According to a Bloomberg report on September 12, the Chinese government is encouraging local carmakers to export knock-down kits to their overseas factories, where key car components are produced in China and then shipped to the destination markets for final assembly. This strategy aims to avoid punitive tariffs on Chinese cars, while ensuring that advanced EV technologies remain within China.

In recent months, Chinese electric vehicles have faced tariff barriers in Europe and the U.S. On May 14, the White House announced an increase in tariffs on Chinese EV imports to 100%. The European Union imposed additional tariffs on pure electric vehicles from China starting July 4. On August 26, per a report from Reuters, Canada also announced a 100% tariff on Chinese electric vehicles.

To avoid these tariffs, Chinese car manufacturers are setting up production facilities abroad. For instance, BYD signed a USD 1 billion investment agreement with the Turkish government on July 8 to build a factory in Turkey with an annual production capacity of 150,000 electric vehicles, expected to start operations by the end of 2026.

Reportedly, it’s hinted that the new factory may facilitate BYD’s entry into the European market, given Turkey’s customs union agreement with the EU. Turkey also imposed a 40% tariff on Chinese cars in June. Regarding this matter, BYD declined to comment.

The report from Bloomberg also claims that, in July, China’s Ministry of Commerce held a meeting with several car manufacturers.

During this meeting, the Ministry suggested keeping key EV technologies within China and instructed that car manufacturers should avoid making any automotive-related investments in India.

Additionally, companies planning to invest in Turkey were advised to notify both the Ministry of Industry and Information Technology, which oversees China’s EV industry, and the Chinese embassy in Turkey.

The Ministry of Commerce indicated that countries inviting Chinese car manufacturers to set up factories are typically those considering or implementing trade barriers against Chinese vehicles. Officials reportedly advised attendees not to blindly follow trends or trust investment offers from foreign governments.

The Ministry’s guidance to keep critical production within China may hinder the global expansion efforts of these manufacturers, who are seeking new customers to offset intense competition and sluggish domestic sales, factors that are impacting their profitability.

This measure could also affect European countries that have been courting Chinese manufacturers, hoping to attract job opportunities and boost their local economies.

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• [News] EU Plans to Cut Tariffs on China-Made Tesla EVs from 20% to 9%, with Final Decision Expected in October
• [News] Punitive Tariffs on Chinese EVs by US Reportedly to Further Hinder BYD, Leapmotor and Others’ Global Expansion Plan, while EU Investigation Persists

(Photo credit: BYD)

According to a report from wccftech, AMD CEO Lisa Su has indicated that she believes the AI Supercycle has just started, and the company has accelerated its product development plans to meet the substantial market demand.

In addition to NVIDIA, AMD is a significant player in the AI market as well. This is not only due to its market impact but also because the company has significantly expanded its AI product portfolio over the past few quarters, attracting attention from major clients like Microsoft and Amazon.

While AMD has not yet replicated NVIDIA’s success in the market, the company remains optimistic about the future, which is why it believes the AI boom has only just begun.

A few months ago, AMD outlined its AI chip development roadmap for the next year. The “Advancing AI” event in this October will showcase the next-generation Instinct MI325X AI chip.

The flagship Instinct MI350 AI chip is scheduled for release in 2025, followed by the Instinct MI400 AI chip in 2026. Despite AMD’s advancements, there remains a generational gap, as competitor NVIDIA is poised to launch its Blackwell architecture AI chips in the coming months.

This move is particularly noteworthy as AMD is focusing on competing with NVIDIA’s CUDA on the software front.

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• [News] AMD Unifies RDNA and CDNA into UDNA Architecture, Aiming to Compete with NVIDIA’s CUDA
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(Photo credit: AMD)

SK Group is set to undertake a major workforce restructuring as part of its broader efforts to realign its business portfolio and reduce costs, following earlier measures this year. According to The Chosun Daily, the restructuring could see significant cuts, with some key affiliates, particularly in the refining sector, potentially reducing up to 20% of their executive positions.

As SK Group downsizes its more than 200 affiliates, it is expected to implement substantial changes, including workforce reductions across various sectors, especially in oil and chemicals. The group, heavily invested in refining and telecommunications, is currently facing a critical situation, partly due to a temporary downturn in electric vehicle demand. Financial pressures are mounting, with key affiliate SK Innovation carrying liabilities of 51 trillion won as of last year, which has added to the group’s financial strain.

At the same time, Reuters also reported that Samsung Electronics, the global leader in smartphones, TVs, and memory, is planning to cut up to 30% of its overseas workforce in certain departments.

According to the same report, sources indicated that Samsung has instructed its global subsidiaries to reduce sales and marketing staff by approximately 15% and management personnel by up to 30%. The plan, which is expected to be implemented by the end of this year, will impact jobs across the Americas, Europe, Asia, and Africa.

Additionally, other industry sources have reportedly confirmed Samsung’s global layoff plan. However, specific details about the scale of the layoffs remain confidential, making it unclear how many employees will be affected and which countries or business units will be most impacted.

(Photo credit: SK Group)

In recent years, the U.S., Japan and the Netherlands, have increasingly expanding restrictions on China in semiconductor technology. South Korea, on the other hand, has been cautiously responding to U.S. demands due to its significant dependence on the Chinese market.

Yet, according to a report by South Korean media outlet The Korea Herald, the U.S. is increasing pressure on South Korea to comply with its export controls to China.

At the Korea-U.S. Economic Security Conference 2024 held in Washington, D.C. on September 10th, U.S. Commerce Department Undersecretary Alan Estevez called on South Korea’s two leading HBM manufacturers, Samsung and SK hynix, to align with U.S. export controls on China. He urged that their production capacity be reserved for supplying advanced chips to allied nations, rather than competitors such as China.

Estevez emphasized his appreciation for South Korea’s long-standing cooperation with the U.S., but pointed out that since AI can be used for military purposes, it is crucial to prevent China from acquiring advanced chips to train AI models.

South Korea’s Trade Minister Cheong In-kyo responded that while they will discuss the matter with the U.S., export controls have a significant impact on South Korea’s businesses and economy.

Some industry sources cited by The Korea Herald have further pointed out that the direct export volume of chips from Samsung and SK hynix to China is not significant, so the actual impact may be limited.

However, per a previous Reuters report cited sources, it’s indicated that about 30% of Samsung’s HBM chip sales in the first half of this year were to China.

The Korea Institute for Industrial Economics and Trade noted that, unlike Japan and the Netherlands, South Korea cannot fully align with U.S. export control measures due to its significant reliance on exports to China.

Per the Chosun Daily citing data from South Korea’s Ministry of Trade, Industry, and Energy and the Korea International Trade Association, it’s shown that in July of this year, South Korea’s exports to China increased by 14.9% year-on-year to USD 11.4 billion, the highest since October 2022. Notably, memory exports surged 89% year-on-year to USD 6.8 billion.

Semiconductor exports saw particularly strong growth, with chip exports rising 49% year-on-year. In June this year, Korea’s memory exports also amounted to USD 8.8 billion, accounting for 65.8% of total semiconductor exports, which reportedly represents the highest proportion in two years since December 2021.

These figures reflect South Korea’s robust performance in the chip sector and the strong demand from the Chinese market for Korean semiconductors and other ICT products.

Meanwhile, due to the U.S.’s strict restrictions on chip manufacturing technology, China is striving for breakthroughs in the HBM field.

The HBM market is currently dominated by South Korea’s SK hynix, Samsung Electronics, and the U.S.’s Micron, all of which are producing the latest standard HBM3 chips.

However, a report from Tom’s Hardware, citing industry sources, has indicated that Chinese companies, including CXMT, have made progress in developing HBM and are in the early stages of production. Huawei is also collaborating with other Chinese companies, with plans to produce HBM2 chips by 2026.

Read more

• [News] ChangXin Memory Technologies in China Has Reportedly Begun Mass Production of HBM2
• [News] Progress Made in Chinese Consortium’s Development of HBM, Reportedly Targeting HBM2 Production by 2026

(Photo credit: Samsung)

Ahead of Intel’s upcoming board meeting in mid-September, rumors have been circulating that the struggling giant may be mulling to selling its FPGA unit Altera, with AMD and Marvell being potential buyers. However, according to an interview with Altera’s CEO by CRN, Altera’s plan for an initial public offering (IPO) remains unchanged, as it pursues to be listed by 2026.

The information is confirmed by Sandra Rivera, Altera’s CEO. Citing her remarks, CRN notes that the FPGA unit is working on its plan, which involves selling a stake in Altera, not the entire company. Rivera further stated that this has been Altera’s communicated strategy for over a year, with an IPO planned for 2026.

Citing Rivera, the report pointed out that though Altera began operating independently from Intel at the start of 2024, it is still in the process of separating from many of the general and administrative functions of its parent company, with a target completion date of January 1, 2025.

Intel acquired Altera in 2015 for USD 16.7 billion, and the latter dropped its name afterwards, known as the Programmable Solution Group under the U.S. semiconductor giant.

It was not until 2023 that Intel announced its intention to spin off the Programmable Solutions Group into a separate, wholly-owned company. In February, 2024, the FPGA unit announced that it would revive the Altera brand, CRN reported.

The spin-off of the FPGA business is intended to achieve two goals: providing Intel with additional liquidity to fund CEO Pat Gelsinger’s costly revitalization strategy and enhancing the business opportunities for the FPGA company, according to CRN.

Intel’s board is set to meet this week to discuss restructuring plans, which may include separating its design division from its foundry operations. Citing Intel CFO David Zinsner’s comments at an investor meeting last week, a report by CNBC notes that dividing the two businesses would be a logical move, as the company is trying to create more separation between these two businesses.

Read more

• [News] AMD Could Emerge as a Prospective Buyer for Intel’s Potential Sale of Altera
• [News] Intel Reportedly Considering Foundry Spin-Off or Merger to Mitigate Losses

(Photo credit: Intel)