in recent weeks, we'd heard that companies making drones for the war in Ukraine had seen supplies capped or cut off. next big escalation in trade war.
here's the story (w/ @mackhawk.bsky.social, @gmvolpi.bsky.social & others)🎁link
China imposed new export controls on the US for critical minerals. Will they be effective? We're skeptical. Read the full piece on the Terminal.
blinks.bloomberg.com/news/stories...
Microchip CEO Sanghi’s remarks about pausing the company’s Chips Act application speak to one of the key challenges of semiconductor industrial policy
Government officials have to make long-term bets in an industry that’s intensely cyclical:
Microchip has paused its Chips Act application process, the CEO said Tuesday, confirming our earlier reporting
The company was in line for $162m. It’s struggling with too much inventory & said Monday it’ll shutter a plant in Arizona
www.bloomberg.com/news/article...
The Biden admin unveiled the new semiconductor controls yesterday, escalating a yearslong campaign to limit China’s chip progress — but stopping short of earlier proposals that would have sanctioned more key Chinese firms
www.bloomberg.com/news/article...
In response to new US chip curbs:
- Beijing banned exports to US of gallium, germanium, antimony & superhard materials; will place tighter controls on graphite
- Chinese internet, semiconductor & auto industry groups urged caution when buying US chips
www.bloomberg.com/news/article...
Intel CEO Pat Gelsinger was forced out after the board lost confidence in his plans to turn around the iconic chipmaker, adding to turmoil at one of the pioneers of the technology industry
Via my colleagues Ian King, Liana Baker & Ryan Gould
www.bloomberg.com/news/article...
Japan is spending another $9.9 billion in chips and AI to keep pace with China and the US on technologies policymakers see as key to national security www.bloomberg.com/news/article...
For more on the past several months of chip toolmaker lobbying & US negotiations with Japan & the Netherlands…
1. www.bloomberg.com/news/article...
2. www.bloomberg.com/news/article...
3. www.bloomberg.com/news/article...
4. www.bloomberg.com/news/article...
Key change — as it stands today — is which Chinese firms will go on the entity list. Biden admin had mulled sanctioning 6 Huawei suppliers, incl. CXMT, & knew of at least 6 more
The latest rules sanction only some of those 6, a list we reported in March: www.bloomberg.com/news/article...
The current proposal would still exempt Japan & the Netherlands (meaning Tokyo Electron & ASML) from additional restrictions on chip equipment sales, as we reported in July: www.bloomberg.com/news/article...
& would also curb HBM sales, as we reported then: www.bloomberg.com/news/article...
Biden admin plans to unveil new chip export controls on China as soon as next week, as WIRED first reported (though timing has slid before & could slide again)
Latest draft — not yet final — includes fewer Huawei supplier sanctions than earlier proposals
www.bloomberg.com/news/article...
South Korea is eyeing $10.2 billion in support for domestic chipmakers next year
www.bloomberg.com/news/article...
Germany is actually trying to do this & earmarked €10b for Intel from the EU Chips Act
Then Intel delayed its Magdeburg fab by at least two years (along with delays in Poland & Malaysia)
www.bloomberg.com/news/article...
This is very kind!! Thank you for reading
Zooming out: The Biden admin has now finalized almost 50% of $39b in Chips Act manufacturing funds
Officials still have almost 20 preliminary deals to close — & more than $2b left to allocate (to say nothing of R&D funding)
Trump’s win sets a clear deadline: www.bloomberg.com/news/article...
7/7
Things got trickier after Intel’s disastrous Aug. earnings report
Some sticking points in talks this fall:
1. How much info Intel would disclose about its tech roadmap: www.bloomberg.com/news/article...
2. What happens in the event of an acquisition or spinoff: www.bloomberg.com/news/article...
6/
The March spat over Intel’s military award delayed all the big preliminary announcements bc it wasn’t clear how Commerce would make up the shortfall
They ultimately scrapped a commercial R&D program — & folded some of the new obligations into Intel’s existing $
From Sept:
5/
Why did US officials reduce Intel’s grant?
It’s not bc of Intel’s business problems. It’s bc the Pentagon/Congress forced Commerce to spend $3b on Intel’s military chips award
We reported in March that the move could lower the total $ for Intel: www.bloomberg.com/news/article...
4/
Intel decided not to take $11b in loans
It’s the third major company to turn down loans, along w Samsung (all along) & GlobalFoundries (in final deal)
Chips Act $75b loan authority will be *way* underutilized. Important to note when thinking about future industrial policy
3/
First, the basics:
Intel’s grant will support projects in AZ, OR, NM & OH
The first 3 will get some $ this year because they’ve hit milestones. Ohio is delayed & hasn’t yet qualified for any $
The grant doesn’t cover Intel’s 2nd Ohio fab bc it’ll come online after 2030
2/
Intel has reached a final deal for a nearly $7.9b Chips Act grant & will get at least $1b of that this year
The award is smaller than what was proposed in March (not bc of Intel’s financial woes, but rather bc of a military chips deal)
Free link &🧵:
1/ www.bloomberg.com/news/article...
