Daily: Zhao Weiguo suspended death sentence; Tencent stockpiled chips; Intel aims for No. 2 foundry
5 min read.
Highlights
Zhao Weiguo suspended death sentence. The former chairman of the chip conglomerate / asset acquisition vehicle, Tsinghua Unigroup, Zhao Weiguo, has been given a ‘suspended death sentence.’ Zhao and Tsinghua Unigroup feature prominently towards the tail end of the book Chip War. They had a lot of money and a lot of political capital to push for the rapid buildout of China’s domestic semiconductor industry. I’m sure the levels of corruption and graft must have been enormous. I suspect this would also set a chill among private entrepreneurs, both domestic and foreign, who might want to do high-level, high-capital investments in China. This is especially true for whoever is running China’s latest semiconductor and AI funds.
Tencent stockpiled chips. Chinese tech company Tencent has stockpiled AI chips to tide them through U.S. chip export controls. They don’t seem super rattled, with quarterly results beating expectations, so they must have a lot stockpiled. The company also suggests that domestic chips and efficiency-optimisation are effective alternatives.
Intel aims for No. 2 foundry. Intel aims to become the world’s second largest foundry by 2030, behind TSMC and overtaking Samsung.
Thanks for reading.
1. Policy and Geopolitics
1.1
NYT (05/14): Former Chinese Chip Boss Gets Suspended Death Sentence in Corruption Case
China convicted the former chairman of a once-highflying computer-chip conglomerate on corruption charges and gave him a de facto life sentence, concluding a high-profile case that had shaken the country’s semiconductor industry.
The verdict against Zhao Weiguo, former chairman of government-supported Tsinghua Unigroup, came more than two years after Chinese authorities first announced a corruption probe against him.
Prosecutors accused Zhao of abusing his power to provide benefits to relatives and friends, as well as illegally acquiring state assets valued in 2023 at more than 470 million yuan, equivalent today to $65 million. He was also charged with arranging improper transactions that incurred losses for a listed company and resulted in more than 890 million yuan in economic losses for the state, equivalent today to $124 million.
1.2
Reuters (05/15): Tencent says resilient to US chip curbs after revenues rise
Tencent Holdings' stockpiles of AI chips should protect it from U.S. restrictions, its president said on Wednesday, after it reported first-quarter results that beat expectations.
Tencent, the world's largest video game company and WeChat operator, reported revenue of 180 billion yuan ($24.97 billion) for the quarter ended March, up 13% and beating LSEG analysts' estimates of 174.6 billion yuan.
However, the company noted alternative chips are available in China and that its software innovations should optimise chip efficiency.
1.3
Nikkei (05/15): Japan's Renesas forms India tie-up to support startups in chip push
Renesas Electronics has signed an agreement with an Indian government-affiliated scientific organization to provide semiconductor design and development software to startups and educational institutions, the Japanese chipmaker announced Wednesday.
The company signed two memorandums of understanding with the Centre for Development of Advanced Computing, which falls under the Ministry of Electronics and Information Technology.
2. Economy, Finance, and Business
2.1
Nikkei (05/15): Intel aims to overtake Samsung in contract chipmaking. TSMC might help
From the sudden departure of CEO Pat Gelsinger in December to layoffs and ever-changing U.S. tariff policies, Intel has had a tumultuous few months.
But the U.S. chip titan still wants to be the world's No. 2 foundry company by 2030. That would mean beating out Samsung Electronics, currently the second-largest maker of chips for others, and carving out a market for itself even as Taiwan Semiconductor Manufacturing Co. (TSMC) tightens its grip on the leading position amid rising AI chip demand.
2.2
Reuters (05/15): AI chipmaker AMD unveils $6 billion buyback plan
Advanced Micro Devices on Wednesday announced a new $6 billion stock buyback plan, joining a string of chipmakers that are looking to reduce their float as the AI trade that has powered their shares shows some signs of slowing.
Shares of the Santa Clara, California-based company rose as much as 6.4%. Its shares have fallen more than 6% so far this year, compared with a less than 1% drop for the benchmark Philadelphia Semiconductor Index(.SOX), opens new tab.
The buyback, which boosts its total repurchase authority to about $10 billion, comes just a day after AMD announced a deal with Humain, saying it has formed a $10 billion collaboration, following in the footsteps of a number of U.S. technology firms that struck AI deals in the Middle East.
2.3
Reuters (05/14): Tower Semiconductor forecasts quarterly revenue above estimates on steady wireless chip demand
Contract chipmaker Tower Semiconductor, forecast second-quarter revenue above Wall Street estimates on Wednesday, driven by strong demand for wireless communication and power management chips.
The Israel-based company specializes in analog and mixed-signal semiconductor manufacturing, catering to industries such as automotive, industrial, consumer electronics and communications.
While demand from key industries such as automotive has been choppy in recent quarters, with inventory corrections and softer electric-vehicle demand weighing on orders, Tower Semiconductor is benefiting from higher demand in other end-markets.
2.4
WSJ (05/14): Cisco Systems Boosts Outlook After Posting Higher Profit, Sales
Cisco Systems raised its sales outlook after posting higher-than-expected profit and sales for its fiscal third quarter, fueled by continued demand for the company’s technologies.
The networking-equipment company said Wednesday that it now expects revenue of $56.5 billion to $56.7 billion for its current fiscal year, up from a prior outlook of $56 billion to $56.5 billion. It also guided for adjusted per-share earnings of $3.77 to $3.79, up from $3.68 to $3.74.
Shares were up 3.4% to $63.40 in after-hours trading. Through Wednesday’s close, the stock is up 23% in the past year.
3. Technology
3.1
TrendForce (05/15): Huawei to Unveil First Foldable PC Next Monday, Reportedly Powered By In-house Kirin X90
As Huawei’s Ascend chips take the spotlight under Trump’s new AI rules, the Chinese tech giant is grabbing headlines again—this time with the surprise announcement of its first foldable PC, set to debut on May 19, according to its official Weibo and MyDrivers.
Notably, MyDrivers reports that Huawei’s upcoming foldable PC will run the new HarmonyOS for PCs and be powered by the in-house Kirin X90 chip. It is also said to feature a large foldable display and a built-in linear motor that simulates real keyboard typing.
As noted by Tom’s Hardware previously, Huawei’s in-house Kirin X90, reportedly a 10-core Arm-based SoC, could be Huawei’s answer to Apple Silicon. Powering the new MateBook Pro 2025 as well, the chip is said to be designed by Huawei’s HiSilicon and built on SMIC’s 7nm process.
3.2
TrendForce (05/15): Samsung Reportedly Outsourcing Low-End Photomasks, Focusing Resources on ArF and EUV
According to The Elec, Samsung plans to outsource the production of photomasks used in memory chip manufacturing. Until now, the company has produced all photomasks in-house to prevent technology leakage. The Elec states that Samsung is reportedly evaluating potential suppliers for lower-end photomasks, such as i-line and KrF.
At the same time, sources said Samsung plans to outsource i-line and KrF photomasks in order to reallocate those resources toward ArF and EUV. As the report highlights, ArF and EUV photomasks are more advanced and will be key to strengthening Samsung’s technological competitiveness.
Samsung is stepping up efforts to replace Japan-dependent ArF blank masks with domestically produced alternatives, according to sources cited by Business Korea. In addition, the report states that Samsung is also working to localize other Japan-dependent materials, such as EUV pellicles.