Daily: China's new AI fund; Earthquake in Taiwan
4 min read.
Highlights
Last Friday, China created a new ~US$8.2b AI investment fund.
This comes just days after the Biden administration released a flurry of restrictions on the export of semiconductors.
This is also in addition to the China Integrated Circuit Industry Investment Fund (ICF or the “Big Fund”), which launched ~US47.5b in 2024.
TSMC is recovering from a 6.4 magnitude earthquake that hit the south of Taiwan.
China is aggressively recruiting South Korean semiconductor talent, especially in the memory space.
It seems to me that a lot of the discussion about China and semiconductors in the US is about logic/AI chips. But China is rapidly catching up re: memory chips, which has been Korea’s forte since the early 1990s.
1. Policy and Geopolitics
1.1
Tech war: China creates US$8.2 billion AI investment fund amid tightened US trade controls | SCMP
China has created a new artificial intelligence (AI) investment fund, with an initial capital of 60 billion yuan (US$8.2 billion), days after the United States further tightened export controls for advanced semiconductors and placed more Chinese companies on its trade blacklist.
The National AI Industry Investment fund was incorporated in Shanghai last Friday as a joint venture of state-backed Guozhi Investment (Shanghai) Private Equity Fund Management and the China Integrated Circuit Industry Investment Fund (CICF) Phase III, according to information from local business registry service Qcc.com.
1.2
China's aggressive pursuit of South Korean semiconductor talent sparks industry alarm | Chosun
“It takes less than a day after a press release announcing new technology for key engineers to receive recruitment offers. The situation has reached a critical point, making it increasingly difficult to retain core talent,” said a representative from a South Korean semiconductor equipment firm.
On Jan. 21, industry insiders reported a sharp increase in recruitment efforts by Chinese semiconductor companies targeting key personnel in South Korea’s semiconductor industry. While these efforts previously centered on major memory chipmakers such as Samsung Electronics and SK Hynix, they have now expanded to include emerging players in artificial intelligence (AI) semiconductors and equipment manufacturing, heightening concerns within the sector.
1.3
In an 8K filing it submitted to SEC on January 13rd, NVIDIA revealed the scope of products affected by the AI diffusion rule. According to its statement, the rule will impact a broad range of its GPU products starting May 15, 2025, unless changes are made.
The rule applies to products meeting 3A090.a or 4A090.a specifications, including A100, A800, H100, H200, H800, B100, B200, GB200, L4, L40S, and RTX 6000 Ada, as noted by NVIDIA.
It is worth noting that the filing does not warn of any material financial impact. While the new rules won’t take effect for 120 days, it may allow the incoming Trump administration time to weigh in.
2. Economy, Finance, and Business
2.1
TSMC Plants Resume Operation After Earthquake Spurs Evacuation | Bloomberg
Taiwan Semiconductor Manufacturing Co. has restored operations at factories it evacuated after a 6.4 magnitude earthquake struck the island’s south, injuring at least four people.
The world’s largest chipmaker said all affected sites are gradually resuming production and support systems from power to water are functioning normally. The company however is continuing to inspect sites and assess the impact from the suspensions, it said in a statement.
2.2
TSMC Reportedly Building Two More CoWoS Facilities, Debunking Order Cut Rumors | TrendForce
TSMC plans to build two new CoWoS facilities at the Phase III site of Southern Taiwan Science Park (STSP), with an estimated investment exceeding NTD 200 billion.
Construction at the STSP Phase III site is expected to begin as early as March 2025, and the two new facilities are projected to be completed by April 2026, with equipment installation likely commencing shortly thereafter, as the report notes.
2.3
Nvidia CEO’s whirlwind Taiwan tour: from Lunar New Year banquets to night market visits | SCMP
Nvidia CEO Jensen Huang wrapped up a fast-paced 55-hour visit to Taiwan, which included engagements with top industry leaders and visits to key manufacturing sites, underscoring the island’s role in the global artificial intelligence (AI) and semiconductor industries.
On Sunday, Huang hosted a high-profile lunch in Taipei, attended by 36 top executives from Taiwan’s leading technology companies.
3. Technology
3.1
Taiwan’s Alchip Adjusts Chip Design for Chinese Automakers to Meet U.S. Standards | TrendForce
Sources indicate that due to U.S. restrictions on AI computing power exports to China, the application for an ADAS (Advanced Driver Assistance System) chip by Taiwanese ASIC manufacturer Alchip was rejected.
The ADAS chip developed by Li Auto, named “Schumacher,” was co-developed with Alchip and originally planned for production using TSMC’s 5nm process. The chip was scheduled for tape-out at the end of last year, but the application was denied, and the project is now undergoing redesign, as stated in the report.
3.2
A first look at Nvidia’s flagship RTX 5090 compared to the RTX 4090 | The Verge
Nvidia’s GeForce RTX 5090 Founders Edition graphics card is arriving later this month, and we’ve managed to unbox one and compare its design to the RTX 4090. Just like our first look at the RTX 5090, this isn’t a review. Performance figures, benchmarks, and impressions beyond the hardware are coming later.