Skip to content

Information/Technology - 16. page

China’s Smartphone Market Fell Significantly in the Second Quarter

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that the International Data Corporation (IDC) has released its latest mobile phone market report. IDC mentioned in the report that, in the context of improving market supply, soaring inflation and economic uncertainty have severely suppressed consumer spending, global mobile phone inventories have grown significantly, and market demand has been limited. The region with the largest decline in global shipments was in China, down more than 14 percent year-over-year. In the global market; the ranking of manufacturers did not change much in the second quarter. Samsung maintained growth in all regions except Europe with a share of 21.8 percent, and Apple ranked second with a share of 15.6 percent. IDC predicts that the Chinese domestic smartphone market will ship about 280 million units in 2022, down more than 40 percent from the peak of 500 million units. The Chinese Q2 decline is the fifth consecutive quarter of declines in shipments and the second consecutive quarter of double-digit declines. IDC expressed the belief that, in the first half of the year, the sluggish Chinese domestic market was a result of the Covid-19 lockdowns and the lack of sufficient differentiation among mid-to-high-end products. Also, China’s huge smartphone market is highly saturated. As of the end of last year, there were more than 1.6 billion active mobile phone accounts in China, surpassing the population of 1.4 billion. The penetration rate is much higher than the global average, resulting in intense competition.

Source: NetEase, July 29, 2022
https://www.163.com/dy/article/HDFNMFSM051481US.html

Briefings | | |   Economy/Resources Information/Technology

U.S. Imposed New Technology Export Controls

Well-known Chinese news site Sohu (NASDAQ: SOHU) reported not long ago that, in advanced technology fields such as semiconductors, the United States has recently been intervening frequently in normal market competition. Biden just signed the $280 billion chip bill to restrict semiconductor giants from investing in China. Now the U.S. Department of Commerce announced new export control measures. The U.S. Bureau of Industry and Security (BIS) issued an announcement stating that four “emerging and foundational technologies” were included in new export controls due to national security concerns. The four technologies are: fourth-generation semiconductor materials gallium oxide and diamond that can withstand high temperature and high voltage; ECAD software specially designed for 3nm and below chips; pressure gain combustion technology that can be used in rockets and hypersonic systems. Although BIS did not directly mention China, yet China is now one of the countries that the United States has listed under national security controls. As long as technology items are listed in the import and export control catalogue, the U.S. government will likely impose restrictions on China. This will actually lead to further decoupling between China and the US in the semiconductor field. In its announcement, BIS claimed that the inclusion of four technologies supporting the production of advanced semiconductors and gas turbine engines under export controls was the result of an agreement among the 42 participating countries of the Wassenaar Agreement at the December 2021 plenary meeting. Considering that China is increasing its investment in semiconductors, in order to maintain its own advantages, the United States is trying to hinder the development speed of China’s semiconductor industry.

Source: Sohu, August 13, 2022
https://www.sohu.com/a/576560607_115479

Briefings | | |   Information/Technology US-China Relations

Tencent Stock Suffered a Major Decline

Well-known Chinese news site Sohu (NASDAQ: SOHU) recently reported that, on the last trading day of July, Hong Kong stocks fell across the board. The Hang Seng Technology Index plummeted by nearly 5 percent, and Tencent Holdings fell by 4.36 percent. Tencent’s stock price approached the HK$300 mark again, almost returning to the level five years ago. Just over a year ago, Tencent’s per-share price approached a historical peak of HK$750. However, now it has fallen by nearly 60 percent. its market value has evaporated by about HK$4.4 trillion (around US$560 billion). In the past two years, Tencent’s share price has been continuously declining due to the combined effects of multiple factors such as China’s anti-monopoly movement, the government restrictions on online gaming for minors, and China’s strict COVID-19 combat policies, as well as the reduction of shares held by the largest shareholder. Tencent’s financial numbers are indeed slowing over the years, according to its 2021 report. The latest growth rate is the lowest in recent years. Since the end of June, Tencent has launched a share repurchase program. The total scale of this program has reached RMB 3.9 billion (around US$578 million). Tencent Holdings has repurchased a total of about HK$10.01 billion (around US$1.28 billion) dollars this year. Tencent has been China’s largest internet company.

Source: Sohu, July 31, 2022
http://www.sohu.com/a/573053386_115433I

Briefings | | |   Information/Technology

Global Times: U.S. Is Tightening Export of Chip Equipment to China

Global Times recently reported that two U.S. chip equipment companies confirmed that the U.S. crackdown on Chinese chips has expanded from 10 nm to 14 nm technologies. In addition, the scope of the new regulations may not be limited to China’s SMIC (Semiconductor Manufacturing International Corporation), but may also include other chip manufacturers investing and operating in China. Analysts expressed the belief that the latest move by the United States to suppress China’s chip industry may try to have a long-term impact on the Chinese chip industry, On the one hand, it will also hurt the interests of American companies. The scope of U.S. export restrictions may include other chip manufacturers operating in China, such as Taiwan’s TSMC. According to people familiar with the matter, in the past two weeks or so, all U.S. equipment makers have received letters from the Commerce Department describing the requirement. A statement released by the U.S. Department of Commerce said that the Biden administration is tightening relevant policies against China, focusing on weakening China’s efforts to produce cutting-edge chips in response to major national security risks facing the United States. In the eyes of the U.S. government, 14nm is a watershed between advanced and backward chip manufacturing processes. Since 14nm and below technologies are considered advanced, the U.S. embargo focuses on chip equipment with 14nm and below capabilities in order to achieve the purpose of containing Chinese chips and their competition. The chip industry is an industry requiring close cooperation among global industries. The suppression of China by the United States will inevitably affect the normal development of the global chip industry.

Source: Global Times, August 1, 2022
https://world.huanqiu.com/article/493RXZYbLEo

Briefings | | |   Information/Technology US-China Relations

China Opposes “Chip 4” Alliance

China has taken multiple actions to oppose the “Chip 4” alliance, an initiative that the U.S. is proposing for four major chip production countries, the U.S., Japan, South Korea, and Taiwan. Beijing is afraid that forming the “Chip 4” alliance will isolate China. Other consequences are implied.

Huanqiu (Global Times) published a commentary on July 20, stating, “(T)he South Korean government and related companies can judge by common sense alone that participating in this matter not only will not have any incremental gains, but will also face the risk of significant damage to their interests. Data shows that last year, South Korea’s semiconductor exports totaled $128 billion, of which 60 percent went to mainland China and Hong Kong. To cut ties with this large market is tantamount to business suicide. The U.S. has handed South Korea a knife and is forcing it to do so.”

On July 25, China’s Ambassador to South Korea Xing Haiming met with Yang Hyang-ja, a South Korean National Assembly member and Chairman of the Special Committee on Strengthening the Competitiveness of the Semiconductor Industry. Xing said, “China is willing to work with South Korea to adhere to the principle of a fair and just market, eliminate external interference, and to strengthen cooperation in semiconductors and other fields .…”

Xing met with South Korean Trade Minister Ahn Duk-geun on the same day.

Huanqiu (Global Times) also published an article on July 28 to suggest that Taiwan should not  join the “Chip 4.” It stated, “Currently, Taiwan’s chip exports to the mainland account for more than 40 percent of its total chip exports. Semiconductors and other electronic and communication products are large commodities. If the TSMC  (Taiwan Semiconductor Manufacturing Company) joins the ‘chip 4’ alliance to exclude the mainland China market, it will undoubtedly cause huge losses to the entire Taiwan economy.”

Sources:
1. Huanqiu (Global Times), July 20, 2022
https://opinion.huanqiu.com/article/48uEl4JUSyX
2. Global Times, July 25, 2022
https://www.globaltimes.cn/page/202207/1271363.shtml
3. Huanqiu (Global Times), July 28, 2022
https://taiwan.huanqiu.com/article/4909A65sqgo

Briefings | | |   Economy/Resources Information/Technology US-China Relations

Starting in September, China Will Require a Security Assessment before Data Is Sent Overseas,

According to the Cyberspace Administration of China (CAC), starting in September, an official “security assessment” will be required for data to be sent outside of China. This includes operators who have access to information on over 1 million people or have cumulatively provided information on more than 100,000 people.

The CAC, China’s top cyber regulating agency, announced the Measures on the Security Assessment for Data Export on July 7, 2022. “Data export” refers to the overseas transfer from China of data collected and generated within China, as well as the scenario in which a foreign entity or foreign individual is granted the authority to access any data stored within China.

The Measures prescribe several scenarios in which data processors are required to file an application with the authorities for a security assessment before exporting data. 1) The provision of important data outside the country; 2) Operators of Critical Information Infrastructure (CII); 3) Data processors processing the personal information of more than 1 million individuals; 4) operators that have transferred personal information of a total of 100,000 individuals on a cumulative basis since January 1 of the previous year; 5) operators that have transferred sensitive personal information of a total of 10,000 individuals on a cumulative basis since January 1 of the previous year.

The Measures will come into effect on September 1, 2022. The security assessment result is valid for two years. A data processor is also required to re-submit an application for a government security assessment in certain circumstances, such as where the cross-border data transfer purpose has changed.

Source: Central News Agency (Taiwan), July 8, 2022
https://www.cna.com.tw/news/acn/202207in which080164.aspx

Briefings | | |   Information/Technology

VOA Chinese: Biden’s $1 Billion Airport Renovation Plan Avoids Chinese Products

Voice of America Chinese Edition recently reported that the White House held a briefing not long ago, announcing the Biden administration will propose nearly $1 billion to renovate 85 airports across the United States over the next five years. The plan includes updating equipment such as security checks, baggage handling, and more. A lot of environmental protection and security equipment on the market is made by Chinese companies or in Xinjiang. White House officials told VOA that the supply chain situation has been considered, and equipment made in the United States will be used to ensure U.S. national security. Mitch Landrieu, senior White House adviser and infrastructure project implementation coordinator, said that 5,000 projects are already under construction in this plan, and national security considerations are indeed one of the challenges. President Biden hopes to ensure that all products are Made in the USA. Meanwhile, Brian Deese, Director of the National Economic Council, has been planning for a year, and the White House is satisfied with the results so far. Landrieu said that the Biden administration also adopts the “All Hazards Approach” to ensure that all construction projects are in the national security interests of the United States, including this airport construction plan.

Source: VOA Chinese, July 7, 2022
https://www.voachinese.com/a/us-airport-infrastructure-national-security-china-20220707/6648594.html

Briefings | | |   Information/Technology US-China Relations

Kyodo Chinese: Japan Approved TSMC Plant Construction Plan

Major Japanese news agency Kyodo News recently reported in its Chinese edition that the Japanese government announced, based on the relevant laws,  to support the construction of semiconductor factories in Japan. The global semiconductor giant Taiwan Semiconductor Manufacturing Company (TSMC) and others have been approved to build factories in Kumamoto Prefecture. The Japanese government will give a subsidy of up to 476 billion yen (about US$3.5 billion). TSMC will join hands with the Sony Group and Denso to manufacture mainly in order to supply Japanese customers. The factory is expected to make its first shipments in December 2024. The monthly production capacity of semiconductors in the 10 to 20 nanometer scale will reach about 55,000 pieces. According to the plan, the factory covers an area of about 213,000 square meters and employs about 1,700 people. The government believes that TSMC has met the conditions of continuous production for at least 10 years and supplies more than half of the materials purchased in Japan. The Minister of Economy and Industry said at a press conference that the government looks forward to enhancing the resilience of the semiconductor supply chain.

Source: Kyodo Chinese, June 17, 2022
https://china.kyodonews.net/news/2022/06/4abfb33025f7–4760.html

Briefings | | |   Geo-Strategic Trend Information/Technology