China accused Taiwan on Wednesday of attempting to hand over its semiconductor industry to the United States, claiming that the island’s government was using the industry to gain political support from Washington. The accusation comes amid reports that Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, may be negotiating a stake in Intel. However, neither TSMC nor Intel has confirmed the talks and Taiwan’s government says it has not received such investment proposals from TSMC.
China’s Taiwan Affairs Office spokesperson, Zhu Fenglian, suggested without providing evidence that Taiwan’s ruling Democratic Progressive Party (DPP) was using TSMC to seek foreign support for independence, accusing the island of ‘selling out’ its companies to the US. Taiwan, however, rejected these claims, with Taiwan’s Mainland Affairs Council affirming the importance of TSMC to the island’s economy and stressing its commitment to maintaining a leading role in semiconductor technology.
The US has been critical of Taiwan’s semiconductor industry, with former President Donald Trump calling for more manufacturing to return to the United States. Despite China’s claims, Taiwan maintains that it is responsible for its foreign investment decisions. The island continues to rely on the US for military support, though the US does not formally recognise Taiwan’s government.
TSMC, which supplies major companies like Apple and Nvidia, did not comment on the reports. Taiwan’s government, however, vowed to support the company amid rising tensions surrounding its semiconductor industry.
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AI-related stocks declined on Tuesday as investors braced for Nvidia’s earnings, expected to provide insight into AI demand and justify high valuations. Concerns over slowing infrastructure investments and competition from low-cost Chinese AI models weighed on the market.
Tech stocks suffered further losses after a report revealed Microsoft had scrapped data centre leases in the US.
Nvidia dropped 2.1% ahead of its crucial earnings release, while semiconductor firms like Broadcom and Micron slid around 2.1%. Investor scepticism over AI spending deepened following breakthroughs by China’s DeepSeek.
The sector also faced pressure from reports that Washington plans to tighten restrictions on Nvidia’s chip exports to China. US officials are consulting allies about stricter chip controls, adding to uncertainty in the market.
Data centre operators and power firms, expected to benefit from AI growth, also declined. Digital Realty slipped 1.2%, while power providers Vistra and Constellation Energy lost 5.9% and 3.3% respectively.
AI server maker Super Micro Computer led losses on the S&P 500, falling 8.7%, while Palantir dropped 3.7%.
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Intel has announced that the first two of ASML’s cutting-edge high NA lithography machines are now in operation at its factories. Early data shows these machines are producing more consistent results than previous models, with a reported reliability double that of earlier systems. This marks a turning point for Intel, which had struggled with the earlier generation of extreme ultraviolet (EUV) machines.
Intel’s production of 30,000 wafers in a single quarter using these new machines signifies a substantial step forward in chip manufacturing. These high NA machines can print features onto chips with fewer exposures and less processing time, streamlining the production process and reducing costs. This development is set to contribute to Intel’s upcoming 18A manufacturing technology, expected to power a new generation of PC chips later this year.
The company is also preparing to implement the high NA machines for the next generation of 14A technology, though no mass production date has yet been confirmed. This breakthrough is seen as a pivotal moment for Intel, positioning it to reclaim ground lost to rivals in recent years.
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Taiwan‘s economy minister stated that the government has not received any official information regarding a potential overseas investment by chip giant TSMC in Intel or the United States.
Media reports have suggested that TSMC, the world’s largest contract chipmaker, has been in talks to take a stake in Intel, but neither company has confirmed the speculation. Any significant foreign investment by a Taiwanese company requires government approval through the economy ministry’s investment review commission.
Speaking to reporters in Taipei, Economy Minister Kuo Jyh-huei clarified that the ministry cannot comment on market rumours without receiving an official report from TSMC. He confirmed that no application or formal communication has been submitted so far.
Kuo also highlighted that, given the foreign investment nature of such a deal, a formal review process would be necessary before any discussions could take place.
The potential deal has gained attention amid heightened US-Taiwan trade tensions. Former US President Donald Trump previously criticised Taiwan for its dominance in the semiconductor market and expressed a desire to bring more manufacturing back to the United States.
Meanwhile, Taiwan continues to run a significant trade surplus with the US, adding further complexity to any potential cross-border investment.
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Vanguard International Semiconductor has cautioned that US tariffs on imported chips may drive inflation and weaken global economic growth.
Chairman Leuh Fang stated that while the direct impact on Vanguard would be minimal, broader consequences for the semiconductor industry remain uncertain.
The company remains in a wait-and-see mode, as it is unclear how far the proposed tariffs will go. Higher import duties could reduce purchasing power and slow economic expansion, Fang noted.
However, the firm expects little direct exposure to the tariffs due to its focus on legacy chips for automotive and display applications.
Vanguard has no plans to establish a US manufacturing facility. Meanwhile, larger industry players such as TSMC, which owns over a quarter of Vanguard’s shares, are investing in American production to navigate trade uncertainties.
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Huawei’s founder Ren Zhengfei told President Xi Jinping that China’s concerns about a lack of domestically developed chips and operating systems have eased, following a meeting with key entrepreneurs. According to Chinese state media, Ren expressed confidence that China would rise faster, thanks to its advancements in technology, particularly in semiconductors and software. The phrase ‘lack of core and soul,’ which refers to the absence of critical technology like chips and operating systems, was first used in 1999 to highlight challenges in China’s information industry.
The meeting, which included prominent founders such as BYD’s Wang Chuanfu and Xiaomi’s Lei Jun, discussed the achievements and growth in sectors like electric vehicles and electronics. Ren’s comments reflected the progress made despite challenges like US sanctions, with Huawei playing a key role in pushing for China’s self-sufficiency. Wang shared how China’s EV industry had grown significantly, while Lei praised Xi’s leadership, stating that under his guidance, any challenges could be overcome.
Other entrepreneurs, including representatives from Will Semiconductor, Unitree Robotics, and New Hope Group, also spoke at the meeting, although details about their comments were not widely disclosed. The meeting was part of a broader push for China to strengthen its technological independence.
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STMicroelectronics has announced the launch of a new computer chip aimed at the rapidly expanding AI data centre market. Developed in collaboration with Amazon Web Services (AWS), the photonics chip uses light rather than electricity, which helps increase speed and reduce power consumption in AI data centres. These chips are expected to be used in transceivers, which are crucial components in data centre infrastructure.
As top US software companies plan to invest $500 billion into AI infrastructure, there is rising demand for specialised chips, not only for computing but also for memory, power, and communications applications. ST’s new chip targets the communications sector, with a focus on improving the efficiency of transceivers, which are essential in AI data centres. The company also has a collaboration agreement with AWS to deploy this technology in their infrastructure later this year.
ST is working with a leading provider of optical solutions, although the company’s name has not been disclosed, to integrate the new chip into next-generation transceivers. The market for such devices, valued at $7 billion in 2024, is expected to grow significantly, reaching $24 billion by 2030. ST will begin mass production of these chips at its facility in Crolles, France.
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Lam Research has introduced two new chipmaking tools designed to support the growing demand for advanced AI semiconductors. The company unveiled ALTUS Halo, a deposition tool that applies molybdenum layers to chips, enhancing their performance and enabling further scaling for next-generation devices.
Micron Technology has already adopted the tool, bringing molybdenum into mass production, according to executive Mark Kiehlbauch.
Alongside ALTUS Halo, Lam launched Akara, an etching tool that removes excess material from semiconductor wafers, creating precise chip structures essential for complex AI applications.
These innovations position Lam to compete with major players in wafer fabrication equipment, including Applied Materials, ASML, and KLA Corp.
As AI-driven semiconductor demand surges, major clients like Micron, Samsung Electronics, and Taiwan Semiconductor Manufacturing Co (TSMC) are relying on advanced manufacturing tools.
TSMC executive Y.J. Mii highlighted the need for innovative solutions to develop more powerful chip architectures. In January, Lam reported a strong third-quarter revenue forecast, signalling positive growth amid the AI chip boom.
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The European Commission has approved a €920 million German state aid package for Infineon to build a new semiconductor manufacturing plant in Dresden. This funding will support the company’s MEGAFAB-DD project, which aims to produce a wide variety of chips. The new facility, expected to reach full capacity by 2031, will play a key role in strengthening Europe’s technological autonomy and security of supply in semiconductor technologies, aligning with the European Chips Act’s goals.
This move is part of a global trend where chipmakers are investing heavily in new plants, taking advantage of subsidies from the US and the EU to maintain the West’s edge in semiconductor technology over China. The European Commission has allocated €15 billion for public and private semiconductor projects by 2030, further reinforcing the region’s commitment to securing its position in the industry.
Infineon’s €3.5 billion investment, the largest in its history, will help address the growing demand for semiconductors used in industrial, automotive, and consumer applications. The company has committed to ensuring the plant benefits the wider EU semiconductor value chain, including research and development for the next generation of chips. The plant will also contribute to crisis preparedness by prioritising orders in case of supply shortages.
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Microsoft has announced a groundbreaking quantum computing chip, Majorana 1, which it claims could make useful quantum computers a reality within years. The company believes this innovation puts it ahead in the race to unlock quantum computing’s vast potential.
Unlike classical computers, quantum systems could perform calculations in fields like medicine and chemistry that would otherwise take millions of years, although they also pose risks to current encryption standards.
The Majorana 1 chip relies on a particle called the Majorana fermion, theorised in the 1930s. Microsoft says its unique design makes the chip less error-prone than its competitors.
Despite having fewer qubits than chips from Google and IBM, the company argues that the lower error rates mean fewer qubits are needed for practical applications.
Microsoft’s development of Majorana 1 combines advanced materials like indium arsenide and aluminium, using a superconducting nanowire to observe and control the Majorana particles.
Fabricated at its labs in Washington and Denmark, the chip was described as a ‘high risk, high reward’ endeavour by Jason Zander, a senior Microsoft executive.
Quantum physicist Philip Kim from Harvard University praised the innovation, calling it an exciting step forward. While scaling up the technology remains a challenge, experts suggest Microsoft’s approach could lead to significant advancements in quantum computing.
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