Hello everyone, this is Cissy from Hong Kong. Let me share a memorable experience from my summer road trip in Arizona a few years ago. I was taken aback by the scorching weather that was even hotter than I expected. Whenever I stepped out of the car to take photos, I had to rush back in to escape the intense heat. It was quite a challenge!
Fast forward to 2020, when Taiwan Semiconductor Manufacturing Company (TSMC) made an announcement that they would build a chip plant in the desert region of north Phoenix, Arizona. This choice seemed unusual considering the significant water requirements of the industry. Curiosity piqued, my colleague Annie Cheng Ting-Fang traveled to Phoenix last December to cover TSMC’s equipment installation ceremony, an event that even US President Joe Biden attended. It was an exciting occasion!
During the ceremony, TSMC founder Morris Chang shared an interesting anecdote. He mentioned that back in 1995, he had attempted to build a factory in the US, but it turned out to be a failure due to high costs, cultural clashes, and other challenges. He humorously described it as a “dream fulfilled turned nightmare fulfilled.” Although the Phoenix project is not a nightmare, it hasn’t been completely smooth sailing either. Annie spoke with some of TSMC’s Taiwanese suppliers who expressed frustrations about the lengthy review process in the US. Despite submitting their applications for approval, they faced delays of nearly 10 months. A little setback in the grand scheme of things.
Chang’s warning about the remaining hard work stands true. The scheduled start of mass production at the plant had to be pushed back due to a lack of skilled workers. Progress is being made, but there are still hurdles to overcome.
Now, let’s shift our focus to Japan, where the story takes a different turn. TSMC’s chip project in Japan is moving swiftly compared to the Arizona plant. According to Nikkei Asia’s Cheng Ting-Fang and Ryohtaroh Satoh, TSMC, the world’s largest chipmaker, will begin installing chip production tools at their site in Kumamoto, southwest Japan, this month. Test production will follow, and if all goes well, the $8 billion plant will kickstart mass production by the end of next year. In fact, sources involved in the project indicate that it might even be ahead of schedule. Impressive!
TSMC attributes the difference in progress between the two countries to the varying project scales. However, chip industry executives have other explanations. They believe that Japan’s superior chip industry infrastructure and prompt government support play a significant role. Additionally, similarities in working culture between Japan and Taiwan contribute to the project’s smooth progression, along with fewer logistical challenges. A direct flight from Taipei to Kumamoto takes just over two hours, making collaboration easier.
The Kumamoto plant will initially utilize 28-nanometer and 22-nm production technology. While this may be a relatively mature production node, it is crucial for manufacturing chips such as image sensors, driver integrated circuits, and microcontrollers used in various devices like smartphones and cars.
Moving on to a different tech story, let’s talk about Sir Jony Ive, Apple’s renowned designer. Ive hopes to shape the artificial intelligence (AI) era just as he did the modern computing era with innovative devices like the iMac, iPod, iPhone, and Apple Watch. The Financial Times’ Tim Bradshaw, Matthew Garrahan, Madhumita Murgia, and Kana Inagaki report that Ive’s company, LoveFrom, is in discussions with Sam Altman of OpenAI and Masayoshi Son of SoftBank to create what they call the “iPhone of artificial intelligence.” With over $1 billion from SoftBank’s capital, the possibilities are expansive. The form factor of this device is still undecided, with various ideas being explored at Ive’s studio in San Francisco, where brainstorming sessions are taking place. Exciting times lie ahead!
Shifting gears to India, we witness an interesting trend in investment behavior. While domestic fund managers in India remain cautious about investing in the country’s tech startups, foreign investors are embracing them. According to Nikkei Asia’s Sayan Chakraborty, foreign portfolio investors have significantly increased their holdings in three Indian startups – Zomato, Delhivery, and Paytm – in the first half of this year. This has resulted in foreign investors holding a higher share compared to Indian institutional investors. This disparity highlights foreign investors’ comfort with highly valued yet loss-making public companies, particularly in the US, while domestic investors approach such ventures with reservations. Foreign investment inflows will be crucial for upcoming tech IPOs, especially larger ones like Oyo, Firstcry, and Swiggy, which could seek investments ranging from $500 million to $1 billion.
Let’s wrap up with an article about Japan’s search for critical materials for electric vehicle (EV) batteries. As US policy encourages companies to develop supply chains independent of China, Japan is turning to Canada and Australia. Ryohtaroh Satoh reports that Japan’s Minister of Economy, Trade, and Industry, Yasutoshi Nishimura, recently visited Canada to sign a memorandum of cooperation for building an EV supply chain. The plan involves offering government subsidies to Japanese companies seeking to establish sources of battery materials like nickel and lithium in Canada. Japan is also exploring collaboration with Australia for the same purpose, emphasizing the need for a supply chain that doesn’t rely on China. However, Japan faces competition from South Korea, which has been quicker to establish a presence in both Canadian and Australian mineral industries. For Japan to catch up, experts suggest that Japanese companies need to shed their slow and risk-averse reputation.
That concludes this week’s edition of #techAsia. If you’d like to read more about these stories and other fascinating tech news, visit Nikkei Asia. Remember to sign up to receive #techAsia directly to your inbox. For any inquiries or suggestions, please email [email protected].
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