Daily: CHIPS expected to continue; Korea's US$34b tech fund; Malaysia's tariff response
7 min read.
Highlights
CHIPS expected to continue. Following on from Trump’s rejection of the CHIPS Act yesterday, key lawmakers from both parties have signalled that the law is unlikely to be repealed. Even Republican legislators expressed surprise at Trump’s statement and said the program is expected to continue, although there may be some revision.
Separately, Trump is set to meet the leaders of Intel, IBM, Qualcomm, and other tech leaders in a meeting next week.
Korea’s tech fund. South Korea is planning a US$34 billion fund for key technology industries, including semiconductors and AI. It will be administered by the Korea Development Bank and low-interest loans, but requires approval from the opposition-dominated National Assembly.
Malaysia’s tariff response. Malaysia is looking into whether the government can absorb the tariffs that Trump is expected to impose on its chip industry. This follows yesterday’s news that Arm is exploring a major investment in Malaysia. This is certainly a different tactic to other companies/countries, which include, but is not limited to, 1) retaliatory tariffs (e.g., China), 2) appeasement / collaboration (e.g., Colombia), 3) passing along costs to consumers (most companies). In the end, the Malaysian government will have to pay for the tariffs by either collecting more taxes or diverting funds from other programs, so at the end of all that is likely to be the Malaysian citizen.
Thanks for reading.
1. Policy and Geopolitics
1.1
Bloomberg (03/06): Trump Set to Meet With Technology Leaders Early Next Week
President Donald Trump is poised to meet next week with leaders of some of the country’s largest tech companies, which are facing the prospect of import tariffs and stricter export rules that could upend their businesses.
A group including the chief executive officers of HP Inc., Intel Corp., International Business Machines Corp. and Qualcomm Inc. has discussed meeting with the administration on Monday, according to people familiar with the matter who asked not to be identified because the plans aren’t public.
1.2
Bloomberg (03/06): Trump’s Call for Chips Act Repeal Spurned by Key US Lawmakers
US lawmakers who helped secure billions of dollars in subsidies for domestic semiconductor manufacturing rejected President Donald Trump’s call to revoke the 2022 Chips Act, signaling that any repeal effort in Congress would fall short.
Senate Democratic Leader Chuck Schumer, who negotiated the law, predicted Wednesday that Trump’s demand would fail, while a top Republican proponent, Senator Todd Young, expressed surprise at the president’s comments and said he expects the administration to keep the program running.
Republicans control both chambers of Congress. But a slim House majority, plus an expected Senate filibuster, would make a repeal politically difficult. The legislation has drawn investments to Republican strongholds, such as Ohio and Texas, as well as Schumer’s home state of New York.
1.3
Chosun Daily (03/05): S. Korea to launch $34 billion fund to boost semiconductor, AI sectors
South Korea announced plans to create a 50 trillion won ($34.4 billion) fund to bolster high-tech strategic industries, including semiconductors, batteries, and artificial intelligence, in a bid to enhance the country’s long-term competitiveness. The government aims to provide over 100 trillion won in financial support through the Korea Development Bank and other commercial banks.
The 50 trillion won fund will be established under the KDB, Acting President Choi Sang-mok said at a meeting of economy-related ministers on Mar. 5.
The plan, however, requires parliamentary approval to move forward. Since the main opposition Democratic Party of Korea holds a majority in the National Assembly, the government needs the party’s consent. The government plans to submit these legislative revisions within March.
1.4
SCMP (03/05): China leads US in quantity, quality of semiconductor research, report finds
China is producing twice as many research papers as the US on chip design and fabrication, laying the foundation for a possible leadership role in next-generation semiconductor technology, according to a US think tank.
While China is behind in advanced semiconductors and is restricted from buying high-end chipmaking tools such as the extreme ultraviolet lithography system developed by Dutch firm ASML, Chinese scholars published a total of 160,852 chip-related papers from 2018 to 2023, more than the next three ranked countries combined, according to the Emerging Technology Observatory (ETO) at Georgetown University.
The US was in second place with 71,688 articles, less than half of China’s output, followed by India and Japan, according to the report released on Monday. The ETO found that Chinese institutions accounted for nine spots in the top-10 producers of chip articles between 2018 and 2023, and eight spots in the category of highly cited publications. The Chinese Academy of Sciences was the country’s leading publisher of all chip design and fabrication research, as well as the most cited in the research category.
1.5
Reuters (03/06): Malaysia discusses absorbing U.S. chip tariffs with companies
Malaysia is discussing with chip companies based in the country whether they can absorb the impact of potential U.S. tariffs on semiconductors, its trade minister said, as it looks to hedge against risks to its export-driven economy.
U.S. President Donald Trump said in February that he intended to impose tariffs on semiconductors starting at "25% or higher", though it is unclear when this decision could be made.
Malaysia would need to see the magnitude and quantum of the tariffs, Trade Minister Tengku Zafrul Aziz said in an interview with Reuters on Wednesday, as they could have a significant impact on its exports.
1.6
Nikkei (03/05): Intel unveils secure chip supply chain program for government clients
Intel is launching a supply chain assurance program in the second half of this year to address growing demand for more transparency in the chipmaking process for customers in government and highly regulated industries.
The program will cover a selection of chip plants in five locations -- the U.S., Ireland, Taiwan, Vietnam and Malaysia -- but not production facilities in Israel or chip assembly and testing plants in China and Costa Rica. Intel did not elaborate on why these five locations were considered more secure than others.
2. Economy, Finance, and Business
2.1
Bloomberg (03/06): Onsemi Discloses Allegro Takeover Bid at $6.9 Billion Value
ON Semiconductor Corp. made its pursuit of Allegro Microsystems Inc. public on Wednesday after disclosing an unsolicited $6.9 billion bid that includes debt.
The chip company, which does business as Onsemi, is offering $35.10 per share for the target company, up from a September proposal of $34.50, it said in a statement. Allegro responded hours later to say it had reviewed the bid but found it “inadequate.”
2.2
Bloomberg (03/06): Marvell Plunges After Forecast Trails Loftiest Estimates
Marvell Technology Inc. declined in late trading after delivering a revenue forecast that fell short of the highest estimates, disappointing investors who were looking for a bigger payoff from the AI boom.
Sales will be about $1.88 billion in the fiscal first quarter, which runs through April, the chipmaker said in a statement Wednesday. Though that was in line with the average analyst estimate, some projections ranged as high as $2 billion.
Marvell shares fell 16% in late trading after the report was released. They had been down 18% this year through the close.
2.3
Bloomberg (03/06): Apple’s Use of SiTime in iPhone 16e Fuels Stock Rally for Chipmaker
The appearance of SiTime Corp. components in the new iPhone 16e is fueling a stock rally for the little-known chipmaker, sending the shares up 20% on Wednesday.
A device teardown of the smartphone by TechInsights revealed the existence of timer chips from SiTime, a maker of clock components that had about $200 million in revenue last year.
The chipmaker uses silicon parts — what are known as microelectronic mechanical systems — to replace the traditional quartz oscillators that keep time in devices. SiTime sees a huge potential market for this precision-timing technology, which can go into everything from cars to military navigation systems.
2.4
Chosun Daily (03/06): Hanmi, Hanwha clash over $1.5B HBM TC bonder market
Hanmi Semiconductor, a South Korean chip equipment maker specializing in high-bandwidth memory (HBM) technology, saw its revenue surge 2.5-fold in 2024, outpacing the 102% growth of its key client, SK Hynix. The company’s Thermo Compression Bonder (TC Bonder), an essential tool for HBM production, has benefited from soaring global demand for artificial intelligence (AI) semiconductors.
Holding a commanding 70% share of the global HBM TC Bonder market, Hanmi dominates the sector. However, competition is heating up as new players, including South Korean conglomerate Hanwha Group, seek to challenge its position, intensifying the battle in the semiconductor equipment supply chain.
2.5
Reuters (03/06): Intel defeats shareholder lawsuit over foundry losses, $32 billion plunge
Intel won the dismissal of a shareholder lawsuit accusing the chipmaker of fraudulently concealing problems in its foundry business, leading to job cuts and a dividend suspension that wiped out more than $32 billion of market value in one day.
In a decision made public on Tuesday, U.S. District Judge Trina Thompson in San Francisco rejected claims that Intel took too long to reveal a $7 billion fiscal 2023 operating loss linked to its business of making chips for outside customers.
3. Technology
3.1
TrendForce (03/06): Intel Reportedly Doubles Down on Panther Lake as Key Product for Commercial Customers in 2026
Despite concerns over potential delays, Intel stated that Panther Lake will begin production in the second half of 2025. Notably, the company claims the processor will be a key product for commercial customers in 2026, as per a report from Nikkei.
The declaration was made by David Feng, Intel’s VP of client computing group, according to Nikkei. The flagship processor is expected to be fabricated with Team Blue’s 18A node.
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