2024-12-05: China-US Semiconductor Issues Again
Exploring Vietnam-Japan Tech Synergy
Good Morning,
Below are some of the most important developments in the artificial intelligence, semiconductors, and cloud computing sectors in Asia today.
Taiwan: Semiconductor Advancements: TSMC, NVIDIA, and AWS Propel Industry Growth
In the rapidly evolving landscape of semiconductor technology, TSMC is at the forefront, driving significant advancements in chip processes that promise to reshape the industry's future.
Vietnam: Vietnam-Japan Tech Synergy: Transforming IT and Semiconductor Landscape
Vietnam's collaboration with Japan in technology and digital transformation is marked by a significant evolution within the Vietnamese IT sector.
Taiwan: Taiwan Stock Market's Bullish Outlook and AI's Strategic Role in 2025
KGI Securities' investment outlook for 2025 maintains a cautious yet optimistic stance towards Taiwan stocks.
China: US-China Semiconductor Tensions and Strategic Export Moves
In the current landscape of geopolitical tensions, the US Commerce Department has implemented export controls targeting 140 Chinese technology companies.
Thanks for reading,
Rodney J Johnson
Today's Developments
Widely Reported On Issues of Importance
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Semiconductor Advancements: TSMC, NVIDIA, and AWS Propel Industry Growth
In the rapidly evolving landscape of semiconductor technology, TSMC is at the forefront, driving significant advancements in chip processes that promise to reshape the industry's future.
NVIDIA is preparing to unveil its new chip architecture, Blackwell, with regular updates on the horizon. The anticipated AI platform Rubin, set for a 2026 debut, is positioned to nearly double the computational capabilities of Blackwell. This ambitious goal is supported by the planned production of its 3nm GPUs by late 2025, incorporating cutting-edge innovations like the Common Optical Package (CPO) and HBM4 memory to enhance performance. However, the extended testing periods required by Rubin's architecture for AI chips such as Blackwell pose potential challenges, including equipment supply bottlenecks and shipment delays. To address Rubin's demand, TSMC intends to increase its CoWoS production capacity to 80,000 wafers per month by late 2025.
The impact of these developments is predicted to be substantial for Taiwanese companies, with Morgan Stanley rating TSMC, ASE, and KYEC Electronics as "outperform" due to the expected surge in demand for AI computing power. KYEC, in particular, is positioned to benefit immensely, with projections indicating that NVIDIA's AI GPU testing will constitute 26% of its revenue by 2025. ASE is also on track for significant growth in substrate packaging and wafer detection, with anticipated revenues from advanced packaging and testing surpassing $1 billion in 2025. Morgan Stanley provides optimistic stock price targets for TSMC at 1,330 yuan, ASE at 180 yuan, and KYEC Electronics at 160 yuan.
The Industrial Research Institute (ITRI) forecasts robust expansion in Taiwan's manufacturing and electronic components sectors by 2025, predicting a manufacturing output of 25.9 trillion yuan and an annual growth rate of 6.48%. The electronic components sector is expected to see an output of 2.4 trillion yuan, marking a 7.5% increase. According to ITRI Director Lin Zhaoxian, Taiwan's semiconductor industry is projected to grow by 16% in 2025, reaching 5.3 trillion yuan, mainly fueled by advancements in AI technology. Other Taiwanese manufacturing sectors are also expected to experience moderate growth in 2025: metal electromechanical (3.54%), information electronics (10.33%), chemical industry (2.42%), and people’s livelihood industries (3.53%).
The global outlook for 2024, being a major election year, may influence trade, exchange rates, and tariffs, with significant international trends including rising geopolitical risks, increased demand for industrial AI, and a shift towards sustainable supply chains. ITRI suggests enhancing industrial resilience through the establishment of AI centers, advancement of core technologies, and acceleration of carbon reduction initiatives.
Adding another dimension to the semiconductor field, the AWS Annual Cloud Conference highlighted groundbreaking advancements in AI technology. CEO Matt Garman introduced the Trainium 3 chip, produced using TSMC's 3-nanometer process, with a launch anticipated by the end of 2024. AWS also announced plans for a new US data center to commence construction in early 2025, featuring innovative power supply and cooling systems. The introduction of Trn2 UltraServers, designed for efficient inter-chip connectivity, promises to lower training costs compared to NVIDIA's offerings. The Trainium 3 chip seeks to meet the rising demand for generative AI training, aiming to double computing power while boosting energy efficiency by 40% over its predecessor, Trainium 2. AI startup Anthropic, along with tech giant Apple, is expected to be among the early adopters of this technology.
References for this Development
估台積電10年間將帶來11兆日圓經濟效益 熊本還要蓋第3座廠
The Storm Media | Local Language | News
輝達Rubin晶片揭密！大摩按讚台積電、日月光、京元電 目標價曝光
Nvidia Rubin chip revealed! Dalian Massage Likes TSMC, ASE, and KYEC Target Price Exposure
United Daily News | Local Language | News
AWS最新晶片Trainium 3預計明年底上市 由台積電操刀
United Daily News | Local Language | News
台積電2奈米傳良率提高6％ 有望幫客戶節省數十億美元
TSMC’s 2nm process yield rate increased by 6%, expected to save customers billions of dollars
ETtoday | Local Language | News
繼續強力成長 工研院估2025年半導體產值上看6兆元
United Daily News | Local Language | News
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Vietnam-Japan Tech Synergy: Transforming IT and Semiconductor Landscape
Vietnam's collaboration with Japan in technology and digital transformation is marked by a significant evolution within the Vietnamese IT sector.
Vietnamese IT companies operating in Japan are transitioning from traditional outsourcing models to engaging in more complex, high-value projects such as research and solution design. Supported by data from the Vietnam Software and IT Services Association (VINASA), this shift is evidenced by substantial revenue growth among 20 Vietnamese IT firms, from $672 million in 2020 to $1.345 billion projected for 2024, reflecting an annual growth rate of 22-28%. Alongside this financial surge, the workforce has expanded by 8,000, resulting in a remarkable 610% increase in labor productivity.
These Vietnamese firms are increasingly involved in cutting-edge fields like artificial intelligence and blockchain and are beginning to offer proprietary products in addition to services. At the Japan ICT Day 2024 event in Hanoi, potential areas for collaboration between Japanese and Vietnamese businesses were emphasized, particularly in AI, modernization of legacy systems, and smart green manufacturing—areas poised to benefit both economies. However, challenges such as language barriers and workforce stability continue to pose significant obstacles. Japan’s anticipated shortfall of 789,000 IT workers by 2030 renders Vietnam's youthful, tech-savvy workforce particularly attractive.
Held on December 2-3, Japan ICT Day 2024 in Hanoi was a convergence of conferences, networking opportunities, and visits to Vietnamese firms, attended by more than 100 participants from over 30 companies across both nations. This event was instrumental in strengthening the technological partnership between Vietnam and Japan.
References for this Development
Education and innovation key to Vietnam’s semiconductor strategy
Vietnam Net - E | English | News
Japanese firms turn to Vietnam for tech talent and digital transformation
Vietnam Net - E | English | News
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Taiwan Stock Market's Bullish Outlook and AI's Strategic Role in 2025
KGI Securities' investment outlook for 2025 maintains a cautious yet optimistic stance towards Taiwan stocks.
Chairman Zhu Yanmin advises not to anticipate significant gains despite a promising 30% increase recorded last year. While Taiwan stocks may continue to reach historical valuations, Zhu foresees only an 18% profit growth for domestic companies next year, a decline from the previous year's 36%. This suggests a nuanced market trajectory. Donald Trump's impending presidency could bring market volatility reminiscent of the trade tensions experienced during his previous term, potentially introducing new investment opportunities.
KGI anticipates that Taiwan stocks will perform better in the first half of next year compared to the latter half. The unmet growth expectations for AI technologies could challenge cyclical stocks due to overcapacity in China. Savvy investors are encouraged to target undervalued stocks and those aligning with Trump's policies. The Taiwan stock market has been revitalized by a significant return of foreign investors, with TSMC shares seeing increased foreign purchases that have substantially raised its price, aiding in market recovery. The Taiwan stock index recently closed at 23,027.46 points, buoyed by TSMC's surge, which boosted market value over two trading days. Although foreign investments in ETFs are strong, Hon Hai stocks have seen a decline due to foreign selling.
A prevailing bullish trend for Taiwan stocks is expected to carry into 2025, focusing heavily on AI in the technology sector with a U-shaped pattern anticipated throughout the year. Market fluctuations linked to Trump’s policies could offer strategic investment opportunities. Zhu predicts that global economic growth in 2025 will mirror 2024 trends, although inflation could be affected by Trump's policies, and potential Federal Reserve interest rate cuts may bring rates down to 3.75%-4.0% by 2025. Although US stocks have high valuations driven by AI advancements, stock rotation opportunities remain likely, with the S&P 500 expected to see mid-to-high single-digit growth.
Taiwan's stock optimism is buoyed by the semiconductor industry and AI supply chain. Despite slower corporate earnings growth forecasted at 18% for 2025, which may limit significant index increases, the focus should shift to individual stock performances. A U-shaped trajectory is expected with bullish trends prevalent in the first and fourth quarters, counterbalanced by corrections and volatility in the second and third quarters due to economic and trade policies. Notably, on December 3rd, the Taipei stock market rose by 290.53 points, driven by robust US markets and tech stock strength. TSMC, spurred by AI optimism and Intel speculation, played a pivotal role, while smaller AI companies benefited from lower valuations.
References for this Development
台積電強勢表態 台股早盤上漲383點重返23000點
Central News Agency | Local Language | News
台股連二紅 站上23,000關…作帳、作夢題材熱炒
United Daily News | Local Language | News
17檔台股ETF本月除息！00929規模急縮53億 00919叩關3000億
ETtoday | Local Language | News
凱基證看明年台股：創高空間有限 川普創造波動機會
Central News Agency | Local Language | News
矽光子族群強勢 台股盤中漲百點站上23100點
United Daily News | Local Language | News
川普2.0變數多！台股後市怎麼走？專家：2025年多頭格局將延續
NOWnews | Local Language | News
《台北股市》盤中焦點股：眾達-KY、統新、新盛力、世芯-KY、川寶
"Taipei Stock Market" intraday hot stocks: Jones Day-KY, Tongxin, Xinshengli, Shixin-KY, Chuanbao
Yahoo Finance | Local Language | News
台股首檔AI＋優息台股ETF 00962將於本周五掛牌搶錢潮
Taiwan’s first AI+dividend Taiwan stock ETF 00962 will be listed this Friday to grab money.
Yahoo Finance | Local Language | News
為何台積電ADR大漲5%現股今漲不到2%？ 專家曝原因
Yahoo Finance | Local Language | News
【Yahoo早盤】台股早盤漲逾170點後收斂 分析師林漢偉：短線需看量
Yahoo News Taiwan | Local Language | News
《基金》00962聚焦AI大趨勢 周五將掛牌
"Fund" 00962 focuses on the big trend of AI and will be listed on Friday
Yahoo Finance | Local Language | News
美國科技股領漲！標普、那指創高 台積電ADR漲2.31％
U.S. technology stocks lead gains! S&P and Nasdaq hit highs, TSMC ADR rose 2.31%
ETtoday | Local Language | News
【台股盤中】矽光子族群強勢 漲百點站上23100點
[Taiwan Stocks Intraday] The silicon photonics group surged by 100 points to reach 23,100 points
Yahoo Finance | Local Language | News
近10年來11~2月台股連4月上漲 法人看好AI股將是領頭羊
United Daily News | Local Language | News
和碩加入Zettabyte陣容 採Zware定義AI高效運算典範
Pegatron joins Zettabyte lineup and adopts Zware to define AI efficient computing model
United Daily News | Local Language | News
鈊象叩關！台股再現18千金 分析師：AI還是主流
The elephant knocks at the gate! Taiwan stocks reappear 18 rich analysts: AI is still mainstream
Yahoo Finance | Local Language | News
台股作帳與元月行情啟動 首檔AI＋優息台股ETF 00962 12／6掛牌搶布局
Yahoo Finance | Local Language | News
Taiwan shares end sharply higher as TSMC steams further ahead
Focus Taiwan | English | News
券商晨訊台股投資建議摘要 (1) 2024年 12月 4日
Summary of investment advice on Taiwan stocks from brokerage Chenxun (1) December 4, 2024
Yahoo Finance | Local Language | News
快訊／台積電漲15元至1070 台股漲172點
News/TSMC rose 15 yuan to 1070, Taiwan stocks rose 172 points
ETtoday | Local Language | News
【台股開盤】漲98.62點
[Taiwan stocks open] up 98.62 points
Yahoo Finance | Local Language | News
和碩結盟Zettabyte 提升AI伺服器運算效率
Pegatron forms alliance with Zettabyte to improve AI server computing efficiency
Central News Agency | Local Language | News
台股閃現第18千金 AES-KY、富世達站穩千元
Taiwan stocks flashed their 18th gold medal, AES-KY, Fisda stood firm at 1,000 yuan
Yahoo News Taiwan | Local Language | News
【Hot台股】順達爆衝！網喊「羨慕手上有BBU」 專家：行情會續燒
Yahoo Finance | Local Language | News
那指、標普再創新高 台股開盤漲98點、台積電漲至1065元
Nasdaq, S&P reached new highs. Taiwan stocks opened up 98 points, and TSMC rose to 1,065 yuan.
NOWnews | Local Language | News
台股開盤漲98.62點
Taiwan stocks opened up 98.62 points
Central News Agency | Local Language | News
秀AI火力 英特爾攜台鏈組戰隊
Showing off AI firepower, Intel teams up with Taiwan chain
Yahoo Finance | Local Language | News
三大法人買307億元 台股收漲290點、站月線
Yahoo Finance | Local Language | News
《台北股市》三大法人03日賣超前十大 電子成箭靶 緊咬台新金6天
Yahoo Finance | Local Language | News
台股收紅》瘋狗浪式漲法！四點原因 台積高點可期
Yahoo News Taiwan | Local Language | News
《台北股市》台股挑戰26000點！凱基投顧董座看好 親揭後市3重點
Yahoo Finance | Local Language | News
台股兩天收復11月跌點 台積電強彈59元居首功
Central News Agency | Local Language | News
《台北股市》投信03日賣超前十大 電子拿9席 鴻海又是第一
Yahoo Finance | Local Language | News
《台北股市》三大法人3日買超前十大 機票狂掃11.7萬張、6金抱13萬張
Yahoo Finance | Local Language | News
Focus Taiwan | English | News
快訊／台股收盤大漲290.53點 台積電漲20元至1055
News/Taiwan stocks closed up 290.53 points, TSMC rose 20 yuan to 1055
ETtoday | Local Language | News
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US-China Semiconductor Tensions and Strategic Export Moves
In the current landscape of geopolitical tensions, the US Commerce Department has implemented export controls targeting 140 Chinese technology companies.
This measure extends to some firms in Japan, South Korea, and Singapore, aiming to restrict China's access to high-bandwidth memory chips crucial for advanced technologies such as artificial intelligence due to national security concerns. As detailed in the US Federal Register, these regulations are likely to lead to denied export licenses for US companies dealing with these entities. Commerce Secretary Gina Raimondo has emphasized that the objective is to limit China's military advancements and any programs that could pose a threat to US security. However, China's Commerce Ministry has sharply criticized this decision, labeling it as economic coercion.
In retaliation, China is intensifying its efforts to develop its own advanced chips, supported by substantial subsidies and investments, though it still trails in certain technological aspects. Despite some positive market reactions in Japan, stock prices for certain Chinese companies have fallen due to these export controls. The China Semiconductor Industry Association has denounced these measures, arguing they undermine the reliability of US chip products, violate international trade norms, threaten fair trade, and jeopardize the global semiconductor supply chain.
These escalated restrictions are impacting firms in both countries, causing supply chain disruptions and increased costs, prompting Chinese companies to be more cautious about purchasing US chips. Industry groups are advocating for open collaboration to sustain growth, despite mixed market performances in Asia amid the rising US-China tensions. This situation is further complicated by political issues in France and the anticipated US trade policies under President-elect Donald Trump.
Naura Technology Group is among the 140 affected companies, with significant implications for the semiconductor sector. Despite these restrictions, US firms such as Nvidia, AMD, and Intel continue their sales in China, though industry warnings suggest potential shifts in market dynamics. In an assertive countermeasure, China has banned the export of minerals, including gallium, germanium, and antimony, which are crucial for high-tech manufacturing, and is reviewing graphite exports. This move challenges the US, as China's dominance in these minerals has led to price increases, notably in antimony, amid the escalating trade conflict.
Further intensifying these dynamics, the US Bureau of Industry and Security has introduced new export controls designed to hinder China's progress in the AI and semiconductor sectors. Effective December 2024, these comprehensive regulations encompass semiconductor equipment essential for AI applications. They also enforce stringent licensing on US technology involved in advanced computing, aiming to influence broader diplomatic negotiations between the US and China.
Chinese industry associations like the China Semiconductor Industry Association and the China Association of Communications Enterprises have fiercely criticized these controls, advising domestic companies to avoid purchasing US chips and strengthen connections with non-US manufacturers. The Internet Society of China and the China Association of Automobile Manufacturers have also voiced safety concerns regarding US chips, calling for international cooperation to maintain supply chain resilience.
In turn, China's Ministry of Commerce has “reinforced its commitment to national security and international non-proliferation standards” by enforcing a ban on exporting dual-use items such as gallium and germanium to the US and tightening controls on graphite exports. The rising value of these strategic materials, with a notable spike in antimony prices, underscores the widespread implications of these geopolitical tensions on global markets.
Questions To Ask Now
How might the US-China semiconductor tensions impact our supply chain reliability and costs?
What strategies should we adopt to mitigate potential disruptions in our industry caused by these export controls?
How can we engage with Chinese partners given the growing geopolitical tensions and maintain profitable relationships?
What are the potential long-term effects of China's retaliatory measures on our access to essential minerals for manufacturing?
How could these escalated trade tensions between the US and China affect global semiconductor supply and pricing?
What contingency plans should we have if China advances in its domestic semiconductor capabilities and reduces reliance on US firms?
How will these developments impact our market positioning and competitive advantage in China?
What are the potential risks to our profit margins if Chinese companies shift towards non-American chip manufacturers?
How can we leverage our existing business relationships in Asia to counterbalance these geopolitical disruptions?
What are the implications of the US and China's strategic export measures on our future investment and expansion plans in the region?
References for this Development
Chinese associations urge caution in buying US chips
China Org Cn | English | News
Peoples Daily | English | News
Chinese Industry Associations Oppose US Chip Export Curbs, Urge Caution in Buying US Chips
Yicai Global | English | News
US chips 'no longer safe' say Chinese industry body in united response to curbs
Deal Street Asia | English | News
US chips less reliable — forcing wariness
China Daily | English | News
China Tightens Control Over Dual-Use Items Exports to US
Yicai Global | English | News
China hits back against US chip crackdown
Al Jazeera | English | News
美国悍然升级对华半导体管制：140家企业被列入“实体清单” 限制设备商和HBM
STCN | Local Language | News
US expands list of Chinese technology companies under export controls
Independent | English | News
美国进一步加大对华半导体出口限制措施 中国互联网协会声明
Beijing News | Local Language | News
商务部决定加强相关两用物项对美国出口管制
Beijing News | Local Language | News
China lodges solemn representations with U.S. over semiconductor export control measures
Peoples Daily | English | News
Asian markets mixed after US-China chip move, euro hit by France woes
Inquirer Net | English | News
Chinese associations urge caution in buying U.S. chips over semiconductor export control
Xinhua | English | News
外交部：已就美再次更新半导体出口管制规则提出严正交涉
Xinhua | Local Language | News
Cognitive Asia covers AI, semiconductors, and cloud computing-related issues for South Korea, Japan, China, Taiwan, India, and Vietnam.
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