Recently, global chip giant Intel announced to acquire a stake in Dongguan Luxshare Technology Co., Ltd. (Referred to as “Dongguan Luxshare Technology”), a subsidiary of Luxshare Precision.

According to a report from WeChat account DRAMeXchange citing sources, it has shown that on June 12, Dongguan Luxshare Technology’s registered capital increased from around CNY 571 million to around CNY 589 million, an increase of about 3.1%, with Intel (China) Co., Ltd. as a new shareholder. It is reported that Intel China has invested CNY 17.662 million in the company.

Luxshare Precision primarily provides products for industries including consumer electronics, communications and data centers, automotive electronics, and medical sectors. As its subsidiary, Dongguan Luxshare Technology specializes in the production of communications equipment such as base station antennas, filters, and RRU, as well as interconnect products like connectors, cables, optical modules, and AOC, which have been widely used in applications like wireless communication base stations, data centers, servers, switches, and routers.

As a global leader in the semiconductor industry and computing innovation, Intel achieved a revenue of USD 63 billion in 2022. In the computing sector, statistics showed that in 4Q23, Intel shipped as many as 50 million PC processors, representing a year-on-year increase of 3% and a market share of 78%.

In the semiconductor field, Intel is developing foundry business at full throttle. According to its official website, to meet the growing global semiconductor demand and promote its IDM 2.0 strategy, Intel is ramping up its production capacity by investing about USD 20 billion in building fabs in Arizona and New Mexico, and over USD 20 billion in Ohio for the acquisition of Tower Semiconductor. It plans to pour up to EUR 80 billion to the EU in the entire semiconductor value chain over the next decade.

As per another report from the Securities Times, a source revealed that this cooperation does not involve the consumer electronics field but mainly the communications field. That means future products of Luxshare Precision in this field will be deeply integrated with Intel chips. For instance, both parties will engage in deep collaboration from the product development stage.

Furthermore, industry sources cited by the same report further explained that the transmission rate and bandwidth of communication-related products are fundamentally related to the chips they use. Therefore, Intel’s investment in Luxshare Precision’s subsidiary will enhance the competitiveness of Luxshare Precision’s products in the communications and data center sectors, contributing to the rapid development of this business.

As stated in Luxshare Precision’s annual report, the communications industry embraced new development opportunities amidst the wave of global digital transformation in 2023. Copper connectivity, optical connectivity, thermal modules, servers, and communication RF fields that Luxshare’s business has involved also saw significant growth, which became important drivers for the industry development.

Read more

• [News] Intel CEO Gelsinger Indicates US Chip Restriction Could Force China to Accelerate Development
• [News] Luxshare Reportedly Enters NVIDIA’s Chain, Eyeing at AI Chip Business

(Photo credit: Intel)

Due to the EU’s announcement of increased tariffs on Chinese-made electric vehicles, Tesla has announced that it will raise the price of the Model 3 in the European market starting in July, though the extent of the price increase has not been specified.

According to a report from CNBC, Tesla CEO Elon Musk stated on June 13th that the Model 3 price in the European market will be adjusted starting July 1st due to the EU tariffs, without revealing the specific increase.

Per a report from Reuters, the European Commission has announced that, starting July 4th, it will impose tariffs ranging from 17.4% to 38.1% on electric vehicles imported from China. The tariff rates will vary depending on the extent of government subsidies received by each automaker. This measure aims to prevent Chinese manufacturers benefiting from government subsidies from undercutting the market with cheap electric vehicles, thereby harming the EU automotive industry.

It is unclear how much of a tariff will be imposed on Tesla’s Chinese-made electric vehicles. The European Commission stated that Tesla will be subject to an individually calculated tariff rate. Whether Tesla cooperates with the EU authorities’ anti-subsidy investigation will also influence the final tariff rate applied.

Although the EU has decided to impose high tariffs on Chinese electric vehicles, there are still differing opinions among various parties. The German government and automotive industry have reacted most strongly, fearing it could ignite a China-EU trade war.

Per a report from Xinhua citing sources, Tesla’s Shanghai plant is the U.S. car manufacturer’s first gigafactory outside the US, delivered 947,000 vehicles in 2023.

As per a previous report from Barron’s, German Transport Minister Volker Wissing stated that, “The European Commission’s punitive tariffs hit German companies and their top products. Cars must become cheaper through more competition, open markets and significantly better business conditions in the EU, not through trade war and market isolation.”

Read more

• [News] EU Plans to Impose Tariffs as High as 38.1% on Chinese Electric Vehicles Amid Trade War
• [News] TSMC Reportedly Commences Production of Tesla’s Next-Generation Dojo Chips, Anticipates 40x Increase in Computing Power in 3 Years

(Photo credit: Tesla)

Following US sanctions in August 2019, Huawei’s internal operating system backup, HarmonyOS, emerged and has been in development for nearly 5 years. Currently, HarmonyOS is widely recognized, and its native version is set to launch on June 21st, marking the cornerstone of Huawei’s ambitious HarmonyOS project.

According to a report from UDN, Huawei is pursuing a dual-track development strategy for HarmonyOS. Internally, it focuses on its “1+8+N” terminal business strategy: “1” refers to smartphones, “8” includes large screens (TVs), tablets, PCs, wearables, car units, and more, while “N” covers a wide range of IoT devices. This approach aims to expand and flourish the HarmonyOS ecosystem.

In essence, HarmonyOS follows two main paths, while the first shares similar market positioning with current market leaders Android and iOS in the consumer sector, primarily focused on Huawei’s own terminal devices, aiming to expand the HarmonyOS ecosystem within the consumer domain.

The second path is OpenHarmony, also known as Open Source HarmonyOS. Reportedly, this initiative involves Huawei’s ecosystem partners leveraging Huawei’s donated OpenHarmony code base to develop their own commercial versions of HarmonyOS. These partners utilize their industry expertise and resources to vertically expand into sectors such as education, finance, transportation, and more. OpenHarmony primarily targets industrial applications.

Vertically, Huawei is reportedly looking to integrate HarmonyOS and OpenHarmony through foundational technology, establishing interoperability and connectivity to create an unified HarmonyOS. This strategic integration is designed to position HarmonyOS as a world-class operating system for the future IoT, aligning with Huawei’s ultimate goal of establishing HarmonyOS as a global IoT OS.

Recently, the unified device interconnection technology standards for OpenHarmony were officially released. Huawei’s Consumer Business Group Chairman, Richard Yu, recently disclosed plans to unify application and service ecosystems across Harmony OS and the commercial versions of OpenHarmony. This initiative aims to enhance consumer and industry experiences by sharing a unified HarmonyOS ecosystem that includes programming languages, compilers, and tools, thereby constructing a comprehensive smart terminal operating system.

Huawei is also said to be advancing another significant vertical initiative: the native HarmonyOS. Currently, Huawei has successfully developed the entire stack of HarmonyOS as an independent Chinese-made operating system, contrasting with the majority of global operating systems such as Android and iOS, which are based on the Linux or Unix kernel.

Huawei’s recent strides not only shape the future of HarmonyOS and OpenHarmony but also bolster Huawei’s autonomy and control. These developments are crucial for China’s tech enterprises, providing resilience against potential US sanctions. Whether in consumer or industrial sectors, the Mega HarmonyOS can be activated promptly, underscoring why numerous Chinese companies are joining the HarmonyOS ecosystem.

The intense price competition among Chinese mature process foundries is nearing its end. According to a report from the Economic Daily News, it has indicated that Hua Hong Semiconductor, the second-largest foundry in China, plans to raise prices by 10% in the second half of the year.

This marks the end of a two-year decline in mature process foundry prices, signaling that the industry is emerging from its correction phase and moving towards a healthier path. Consequently, Taiwanese foundries specializing in mature processes, such as UMC, VIS, and PSMC, are also expected to see a rise in their prices, boosting their operations.

Industry sources cited in the same report also note that due to geopolitical factors, Chinese foundries primarily focus on the domestic market, which is gradually diverging from the customer base of Taiwanese foundries. However, if Hua Hong’s price increase materializes, it would be a significant indicator.

Since the end of the COVID-19 pandemic, mature process foundry prices have been continuously adjusting downward. A price increase would indicate a rebound in demand for consumer electronics.

Reportedly, the industry sources believe that if the market for mature process foundries rebounds, UMC will be the primary beneficiary. As demand for consumer electronics and mobile phones picks up, related products such as OLED panel driver ICs, image signal processors (ISP), and WiFi chip will see improvements in inventory levels across the computer, consumer, and communication sectors, reaching healthier levels.

VIS and PSMC are also expected to benefit from the industry’s recovery trend. Although VIS does not comment on pricing issues, the company previously mentioned that inventory levels for consumer electronics are expected to return to normal by 2024. Despite ongoing adjustments in industrial and automotive inventories, the company remains optimistic about moderate growth in the second half of the year.

PSMC is anticipated to experience a gradual return of orders as well. The company emphasizes its commitment to adapting to market competition and continuously adjusting its production and sales strategies. With the positive effects of these adjustments becoming evident and customer inventory levels returning to healthy standards, along with new business opportunities at the Tongluo plant, PSMC expects its revenue to gradually recover.

Read more

• [News] UMC Optimistic About Second Half Business Outlook, While AI Could Capture 10-20% Market Share
• [News] Foundries Face Price Pressure in Mature Process Amid Oversupply, Indicating Q3 Price Decline
  

(Photo credit: UMC)

Following an eight-month anti-subsidy investigation, the EU announced on June 12th that it will increase the temporary tariff rate on all Chinese electric vehicle companies from the current 10% to as high as 38.1%. According to a report from CNBC, the European Commission warned that if an agreement on automotive production capacity with China cannot be reached, the new tariffs will be implemented around July 4th.

Per the same report, the European Commission has announced the latest tariff rates, imposing additional tariffs on Chinese electric vehicle manufacturers BYD, Geely, and SAIC Group at rates of 17.4%, 20%, and 38.1%, respectively.

Other companies cooperating with the investigation will be subject to a 21% tariff, while non-cooperating companies will face tariffs as high as 38.1%. American automotive giant Tesla’s electric vehicles produced in China will be subject to a separate tariff rate following the investigation.

As per another report from BBC cited by Commercial Times, nearly 50% of the electric vehicles exported from China to the EU are from Western car brands such as Tesla, Volkswagen, and BMW, with Tesla alone accounting for about 40%. In contrast, the annual sales of Chinese electric vehicle brands in Europe are less than 200,000 units, with a market share of less than 8%, mainly represented by BYD, SAIC Group (which owns the European brand MG), and Geely.

Per a report from the Global Times on June 12th, China’s Ministry of Commerce strongly reacted, expressing discontent on the matter. China, reportedly, will closely monitor the EU’s subsequent actions and take all necessary measures to firmly defend the legitimate rights and interests of Chinese enterprises. The China Association of Automobile Manufacturers also expressed deep regret and stated that the decision is absolutely unacceptable.

Although the EU has decided to impose high tariffs on Chinese electric vehicles, there are still differing opinions among various parties. The German government and automotive industry have reacted most strongly, fearing it could ignite a China-EU trade war.

As per a report from Barron’s, German Transport Minister Volker Wissing stated that, “The European Commission’s punitive tariffs hit German companies and their top products. Cars must become cheaper through more competition, open markets and significantly better business conditions in the EU, not through trade war and market isolation.”

Per a report from Reuters, BMW Group Chairman Oliver Zipse stated that the European Commission’s decision to impose tariffs on Chinese electric vehicles is a wrong way to go. Volkswagen expressed that the European Commission’s decision detrimental to the current weak demand for BEV vehicles in Germany and Europe.

Read more

• [News] EU Reportedly Delays Decision on Imposing Tariffs on Chinese Electric Cars
• [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: Pixabay)