Due to restrictions on AI products’ usage in China, Apple is actively seeking Chinese partners to advance in the local AI application market. According to the latest report by the Economic Daily News, the tech giant has been engaged with Chinese firms such as Baidu, Alibaba, and Baichuan Intelligence to push AI efforts. While the move helps to boost these firms’ investment in AI server infrastructure, it may further benefit Taiwan’s AI server supply chain.

The report noted that the industry is optimistic about Baidu’s potential cooperation with Apple, while Alibaba is also a strong competitor. Taiwanese contract electronics manufacturer Inventec, a contract manufacturing partner for both Baidu and Alibaba’s servers, thus reportedly positions itself as a major winner in Apple’s bid to capture the Chinese AI application market.

It is worth noting that Inventec has formed strong partnership with Baidu, as the company has been providing customized server manufacturing services for the Chinese search engine leader for 13 years, according to the report. Inventec has been a key partner since the second generation of Baidu’s super AI computing platform, X-MAN 2.0, which addresses cooling challenges with cold plate liquid cooling technology.

Inventec’s clients include the four major North American cloud service providers (CSPs) as well as Chinese CSP giants such as Baidu, Alibaba, Tencent, and ByteDance.

Based on the information disclosed on its official website, Inventec not only builds edge computing products for brand-name server customers, but also focuses on customizing designs to meet cloud clients’ demands for deep learning, training, and machine learning by maximizing the synergies between CPU and GPU.

The pressure Apple has been facing in the Chinese market, on the other hand, is escalating in the AI arena. As China is Apple’s largest market for iPhones outside the United States, in order to bring AI functions into its devices, Apple is still searching for a Chinese AI partner to support its new iPhone launch in a few months.

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• [News] Apple’s AI Push on iPhone 16 in China Faces Obstacles in Finding Local Partners

(Photo credit: Inventec)

As the market demand for AI chips keeps booming, two South Korean AI chip companies, Sapeon and Rebellions, are pursuing a merger to enhance their competitiveness. According to a report by the Korea Economic Daily, if everything proceeds as planned, the merger will result in the formation of Korea’s first semiconductor unicorn, with the new company’s corporate value amounting to 2 trillion won (USD 1.5 billion).

According to a report by Korean media outlet TheElec, the merger will be finalized within this year, following the signing of the deal in the third quarter.

TheElec stated that Sapeon Inc, headquartered in the US and the sole owner of Sapeon Korea, will be the largest shareholder of the merged entity. Post-merger, Sapeon Inc is expected to hold about 30% of the shares, with Rebellions’ CEO, Sunghyun Park, leading the new company.

Based on the reports, the alliance has been formed in order to win in the global AI chip market, while the two companies identify the next two to three years as a crucial window of opportunity.

Sources cited by TheElec indicated that Sapeon Korea is valued at 500 billion won, while Rebellion is valued at 880 billion won. Regarding details of the merger, during its Series A funding round, Sapeon issued convertible bonds to its investors instead of equity. Afterwards, these investors will receive shares in the merged entity.

It is worth noting that both Sapeon and Rebellion have been backed up by tech heavyweights. According to The Elec, South Korean telco SK Telecom, as Sapeon Inc’s largest shareholder, holds 62.5% of the company. On the other hand, memory giant SK hynix owns 25%, while SK Square holds 12.5%.

Meanwhile, according to the Korea Economic Daily, Rebellions is part of the telecom giant KT Corp.-led Korean “AI full stack” service providers, offering AI infrastructure including AI chips, cloud computing, and various applications.

The report by TheElec, citing industry sources, noted that since SK Group will be the majority shareholder of the merged entity, it may prefer TSMC over Samsung Foundry, given that SK hynix and Samsung are rivals in memory chips. For now, Sapeon uses TSMC as its foundry, whereas Rebellions collaborates with Samsung Foundry.

(Photo credit: Rebellions)

According to a report from Wall Street Journal, Alphabet CFO Ruth Porat announced in a statement on May 30 that Google has committed to investing USD 2 billion in Malaysia. The investment includes building its first data center, expanding Google Cloud, and further developing artificial intelligence (AI).

Porat highlighted that this will be Google’s largest investment project in Malaysia. Google estimates that this investment will contribute over USD 3.2 billion to Malaysia’s GDP and create 26,500 jobs by 2030.

As per a report from Bloomberg, Google stated that in addition to developing cloud computing services, it will also support AI literacy programs for students and educators.

In its earnings call in April, Porat mentioned that the significant year-over-year increase in capital expenditures over recent quarters reflects Alphabet’s confidence in the potential of AI. She projected that the quarterly capital expenditures for the second to fourth quarters of this year would be comparable to or slightly higher than those in the first quarter.

On May 2, Microsoft Corp. announced that it will invest USD 2.2 billion in Malaysia over the next four years to support the country’s digital transformation. The investment projects include developing digital infrastructure, creating AI skill opportunities, establishing a National AI Excellence Center, and enhancing Malaysia’s cybersecurity capabilities.

Earlier this week, Malaysian Prime Minister Anwar Ibrahim announced the National Semiconductor Strategy, which includes providing at least USD 5.3 billion in financial support and training 60,000 semiconductor engineers, aiming to make Malaysia a global chip hub.

Amidst the U.S.-China rivalry and other geopolitical tensions, global companies are seeking to diversify their supply chains. Facing competition between the U.S. and China, Malaysia is reportedly keen to maintain a neutral position in the semiconductor supply chain landscape. According to the Malaysian Investment Development Authority (MIDA), the country currently provides 13% of global testing and packaging.

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• [News] Malaysia’s Major Investment Aims to Establish Global Chip Hub
• [News] Overseas Expansion of Testing and Packaging Facilities – Japan, Malaysia, and Singapore Emerge as Top Choices

(Photo credit: Google)

In response to US export bans, NVIDIA, the global leader in AI chips, has commenced to sell H20, its AI chip tailored for the Chinese market earlier this year. However, an oversupply caused the chip to be priced lower than its rival, Huawei, in some cases even at an over 10% discount, according to the latest report by Reuters.

The US Department of Commerce restricted the export of NVIDIA AI chips to China due to concerns about their potential military use in late 2022. In response, NVIDIA has repeatedly reduced product performance to comply with US regulations. The H20 chip, derived from the H800, is specifically designed as a ‘special edition’ for the Chinese market.

However, due to the abundant supply in the market, citing sources familiar with the matter, Reuters noted that H20 chips are being sold at a discount of over 10% compared to Huawei’s Ascend 910B, the most powerful AI chip from the Chinese tech giant.

The chip is reportedly to be sold at approximately 100,000 yuan per unit, while Huawei 910B sold at over 120,000 yuan per unit.

The decreasing prices underscore the difficulties NVIDIA encounters in its China operations amid U.S. sanctions on AI chip exports and rising competition from local rivals.

According to a previous report by The Information, major tech companies such as Alibaba, Baidu, ByteDance, and Tencent have been instructed to reduce their spending on foreign-made chips like NVIDIA’s, according to sources cited by the media outlet.

(Photo credit: Huawei)

Huawei, in collaboration with Orange Pi, an open source product brand of Shenzhen Xunlong Software, have unveiled their latest brandchild, OrangePi Kunpeng Pro development board. Though the specifics of the product have been hidden from public, an AI processor is said to be integrated into the package, indicating that Huawei’s Kunpeng chipsets have been progressing into the AI realm, according to a report from tom’s Hardware.

The Kunpeng Pro development board, an alternative of Raspberry Pi, is reported to be powered by a quad-core 64-bit Arm processor and an AI processor integrated into the same package. However, details of these processors remain undisclosed.

This is a tactic Huawei has employed previously to deter Western scrutiny. Huawei has been facing strict sanctions from the U.S. government, restricting its access to certain chips and chip-making technologies. On May 7th, the U.S. authority revoked the licenses of Intel and Qualcomm to supply semiconductor chips used in laptops and handsets to Huawei, which took immediate effect.

The development board is reported to be designed for a diverse user base, including consumers, developers, and students. It comes preinstalled with the openEuler OS, the openGauss database, and a range of internet, productivity, and software development tools.

Tom’s Hardware has learned that Kunpeng Pro uses a custom Huawei Kunpeng CPU that is paired with an AI FPGA processor. The CPU is believed to be a quad-core ARM model, while the AI FPGA processor is reportedly to offer 8 TOPS (Trillions or Tera Operations per Second) of AI computing power.

Qualcomm’s Snapdragon X Elite, launched in late 2023, delivers peak AI computing performance of 45 TOPS, while Apple’s M4, released in early May, is rated at 38 TOPS.

(Photo credit: Orange Pi)