Huawei plans to begin mass-producing its Ascend 910C AI chip in early 2025, despite ongoing struggles to achieve sufficient production yields due to US trade restrictions. The Chinese telecom giant has already sent samples to tech firms and started taking orders for the chip, designed to rival Nvidia’s high-performance processors. The company faces significant challenges, as restrictions on advanced manufacturing technologies have limited its chip-making efficiency.
The Ascend 910C is produced by Semiconductor Manufacturing International Corp (SMIC) using an N+2 process but suffers from a yield of just 20%—far below the 70% required for commercial viability. Previous Huawei processors, including the 910B, achieved yields of around 50%, leading to delays in fulfilling orders from major clients like ByteDance. Washington’s restrictions, which prevent access to critical Dutch lithography equipment, have further constrained China’s ability to produce advanced semiconductors.
Huawei’s reliance on SMIC has been costly, with chips produced on its advanced nodes priced up to 50% higher than alternatives. While the company has sought supplemental production from Taiwan’s TSMC, US authorities have tightened export controls, limiting access to cutting-edge chips and forcing Huawei to prioritise strategic government and corporate orders. The escalating trade tensions underscore the geopolitical struggle between the US and China over technological dominance, with both nations doubling down on policies to secure their interests.
As Beijing pushes for self-reliance in semiconductors, Huawei’s production challenges reflect the broader impact of US restrictions on China’s tech sector. With further curbs on the horizon, Huawei’s success in advancing its AI chips may shape the next phase of the US -China tech rivalry.
Italian lawmakers are challenging proposed tax hikes on cryptocurrency capital gains and an expansion of the country’s digital tax. The government’s plans, part of Prime Minister Giorgia Meloni’s 2024 budget, include raising cryptocurrency taxes from 26% to 42% and applying digital levies to smaller firms. However, coalition members are advocating for less drastic measures, calling for a reduced crypto tax of 28% and preserving revenue thresholds for the digital tax.
Italian Economy Minister Giancarlo Giorgetti has signaled openness to revising the cryptocurrency tax proposal, emphasising the need for a balanced approach. Meanwhile, Forza Italia, a co-ruling party, is pushing to keep Italy’s web tax focused on large tech companies like Meta, Google, and Amazon, arguing that expanding it to smaller businesses could harm local enterprises.
Italy introduced a 3% digital tax on major tech firms in 2019, but new proposals to eliminate revenue thresholds have sparked concerns of unfair burdens on small and medium-sized businesses. The debate reflects broader tensions over balancing revenue generation with economic fairness and international relations, particularly with the US, which has criticised the digital tax’s impact on American firms.
Senator Richard Blumenthal has reaffirmed that ByteDance must divest TikTok’s US operations by January 19 or risk a ban. The measure, driven by security concerns over potential Chinese surveillance, was signed into law in April. A one-time extension of 90 days is available if significant progress is made, but Blumenthal emphasised that laws cannot be disregarded.
Blumenthal also raised alarms over China’s influence on US technology companies. Tesla’s production in China and the US military’s reliance on SpaceX were flagged as security risks. He pointed to Elon Musk’s economic ties with China as a potential vulnerability, warning that such dependencies could compromise national interests.
Apple faced criticism for complying with Chinese censorship and surveillance demands while generating significant revenue from the country. Concerns were voiced that major tech companies might prioritise profits over US security. Neither Apple nor Tesla has commented on these claims.
TikTok and ByteDance are challenging the divestment law in court. A decision is expected soon, but restrictions will tighten for app stores and hosting services if compliance is not achieved. The Biden administration has clarified that it supports ending Chinese ownership of TikTok rather than an outright ban.
The US Senate Judiciary subcommittee will convene a hearing on Tuesday to investigate recent Chinese cyberattacks targeting American telecommunications companies. The hearing, led by Senator Richard Blumenthal, will delve into the national security threats posed by these breaches and their impact on the US economy.
Authorities allege that China-linked hackers accessed surveillance data from telecom networks, intercepting sensitive communications tied to government and political figures. This breach has heightened concerns over the security of critical infrastructure, especially as bipartisan lawmakers scrutinise the role of major providers like AT&T and Verizon.
The session will also include discussions on Elon Musk’s business ties with China amid his growing involvement in US government affairs. Witnesses, including cybersecurity and industry experts, are expected to shed light on the scale and potential consequences of these incidents. Beijing, however, has denied any involvement in cyber espionage activities.
Perplexity, an AI-driven search startup, has unveiled a new shopping hub to attract users and compete with Google’s dominance in search. Backed by Amazon founder Jeff Bezos and Nvidia, the platform offers visually rich product cards in response to shopping-related queries, integrating with platforms like Shopify to provide real-time product details.
The rollout includes features like ‘Snap to Shop,’ which uses photos to suggest products and a Merchant Program that allows retailers to share their offerings with Perplexity. Initially available in the US, the service will expand to other markets at a later date.
This move comes as Perplexity raises new investments at a reported $9 billion valuation and seeks to compete with OpenAI, which recently introduced enhanced search features for ChatGPT. The startup aims to leverage AI-powered tools to boost its presence in e-commerce and attract both users and merchants.
Japan, the United States, and South Korea concluded a three-day joint military exercise, Freedom Edge, showcasing their commitment to strengthening multi-domain defence cooperation amidst escalating tensions in East Asia. Select training sessions were open to media in the second iteration of Freedom Edge. The drills spanned maritime, aerial, and cyber domains, and operations were conducted in strategic areas, including the East China Sea near South Korea’s Jeju Island.
Designed to counter various threats — from ballistic missiles and cyberattacks to fighter jets and submarines — the drills emphasised seamless coordination among the three nations’ forces. By refining joint response procedures, the exercise bolstered deterrence and preparedness for complex regional challenges.
President Joe Biden and China’s President Xi Jinping held a two-hour meeting on the sidelines of the APEC summit on Saturday. Both leaders reached a significant agreement to prevent AI from controlling nuclear weapons systems and made progress on securing the release of two US citizens wrongfully detained in China. Biden also pressured Xi to reduce North Korea’s support for Russia in the ongoing Ukraine conflict.
The breakthrough in nuclear safety, particularly the commitment to maintain human control over nuclear decisions, was reported as an achievement for Biden’s foreign policy. Xi, in contrast, called for greater dialogue and cooperation with the US and cautioned against efforts to contain China. His remarks also acknowledged rising geopolitical challenges, hinting at the difficulties that may arise under a Trump presidency. The meeting showcased a shift in tone from their previous encounter in 2023, reflecting a more constructive dialogue despite underlying tensions.
Reuters reported that it remains uncertain whether the statement will result in additional talks or concrete actions on the issue. The US has long held the position that AI should assist and enhance military capabilities, but not replace human decision-making in high-stakes areas such as nuclear weapons control. Last year, the Biden-Harris administration announced the Political declaration on responsible military use of AI and autonomy, and more than 20 countries endorsed the declaration. The declaration specifically underlines that “military use of AI capabilities needs to be accountable, including through such use during military operations within a responsible human chain of command and control”.
A US congressional commission has proposed a bold initiative modeled on the Manhattan Project to accelerate the development of artificial general intelligence (AGI) that could rival or surpass human intelligence. The US-China Economic and Security Review Commission (USCC) emphasised the importance of public-private partnerships to drive technological innovation as competition with China intensifies. However, the panel provided no specific funding plans in its annual report.
Commissioner Jacob Helberg highlighted China’s rapid advancements in AGI, warning of potential shifts in global power dynamics. Addressing infrastructure bottlenecks, he suggested streamlining regulations for data centres as a step to accelerate AI progress. Tech leaders like OpenAI have also advocated for increased government investment in AI to maintain global competitiveness.
Beyond AI, the USCC report included recommendations to tighten trade regulations, particularly by ending the “de minimis” exemption that allows duty-free imports under $800. Commissioner Kimberly Glas underscored the challenge of inspecting the overwhelming volume of such shipments, which she claimed serve as a channel for unregulated Chinese goods, including dangerous materials. Proposals to curb this exemption have sparked bipartisan debate, though legislative progress has been hampered by industry opposition and political gridlock.
Global semiconductor manufacturers are accelerating their shift from China to Vietnam, driven by the anticipated intensification of US sanctions on China’s semiconductor industry, especially with the return of Donald Trump to the White House. South Korean firms, including Samsung Electronics and SK Hynix, are leading this transition, halting production expansions in China and focusing investments on Vietnam, which has become a rising hub for semiconductor production.
SK Hynix, for instance, shelved plans to increase DRAM chip production at its Wuxi plant in China, while Samsung Electronics is cutting back on production at its NAND flash memory facility in Xi’an. Other companies are also following suit; South Korea’s Hana Micron is expanding its presence in Southeast Asia, and Amkor Technology is investing $1.6 billion in a new semiconductor packaging plant in Vietnam. The facility will feature advanced technology, with some equipment reportedly transferred from China.
Vietnam’s semiconductor industry is also benefiting from the growth of companies like Samsung, which established a $1.7 billion OLED plant in the country. Samsung’s semiconductor division is reportedly boosting its investments in Vietnam, encouraging further expansions from supporting companies. Semiconductor testing and packaging firm Signetics is set to invest $100 million in a new facility in Vietnam, and German company Infineon is considering setting up an R&D center in Hanoi.
This shift underscores the ongoing global realignment in the semiconductor industry as companies adapt to geopolitical tensions and US-China trade policies.
T-Mobile‘s network was among those breached in a prolonged cyber-espionage campaign attributed to Chinese intelligence-linked hackers, according to a Wall Street Journal report. The attackers allegedly targeted multiple US and international telecom companies to monitor cellphone communications of high-value intelligence targets. T-Mobile confirmed it was aware of the industry-wide attack but stated there was no significant impact on its systems or evidence of customer data being compromised.
The Federal Bureau of Investigation (FBI) and the US Cybersecurity and Infrastructure Security Agency (CISA) recently disclosed that China-linked hackers intercepted surveillance data intended for American law enforcement by infiltrating telecom networks. Earlier reports revealed breaches into US broadband providers, including Verizon, AT&T, and Lumen Technologies, where hackers accessed systems used for court-authorised wiretapping.
China has consistently denied allegations of engaging in cyber espionage, rejecting claims by the US and its allies that it orchestrates such operations. The latest revelations highlight persistent vulnerabilities in critical communication networks targeted by state-backed hackers.
