Taiwan

taiwan-rejects-trump’s-demand-to-shift-50%-of-chip-manufacturing-into-us

Taiwan rejects Trump’s demand to shift 50% of chip manufacturing into US

In August, Trump claimed that chip tariffs could be as high as 100 percent while promising to exempt any tech companies that have committed to moving significantly more manufacturing into the US.

Since then, sources familiar with the investigation told Reuters that “the Trump administration is considering imposing tariffs on foreign electronic devices based on the number of chips in each one.” Under that potential plan, the tariff charged would be “equal to a percentage of the estimated value of the product’s chip content,” sources suggested.

Some expect that companies like the Taiwan Semiconductor Manufacturing Company (TSMC) may be exempted from these tariffs, based on a pledge to invest $100 billion into US chip manufacturing.

However, sources told Reuters that the Commerce Department has weighed offering “a dollar-for-dollar exemption based on investment in US-based manufacturing only if a company moves half its production to the US.” TSMC’s total market value is more than $1 trillion, so the US may seek more investments if the campaign to move half of Taiwan’s chip production into the US fails.

Brzytwa told Ars that tech companies are already struggling to do the math from Trump’s tariff stacking. And those headaches will likely continue. At a meeting last week with chip industry executives, Lutnick confirmed that Trump plans to use tariffs to push tech companies to buy US-made chips, The New York Times reported.

If those plans go through, companies would be expected to buy half their chips in the US, earning credits “for each dollar spent on American semiconductors, which they can use against what they spend on foreign semiconductors,” the Times reported.

Any company not maintaining “a 1:1 ratio over time would have to pay a tariff,” sources told The Wall Street Journal. For companies like Apple, the policy would require tracking every chip used in every device to ensure a perfect match. But there would likely be an initial grace period, allowing companies to adjust to the new policy as the US increases its domestic chip supply chain, the WSJ reported. And chipmakers like TSMC could potentially benefit, the WSJ reported, possibly gaining leverage in the market if it increases its US manufacturing ahead of rivals.

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Taiwan pressured to move 50% of chip production to US or lose protection

The Trump administration is pressuring Taiwan to rapidly move 50 percent of its chip production into the US if it wants ensured protection against a threatened Chinese invasion, US Commerce Secretary Howard Lutnick told NewsNation this weekend.

In the interview, Lutnick noted that Taiwan currently makes about 95 percent of chips used in smartphones and cars, as well as in critical military defense technology. It’s bad for the US, Lutnick said, that “95 percent of our chips are made 9,000 miles away,” while China is not being “shy” about threats to “take” Taiwan.

Were the US to lose access to Taiwan’s supply chain, the US could be defenseless as its economy takes a hit, Lutnick alleged, asking, “How are you going to get the chips here to make your drones, to make your equipment?”

“The model is: if you can’t make your own chips, how can you defend yourself, right?” Lutnick argued. That’s why he confirmed his “objective” during his time in office is to shift US chip production from 2 percent to 40 percent. To achieve that, he plans to bring Taiwan’s “whole supply chain” into the US, a move experts have suggested could take much longer than a single presidential term to accomplish.

In 2023, Nvidia CEO Jensen Huang forecast that the US was “somewhere between a decade and two decades away from supply chain independence,” emphasizing that “it’s not a really practical thing for a decade or two.”

Deal is “not natural for Taiwan”

Lutnick acknowledged this will be a “herculean” task. “Everybody tells me it’s impossible,” he said.

To start with, Taiwan must be convinced that it’s not getting a raw deal, he noted, explaining that it’s “not natural for Taiwan” to mull a future where it cedes its dominant role as a global chip supplier, as well as the long-running protections it receives from allies that comes with it.

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taiwan-starts-weaponizing-chip-access-after-us-urged-it-to,-expert-says

Taiwan starts weaponizing chip access after US urged it to, expert says

Taiwan has begun evolving its trade strategy to start wielding its dominant position as a leading supplier of cutting-edge chips as a weapon, Bloomberg reported.

The move comes amid Donald Trump’s heightening global trade war and after years of Taiwan’s use of its chip dominance as a shield against Chinese aggression, with Taiwan allying with the US to stave off China’s threats of invasion. Under the so-called “one-China principle,” China has rejected Taiwan’s independence, requiring allies to sever ties with Taiwan.

On Tuesday, Taiwan announced that it would be limiting shipments of semiconductors into South Africa—among 47 restricted products—due to national security concerns. The rare export curbs could hit South Africa’s “electronics, telecom, and auto parts sectors” hard, MSN reported, if South Africa doesn’t meet with Taiwan to discuss better terms within the next 60 days.

As Bloomberg previously reported, Taiwan is upset that South Africa unilaterally moved to relocate Taiwan’s embassy from Pretoria to Johannesburg after meeting with China’s president, Xi Jinping, in 2023. As a major ally to China, South Africa recently intensified pressure to move the embassy in July ahead of another meeting in November that Xi is expected to attend—attempting to signal that South Africa was weakening ties with Taiwan, as China had demanded.

Taiwan’s Ministry of Foreign Affairs immediately protested South Africa’s efforts in July, accusing South Africa of suppressing Taiwan and promising countermeasures if South Africa refused to consult with Taiwan on the embassy relocation.

In a statement, South Africa’s foreign ministry spokesperson, Chrispin Phiri, insisted that South Africa’s ties with Taiwan are “non-political,” while noting that “South Africa is a critical supplier of platinum group metals, like palladium, essential to the global semiconductor industry,” Bloomberg reported.

On Wednesday, China’s foreign ministry spokesperson, Guo Jiakun, criticized Taiwan’s export curbs as “a deliberate move to destabilize global chip industrial and supply chains and counter the prevailing international commitment to the one-China principle by weaponizing chips.”

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openai’s-secret-weapon-against-nvidia-dependence-takes-shape

OpenAI’s secret weapon against Nvidia dependence takes shape

OpenAI is entering the final stages of designing its long-rumored AI processor with the aim of decreasing the company’s dependence on Nvidia hardware, according to a Reuters report released Monday. The ChatGPT creator plans to send its chip designs to Taiwan Semiconductor Manufacturing Co. (TSMC) for fabrication within the next few months, but the chip has not yet been formally announced.

The OpenAI chip’s full capabilities, technical details, and exact timeline are still unknown, but the company reportedly intends to iterate on the design and improve it over time, giving it leverage in negotiations with chip suppliers—and potentially granting the company future independence with a chip design it controls outright.

In the past, we’ve seen other tech companies, such as Microsoft, Amazon, Google, and Meta, create their own AI acceleration chips for reasons that range from cost reduction to relieving shortages of AI chips supplied by Nvidia, which enjoys a near-market monopoly on high-powered GPUs (such as the Blackwell series) for data center use.

In October 2023, we covered a report about OpenAI’s intention to create its own AI accelerator chips for similar reasons, so OpenAI’s custom chip project has been in the works for some time. In early 2024, OpenAI CEO Sam Altman also began spending considerable time traveling around the world trying to raise up to a reported $7 trillion to increase world chip fabrication capacity.

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tsmc-will-stop-making-7-nm-chips-for-chinese-customers

TSMC will stop making 7 nm chips for Chinese customers

The company is understood to be particularly wary of being targeted as unreliable or uncooperative as Donald Trump is set to become the next US president.

This year, Trump accused Taiwan of “stealing” the US chip industry, and suggested TSMC could move its production back home after pocketing billions of dollars in subsidies from Washington for building fabrication plants in the US.

A person close to TSMC said its move was “not a show for Trump but definitely designed to underscore that we are the good guys and not acting against US interests.”

Being cut off from TSMC could hurt Chinese tech giants that have bet on making their most advanced AI chips in Taiwan. Search giant Baidu, in particular, is aiming to build a full stack of software and hardware to underpin its AI business.

Near the center of those efforts is its Kunlun series of AI chips. Its Kunlun II processor is made by TSMC on its 7-nanometer level of miniaturization, according to Bernstein Research.

“Kunlun chips are now especially well-suited for large model inference and will eventually be suitable for training,” Baidu founder Robin Li told a conference last year. Li added that the group had been effective in cutting costs by designing its own chips.

The people briefed on the situation said TSMC’s new rules were clear in targeting AI processors, but it was so far unclear how widely that would be applied to other chips. China has a number of leading start-ups designing AI chips for self-driving, including Hong Kong-listed Horizon Robotics and Black Sesame International Holding.

Executives and company materials at both groups have indicated their newest generation of chips would be made by TSMC on the 7-nanometer node.

The people close to TSMC said its new restrictions would not have a major impact on its revenue. TSMC’s October revenue increased 29.2 percent to NT$314 billion ($9.8 billion), a slight deceleration of growth compared with preceding months.

In a statement, TSMC said it was a “law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls.”

The news was first reported by Chinese media site ijiwei.com.

Nian Liu contributed reporting from Beijing.

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Nvidia jumps ahead of itself and reveals next-gen “Rubin” AI chips in keynote tease

Swing beat —

“I’m not sure yet whether I’m going to regret this,” says CEO Jensen Huang at Computex 2024.

Nvidia's CEO Jensen Huang delivers his keystone speech ahead of Computex 2024 in Taipei on June 2, 2024.

Enlarge / Nvidia’s CEO Jensen Huang delivers his keystone speech ahead of Computex 2024 in Taipei on June 2, 2024.

On Sunday, Nvidia CEO Jensen Huang reached beyond Blackwell and revealed the company’s next-generation AI-accelerating GPU platform during his keynote at Computex 2024 in Taiwan. Huang also detailed plans for an annual tick-tock-style upgrade cycle of its AI acceleration platforms, mentioning an upcoming Blackwell Ultra chip slated for 2025 and a subsequent platform called “Rubin” set for 2026.

Nvidia’s data center GPUs currently power a large majority of cloud-based AI models, such as ChatGPT, in both development (training) and deployment (inference) phases, and investors are keeping a close watch on the company, with expectations to keep that run going.

During the keynote, Huang seemed somewhat hesitant to make the Rubin announcement, perhaps wary of invoking the so-called Osborne effect, whereby a company’s premature announcement of the next iteration of a tech product eats into the current iteration’s sales. “This is the very first time that this next click as been made,” Huang said, holding up his presentation remote just before the Rubin announcement. “And I’m not sure yet whether I’m going to regret this or not.”

Nvidia Keynote at Computex 2023.

The Rubin AI platform, expected in 2026, will use HBM4 (a new form of high-bandwidth memory) and NVLink 6 Switch, operating at 3,600GBps. Following that launch, Nvidia will release a tick-tock iteration called “Rubin Ultra.” While Huang did not provide extensive specifications for the upcoming products, he promised cost and energy savings related to the new chipsets.

During the keynote, Huang also introduced a new ARM-based CPU called “Vera,” which will be featured on a new accelerator board called “Vera Rubin,” alongside one of the Rubin GPUs.

Much like Nvidia’s Grace Hopper architecture, which combines a “Grace” CPU and a “Hopper” GPU to pay tribute to the pioneering computer scientist of the same name, Vera Rubin refers to Vera Florence Cooper Rubin (1928–2016), an American astronomer who made discoveries in the field of deep space astronomy. She is best known for her pioneering work on galaxy rotation rates, which provided strong evidence for the existence of dark matter.

A calculated risk

Nvidia CEO Jensen Huang reveals the

Enlarge / Nvidia CEO Jensen Huang reveals the “Rubin” AI platform for the first time during his keynote at Computex 2024 on June 2, 2024.

Nvidia’s reveal of Rubin is not a surprise in the sense that most big tech companies are continuously working on follow-up products well in advance of release, but it’s notable because it comes just three months after the company revealed Blackwell, which is barely out of the gate and not yet widely shipping.

At the moment, the company seems to be comfortable leapfrogging itself with new announcements and catching up later; Nvidia just announced that its GH200 Grace Hopper “Superchip,” unveiled one year ago at Computex 2023, is now in full production.

With Nvidia stock rising and the company possessing an estimated 70–95 percent of the data center GPU market share, the Rubin reveal is a calculated risk that seems to come from a place of confidence. That confidence could turn out to be misplaced if a so-called “AI bubble” pops or if Nvidia misjudges the capabilities of its competitors. The announcement may also stem from pressure to continue Nvidia’s astronomical growth in market cap with nonstop promises of improving technology.

Accordingly, Huang has been eager to showcase the company’s plans to continue pushing silicon fabrication tech to its limits and widely broadcast that Nvidia plans to keep releasing new AI chips at a steady cadence.

“Our company has a one-year rhythm. Our basic philosophy is very simple: build the entire data center scale, disaggregate and sell to you parts on a one-year rhythm, and we push everything to technology limits,” Huang said during Sunday’s Computex keynote.

Despite Nvidia’s recent market performance, the company’s run may not continue indefinitely. With ample money pouring into the data center AI space, Nvidia isn’t alone in developing accelerator chips. Competitors like AMD (with the Instinct series) and Intel (with Guadi 3) also want to win a slice of the data center GPU market away from Nvidia’s current command of the AI-accelerator space. And OpenAI’s Sam Altman is trying to encourage diversified production of GPU hardware that will power the company’s next generation of AI models in the years ahead.

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A top-secret Chinese spy satellite just launched on a supersized rocket

A Long March 5 rocket, the largest launcher in China's inventory, deployed a classified Chinese military satellite into orbit Friday.

Enlarge / A Long March 5 rocket, the largest launcher in China’s inventory, deployed a classified Chinese military satellite into orbit Friday.

China’s largest rocket apparently wasn’t big enough to launch the country’s newest spy satellite, so engineers gave the rocket an upgrade.

The Long March 5 launcher flew with a payload fairing some 20 feet (6.2 meters) taller than its usual nose cone when it took off on Friday with a Chinese military spy satellite. This made the Long March 5, with a height of some 200 feet, the tallest rocket China has ever flown.

Adding to the intrigue, the Chinese government claimed the spacecraft aboard the Long March 5 rocket, named Yaogan-41, is a high-altitude optical remote sensing satellite. These types of surveillance satellites usually fly much closer to Earth to obtain the sharpest images possible of an adversary’s military forces and strategically important sites.

This could mean a few things. First, assuming China’s official description is accurate, the satellite could be heading for a perch in geosynchronous orbit, a position that would afford any Earth-facing sensors continuous views of a third of the world’s surface. In this orbit, the spacecraft would circle Earth once every 24 hours, synchronizing its movement with the planet’s rotation.

Because this mission launched on China’s most powerful rocket, with the longer payload fairing added on, the Yaogan-41 spacecraft is presumably quite big. The US military’s space tracking network found the Yaogan-41 satellite in an elliptical, or oval-shaped, soon after Friday’s launch. Yaogan-41’s trajectory takes it between an altitude of about 121 miles (195 kilometers) and 22,254 miles (35,815 kilometers), according to publicly available tracking data.

This is a standard orbit for spacecraft heading into geosynchronous orbit. It’s likely in the coming weeks that the Yaogan-41 satellite will maneuver into this more circular orbit, where it would maintain an altitude of 22,236 miles (35,786 kilometers) and perhaps nudge itself into an orbit closer to the equator.

Staring down from space

In an official statement, China’s state-run Xinhua news agency claimed Yaogan-41 will be used for civilian purposes, such as land surveys and agricultural monitoring. In reality, China uses the Yaogan name as a blanket identifier for most of its military satellites.

US military officials will closely watch to see where Yaogan-41 ends up. If it settles into geosynchronous orbit over the Indian or Pacific Oceans, as analysts expect, Yaogan-41 would have a constant view of China, Taiwan, and neighboring countries.

From such a high altitude, Yaogan-41’s optical imager won’t have the sharp vision of a satellite closer to Earth. But it’s easy to imagine the benefits of all-day coverage, even at lower resolution, without China’s military needing to wait hours for a follow-up pass over a potential target from another satellite in low-Earth orbit.

In August, China launched a synthetic aperture radar surveillance satellite into a geosynchronous-type orbit using a medium-lift Long March 7 rocket. This spacecraft can achieve 20-meter (66-foot) resolution at Earth’s surface with its radar instrument, which is capable of day-and-night all-weather imaging.

Optical payloads, like the one on Yaogan-41, are restricted to daytime observations over cloud-free regions. China launched a smaller optical remote sensing satellite into geosynchronous orbit in 2015, ostensibly for civilian purposes.

Although Chinese officials did not disclose the exact capabilities of Yaogan-41, it would almost certainly have the sensitivity to continually track US Navy ships and allied vessels across a wide swath of the Indo-Pacific. Aside from its use of the larger payload fairing, the Long March 5 rocket used to launch Yaogan-41 can haul approximately 31,000 pounds (14 metric tons) of payload mass into the orbit it reached on Friday’s launch.

This suggests China could have equipped Yaogan-41 with a large telescope to stare down from space. Notably, China acknowledged Yaogan-41’s purpose as an optical imaging satellite. China’s government doesn’t always do that. Perhaps this is a signal to US officials.

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