During a visit to Washington, Netherlands’ economy minister Dirk Beljaarts emphasised the significance of China as a trading partner. They advocated for the semiconductor equipment maker ASML to operate with maximum freedom. His discussions with US Deputy Secretary of Commerce Don Graves were focused on enhancing bilateral trade rather than addressing export restrictions, which are not under his jurisdiction.
Beljaarts’ visit comes amid anticipation of expanded US export rules affecting semiconductor sales to China. ASML, a leading supplier to chip manufacturers, recently faced new export license requirements imposed by the Dutch government, influenced by US pressure.
While the US is a crucial ally of the Netherlands, Beljaarts highlighted that ASML’s main markets are in Taiwan, China, and South Korea. He stressed the need to maintain balanced trade relationships, arguing that ‘We have our economy to uphold,’ and expressed pride in ASML as a vital asset for the Dutch economy.
Qualcomm has approached Intel to discuss a potential acquisition, a move that could transform the semiconductor landscape. CEO Cristiano Amon is personally engaged in these early talks, which have yet to produce a formal offer. Reports suggest that Qualcomm is especially interested in Intel’s PC design unit and its overall portfolio as part of this exploration.
Intel, once the dominant force in chip manufacturing, has seen its stock plummet nearly 60% this year, highlighting its current vulnerability. A deal with Qualcomm would likely face intense scrutiny from antitrust regulators in the US, China, and Europe, possibly requiring Qualcomm to divest parts of Intel to gain approval.
If successful, this acquisition would mark a historic move in the tech sector, rivalling Broadcom’s attempted $142 billion takeover of Qualcomm in 2018. However, how Qualcomm would finance the deal, given its $13 billion cash reserves and Intel’s $122 billion valuation, remains unclear. Additionally, Qualcomm would need to navigate the complexities of managing Intel’s extensive manufacturing operations, a challenge for a company that currently relies on external contractors for chip production.
Intel is actively seeking to revitalise its business by prioritising AI processors and restructuring its operations, which includes pausing factory construction in Poland and Germany. As discussions with Qualcomm progress, both companies will need to navigate significant challenges in a rapidly changing market.
Two leading chip manufacturers, TSMC and Samsung Electronics, are exploring the establishment of chip factories in the United Arab Emirates. Reports suggest these projects could surpass $100 billion in value, indicating significant investment in the region’s technology sector.
Executives from TSMC have made recent visits to the UAE, discussing plans for a facility comparable to their advanced plants in Taiwan. Meanwhile, Samsung is also assessing opportunities for major chip-making operations in the country, though these talks remain in preliminary stages.
Funding for these ambitious projects may largely come from the UAE, with Abu Dhabi’s Mubadala playing a crucial role. The overarching aim is to boost global chip production while maintaining the profitability of manufacturers.
As tech ventures in the Middle East accelerate, concerns in Washington grow regarding the potential transfer of advanced US technology to China via the UAE and other regional partners.
In 2024, the storage market is seeing notable advancements, especially in NAND flash technology, as key players like Samsung, Micron, and SK Hynix innovate to meet rising demands. Samsung has recently begun mass production of its 9th generation QLC V-NAND, boasting impressive enhancements in bit density and performance. This new model improves data retention and significantly lowers power consumption, addressing the growing need for efficient storage solutions in AI applications. Micron and SK Hynix are also pushing forward with their high-performance SSDs, reflecting a broader trend toward optimising storage for increased data demands.
Micron and SK Hynix are advancing their storage solutions as well, with Micron’s latest SSDs featuring 9th-generation TLC NAND technology that delivers impressive data transfer speeds. Meanwhile, SK Hynix is developing high-performance SSDs tailored for data centres. As the demand for storage continues to surge due to AI applications, there is a growing preference for higher-capacity SSDs, leading manufacturers to prioritise both TLC and QLC technologies in their offerings. This shift reflects the industry’s response to the increasing need for efficient and powerful storage solutions.
Market research forecasts that the demand for AI-related SSDs will surpass 45 exabytes in 2024, with the share of AI SSDs in the NAND flash market expected to grow significantly. Despite facing challenges in the PC and smartphone sectors, NAND flash revenue has risen, driven by strong demand from the AI industry. As companies ramp up production capacity, they are well-positioned to meet the increasing needs of data centres and AI applications. This trend underscores a transformative period for the NAND flash market, reflecting its critical role in supporting advancements in technology.
Analog Devices (ADI) has entered into an agreement with India’s Tata Group to explore semiconductor manufacturing opportunities in the country. Tata Electronics, the conglomerate’s electronics manufacturing division, is investing $14 billion to build India’s first semiconductor fabrication plant in Gujarat and a chip-assembly and testing facility in Assam.
The collaboration aims to produce ADI’s semiconductor products at Tata Electronics’ facilities, boosting India’s presence in the global semiconductor industry. Prime Minister Narendra Modi’s government is pushing for the country to become a key player in semiconductor production, rivalling established hubs such as Taiwan.
As part of the deal, Tata will also integrate ADI’s semiconductor products into Tata Motors’ electric vehicles and Tejas Networks’ telecom infrastructure. However, neither company has disclosed specific details regarding the products that will be manufactured or utilised.
Several other global companies, including NXP Semiconductors and Micron, have also announced plans to invest in India’s growing semiconductor sector, further solidifying the nation’s ambitions in this critical technology area.
Intel is going through a major restructuring by spinning off its chip manufacturing business into a new independent subsidiary called Intel Foundry. This decision comes after the company experienced significant financial losses, totalling $1.6 billion in the first quarter of 2024. The restructuring, which was announced by CEO Pat Gelsinger, is intended to address the company’s declining stock price. It includes the creation of a separate board of directors and financial reporting specifically for Intel Foundry.
As part of its reorganisation, Intel will suspend operations at its manufacturing plants in Poland and Germany for two years, while continuing projects in Arizona, Oregon, New Mexico, and Ohio. The company also plans to sell part of its stake in Altera and reduce its global real estate footprint by about two-thirds to cut operating expenses. Intel has already laid off 15,000 employees as part of its cost-saving measures.
On a positive note, the Biden administration has approved up to $3 billion in funding for Intel to build chips for the US military, which could boost its position in the defence sector. Despite these efforts, Intel faces challenges with its 13th and 14th generation processors and a $7 billion operating loss in 2023. The company is investing in the new 18A chip manufacturing process, but early tests have raised concerns. Intel plans to begin producing chips with this new process for partners like Microsoft and Amazon next year, which will be crucial for its recovery and regaining its semiconductor leadership.
Lenovo has announced plans to begin manufacturing AI servers at its plant in Puducherry, southern India, and has opened an AI-focused research and development lab in Bengaluru. The company intends to produce 50,000 AI rack servers and 2,400 GPU servers annually, designed for machine learning and other resource-intensive tasks.
These servers will not only serve local demand but also be exported, according to Amar Babu, Lenovo’s Asia Pacific president. Although no specific investment or hiring targets were disclosed, Lenovo already manufactures laptops, notebooks, and personal computers at the Puducherry plant.
The demand for AI chips has surged following the rise of generative AI in late 2023, with AI hardware expected to capture 12% of the global AI market by 2027. Lenovo, which now earns nearly half its revenue from non-PC businesses, is joining other tech giants like Apple and Dell in boosting production in India, partly to reduce reliance on China.
India has attracted global companies with manufacturing incentives, although Lenovo’s AI server production is not tied to any such scheme. However, its collaboration with Dixon Technologies on PC and Motorola phone production does benefit from these incentives.
Qualcomm faced another legal setback in the EU as the continent’s second-highest court largely upheld an EU antitrust fine, reducing it slightly to €238.7 million ($265.5 million) from the original €242 million. The fine, imposed by the European Commission in 2019, stemmed from Qualcomm’s practice of selling chipsets below cost between 2009 and 2011—a tactic known as predatory pricing—aimed at driving British competitor Icera, now part of Nvidia, out of the market.
Qualcomm argued that the chipsets in question only accounted for a small fraction (0.7%) of the market, making it unlikely they could have effectively blocked competitors. However, the General Court in Luxembourg dismissed most of the company’s claims, apart from a minor point regarding the fine’s calculation, which led to a slight reduction.
The ruling marks another chapter in Qualcomm’s legal battles with the EU. While the company can appeal on legal grounds to the EU Court of Justice, it has already experienced mixed results in the European courts. In 2021, Qualcomm overturned a separate €997 million fine, which had been levied for paying Apple billions to exclusively use its chips in iPhones and iPads from 2011 to 2016.
For now, the EU’s watchdog continues to pursue antitrust enforcement in the tech sector, with Qualcomm remaining a key target in its efforts to curb anti-competitive behaviour.
Germany remains confident in Intel’s commitment to building semiconductor plants, despite a two-year delay announced by the US chipmaker. Chancellor Olaf Scholz emphasised the importance of Intel’s project, viewing it as a long-term strategy to enhance Germany’s position in the global semiconductor industry. Scholz made these remarks during a visit to Astana, Kazakhstan.
Intel’s CEO, Pat Gelsinger, revealed the construction pause in Magdeburg as part of broader cost-saving measures. Although German officials acknowledged the delay, they remain optimistic about Intel’s future in the country. Economy Minister Robert Habeck stressed the continued importance of semiconductor production for Germany and Europe.
A disagreement emerged within Germany’s coalition government over the unused subsidies intended for Intel. While the finance ministry favours reallocating the funds to balance the budget, the economy ministry is advocating for reinvestment in the semiconductor industry. Economists also proposed using the funds for tax reform or investment incentives to benefit all companies, not just those receiving political attention.
Scholz confirmed that the government would address how to best allocate the unspent subsidies. Many experts agree that focusing on tax reforms could promote broader business growth across Germany’s industries, ensuring long-term economic stability.
Intel has announced a two-year delay in its plans to build mega chip-making factories in Germany and Poland, citing lower demand than expected. Despite significant government subsidies, Intel decided to pause the projects, which had been seen as a boost for both countries’ national industries. The decision comes as a setback after months of negotiations between German officials and the company, which resulted in increased subsidies for the €30 billion project.
In Poland, Intel had planned to establish a semiconductor factory near Wroclaw, supported by $1.8 billion in funding. While European plans have been delayed, Intel confirmed its US projects remain unaffected, with the company receiving $3 billion in direct funding to bolster domestic semiconductor manufacturing for the US military.
Additionally, Intel is scaling back its investments in Malaysia but will continue expanding its capacity in Ireland, which will remain its primary European hub. The delay in these European projects reflects the broader challenges faced by the EU as it aims to increase semiconductor production and reduce reliance on Asian markets.
Intel’s decision comes at a time when European nations are seeking to strengthen their chip manufacturing capabilities after recent supply chain disruptions. As demand for semiconductors remains crucial to industries such as defence and electronics, both Germany and Poland face delays in their plans for industrial growth.
