Silicon Valley’s chip production is lurching to enlarge its investments in Chinese semiconductor firms, as Washington’s rising tension of upholding its status in global innovation could be overthrown by Beijing’s bid for chip-sector sovereignty.
One of the companies joining the semiconductor progression is Intel Corp. The chip manufacturer is backing Chinese company Primarius Technologies Co., specializing in chip design. The Shanghai-based manufacturer mainly focuses on chip design tools that American firms are currently leading the market in, according to analytics firm PitchBook Data Inc.
In parallel, Silicon Valley’s Chinese affiliates such as Sequoia Capital, Lightspeed Venture Partners, Matrix Partners, and Redpoint Ventures are empowering their connections with U.S. tech companies by investing in more than 67 investments in Chinese chip manufacturing companies since early 2020.
According to PitchBook Data, Silicon Valley’s chip production has pushed firms to engage in financial rounds investments, raising billions of dollars of the country’s startups. This could potentially hold detrimental outcomes to the U.S. as it is currently trying to uphold its position as the leading powerhouse in vital technologies.
The escalating tensions between economic powers have reached an all-time high with this wave of heavy investments from Silicon Valley giants into the Chinese market, leading to a decisive shift in geopolitical power between the East and the West.
Intel’s role in this state of affairs is directed by its need to secure massive funding to maintain chip production. As it attempts to hasten its manufacturing plans in China, the Santa-Clara-based firm has been counteracted by Washington, according to Bloomberg.
The news hub revealed Intel announced undisclosed proposals of creating silicon wafers in a Chengdu-based factory, with plans to initiate production by the end of 2022. However, it seems that its maneuverings might be put on hold as the White House “strongly discouraged” its plans under the pretense of national security.
From its part, Intel stated that it is not planning on initiating any Chinese production for its silicon wafers following its discussions with Washington officials, adding that it will contemplate other alternatives.
“Intel and the Biden Administration share a goal to address the ongoing industrywide shortage of microchips, and we have explored several approaches with the U.S. government,” Intel informed Bloomberg.
Some of the chip manufacturer’s alternatives may be directed towards pumping heavy investments to American and European silicon wafer producers, in compliance with Washington’s demands to maintain chip manufacturing within U.S. borders.
Skepticism following Chinese firms has led forceful global entities to take actions to halt back Beijing’s technological development, with the UK intensifying its probe on previous, current, and potential acquisitions.
The UK authority has expressed its dissatisfaction with NVIDIA’s ARM acquisition, as per Reuters report. Speculations surfaced that the Digital and Culture Secretary, Nadine Dorries, will launch a probable investigation led by the Kingdom’s Competition and Markets Authority to initiate a “phase two” examination into NVIDIA’s acquisition over probably national security threats.
While the announcement has yet to be publicized by the governmental entity, The Times announced that it could come as soon as next week, with a second investigation launch that could potentially take about six months.
It is worth mentioning that any credible examination could result in the graphics chipmaker being forced to sacrifice some of its periodic plans, as the investigation could get UK officials’ approval by 2022, followed by the final regulatory approval before optimal merger completion.
Once the Authority’s probation is finalized, officials would have the power to either terminate the deal, approve it without adjustment, or demand additional compromises to accommodate the Department’s demands.
The UK’s Department of Digital, Culture, Media, and Sport refused to comment on the matter while NVIDIA revealed its current emphasis is directed at moderating concerns concerning ARM’s neutrality once the deal finalizes if it closes.
The global chip shortage is sweeping Silicon Valley’s chip production from its core, as it spreads to larger innovative areas by the day, heightening demand, and by default increasing the crisis’ intensity. As Beijing is in full-throttle mode to usurp Washington from its global thrown in critical technologies, tech and manufacturing firms are caught in the antagonism between economic powerhouses.
Google failed to respect ‘Don’t Be Evil’ policy when firing engineers
“Don’t be evil,” is the famous motto of Alphabet Inc. was not honored by the company especially after breaching their employment contracts, a group of former Google employees highlighted on Monday.
Google have failed to respond to comments on the matter, while it previously said that the employees violated data security policies.
Furthermore, former Google employees Rebecca Rivers, Sophie Waldman and Paul Duke alleged, in the lawsuit filed in California state court in Santa Clara County, that they were fired two years ago for fulfilling their contractual obligation to speak up if they saw Google violating its “don’t be evil” pledge.
The lawsuit noted that the motto that comes under Google’s policies calling for “acting honorably and treating each other with respect” and engaging in “the highest possible standards of ethical business conduct,” was considered by workers within immigration work as “evil.”
The company’s code of conduct says workers who think the company may be falling short of its commitment should not stay silent, the lawsuit said. For around 20 years, Google promoted “don’t be evil” as a core value, including when it went public in 2004.
In addition, the three software engineers raised concerns in forums inside Google about the company potentially selling cloud technology to U.S. immigration authorities, which at the time were engaging in detention tactics considered inhumane by rights activists, including separating migrant children from their families.
Workers taking part in the suit have failed to specify the amount of damages.
China to set rules to protect drivers’ rights in ride-hailing Industry
China defined new rules on Tuesday to protect the rights of drivers in its giant ride-hailing industry, requiring operators of the services to provide them with social insurance and make their earnings public.
As such, the rules came after Chinese regulators told companies including Didi Global, Meituan, Alibaba Group’s Ele.me and Tencent Holdings, in September, to improve their income distributions and guarantee rest periods for drivers and food-delivery riders.
Also, China’s state media has also criticized Didi, the country’s dominant ride-hailing platform, for not paying drivers fairly.
The new rules come as President Xi Jinping called for China to achieve “common prosperity,” seeking to narrow a wide wealth gap that threatens the country’s economic incline and the legitimacy of Communist Party’s rule. Also, the rules could increase costs for ride-hailers and impact their earnings.
In addition, the industry in China hit an overall transaction volume of $39.22 billion in 2020, according to a report by the Internet Society of China.
To be more specific, the transport ministry said that ride-hailing companies should improve income distribution mechanisms. “Anti-monopoly measures will be stepped up against such companies and a ‘disorderly expansion of capital’ will be prevented in the sector,” it added.
However, regulators in China criticized the biggest technology firms regarding their policies that exploit workers and violate consumer rights, as part of a campaign to exercise more control over large swathes of the economy after years of runaway growth.
The Chinese regulator imposed, in August, a limit on the percentage the delivery platforms take from drivers’ fee, according to a transport ministry official.
Cyber Monday caps holiday shopping weekend as virus lingers
Americans are spending freely and going back to store shopping, knocking out some of the momentum in online sales from last year when Americans were making many of their purchases exclusively via the internet.
Shopper traffic roared back on Black Friday, but it was still below pre-pandemic levels, in part because retailers spread out big deals starting in October. The early buying is expected to also take a bite out of online sales on Monday, coined Cyber Monday by the National Retail Federation in 2005.
In fact, Adobe Digital Economy Index said that it was the first time online sales on Thanksgiving and Black Friday hadn’t grown, and Cyber Monday could likewise see a decline compared with a year ago. Adobe, which tracks more than one trillion visits to U.S. retail sites, had previously recorded healthy online sales gains since it first began reporting on e-commerce in 2012.
Still, Cyber Monday should remain the biggest online spending day of the year. For the overall holiday season, online sales should increase 10% from a year ago, compared with a 33% increase last year, according to Adobe.
A possible game changer is the omicron variant of the coronavirus, which could put a damper on shopping behavior and stores’ businesses. The World Health Organization warned Monday that the global risk from the omicron variant is “very high” based on early evidence, saying the mutated coronavirus could lead to surges with “severe consequences.”
Jon Abt, co-president and a grandson of the founder of Abt Electronics, said that holiday shopping has been robust, and so far overall sales are up 10% compared to a year ago. But he said he thinks Cyber Monday sales will be down at the Glenview, Illinois-based consumer electronics retailer after such robust growth from a year ago. He also worries about how the rest of the season will fare given the new variant.
“There are so many variables,” Abt said. “It’s a little too murky.”
Here is how the season is shaping up:
CYBER MONDAY STILL KING BUT COOLING
Consumers are expected to spend between $10.2 billion and $11.3 billion on Monday, making it once again the biggest online shopping day of the year, according to Adobe. Still, spending on Cyber Monday could drop from last year’s level of $10.8 billion as Americans are spreading out their purchases more in response to discounting in October by retailers, according to Adobe.
Both Black Friday and Thanksgiving Day online shopping came in below Adobe’s prediction. On Black Friday, online sales reached $8.9 billion, down from the $9 billion in 2020, the second largest day of the year. On Thanksgiving Day, online sales reached $5.1 billion, even from the year-ago period.
Harley Finkelstein, president of Canadian e-commerce platform Shopify, which has 1.7 million independent brands on its site, said that so far, Cyber Monday is off to a strong start. Sales on his platform were up 21% on Black Friday compared with 2020 and more than double compared with 2019. He said he believes that independent brands will see better percentage sales gains online than big national chains, as shoppers gravitate more toward direct-to-consumer labels and look for brands with social conscience. And he says these brands have been able to get the inventory. Among some of the hot items on Shopify are children’s couches from Nugget and luxurious linens from Brooklinen.
“I think it is a tale of two different worlds,” he added.
BLACK FRIDAY BACK BUT NOT THE SAME
Overall, Black Friday store traffic was more robust than last year but was still below pre-pandemic levels as shoppers spread out their buying in response to earlier deals in October and shifted more of their spending online. Sales on Friday were either below or had modest gains compared with pre-pandemic levels of 2019, according to various spending measures.
Black Friday sales about 30%, compared with the year-ago period, according to Mastercard SpendingPulse, which tracks all types of payments, including cash and credit cards. That was above its 20% growth forecast for the day. Steve Sadove, senior adviser for Mastercard, said the numbers speak to the “strength of the consumer.” For the Friday through Sunday period, sales rose 14.1% compared with the same period in 2020 and were up 5.8% compared to 2019, Mastercard reported.
Customer counts soared 60.8% on Black Friday compared with a year ago, but were down 26.9% on the same day in 2019, according to RetailNext, which analyzes store traffic with monitors and sensors in thousands of stores. Sales rose 46.4% on Black Friday but were down 5.1% in 2019, according to RetailNext. Sensormatic, another firm that tracks customer traffic, reported a 47.5% surge in traffic on Black Friday compared with a year ago but that number fell 28.3% compared with 2019.
THE CHANGING DISCOUNT LANDSCAPE
Unlike in years past, many big box stores like Walmart didn’t market their discounted goods as “doorbusters,” in their Black Friday ads, choosing instead to stretch the deals out throughout the season or even the day. And the discounts are smaller this season as well.
Shoppers were also expected to pay on average between 5% to 17% more for toys, clothing, appliances, TVs and others purchases on Black Friday this year compared with last year, according to Aurelien Duthoit, senior sector advisor at Allianz Research. That’s because whatever discounts are offered will be applied to goods that already cost more.
And for the first time, discounts on Cyber Monday compared with a year ago are expected to be weaker, according to Adobe. Still, Cyber Monday remains the best day to buy TVs with discount levels at 16%, compared with 19% discounts last year. Other categories where consumers will find deals include clothing at a 15% markdown, compared with 20% last year. Computers are being discounted at 14%, compared with 28% last year, according to Adobe.
Overall holiday sales could be record breaking. For the November and December period, the National Retail Federation predicts that sales will increase between 8.5% and 10.5%. Holiday sales increased about 8% in 2020 when shoppers, locked down during the early part of the pandemic, spent their money on pajamas and home goods.
NEW YORK (AP)
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