The exodus of manufacturing from China
Asia Tech Review: 10 April 2023
Good morning,
This week’s issue is a little lighter than usual on account of the long Easter weekend—if you celebrated it, I hope you had a great holiday.
Don’t forget you can follow ATR for the latest news in the Telegram channel, while there are also accounts on Twitter and now LinkedIn to keep you updated.
See you again next week!
Jon
Links in focus
Rather than the usual of section of analysis on three top stories, this week we’re highlighting a number of links that show how China is increasingly drifting from the rest of the world, or at least where China used to be:
On supply chain, Bloomberg has a deep look at how Apple—a bellwether for manufacturing—is laying the foundations to manufacture phones outside of China, including the tricky politics of how CEO Tim Cook is navigating the challenge of staying on side with the Chinese government
The Information has an opinion piece that profiles India—Apple’s key alternative to China—as “the world’s next tech manufacturing hub” albeit with the challenge of lacking necessary infrastructure and expertise to reach the high bar that China has set
Finally, India and Southeast Asia (Vietnam, Thailand and Cambodia) are among the early winners of the shift in semiconductor production away from Taiwan and China due to political and economics reasons, as Bloomberg (again) reports
To drill home the point about political challenges when working with China or being reliant on the market, there’s two notable pieces of news that provide broader context
China appears to be using a security review of Micron Technology, a US semiconductor firm with deep roots in China, to “strike back” at America’s hostile approach to Chinese tech and chipmakers
In other words, companies can easily get caught in political crosshairs link
While Chinese regulators have reportedly slowed down their merger reviews of a number of proposed acquisitions by US companies—indicating that collateral damage can be wider than just the semiconductor industry link
China
Following that big week for TikTok, there’s plenty more from ByteDance’s big hitting app:
TikTok got a lot of support in China link
In an information campaign primarily run on Twitter, Chinese officials and state media organizations widely mocked the United States in the days before and after the hearing, accusing lawmakers of hypocrisy and even xenophobia for targeting the popular app, according to a report released on Thursday by the Alliance for Securing Democracy, a nonpartisan initiative from the German Marshall Fund.
While advertisers are said to be increasing their spending despite the threat of a US ban link
Meanwhile Lemon8, ByteDance’s latest app for creators in the US, is again leaning on its China playbook link
The information reports that US VC funds and many US-based LPs are indirectly financing a range of Chinese AI startups that aspire to rival OpenAI—potentially raising national security and political issues on both sides in the future link
Chinese state-owned telecom firms are developing a $500M undersea fiber-optic internet cable network that would link Asia, the Middle East and Europe to rival a similar US-backed project link
How China is winning the race for Africa’s lithium—a crucial resource for EV batteries link
There’s concern that Alibaba’s break-up will mean a prioritisation on all things e-commerce, and not its other bets link
Alibaba, meanwhile, unveiled its answer to ChatGPT link
Tencent and Douyin have ended years of copyright disputes with an agreement on content distribution link
China’s SJ Semiconductor raised a $340M extended Series C link
Binance reportedly turned down an offer to acquire Justin Sun’s ownership stake in Huobi apparently due to its ties to mainland China. link
India
Rest of World argues that cheap smart speakers are a key reason behind the rise of digital payments in India link
Vedanta—a local venture with Foxconn—is seeing its plan to build a $19B chip-making plant in India “floundering” due to a lack of local tech partners and limited government support link
Reliance’s next startup act is a Meesho-like zero-commission retail marketplace from its Ajio division link
Zyod, which enables apparel sourcing and manufacturing for fashion brands, raised $3.5M link
India does not plan to regulate the growth of AI, which the government has identified as a “significant and strategic” area of opportunity link
Apple is gearing up to (finally) open its first physical retail store in India later this month link
Saas fund Iron Pillar has made a final close of its $129M fund link
Google will prohibit personal loan apps from accessing user photos and contacts following concern that apps had taken users hostage by using social links and friend groups to apply pressure link
India’s central bank has halted its plans for a high-profile project intended to rival the nation’s dominant UPI payment system link
A worrying amendment to India’s IT law will now require social media firms like Facebook and Twitter to rely on government fact checking and prohibit the publishing of anything deemed to be “false information” link
New online gaming rules announced by the government are expected to curb the menace of illegal offshore betting and gambling websites link
Southeast Asia
The FT looks at how Singapore is drawing startup founders and talent from China by positioning itself as a gateway to Southeast Asia link
Tencent is among the backers of Singapore’s Horizon Quantum Computing via a new $18M round which includes Sequoia and SGInnovate among others link
The number of QR code-based payment transactions has tripled each year in Indonesia since being introduced in 2020 link
Japan
Japan is poised to sharply raise its chip-gear spending in an attempt to boost its position in the global semiconductor market link
Electronics firm Kyocera will spend $470M to build its first new domestic production facility in two decades link
South Korea
Samsung Display will invest $3.1B in OLED production in South Korea link
But group parent Samsung will cut chip production after carding a worse-than-expected 96% plunge in quarterly operating profit as a global semiconductor market downturn deepens link
Elsewhere in Asia
Brazil is going after Asian e-commerce giant that operate on its soil with a new tax push link
Hackers posed as reporters in attacks on North Korea experts, according to a report from Google link
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Very bullish on Vietnam, India and Mexico here