Hi everyone! This is Lauly, waving hello from Taipei, where we have finally welcomed the arrival of winter. November has passed faster than I expected, as I spent quite some time working on several stories about Foxconn, a key Nvidia and Apple supplier and the world’s biggest contract electronics maker.
I made a short trip to Tokyo at the beginning of this month, conducting an exclusive interview with Foxconn chair Young Liu when he attended Nikkei Forum’s Global Management Dialogue. The interview was even more fruitful than I anticipated. The conversation was natural and smooth, and Liu was frank about sharing Foxconn’s plans in Japan and the US. He also patiently explained his definitions of different levels of robotics used in smart factories.
Leading the contract electronics manufacturing giant since mid-2019, Liu’s personality and management style are very different from his predecessor Terry Gou, Foxconn’s founder and former chair, according to industry analysts and former and current Foxconn employees I spoke with. Reporters like me can also feel a difference. For starters, Liu always greets the media with a big smile, no matter what the occasion. Some other reporters who have covered the company for years describe him as Foxconn’s “underground chief marketing officer”, a characterisation which I don’t disagree with.
Foxconn’s annual tech day was another highlight this month, showcasing a wide variety of the company’s latest technologies, ranging from electric vehicles and semiconductors to smart city solutions and humanoid robots. Of course Nvidia’s latest GB300 NVL72 server system was also highlighted.
It was an exciting event, though If I had to nitpick about one thing, it would have been better not to hear the Foxconn theme song (which was made and produced after Liu became chair) for hours on end. The song itself is nice, but I had the tune stuck in my head for the whole night after I left the venue.
On a different note, thanks to my colleague Annie Cheng Ting-Fang, I had the opportunity to join her exclusive interview with former Intel CEO Pat Gelsinger, who is now a general partner of venture capital Playground Global.
It was an insightful interview that I enjoyed a lot. Gelsinger touched on many topics from the outlook for AI and the tech ecosystems in Taiwan and Japan to the rebirth of the chipmaking industry in the US.
Intel was also caught up in another big story recently: TSMC filed a lawsuit against Lo Wei-jen, a former executive, over suspicions he leaked sensitive information to Intel, which is also an important client to the Taiwanese company. The lawsuit came a week after Taiwan’s prosecutors launched an investigation against the former executive for possible violations of the national security law. In response, Intel said it stands by its decision to hire Lo and said it had no reason to believe the allegations of trade secret thefts.
It is rare for the world’s two top chipmakers to be caught in such a public disagreement — TSMC even filed a statement on its strongly worded lawsuit with the Taiwan Stock Exchange. It is worth continuing to monitor how the situation develops, as it may have layers of implications for the global tech industry, national security and geopolitics.
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Chattanooga challenger
Australia-founded Novonix is building what it says will be North America’s first large-scale production facility for synthetic graphite in Chattanooga, Tennessee, part of a broader US attempt to break China’s dominance in critical materials, Nikkei Asia’s Pak Yiu writes.
Graphite is a crucial ingredient in making batteries used in a wide range of applications like electric vehicles and energy storage systems. It was identified as a strategic resource and a supply chain vulnerability in former US President Joe Biden’s supply chain review report in 2021 due to China’s massive market share in the material.
More than 85 per cent of the world’s supply of graphite came from China last year, according to the International Energy Agency. China’s market share for battery-grade graphite was 96 per cent, while Japan produces just over 2 per cent.
Opening up a lead
This year for the first time, China has overtaken the US in the global market for “open” artificial intelligence models, gaining a crucial edge over how the powerful technology is used around the world, writes the Financial Times’ Melissa Heikkilä.
New data from open source AI start-up Hugging Face and the Massachusetts Institute of Technology shows a big shift in the concentration of power in AI. The total share of downloads of new Chinese-made open models rose to 17 per cent in the past year. The figure surpasses the 15.8 per cent share of downloads from American developers such as Google, Meta and OpenAI.
Open models — which are free to download, modify and integrate by developers — make it easier for start-ups to create products and researchers to improve them.
While US labs have moved towards closed models in the race to build the cutting-edge technology, China has pushed to release open systems that can be adopted widely by the broader AI community. Experts say widespread adoption of China’s open models could have huge consequences for what the future of AI looks like.
A new direction
You probably know Jensen Huang is the chair and CEO of Nvidia, the world’s most valuable AI chip developer, but do you know who leads the company that makes Nvidia’s AI server systems? Meet Young Liu, the man who orchestrated Foxconn’s pivot from making iPhones to AI servers.
Liu took over as chair of the world’s largest contract electronics maker from founder Terry Gou in 2019. It was a rather challenging time for the Taiwanese company, writes Nikkei Asia’s Lauly Li. Foxconn was highly reliant on smartphones, on production in China and on Apple, its biggest client. At the same time, it was walking a tightrope between Washington and Beijing.
In just six years, Liu has steered the manufacturing empire — which is China’s largest private employer, with close to 1mn staff and contract workers — to diversify its production footprint and strengthen its position in the AI supply chain. He has also made the company less reliant on a single top decision maker, fended off enormous pressure from competitors and navigated geopolitical uncertainties and the Covid pandemic.
The company’s share price has tripled since Liu took over, surging in particular over the last three years as he reoriented Foxconn towards AI technologies and aligned the company closely with chipmaker Nvidia.
A rapid roadmap
Rapidus, Japan’s fast-rising homegrown contract chipmaker, plans to start building its second plant in 2027 and aims to produce 1.4-nanometre chips as early as 2029 in a race to narrow the gap with Taiwan Semiconductor Manufacturing Co, the world’s largest contract chipmaker, write Nikkei’s Ryo Mukano and Hajime Tsukada.
The Japanese chipmaker successfully began pilot production of its 2-nm chips in Hokkaido this summer, marking a milestone since breaking ground on the plant in 2023.
Rapidus plans to begin mass production of 2-nm chips in 2027 as it moves ahead with construction of the second plant, which could also produce 1-nm chips in addition to 1.4-nm products.
TSMC, Intel of the US, Samsung of South Korea and Rapidus are the only companies in the world pursuing such cutting-edge chip production technologies. China’s pace has slowed due to Washington’s export controls that limit its ability to access critical chipmaking equipment and materials.
The Rapidus project is estimated to cost several trillion yen. The Japanese government will invest hundreds of billions of yen in the company, part of which will be used for research and development.
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#techAsia is co-ordinated by Nikkei Asia’s Katherine Creel in Tokyo, with assistance from the FT tech desk in London.
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