Daily: China's big R&D budget; Lip-bu Tan's Intel Strategy; Good news for Nvidia and partners
6 min read.
Highlights
China’s big R&D budget. China’s 2025 budget saw a 10% yoy increase in its allocation to science and technology R&D. The sum, ~US$55 billion, which is roughly equivalent to the CHIPS Act, will go to semiconductors, among other fields, such as AI, space, and quantum.
China is also looking to impose more controls on critical minerals, in retaliation to the US’ tariffs on Chinese goods. This includes gallium, which is used in the semiconductor fabrication process.
Lip-bu Tan’s Intel strategy. Reuters reports on more details of new Intel CEO Lip-bu Tan’s strategy. It will include lots of cuts to middle management, an emphasis on AI, and a refreshing of Intel Foundry. Not a ton of detail but it seems to be trending in the right direction. Intel stock was up ~7% on the news yesterday and is up almost 30% over the past 5 days.
Good news for Nvidia and partners. Nvidia’s GPU conference has been good news for the company and its partners. Nvidia stock is up 11% over the past 5 days. Exclusive HBM3E (high bandwidth memory) supplier SK Hynix is up ~5% over the same period. While Samsung has been a little behind in the HBM game, investors are optimistic that the company can catch up, sending the company up 7%.
Thanks for reading.
1. Policy and Geopolitics
1.1
Tom’s Hardware (03/17): China to spend $55 billion on R&D in 2025 — Semiconductor, AI and quantum computing fields to benefit
According to China's Ministry of Finance, the 2025 central budget will allocate ¥398.12 billion yuan ($55 billion) for science and technology, a 10% increase from 2024. This allocation is the third-largest item in the budget, surpassed only by national defense and debt interest payments.
The increase in spending on science and technology by 10%, or $5 billion, emphasizes that China wants to accelerate its national R&D this year, which will speed up its plans for self-reliance in sectors such as semiconductors. $5 billion will not build the country a breakthrough but will rather help with existing projects, particularly in fields such as semiconductors, AI, space exploration, and quantum computing.
1.2
Nikkei (03/18): China set to tighten export curbs on battery, chip material tech
The Chinese government is poised to intensify trade restrictions on technology used to make materials for electric vehicle batteries and semiconductors in a bid to maintain its competitive advantage against the U.S.
The new curbs will apply to production technology for gallium, an element used to make semiconductors, and cathode materials for lithium-ion batteries. Those looking to move the tech overseas would need permission from the Ministry of Commerce.
1.3
SCMP (03/17): Tech war: Huawei develops computer chips in move away from Intel, Windows
The government-backed China Information Technology Security Evaluation Centre said on Friday that the Kirin X90 chip – a central processing unit (CPU) developed by Huawei’s chip design arm, HiSilicon – received a Level 2 national certification for security reliability.
The certification, which is voluntary, allows companies to assess the security levels of their domestically designed and produced computers, server CPUs and systems. It often serves as a precursor to adoption.
1.4
Bloomberg (03/17): China’s Leapmotor Says It Can Weather an Expansion of Chip Curbs
Electric vehicle maker Zhejiang Leapmotor Technology Co., which uses chips from Qualcomm Inc. and Nvidia Corp., said it would be able to ride out any escalation in US curbs on the flow of advanced chips to China.
While the EV sector has so far escaped major fallout from the chip curbs, the industry is front and center of trade tensions between Europe and China. The European Union has imposed hefty tariffs on Chinese-made EVs, prompting a number of firms to look at stepping up their presence in the region.
1.5
TrendForce (03/18): Vietnam’s First Wafer Fab Set to Begin Construction
The Vietnamese government has officially approved a wafer fab construction project with a total investment of VND 12.8 trillion (approximately $500 million). This will be Vietnam’s first wafer fab, marking a key breakthrough in the country’s semiconductor strategy.
In March 2025, Vietnam’s first wafer fab project received approval, with plans to complete construction before 2030. The fab is positioned to produce specialized chips for defense, AI, and high-tech applications. The local government will provide direct financial support covering up to 30% of the total investment (capped at VND 10 trillion) along with tax incentives. A special steering committee, led by the Prime Minister, will oversee the project and coordinate resources.
1.6
Reuters (03/17): Europe should focus on sustainable chip production as sector emissions rise, study says
With pollution linked to the manufacture of cutting-edge computer chips needed for AI rising rapidly, the European Union should focus on developing its existing lower-emission semiconductor production, think-tank interface said on Monday.
In a review of pollution trends in the chemical-intensive semiconductor sector published on Monday, interface found the industry's energy use had risen 125% globally over the past eight years both as output rose and as cutting-edge chip production caused more emissions per chip.
2. Economy, Finance, and Business
2.1
Reuters (03/18): Exclusive: Intel's new CEO plots overhaul of manufacturing and AI operations
Intel's incoming CEO Lip-Bu Tan has considered significant changes to its chip manufacturing methods and artificial intelligence strategies ahead of his return to the company on Tuesday, two people familiar with Tan's thinking told Reuters, in a sweeping bid to revive the ailing technology giant.
The new trajectory includes restructuring the company's approach to AI and staff cuts to address what Tan views as a slow-moving and bloated middle management layer. Revamping the company's manufacturing operations, which at one time only made chips for Intel but have been repurposed to make semiconductors for outside clients such as Nvidia, is one of Tan's core priorities, these sources said.
2.2
Bloomberg (03/17): Nvidia Investors Look to CEO Keynote to Keep Rebound Going
Nvidia Corp. shareholders are hoping that a keynote speech from chief executive Jensen Huang can deliver enough optimism to help sustain the stock’s recent rebound.
The company’s GPU Technology Conference (GTC) comes at a make or break moment for the firm as it heads into the next few quarters, with Huang’s Tuesday speech seen as having the ability to stave off fears that the chipmaker’s sales boom is peaking. Top of mind for investors will be updates on the company’s Blackwell product line as well as commentary on gross margins, China, competitors and growth.
2.3
WSJ (03/17): Samsung Leads Gains by Nvidia’s Asian Suppliers Ahead of Key AI Event
Shares of Nvidia’s Asian suppliers rose ahead of the U.S. chip giant’s key annual artificial-intelligence conference as the expected unveiling of next-generation AI chips boosted investors’ sentiment.
On Monday, shares in Samsung Electronics rose 5.3%, notching their biggest one-day percentage gain in four months. Market sentiment was buoyed by expectations that Huang could express positive opinions regarding the South Korean tech titan’s high-bandwidth memory chips.
3. Technology
3.1
Reuters (03/17): Google preparing to partner with Taiwan's MediaTek on next AI chip, Information reports
Alphabet's Google is preparing to partner with Taiwan's MediaTek on the next version of its AI chips, Tensor Processing Units, that will be made next year, the Information reported on Monday, citing people involved in the project.
However, Google has not cut ties with Broadcom, the chip designer it has worked with exclusively on the AI chips over the past several years, the report said, citing an employee at the San Jose-based company.
Google chose MediaTek partly because the Taiwanese firm has a strong relationship with TSMC and charges Google less per chip compared to Broadcom, the Information report added.
3.2
TrendForce (03/18): SK hynix Reportedly Locks in Exclusive 12H HBM3E Deal for NVIDIA’s GB300
With NVIDIA unveiling its next-gen GB300 AI chip at GTC 2025, SK hynix stands to benefit as the exclusive supplier of 12H HBM3E for the Blackwell Ultra.
In addition, SK hynix could further strengthen its HBM lead, as the report suggests its HBM4 will power NVIDIA’s next-gen AI chip, Rubin, set for a Q3 launch.
3.3
Bloomberg (03/18): AI Rush Has TPG-Backed Intersect in Talks on Texas Data Centers
Intersect Power, a clean-energy developer backed by private equity firm TPG Inc., is in talks with technology companies to build two enormous data center sites in Texas, the latest sign that the race to develop artificial intelligence continues to heat up.
Intersect is marketing two locations in the Texas panhandle, one capable of supporting a three-gigawatt data center and another that could host a one-gigawatt facility, Intersect Chief Executive Officer Sheldon Kimber said in an interview. Intersect is in talks about the sites with big hyperscalers who want to train AI models, he said, declining to name the companies. A gigawatt is typically enough to power 250,000 homes in Texas.
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