Chipmaker giant, Texas Instruments, has been awarded up to $1.6 billion in funding from the US Commerce Department to support the construction of three new semiconductor factories. This financial boost, part of the CHIPS and Science Act, will enable the company to build two facilities in Texas and one in Utah.
The investment is set to create approximately 2,000 new jobs and will be complemented by an additional $6 billion to $8 billion in tax credits and $10 million for workforce development.
The move aligns with the Biden Administration’s broader strategy to enhance domestic semiconductor production. With a commitment of $18 billion through 2029, Texas Instruments plans to increase its internal manufacturing capacity to over 95% by 2030. However, new facilities will produce critical analog and embedded processing chips, essential for various technologies, from smartphones to vehicles.
Apart from that, The CHIPS Act, passed in 2022, aims to boost US semiconductor manufacturing with a total of $52.7 billion in funding. This includes significant subsidies for production and research and development. The funding for Texas Instruments follows similar substantial awards to other major chipmakers, such as Intel and Micron Technology, further underscoring the US government’s commitment to strengthening the semiconductor supply chain.
The US Federal Trade Commission (FTC) has finalised a rule prohibiting companies from buying or selling fake online reviews. New regulation allows the FTC to impose fines of up to $51,744 per violation, targeting deceptive practices that harm consumers and distort competition.
The rule addresses various forms of manipulation, including fake reviews from non-existent customers, company insiders, or AI. It also bans purchasing fabricated views or followers on social media and using intimidation to remove negative reviews. While the rule does not require platforms to verify consumer reviews, it represents a significant step towards a more honest online marketplace.
Trade groups and businesses like Google, Amazon, and Yelp have supported the rule. Yelp’s General Counsel, Aaron Schur, stated that enforcing the rule would improve the review landscape and promote fair competition among businesses.
Consumer advocates, such as Teresa Murray from the US Public Interest Research Group, praised the rule as essential protection for online shoppers. The hope is that the fear of penalties will encourage companies to adhere to ethical practices, benefiting both consumers and businesses.
Global banks are beginning to revive technology projects that were paused in 2023, offering renewed hope for the $254 billion Indian IT sector. The industry, which earns a significant portion of its revenue from banking, financial services, and insurance (BFSI) clients, had been experiencing reduced demand for six quarters following the Silicon Valley Bank collapse.
Recent quarterly reports from major Indian IT firms like Tata Consultancy Services, Infosys, and Wipro indicate a modest recovery in BFSI client demand. Industry leaders believe that interest rate cuts by central banks and the resolution of US election-related uncertainties could further boost client confidence and spending on technology services.
Top US banks, including JPMorgan Chase and Bank of America, have already begun increasing their technology budgets. These investments are directed towards improving regulatory compliance, enhancing customer experiences, and upgrading infrastructure through cloud migration. The focus on technology, including generative AI, highlights a shift in strategic priorities among BFSI clients, aiming to enhance operational efficiency.
However, some analysts remain cautious, noting that while the resurgence in tech spending is promising, it may be too early to declare a full recovery. Any resurgence in recession fears could dampen client sentiment and slow the momentum seen in recent months.
Huawei Technologies is on the brink of releasing a new AI chip, Ascend 910C, to challenge Nvidia’s dominance in the Chinese market. The company has made significant strides despite US sanctions, with Chinese internet firms and telecom operators recently testing the processor.
Huawei claims that the Ascend 910C rivals Nvidia’s H100, a powerful AI chip that has been unavailable in China.
Why does this matter?
The development signals Huawei’s ongoing efforts to circumvent restrictions and bolster its position in the AI sector.
A US court has ordered the bankrupt cryptocurrency exchange FTX to pay $12.7 billion in relief to its customers. The Commodity Futures Trading Commission (CFTC) announced that the order resolves a settlement between the CFTC and FTX, which collapsed in late 2022 after misappropriating customer deposits for risky investments. FTX has committed to a bankruptcy liquidation plan, promising 100% recovery for its customers based on the value of their accounts at the time of the bankruptcy filing.
The CFTC settlement ensures that the government’s lawsuit against FTX will not reduce the funds available to customers, as the CFTC has agreed to wait until all customers are repaid with interest before collecting any payment. FTX is required to pay $8.7 billion in restitution and $4 billion in disgorgement to further compensate victims for their losses. Despite the settlement, some victims of the crypto theft remain dissatisfied, arguing that they are being short-changed by the decision to repay them based on lower cryptocurrency prices from November 2022.
FTX is currently soliciting votes on its bankruptcy proposal, with final approval expected on 7 October. The exchange has been selling assets purchased with misappropriated customer funds to satisfy its obligations. Meanwhile, FTX founder Sam Bankman-Fried, sentenced to 25 years in prison for stealing $8 billion from customers, has appealed his conviction.
The United States Commerce Department announced on Tuesday that it plans to award SK Hynix up to $450 million in grants to support the construction of an advanced packaging plant and research facility for AI products in Indiana. SK Hynix, the world’s second-largest memory chip maker, previously announced an investment of approximately $3.87 billion to build the facility, which will include a cutting-edge production line for next-generation high bandwidth memory chips, crucial for AI systems.
In addition to the grants, the Commerce Department plans to provide $500 million in government loans for the SK Hynix project, which is expected to qualify for a 25% investment tax credit. The facility is projected to create 1,000 jobs and address a critical gap in the US semiconductor supply chain. The project is part of a broader effort to enhance US semiconductor manufacturing, supported by a $39 billion subsidy program and $75 billion in government lending authority approved by Congress in August 2022.
Commerce Secretary Gina Raimondo highlighted the significance of securing commitments from all five major semiconductor manufacturers, including TSMC, Intel, Samsung Electronics, Micron, and SK Hynix. Raimondo stated that these commitments would ensure the U. has the most secure and diverse supply chain for advanced semiconductors that power AI technologies. The SK Hynix facility in West Lafayette, Indiana, will play a pivotal role in producing high-bandwidth memory chips essential for training AI systems.
The announcement comes amid increasing global tensions over semiconductor supply chains, with the US expanding chip export controls and firms from China stockpiling high bandwidth memory chips in response to these restrictions. SK Hynix’s CEO, Kwak Noh-Jung, expressed gratitude for the US Commerce Department’s support, emphasizing the company’s excitement about bringing this transformational project to fruition. The initiative follows a previous $75 million award to Absolics, an affiliate of SK Group, for a facility in Georgia to supply advanced materials to the US semiconductor industry.
The next US administration is expected to adopt a ‘constructive’ stance on cryptocurrency regardless of the election outcome, according to Brian Armstrong. The CEO of Coinbase has highlighted the industry’s growing political influence as the November election approaches. Both Republican and Democratic parties have acknowledged the increasing significance of the crypto sector, with major political action committees raising over $230 million to support pro-crypto candidates.
Coinbase, the largest United States crypto exchange, is currently engaged in a legal battle with the SEC over allegations of failing to register as an exchange. The support from Wall Street and corporate figures like Elon Musk has boosted the sector’s mainstream appeal. Recently, Republican candidate Donald Trump pledged to create a ‘stockpile’ of bitcoin, while advisors to Democratic Vice President Kamala Harris have engaged with top crypto companies to improve relations.
A recent Supreme Court ruling overturning the ‘Chevron deference’ doctrine, which limited judicial interpretation of laws, is seen as a positive development for the crypto industry. Coinbase has strengthened its board by adding former US Solicitor General Paul Clement, a key figure in the Chevron ruling case. The shifting political landscape and favourable court rulings are expected to attract new institutional capital to the crypto market. Coinbase’s recent surpassing of Q2 revenue expectations and strategic board expansions further highlight its proactive stance amid these changes.
Coinbase’s second-quarter revenue surpassed Wall Street predictions, fuelled by a revival in trading volumes and positive market sentiment due to regulatory relaxation. That resulted in a 3% rise in the company’s shares. The US Securities and Exchange Commission (SEC) approved an exchange-traded fund (ETF) to track bitcoin and ether prices, resolving a prolonged regulatory conflict and boosting market confidence. CEO Brian Armstrong expressed hope for constructive future regulatory measures.
Despite ongoing disagreements with the SEC over crypto token classifications, the approval of spot bitcoin ETFs by major financial players like BlackRock and Fidelity has bolstered the sector’s credibility. As a result, the total market capitalisation has increased to around $2.36 trillion. Revenue from Coinbase’s subscription and services segment jumped 79% to $599 million, with total revenue doubling to $1.45 billion, exceeding analyst forecasts. The company reported a profit of 14 cents per share, compared to a loss in the previous year.
Why does this matter?
Coinbase’s strong Q2 performance signals a significant recovery and growth in the cryptocurrency market, driven by positive regulatory developments. The SEC’s approval of bitcoin and ether ETFs marks a pivotal moment, potentially attracting more institutional investors and increasing mainstream acceptance of digital assets.
Hundreds of Chinese sellers on Temu have protested against what they describe as excessively high penalties imposed by the platform. Temu, an international online marketplace owned by PDD Holdings, has seen increased competition with rivals like Shein since its launch in September 2022. Merchants claim that new penalties introduced in April can reach up to five times the value of a sale when customers return products, causing significant financial strain.
A garment seller from Guangzhou reported that Temu has not adequately addressed their concerns despite urging vendors to register their fines. That led to a larger protest involving around 400 to 500 merchants from China on 29 July. Protesters shared videos online showing large crowds outside Temu’s headquarters, highlighting the widespread discontent among sellers.
Temu acknowledged the protest, noting that most participants were garment sellers who were also active on Shein. The company emphasised its efforts to resolve disputes and maintain quality standards, though some merchants argue that the penalties drive them out of business. Despite the challenges, Temu claims that most merchants on the platform are flourishing and benefit from increased sales and customer satisfaction.
Many sellers, however, remain in a difficult position. One vendor, facing fines nearly triple her initial estimate, expressed the struggle of balancing penalties with minimal profits. Another merchant, unable to quit due to financial commitments, described the situation as having ‘no way out.’ Temu maintains that while penalties are essential for quality control, they aim to enforce them fairly and resolve disputes effectively.
The Consumer Product Safety Commission (CPSC) of the United States declared that Amazon will be held accountable for selling hazardous third-party products on its platform. It has further asked the company to take steps to inform consumers and ensure that they return or destroy such products. The directive encompasses 400,000 items that violate flammability standards, such as defective carbon monoxide detectors, unsafe hairdryers, and children’s sleepwear. In response, Amazon revealed its intention to contest the order in court.
The US agency stated that ‘Amazon failed to notify the public about these hazardous products and did not take adequate steps to encourage its customers to return or destroy them, thereby leaving consumers at substantial risk of injury’. The CPSC labelled Amazon as a ‘distributor’ of faulty products, as such products are stored and shipped by the company.
This is not a one-off incident for the company as previously, in 2021, the CPSC also sued Amazon, compelling them to recall numerous hazardous products sold on their platform. Subsequently, Amazon was forced to remove most of these items and refunded customers. Nevertheless, Amazon maintained that they provide logistics for independent sellers and are not distributors.
