Hello from California, this is Yifan, your #techAsia host this week. Happy Thanksgiving to those who celebrate. In many American households, US President-elect Donald Trump will likely dominate the conversation around the dinner table on Thursday, and it’s no exception here in Silicon Valley.
It has been an unusually busy holiday season here as tech executives, investors and analysts all try to assess the likely impact of the incoming Trump administration. As one venture capital investor told me: It’s the season of joy and endless speculation on what’s going to happen in the next four years.
Trump has already caused a panic in the tech supply chain and stock markets at home and abroad by threatening more tariffs and anti-China measures. But how much of his rhetoric will become actual policy after January? We just have to wait and see.
Meanwhile, as we approach the year-end and the last stretch of the Biden administration, the Department of Commerce is moving fast to get the largest Chips Act deals over the finish line before Trump takes office.
This week, it finalised a $7.86bn grant to Intel, $600mn short of the amount set under the preliminary terms, which the Commerce Department said was due to the additional funding the US chip giant is set to receive from the Department of Defense.
However, it does invite the question of whether the US government is losing some confidence in Intel’s foundry venture, which has been weighing on the company’s bottom line and has faced delays as the chipmaker goes through lay-offs and other restructuring in an effort to cut costs.
$100mn? No thank you
The Indonesian government rejected Apple’s $100mn investment plan in an effort to lift a sales ban on the iPhone 16 in the country. The Southeast Asian country said it compared Apple’s investment proposal to contributions from other smartphone brands with manufacturing facilities in Indonesia and found it lacking.
At the heart of the problem is Indonesia’s “local content” requirements, and Apple’s reluctance to build production facilities in south-east Asia’s largest economy. Why is Apple not so eager about manufacturing in Indonesia and what does this all mean for the iPhone giant’s future in south-east Asia’s biggest market?
Nikkei Asia’s Ismi Damayanti and Rezha Hadyan answer these questions and more here.
A homegrown Mate
Chinese national champion Huawei launched its first flagship phone with a fully homegrown operating system on Tuesday, in the latest sign of how technology is splintering into competing US and Chinese ecosystems, writes the Financial Times’ Ryan McMorrow.
Huawei’s Mate 70 smartphone features HarmonyOS Next, which the group hopes to establish as a third major mobile operating system alongside Apple’s iOS and Google’s Android.
It is the latest demonstration that US sanctions designed to enfeeble Huawei have instead cemented its status as a technological juggernaut. Last year, the group unveiled the Mate 60 with a first-of-its-kind self-developed and domestically made processor — a feat many in Washington believed was not possible.
Still, early beta users and developers say the Next operating system remains a work in progress. Huawei executives at the last minute decided to allow Mate 70 buyers the option to keep the company’s old Android-based operating system for now.
Tariffs, tariffs and more tariffs
Tech companies are bracing for more tariffs as Trump vows to impose more restrictive trade measures against China, including an additional 10 per cent duty on imports from the country.
Some are stocking up on parts in preparation for Trump 2.0. Microsoft, HP and Dell, for example, are rushing to prepare as many electronic components as possible before January, Nikkei Asia’s Cheng Ting-Fang and Lauly Li report.
And they are not alone in trying to beat the expected January deadline. China is expected to pump out a record amount of exports this year, driven partly by a wave of American clients rushing to hoard Chinese goods before Trump returns to the White House.
Rare earths, rare energy
Energy has become a thorny topic in the tech world. From artificial intelligence to crypto, the power hungry tech sector is dependent on energy supplies, more so than they may realise.
Case in point: rare earths, a group of 17 critical minerals used in everything from EVs to wind turbines to smartphones, are also facing energy bottlenecks.
Australian rare earths producer Lynas won’t move to more advanced processing at its new plant in Western Australia “without low-cost reliable power”, CEO Amanda Lacaze tells Nikkei Asia’s Shaun Turton, noting that energy constraints risk holding back the country’s broader manufacturing ambitions.
The company opened a facility in Kalgoorlie this month for cracking and leaching, an initial step in turning the concentrated mined minerals to usable chemicals, but Lacaze said any further steps downstream are dependent on access to affordable energy.
China has a more than 85 per cent share of refining, giving it enormous dominance in the important market. Lynas remains the only major supplier outside China, extracting the ore from its Mt Weld mine in remote Western Australia and separating it at its plant in Malaysia.
But power prices, as pointed out by Lacaze, as well as high labour and material costs pose challenges to the global shift by Western governments to reduce reliance on China for critical minerals like battery metals and rare-earth elements.
Suggested reads
-
Nvidia and Intel suppliers reassess Mexico plans amid Trump tariff threat (Nikkei Asia)
-
Infosys chair bets companies will develop their own AI models (FT)
-
SoftBank to boost OpenAI stake with up to $1.5bn investment (FT)
-
China’s Pony AI raises $260m in Nasdaq listing (Nikkei Asia)
-
Samsung replaces memory, foundry chiefs amid AI chip struggles (Nikkei Asia)
-
Apple hits hurdles in China with AI rollout for iPhones (FT)
-
Japan, South Korea struggle to reduce reliance on China tech materials (Nikkei Asia)
-
Samsung’s princeling heir Lee Jae-yong grapples with corporate crisis (FT)
-
Foreign tech startups compete to help Vietnam go green (Nikkei Asia)
-
The geopolitics of chips: Taiwan’s ‘Silicon Shield’ (FT)
#techAsia is co-ordinated by Nikkei Asia’s Katherine Creel in Tokyo, with assistance from the FT tech desk in London.
Sign up here at Nikkei Asia to receive #techAsia each week. The editorial team can be reached at techasia@nex.nikkei.co.jp.
