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Taiwan Semiconductor Manufacturing Company (TSMC) has indicated it will increase the cost of chips made outside of Taiwan as the company reacts to pressures on its profitability.
The world's largest maker of advanced chips for customers like Apple Inc. and Nvidia Corp., has sounded its price warning as government and big tech firms are cognizant of the geopolitical risks of having more than 90% of the world’s chips made in the country. Moves are already underway to spread the production of the most advanced semiconductors to other locations, especially as China claims Taiwan as part of its sovereign territory and is striving to bring it under full control.
TSMC’s chief executive CC Wei made a clear statement on Thursday, during the company’s earnings call for the first quarter.
"If a customer requests to be in a certain geographical area, the customer needs to share the incremental cost."
"In today's fragmented globalization environment, cost will be higher for everyone, including TSMC, our customers and our competitors," he said, adding that discussions with customers had commenced.
TSMC plans for overseas semiconductor production
Global expansion, intense power consumption, and overall production of in-demand cutting-edge technology come with a significant outlay so this development won’t be a shock to many. As the company deviates from its original policy of only making chips in Taiwan, it is reacting to market forces.
TSMC is now preparing to make its chips in Germany, Japan, and the US with fabs being built to house the production but it will mean paying a premium for the product.
Startup and material costs are simply much more expensive than in TSMC’s native environment and this comes at a time when it expects to see a slump in the domestic market.
The flagship Taiwanese company has forecast for profitability to fall this year due to increased power costs at its main base, the damaging impact of the earthquake earlier in April, and a slower 3nm manufacturing process – the most advanced chip technology currently in mass production.
Image credit: TSMC
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Apple has, on orders from China’s government, removed the social networking apps WhatsApp and Threads from the App Store serving that country. Both applications are owned and administered by Meta, the parent company of Facebook and Instagram.
The two applications had already been blocked by Chinese authorities, but still they saw heavy use, mainly from those who accessed them with a virtual private network that masked their internet protocol address and allowed users to sign in as if they were in another country.
“We are obligated to follow the laws in the countries where we operate, even when we disagree” Apple said in a statement to CNN. “The Cyberspace Administration of China ordered the removal of these apps from the China storefront based on their national security concerns. These apps remain available for download on all other storefronts where they appear,
Apple removes Threads and WhatsApp from China store
The two applications had already been blocked by Chinese authorities, but still they saw heavy use, mainly from those who accessed them with a virtual private network that masked their internet protocol address and allowed users to sign in as if they were in another country.
Apple has had a rocky relationship with China over the years. Most recently, the company chose to settle a class action lawsuit for $490 million, rather than go to a jury over comments that CEO Tim Cook made to investors in 2018 regarding China and the sales performance of the iPhone there.
In the United States, the Republican-led House of Representatives have taken aim at apps they also disapprove of, most notably TikTok, which is owned by the Chinese company ByteDance. The American government is pressuring TikTok to divest from China’s government or else face legislation that would ban it it from U.S.-based app stores for Google and Apple devices.
U.S. lawmakers continue to pressure TikTok
“America’s” foremost adversary has no business controlling a dominant media platform in the United States,’ said Mike Gallagher (R-Wisconsin), chairman of a House select committee investigating China’s cyberspace activities.
The House of Representatives is considering legislation titled, “Recognizing the importance of the national security risks posed by foreign adversary controlled social media applications” The bill is clearly aimed at China and Chinese-controlled companies.
The move by the Cyberspace Administration of China could be seen as a response to this proposed law, and the U.S. congress’ increasing pressure on ByteDance.
Image: Ideogram.
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TikTok is still on the brink of being banned in the United States after House Republicans included the proposed legislation in a package of bills which would secure foreign aid for Israel and Ukraine.
The threat from US lawmakers to ban the Chinese-owned video-sharing app unless owners ByteDance divest majority control of the company, elsewhere.
Back in March, the TikTok legislation passed the House and it has significant support in both chambers, whilst President Biden has indicated he will approve it if the bill lands on his desk. The latest development sees this action included in a House package as Representatives strive to secure votes for foreign aid agreements following further negotiations with the Senate on how long ByteDance would have to sell TikTok to prevent it from being banned in the States.
Revised legislation has increased the sale period from six months to a year, earning a notable endorsement from Senate Commerce Committee Chairwoman Maria Cantwell.
Originally, a six-month deadline was proposed for the sale of the company to be completed but that has been changed to nine with a three-month extension to be granted as long as a deal is in progress.
No evidence presented against Chinese-owned TikTok
It is unusual for both Democrat and Republican parties to unite so strongly against a particular company in support of a bill, so it would be a landmark moment if Congress passes the TikTok legislation. The situation reflects the unease on Capitol Hill, where there is significant bipartisan concern over the Chinese threat to the US.
However, there is opposition to the plans to impose an outright ban on TikTok with challengers citing the First Amendment, insisting the prohibition of the app would be unconstitutional.
Kentucky Senator Rand Paul believes this course of action would set a dangerous precedent, "The passage of the House TikTok ban is not just a misguided overreach; it's a draconian measure that stifles free expression, tramples constitutional rights, and disrupts the economic pursuits of millions of Americans," he said.
Political opposition has augmented a fierce defense from TikTok as it works to maintain its strong market presence in America. Since March, the company is said to have spent $5 million on TV adverts in opposition to the bill. The ads have featured various content creators in support of TikTok and how it improves their lives including the reliance on the app for their income.
To date, the US government has not provided any evidence to show TikTok sharing US user data with the Beijing administration or to outline how the Chinese government has influenced the company’s algorithm to influence what is seen by the app’s vast user base in the US.
Image credit: Ideogram
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Gamblers in North Carolina staked a total bet value of $659.3 million (£528.7m) during the first month of legal sports betting in the state.
As of 11 March, the regulated sports betting market was opened in the Tar Heel State with the disclosed figures from the North Carolina State Lottery Commission covering the period up to the end of the month.
Promotional wagers from sportsbook operators are said to have accounted for $202.6m of the overall total revenue figure, with gamblers earning back around $590.8m in wins. $66.5m in stakes was lost but the state taxes this amount, known as gross wagering revenue, by 18%.
The North Carolina sports wagering law which was passed last June lays out how the tax revenue will be spent too. $2 million will be set aside each year to support people with gambling addiction and a further $1 million will support youth sports.
The tax revenue will also go towards being used to attract big events to the area, like sports tournaments and music festivals.
Early data released by the Commission indicated $24m had been staked on the opening day of the market, with a total of $198m placed in online sports bets over the first week.
State of play in North Carolina betting market
Eight operators have been licensed to provide betting services in North Carolina but must enter into a partnership with a sports enterprise within the state.
That is the case for all the active, established brands: FanDuel, Caesars Entertainment, DraftKings, Fanatics, Bet365, BetMGM, ESPNBet, and Underdog.
In the case of DraftKings, it entered into an agreement with NASCAR whilst FanDuel has partnered with NFL side Carolina Panthers. ESPN Bet has opted for golf’s PGA Tour and its Wells Fargo Championship as operators seek to cover different sports interests.
North Carolinians appear to have embraced the betting market in the opening weeks but more time will be required to properly analyze the situation once the novelty and promotional period has worn off.
Image credit: andres/pexel
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Meta is making a significant stride in the AI space this week, expanding the reach of its AI assistant across all of Metaverse's social media platforms, including Instagram, Facebook, Messenger, and WhatsApp.
The company's site heralded the announcement alongside the development of the flagship artificial intelligence model Meta Llama 3.
Meta's new AI assistant
At the heart of the Meta AI assistant is the powerful Meta Llama 3, a large language model (LLM). This cutting-edge technology is the engine that drives the prompts users ask of the assistant across the Meta social channels.
"With our most powerful large language model under the hood, Meta AI is better than ever. We're excited to share our next-generation assistant with even more people and can't wait to see how it enhances people's lives," the Meta announcement boasted.
We reported that Meta had tested the assistant in India and certain parts of Africa. Users in these regions had flagged across social media, that they had spotted the AI elements appearing on the company's apps like WhatsApp. This appears to have been a soft launch of the features before the global announcement this week.
The Meta AI whatsapp bot is very disruptive. The AI wars have begun. The Internet is changing rapidly. pic.twitter.com/3PUsq6LwJO
— Munya Bloggo (@MunyaBloggo) April 19, 2024
The "Ask Meta anything" prompt will be available across all of the social media giant's apps and provide optional information to guide users’ decision-making. This feature can be used to run queries past the assistant. It will produce information like restaurant recommendations with specifics, answer technical queries, and suggest images for furniture and household items.
The company's "Imagine feature" also generates AI-prompted images in real-time across all of its apps, showcasing the assistant’s advanced capabilities. These images can also be animated with a prompt and converted into a GIF to send across Metavers's many social channels.
Meta also announced that a browser-based version of Meta AI will be available for those using their computers. The release said, "We're rolling out meta.ai (the website) today. Struggling with a math problem? Need help making a work email sound more professional? Meta AI can help! And you can log in to save your conversations with Meta AI for future reference."
The company believes this is the most robust free AI assistant on the market and will be deploying it across more than a dozen countries. This is a pretty powerful step forward for Meta, which is in hot competition with Google's Gemini and OpenAI's ChatGPT for the top spot in AI.
Image: Meta.
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