outlay was 60 per cent lower than the pace in the previous quarter.
5. AI set to transform healthcare
A number of digital health applications are being developed by and for those in emerging economies. But concerns persist about lack of regulation, governance and equity. Read about this and more in our Special Report: The Future of AI and Digital Health.
Tech tools — smart jewellery
Quietude is a range of smart jewellery being developed to help deaf people perceive sound. These necklaces translate sound into shape changes, light patterns and vibrations, letting the wearer perceive noise via their body. There’s more on this and the latest smart watches in our May Watches and Jewellery report.
Source: Economy - ft.com
