Daily: Trump's commerce sec. nominee on CHIPS; Intel to be acquired?
3.5 min read.
Highlights
Biden admin defends that US export controls worked in controlling China.
Trump's Commerce Sec. nominee expected to continue the CHIPS Act.
Bloomberg reports a rumour that Intel might be acquired again, sending stock up ~10%.
1. Policy and Geopolitics
1.1
FT (01/20): ‘We’ve impeded China’: departing official defends US export controls
For the past four years, Alan Estevez, under-secretary of commerce for industry and security, has been finding new obstacles to place in China’s path as it tries to use US technology to develop cutting-edge chips and artificial intelligence.
Estevez and Tarun Chhabra, a White House official, have been responsible for policies designed to slow China’s semiconductor and AI industries by severing access to critical US technology.
Estevez conceded that US policy could do no more than slow China since it had smart engineers, money to invest and government support. But he said Washington had been successful, pointing to statements from Chinese AI groups identifying US export controls as their main obstacle.
The outgoing under-secretary has straddled two forces: American companies and some allies who believe the US went too far, and critics who wanted the administration to take even harsher, quicker action against China and its military.
1.2
TrendForce (01/20): Trump’s Commerce Secretary Pick Reportedly Hints at CHIPS Act Support Despite Uncertainty
Howard Lutnick, Trump’s Commerce Secretary nominee, indicated to outgoing Secretary Gina Raimondo his plan to continue the program.
However, two major participants, Intel and Samsung, are facing downturns, and it will take years to get many of the new factories operational, as highlighted by the report.
1.3
Nikkei (01/17): Netherlands excludes billions in ASML sales to China from disclosure
The Dutch government excludes billions of euros of sales by technology company ASML to China from disclosures on sensitive goods exports, it has told Reuters, following a policy decision that has not been previously reported.
The move is of interest because experts and others who rely on routine disclosures to understand the Netherlands' exports of goods with military applications, including parliament, may not have the full picture.
2. Economy and Finance
2.1
Bloomberg (01/17): Intel Shares Jump on Report It’s an Acquisition Target
Intel Corp. shares jumped as much as 9.5% Friday morning after a report on a technology news site said the beleaguered chipmaker is an acquisition target. It did not name any potential acquirers.
Qualcomm Inc. approached Intel to discuss a potential acquisition before eventually cooling on the idea, Bloomberg reported last year. Arm Holdings Plc similarly inquired about possibly buying Intel’s product division, but was told the business wasn’t for sale, Bloomberg reported in September.
2.2
FT (01/19): Broadcom chief eyes AI opportunity after confronting VMware backlash
When Broadcom, the $1tn tech group, bought VMware in 2023, the software company’s customers could choose between thousands of different products to help them manage their data centres.
During the year after the $69bn deal closed, Broadcom slashed that number to five.
It is the kind of manoeuvre that has won Tan — who told investors last month the deal would deliver a “significantly” greater boost to earnings than the $8.5bn it initially expected — a reputation for ruthlessly effective dealmaking and merger integration, as he hunts for Broadcom’s next big acquisition.
Tan is now positioning VMware as the main alternative for companies who do not want to hand over all their data to US cloud providers, especially in Europe, as rapid adoption of artificial intelligence is forcing a rethink of how data centres are run.
VMware’s virtualisation system hides the underlying complexity of the various servers, storage and switches that make up a data centre, effectively allowing businesses to run it like a software platform. Tan argues this helps customers spend less on hardware and makes their infrastructure more resilient and secure.
2.3
Bloomberg (01/17): Samsung Executives to Get Part of Bonus in Stock in Big Revamp
Samsung Electronics Co. has decided to pay part of executives’ bonuses in stock rather than cash for the first time, linking pay to share performance at a time the company is struggling with chipmaking.
The company will pay a portion of the annual bonus in shares to executives starting January next year, according to an internal posting confirmed by the company. The stock portion of the bonus — previously all cash — varies from 50% to 100%, increasing in proportion to seniority. Company officials will then be barred from selling those shares for one to two years, again depending on their rank.