Powerchip Technology, a Taiwanese IT company, is facing intense competition from Chinese foundries like Nexchip, which has rapidly gained market share in the legacy chip sector. This shift, driven by steep discounts and aggressive capacity expansion, has been accelerated by China’s localisation efforts, forcing Powerchip to retreat from the once-profitable business of making integrated circuits for Chinese flat panels. The increasing dominance of Chinese companies in the $56.3 billion legacy chip market is causing concern in Taiwan, with companies like Powerchip and UMC now focusing on more advanced technologies to stay competitive.
Chinese foundries, supported by strong government funding and low margins, have significantly increased their production capacity, undercutting Taiwanese rivals on price. By 2027, China is projected to surpass Taiwan’s global mature node manufacturing capacity. Taiwanese executives are exploring specialisation and diversification, shifting focus from legacy chips to more advanced processes like 3D stacking, which integrates logic and DRAM memory to improve performance.
The rising competition from China is compounded by geopolitical tensions, as some customers are now requesting chips made outside China. This shift is partly due to the US’s trade policies and worsening relations between Beijing and other nations. Taiwanese companies are seeing more orders directed to their local fabs, with some customers explicitly avoiding ‘Made in China’ products.
While Taiwanese companies still have an edge in terms of process stability and production yields, the pressure from Chinese competitors is forcing them to rethink their strategies and adapt to the changing landscape. The future of the industry may depend on how Taiwan navigates both the rising Chinese competition and the geopolitical challenges shaping global supply chains.
France is set to announce private sector investments totalling around 109 billion euros ($112.5 billion) in its AI sector at the Paris AI summit, according to President Emmanuel Macron. The investment package includes 20 billion euros from Canadian investment firm Brookfield and up to 50 billion euros from the United Arab Emirates, which will also fund a 1-gigawatt data centre.
Brookfield’s investment is expected to focus on developing data centre infrastructure, crucial for AI technology that requires massive amounts of energy to operate.With the demand for AI technology rising, Europe is aiming to secure necessary investments to meet the growing need for energy and infrastructure.
This comes amid global competition, as US President Donald Trump recently announced that companies like OpenAI, SoftBank, and Oracle would invest $500 billion in AI infrastructure over the next four years to ensure the US stays ahead in the global AI race.
Stellantis, the world’s fourth-largest carmaker, has announced an expanded partnership with French AI firm Mistral. The move aims to accelerate the company’s ability to analyse industry data, improving decision-making speed. The integration of AI is becoming more common in the automotive sector, with many manufacturers using the technology to assess customer feedback and monitor manufacturing quality.
Ned Curic, Stellantis’ Chief Engineering and Technology Officer, highlighted the significance of this collaboration, noting that it enables the company to perform data analysis in minutes rather than weeks. This rapid processing allows for quicker decision-making, improving operational efficiency.
This strategic shift comes shortly after Stellantis underwent management changes following the unexpected departure of CEO Carlos Tavares in December. The restructuring appears to be part of a broader effort to streamline operations and better position the company for the future.
Britain’s security officials have reportedly ordered Apple to create a so-called ‘back door’ to access all content uploaded to the cloud by its users worldwide. The demand, revealed by The Washington Post, could force Apple to compromise its security promises to customers. Sources suggest the company may opt to stop offering encrypted storage in the UK rather than comply with the order.
Apple has not yet responded to requests for comment outside of regular business hours. The Home Office has served Apple with a technical capability notice, which would require the company to grant access to the requested data. However, a spokesperson from the Home Office declined to confirm or deny the existence of such a notice.
In January, Britain initiated an investigation into the operating systems of Apple and Google, as well as their app stores and browsers. The ongoing regulatory scrutiny highlights growing tensions between tech giants and governments over privacy and security concerns.
OpenAI announced on Thursday that it is evaluating US states as potential locations for data centres supporting its ambitious Stargate project, which aims to secure the US’s lead in the global AI race. The project is seen as crucial for ensuring that AI development remains democratic and open, rather than falling under authoritarian control, according to Chris Lehane, OpenAI’s chief global affairs officer.
Stargate, a venture backed by SoftBank, OpenAI, Oracle, and other investors, is set to receive up to $500 billion for AI infrastructure. A significant portion of this investment, $100 billion, will be deployed immediately, with the rest scheduled over the next few years. Texas has been designated as the flagship location for Stargate’s data centres. An initial site under construction in Abilene is expected to begin operations later this year.
The announcement follows the rise of DeepSeek, a Chinese AI model that challenges the traditional view that AI development requires large, specialised data centres. DeepSeek’s use of cheaper chips has raised concerns among investors, leading to a significant drop in tech stock values, including a record $593 billion loss for Nvidia, the leading AI chipmaker.
OpenAI is considering data centre locations in approximately 16 states, with plans to expand the Stargate network to five to ten campuses in the coming months.
Chinese Vice Premier Zhang Guoqing will visit France from Sunday until February 12 to attend the AI Action Summit as a special representative of President Xi Jinping. The summit will bring together representatives from nearly 100 countries to discuss the safe development of AI.
A foreign ministry spokesperson, Lin Jian, said China is eager to strengthen communication and collaboration with other nations at the event. China also aims to foster consensus on AI cooperation and contribute to the implementation of the United Nations Global Digital Compact.
Vice President JD Vance is leading the US delegation to the summit, but reports suggest that the US team will not include technical staff from the AI Safety Institute.
Sberbank, Russia’s largest bank, has announced plans to collaborate with Chinese researchers on AI projects. The move comes as China’s DeepSeek has disrupted the global tech industry with its low-cost AI models, challenging US rivals like Nvidia. Sberbank, which has transformed from a Soviet-era state savings bank into a major AI player under CEO German Gref, aims to leverage its network of scientists to join forces with China’s AI researchers.
Sberbank’s First Deputy CEO, Alexander Vedyakhin, confirmed the plans but refrained from naming specific Chinese partners. DeepSeek, a startup based in Hangzhou, has gained significant attention for its ability to produce advanced AI models at a fraction of the cost of American counterparts. This development could further fuel competition in the AI sector, especially amid growing tensions between the West and nations like Russia and China.
The strategic partnership between Russia and China is deepening, with both countries emphasising AI as a key area of cooperation. As Moscow faces Western sanctions due to the war in Ukraine, collaboration with China is seen as essential for advancing in AI and other technological fields. However, Russia’s AI projects remain somewhat secretive, making it difficult to assess their true capabilities. Despite this, Sberbank’s First Deputy CEO noted that DeepSeek’s models have outperformed Russia’s GigaChat in scientific tasks, though Sberbank’s model remains competitive in banking applications.
Vedyakhin also highlighted the efficiency of DeepSeek’s approach, noting that its success proves high-quality AI can be achieved without massive investments in infrastructure. This philosophy aligns with Sberbank’s strategy, which focuses on low-cost AI solutions rather than the large-scale projects seen in the US. The bank’s AI platforms, like its Kandinsky text-to-image model and GigaChat Lite, are publicly available, following the transparent approach that has made DeepSeek successful.
The Trump administration’s move to end tariff-free low-cost imports into the US is expected to impact fast fashion retailer Shein more severely than online dollar-store competitor Temu. Both companies have heavily benefited from the ‘de minimis’ rule, which exempts shipments under $800 from import duties, with a significant portion of US daily packages coming from these retailers. While the Biden administration has scrutinised the rule, Temu has been quicker to adapt, diversifying its shipping strategy to minimise reliance on this exemption.
Temu, owned by PDD Holdings, has made considerable shifts in its model, including a move to bulk shipping to US warehouses instead of directly to consumers. By late 2023, about 50% of its US sales came from local warehouses. The company has also increased sea freight for bulkier items like furniture. This strategy contrasts with Shein’s continued dependence on air freight for its fast-fashion inventory, despite opening US centres and expanding its supply chain to countries like Brazil and Turkey.
While the Trump administration’s decision is set to raise prices for American consumers ordering from Shein and Temu, analysts believe the impact will not be catastrophic for these Chinese e-commerce giants. Shein, despite its reliance on fast inventory turnover and speed, is seen as capable of adapting, though the new tariffs and regulations will accelerate the need for supply chain diversification.
Recent changes in US Postal Service policies have added further uncertainty, reversing decisions on accepting parcels from China and Hong Kong. Analysts estimate that de minimis shipments could drop by up to 60%. However, experts remain confident that both Shein and Temu will navigate the changes, given the flexibility and competitiveness of their supply chains.
Thailand plans to draft a strategic plan for its semiconductor sector within 90 days, aiming to attract new investments amid the growing trade tensions between the US and China. The country’s national semiconductor board will engage a consultancy to create an industry roadmap, with Narit Therdsteerasukdi, secretary-general of the Thailand Board of Investment (BOI), leading efforts to promote the sector. As part of these efforts, Narit is also organising roadshows in the US and Japan to draw in semiconductor investments.
The semiconductor industry has faced significant disruption due to the US-China trade war, and further instability is expected as US President Donald Trump’s renewed tariffs on Chinese imports continue. Despite this, Thailand’s semiconductor sector has seen growth, with inbound investment applications reaching a decade-high of 1.14 trillion baht ($33.5 billion) in 2023. The country aims for 500 billion baht in new investments by 2029, focusing on power electronics, including semiconductors for electric vehicles, data centres, and energy storage systems.
Thailand is positioned as a key player in the global semiconductor market, ranking second among emerging economies for semiconductor manufacturing. Companies like Analog Devices, Sony, Toshiba, and Infineon have facilities in Thailand, and investment in printed circuit boards, essential for electronic devices, has also surged. Thailand’s neutral position in the ongoing trade conflict makes it an attractive destination for investors seeking stability.
However, Thailand faces stiff competition from other Southeast Asian countries, particularly Malaysia, which is aiming for over $100 billion in semiconductor investments. Despite this, Thailand’s growth potential remains strong, driven by its growing reputation as a manufacturing hub for electronics.
Chinese investors are flocking to AI-related stocks, betting that the success of home-grown startup DeepSeek will propel China to the forefront of the AI race amid the escalating Sino-US technology conflict. DeepSeek’s breakthrough in developing a competitive large language model, cheaper to produce than those of US giants like OpenAI, has ignited a surge in investments, particularly in Chinese chipmakers, software companies, and data centre operators. This patriotic investment surge follows US President Donald Trump’s fresh tariffs and trade war tactics.
Shares in AI, semiconductor, and robotics firms in China and Hong Kong have seen notable increases, with the Hang Seng AI Index rising by more than 5% and related sectors climbing over 11%. Investors are optimistic about the rapid adoption of AI technologies, with industry experts predicting significant growth in AI applications by 2025. Companies such as Nancal Technology and Suzhou MedicalSystem Technology are seen as likely beneficiaries of the AI boom.
The rise of DeepSeek has also sparked discussions about the undervaluation of Chinese tech stocks compared to their US counterparts. Chinese stocks are trading at much lower price-to-earnings ratios, and analysts believe AI breakthroughs could help close this gap. While US export restrictions on Chinese tech could intensify, this may prompt further government support, driving faster growth in the AI sector.
However, not all investors are entirely convinced. Some remain cautious about the long-term profitability of AI-focused companies, with concerns that many are still far from turning a profit. Despite the optimism, the future of AI investments in China remains a delicate balancing act between technological innovation and market realities.
