2025-07-07: Hon Hai Achieves Record Revenue Growth Driven by Surging AI Server Demand in Early 2025

Vietnam Achieves Record FDI Growth and Enterprise Expansion in 2025

Jul 06, 2025

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Good Morning,

Below are some of the most important developments in the artificial intelligence, semiconductors, and cloud computing sectors in Asia today.

▪️ Taiwan: TSMC’s Global Expansion and Competitive Advances in AI Chip Manufacturing
Taiwan Semiconductor Manufacturing Company (TSMC) is shaping the future of AI and advanced semiconductors through its technology roadmap, global capacity expansion, and strategic navigation of geopolitical and financial challenges.

▪️ South Korea: Naver’s HyperCLOVA X Think Accelerates Korea’s AI Advancements and Market Growth
Korean firms are advancing AI integration with language-optimized models and multimodal capabilities to strengthen national competitiveness and drive market growth.

▪️ Vietnam: Vietnam Achieves Record FDI Growth and Enterprise Expansion in 2025
Vietnam’s economy in 2025 continues to benefit from robust foreign direct investment inflows and dynamic domestic enterprise growth.

▪️ Taiwan: Hon Hai Achieves Record Revenue Growth Driven by Surging AI Server Demand in Early 2025
Hon Hai/Foxconn posted record revenue growth across multiple product segments in early 2025, driven by robust AI server demand and global market dynamics.

▪️ South Korea: SK Telecom Waives Penalties and Launches Customer Support After April 2025 Security Breach
SK Telecom is responding to the fallout from its April 2025 security breach with a comprehensive penalty waiver and customer support program.

For more information on these developments, please see the full report below.

Thanks for reading,

Rodney J Johnson

Today's Developments

Widely Reported On Issues of Importance

TSMC’s Global Expansion and Competitive Advances in AI Chip Manufacturing

Taiwan Semiconductor Manufacturing Company (TSMC) is shaping the future of AI and advanced semiconductors through its technology roadmap, global capacity expansion, and strategic navigation of geopolitical and financial challenges.

TSMC, Intel and Samsung each pursue distinct paths toward 1.4-nanometer process technologies.
TSMC plans risk production of its 14A node, built on second-generation nanosheet transistors and the NanoFlex Pro architecture, in 2027 and mass production in 2028, targeting faster speeds, lower power consumption and higher logic density while taking a cautious R&D approach to stabilize yields. Intel has shifted resources from its 18A development to a 14A node featuring RibbonFET 2 and PowerDirect power delivery innovations, aiming for risk trials in 2027, but it faces yield challenges, limited availability of High-NA EUV tools, customer pressures and capital-expenditure constraints amid fierce competition. Samsung deferred its 1.4-nanometer mass-production timeline to 2029 after reporting substantial operational losses and foundry-division deficits in 2023 and early 2024, and it is redirecting efforts to boost yields and stability at its 2-nanometer node.

Alongside its R&D efforts, TSMC is executing a major global expansion program.
In Arizona, its first fab began commercial production in late 2023, the second plant is now in the equipment-installation phase, and a third fab broke ground in April 2024. The company has committed US$100 billion to build three additional fabs, two IC-assembly facilities and an R&D center in the United States. In Phoenix, TSMC plans a large manufacturing complex of up to nine wafer fabs covering advanced nodes between 1.6 nm and 4 nm, positioning the site as the sole non-Taiwan location capable of mass-producing high-end chips for clients such as Apple, Nvidia and AMD.

Beyond the United States, TSMC’s first fab in Japan’s Kumamoto prefecture commenced mass production of mature technologies in late 2024.
Its second Kumamoto facility, intended for more advanced processes, has faced slight delays due to local traffic concerns rather than political or tariff issues, and no revised timeline has been announced. TSMC emphasizes that accelerating US investment does not detract from projects in Japan or other regions; it selects sites and schedules builds based on customer demand, operational efficiency, government support and cost considerations. In Germany, TSMC is building a new fab in Dresden that is expected to enter production by 2027.

Meanwhile, at its Arizona campus, TSMC faces a class-action lawsuit alleging racial discrimination, retaliation and unsafe working conditions.
Seventeen plaintiffs claim that non-East Asian employees experienced a hostile environment, marginalization in favor of Taiwanese and Mainland Chinese workers, racist remarks and exclusionary practices. They also allege discouraged emergency-response protocols, inadequate safety training and protective equipment, and the cancellation of a safety-harness purchase. Certain claims of drug and sex trafficking have been sealed. TSMC has affirmed its commitment to a safe, inclusive workplace and declined further comment beyond court filings.

Geopolitical shifts and US policy incentives have influenced TSMC’s prioritization of its Arizona expansion over the second Kumamoto fab.
Anticipation of potential increases in semiconductor investment tax credits under the Great and Beautiful Act and the looming 2026 expiration of US CHIPS-related incentives have driven TSMC to accelerate its US capacity build-out. At the same time, the company warns that prospective US tariffs on Taiwanese chips could dampen demand and complicate its US expansion plans. Financially, TSMC holds approximately 2.4 trillion New Taiwan dollars in cash and short-term assets, largely invested in corporate bonds, generating significant interest income to support its global capital-expenditure program.

IMPACT ANALYSIS

From this Development, various impacts could cascade through the system, to a lesser or greater extent, depending on the severity and criticality of the shocks.

BOTTOM LINE

TSMC’s commitment to invest roughly US$100 billion in multiple Arizona fabs, two IC-assembly facilities and an R&D center is shifting high-end chip manufacturing capacity from Taiwan to the United States, which will boost U.S. fab utilization and attract further FDI while raising global supply-chain relocation costs and potentially slowing potential GDP growth in both origin and host economies.
Samsung’s decision to defer its 1.4 nm mass-production timeline to 2029, coupled with Intel’s 14A node yield and tooling difficulties, has widened TSMC’s technology lead in sub-2 nm logic, which should draw more customers to its advanced roadmap, strengthen its negotiating position on pricing and capacity, and entrench its market share advantage.
The class-action suit in Arizona alleging racial discrimination, retaliation and unsafe working conditions threatens to impose substantial legal and remediation costs on TSMC, damage its reputation among skilled workers and require tighter oversight of safety and labor practices—any of which could divert resources from expansion projects or slow production ramps.
Anticipation of expanded semiconductor tax credits under the CHIPS Act and the prospective Great and Beautiful Act has driven TSMC to accelerate its Arizona expansion at the expense of its second Kumamoto fab, thereby increasing R&D tax-credit utilization, stimulating more public–private joint research projects and improving the patent-to-product conversion pipeline for next-generation nodes.
Heightened U.S. export-control measures and threats of tariffs on Taiwanese-made chips bound for China risk reducing order volumes at both Arizona and Taiwan fabs, undermining economies of scale, elevating per-unit costs and incentivizing TSMC to redirect output to non-restricted markets or lower-end processes.
The planned nine-fab complex in Phoenix focusing on 1.6 nm–4 nm nodes will intensify demands for high-skill immigration policy reforms; if visa processes become more open, U.S. universities and fabs will see higher STEM postgraduate enrollment, improved yield stability and increased high-tech export volumes.
As TSMC’s onshore fabs drive the minimum domestic node size down into the 3 nm–1.6 nm range by 2028–29, U.S. and EU AI compute capacity measured in petaflop-days will rise sharply, leading to lower AI inference costs, broader AI deployment across services and manufacturing, and measurable GDP gains from automation.
Streamlined permitting and harmonized regulatory standards in response to rapid fab builds will enhance the regulatory-quality index, reduce the average cost of capital for semiconductor scale-ups, increase five-year survival rates, and help spawn a new wave of design-tools and packaging unicorns in the chip ecosystem.

References for this Development

1.4奈米製程三家爭霸！台積電穩健領跑、英特爾調整戰略、三星延後量產

1.4nm Process Three-Way Battle! TSMC Steadily Leads, Intel Adjusts Strategy, Samsung Delays Mass Production

Yahoo Finance | Local Language | News

TSMC says U.S. investment won't impact projects elsewhere

Focus Taiwan | English | News

台積電在美國又被告最新聲明回應出爐

TSMC Sued Again in the US, Latest Statement Released in Response

UP Media | Local Language | News

【台股Q3 2-1】台幣暴力狂升財報將現形大立光台積電法說釋風向

Taiwan Stock Market Q3 2-1: Sharp Rise in TWD Reveals Financial Reports, Largan Precision and TSMC Earnings Calls Indicate Market Trends

Yahoo Finance | Local Language | News