China and the US trade blows
China and the US trade blows
India's manufacturing dream takes off and Sequoia funds are already in competition
Welcome back,
This week’s focus is on the tech arms race. The latest scuffle between the US and China has seen Beijing restrict the export of two key materials that go into the semiconductors that act as the brain for consumer tech devices. The move, made in retaliation to US restricting investment in certain Chinese tech sectors, could hit chipmakers, device makers and others. We’ll have to wait to see.
Elsewhere, India’s dreams of manufacturing on home soil are coming together (not without caution) and Sequoia’s funds, which split off a month or so ago, are already in direct competition. That was fast.
If you missed this week’s story on Bitkub, the Thai startup that saw a dream billion-dollar acquisition from the country’s oldest bank fall through, you can find it here.
That’s all for now, see you on Thursday with another original article.
Jon
News in focus
US and China trade blows on semiconductor export restrictions
In today’s world, he who controls the tech, controls the world. Control is about semiconductors— “chips are the new oil and gas of geopolitics,” according to Intel’s CEO—and so it is no surprise that the US and China continue to fight over control.
This past week, the two giants scrapped again as China moved to restrict exports of two key chipmaking materials in response to US plans to control investments into Chinese companies in areas it deems sensitive national security sectors.
US Treasury Secretary Janet Yellen said the proposed move wouldn’t harm China, but Beijing reacted quickly claiming its moves—which will require exports to seek permission to ship some gallium and germanium products—are aimed at protecting national security and interests.
In response, some countries are preparing for damage although TSMC foresees no direct impact on its business, which is the world’s largest contract maker of semiconductors.
Still, it could represent a new escalation, with the US government is also said to be looking to restrict China’s access to cloud computing.
India’s home-grown semiconductor industry edges closer to reality… but bumps are likely
India has quickly become a major manufacturing hub for tech companies like Apple. The country isn’t about to replace China, despite growing numbers, but that could change as local business around manufacturing ramps up significantly.
India will break ground on its first semiconductor assembly plant next month and begin producing the country’s first domestically manufactured microchips by the end of 2024, according to a senior government official who is overseeing New Delhi’s $10B chipmaking foray
At the same time, India's Vedanta will take over Foxconn chip joint venture from its holding company—it is also taking over a display glass manufacturing venture from Volcan Investments, Vedanta's holding company.
The obvious BUT coming here is whether this push can be achieved without the expertise of an industry giant like Foxconn, which some estimates put down as responsible for producing 40% of global consumer tech. The Reuters article above highlights the struggle of landing big name support:
But his plan had been slow to take off. Among other problems encountered by the Vedanta-Foxconn project were deadlocked talks to involve European chipmaker STMicroelectronics as a tech partner, Reuters has previously reported.
While Vedanta-Foxconn managed to get STMicro on board for licensing technology, India's government had made clear it wanted the European company to have more "skin in the game", such as a stake in the partnership.
STMicro was not keen on that and the talks remained in limbo, a source has said.
India is no easy nut to crack as we say earlier this year when Wistron, another key Apple manufacturing partner, quit the country after 15 years because it couldn’t find the necessary scale. It sold its plant to Tata, another Indian mega conglomerate with eyes on the prize that is local manufacturing.
Sequoia funds will compete in Singapore
I wrote back in June that Sequoia’s breakup will see its regional funds compete against each other as independent entities, but the speed at which HongShan—formerly Sequoia China—has pitched up in Singapore is surprising.
The FT reports the Chinese fund opened an office in Singapore which will be its base for investing in Southeast Asia, one of the key markets for Peak XV—formerly Sequoia India and Southeast Asia
The two funds are also reportedly heavily courting global backers using their new-found independence
China
Alibaba is conducting a strategic review of its video streaming platforms Youku and Tudou—one option could see it move the assets into Alibaba Pictures to bolster the Hong Kong-listed company link
Elsewhere, China will end Ant Group's regulatory revamp with fine of at least $1.1B link
While Ant has initiated a share repurchase plan that values the firm around $79B, at a steep 70% valuation drop from its $280B peak link
Meta is in talks with Tencent to bring Quest VR headsets to China, but potential partners worry about Zuckerberg’s past criticisms of the country link (Beijing state media blasted Zuckerberg for past criticisms of China)
Indonesia offers a template on how TikTok is planning its global e-commerce push, which targets Amazon among others link
Indonesia was the first market for TikTok Shop and is still its biggest, helped by a young, mobile-savvy population that’s embraced the combination of short videos and in-app shopping since its 2021 launch. TikTok Shop is expected to hit $20 billion in gross merchandise value by the end of this year, quadrupling from a year earlier.
TikTok says it has more than 100 million monthly users in Indonesia, who on average spend more than 100 minutes on the app every day.
ByteDance will launch a new music streaming service in Brazil and Indonesia—its not immediately clear how TikTok Music will be different to its previous music app Resso link
Baidu’s Ernie Bot and iFlytek’s Spark are both present in Apple’s mainland App Store, but local Chinese AI chatbots are very much still on trial mode link
A slew of top gaming hits have seen NetEase stock jump 85% to defy China’s slowdown link
Reuters look at a subsea cable firm—born out of a Cold War spy project—that’s secretly helping the US take on China by laying internet cables on the ocean floor, including a clandestine mission to a remote island naval base link
US chipmakers and their allies say they are finding it increasingly hard to operate in China but say doing business in the country is still key to their survival link
Hong Kong
Hong Kong government sets up web3 task force to help ‘build a thriving ecosystem’ link
India
Reliance — which revolutionised India with cheap data — launched a $12 4G-enabled phone aimed at people using the country’s legacy 2G networks link
Meanwhile, sibling Reliance Retail is reportedly valued as high as $96B link
Reliance head Mukesh Ambani is also pushing on streaming where his Jio Cinema app has pushed into sport by winning the rights to offer IPL cricket, and the rights to shows and films made by global networks NBC, HBO and Warner Bros link
Disney+ Hotstar lost the rights to offer IPL cricket last year, but it remains India’s market leader with 50M subs ahead of Amazon's Prime Video (12.4M) and Netflix (6.2M) link
PharmEasy, previously valued at $5.6B, is reportedly planning a significantly discounted round at a $500-600M valuation to pay off loans link
Battery Smart raised $33M in funding from Tiger Global, Blume Ventures and others link
Google has accused India's antitrust body of ordering changes to its business model "only to protect" rival Amazon, which complained about its struggles to develop a modified version of the Android system due to Google's restrictions link
Southeast Asia
Tests show Singapore-registered dropshipping agent Poxdo is behind a lot of weird product ads on Twitter link
Singapore wants its crypto firms to keep client funds in a trust—following others with tighter regulations to safeguard against a repeat of the FTX fiasco link
Japan
SoftBank spent $140B on AI with little to show—now it is trying again Link
SoftBank backed Japanese robotics startup Telexistence in $170M round link
Tokyo-based CADDi, which operates a B2B marketplace for manufacturing, raised a $89M Series C to take its total capital to $164M link
Low-cost e-commerce platform Temu, owned by PDD, has started selling to Japan link
Sega is pulling back from blockchain gaming to “avoid devaluing its content” link
South Korea
Samsung sued Chinese rival BOE Technology over alleged patent violation on iPhone displays link
Foreign investors betting on AI are pouring money into Samsung's shares but analysts say it will have a hard time keeping up with rivals link
Elsewhere in Asia Pacific
Bangladesh government website leaks citizens’ personal data link