According to The Information, in a strategic maneuver to circumvent the constraints imposed by US sanctions, Huawei is accelerating efforts to establish domestic production capabilities for High Bandwidth Memory (HBM) within China. This move addresses the limitations that have hampered the company's advancements in AI and high-performance computing (HPC) sectors. HBM technology plays a pivotal role in enhancing the performance of AI and HPC processors by mitigating memory bandwidth bottlenecks. Recognizing its significance, Huawei has assembled a consortium comprising memory manufacturers backed by the Chinese government and prominent semiconductor companies like Fujian Jinhua Integrated Circuit. This consortium is focused on advancing HBM2 memory technology, which is crucial for Huawei's Ascend-series processors for AI applications.

Huawei's initiative comes at a time when the company faces challenges in accessing HBM from external sources, impacting the availability of its AI processors in the market. Despite facing obstacles such as international regulations restricting the sale of advanced chipmaking equipment to China, Huawei's efforts underscore China's broader push for self-sufficiency in critical technologies essential for AI and supercomputing. By investing in domestic HBM production, Huawei aims to secure a stable supply chain for these vital components, reducing reliance on external suppliers. This strategic shift not only demonstrates Huawei's resilience in navigating geopolitical challenges but also highlights China's determination to strengthen its technological independence in the face of external pressures. As the global tech landscape continues to evolve, Huawei's move to develop homegrown HBM memory could have far-reaching implications for China's AI and HPC capabilities, positioning the country as a significant player in the memory field.

The US government is investigating the potential national security risks associated with China's involvement in the development of open-source RISC-V chip technology. According to a letter obtained by Reuters, the Department of Commerce has informed US lawmakers that it is actively reviewing the implications of China's work in this area. RISC-V, an open instruction set architecture (ISA) created in 2014 at the University of California, Berkeley, offers an alternative to proprietary and licensed ISAs like those developed by Arm. This open-source ISA can be utilized in a wide range of applications, from AI chips and general-purpose CPUs to high-performance computing applications. Major Chinese tech giants, including Alibaba and Huawei, have already embraced RISC-V, positioning it as a new battleground in the ongoing technological rivalry between the United States and China over cutting-edge semiconductor capabilities.

In November, a group of 18 US lawmakers from both chambers of Congress urged the Biden administration to outline its strategy for preventing China from gaining a dominant position in RISC-V technology, expressing concerns about the potential impact on US national and economic security. While acknowledging the need to address potential risks, the Commerce Department noted in its letter that it must proceed cautiously to avoid unintentionally harming American companies actively participating in international RISC-V development groups. Previous attempts to restrict the transfer of 5G technology to China have created obstacles for US firms involved in global standards bodies where China is also a participant, potentially jeopardizing American leadership in the field. As the review process continues, the Commerce Department faces the delicate task of balancing national security interests with the need to maintain the competitiveness of US companies in the rapidly evolving landscape of open-source chip technologies.

A recent Reuters investigation has uncovered evidence suggesting Chinese universities and research institutes may have circumvented US sanctions on high-performance NVIDIA GPUs by purchasing servers containing the restricted chips. The sanctions tightened on November 17, 2023, prohibit the export of advanced NVIDIA GPUs like the consumer GeForce RTX 4090 to China. Despite these restrictions, Reuters found that at least ten China-based organizations acquired servers equipped with the sanctioned NVIDIA GPUs between November 20, 2023, and February 28, 2024. These servers were purchased from major vendors such as Dell, Gigabyte, and Supermicro, raising concerns about potential sanctions evasion. When contacted by Reuters, the companies provided varying responses.

Dell stated that it had not observed any instances of servers with restricted chips being shipped to China and expressed willingness to terminate relationships with resellers found to be violating export control regulations. Gigabyte, on the other hand, stated that it adheres to Taiwanese laws and international regulations. Notably, the sale and purchase of the sanctioned GPUs are not illegal in China. This raises the possibility that the restricted NVIDIA chips may have already been present in the country before the sanctions took effect on November 17, 2023. The findings highlight the challenges in enforcing export controls on advanced technologies, particularly in the realm of high-performance computing hardware. As tensions between the US and China continue to rise, the potential for further tightening of export restrictions on cutting-edge technologies remains a possibility.

According to the latest report from Bloomberg, the US government under Joe Biden's administration has announced plans to provide Taiwan Semiconductor Manufacturing Company (TSMC) with a substantial financial support package worth $11.6 billion. The package is composed of $6.6 billion in grants and up to $5 billion in loans. This represents the most significant financial assistance approved under the CHIPS and Science Act, a key initiative to resurrect the US chip industry. The funding will aid TSMC in establishing three cutting-edge semiconductor production facilities in Arizona, with the company's total investment in the state expected to exceed an impressive $65 billion. TSMC's multi-phase Arizona project will commence with the construction of a fab module near its existing Fab 21 facility. Production using 4 nm and 5 nm process nodes is slated to begin by early 2025. The second phase, scheduled for 2028, will focus on even more advanced 2 nm and 3 nm technologies.

TSMC has kept details about the third facility's production timeline and process node under wraps. The company's massive investment in Arizona is expected to profoundly impact the local economy, creating 6,000 high-tech manufacturing jobs and over 20,000 construction positions. Moreover, $50 million has been earmarked for training local workers, which aligns with President Joe Biden's goal of bolstering domestic manufacturing and technological independence. However, TSMC's Arizona projects have encountered obstacles, including labor disputes and uncertainties regarding government support, resulting in delays for the second facility's production timeline. Additionally, reports suggest that at least one TSMC supplier has abandoned plans to set up operations in Arizona due to workforce-related challenges.

The expansion of AI technology affects not only the production and demand for graphics cards but also the electricity grid that powers them. Data centers hosting thousands of GPUs are becoming more common, and the industry has been building new facilities for GPU-enhanced servers to serve the need for more AI. However, these powerful GPUs often consume over 500 Watts per single card, and NVIDIA's latest Blackwell B200 GPU has a TGP of 1000 Watts or a single kilowatt. These kilowatt GPUs will be present in data centers with 10s of thousands of cards, resulting in multi-megawatt facilities. To combat the load on the national electricity grid, US President Joe Biden's administration has been discussing with big tech to re-evaluate their power sources, possibly using smaller nuclear plants. According to an Axios interview with Energy Secretary Jennifer Granholm, she has noted that "AI itself isn't a problem because AI could help to solve the problem." However, the problem is the load-bearing of the national electricity grid, which can't sustain the rapid expansion of the AI data centers.

The Department of Energy (DOE) has been reportedly talking with firms, most notably hyperscalers like Microsoft, Google, and Amazon, to start considering nuclear fusion and fission power plants to satisfy the need for AI expansion. We have already discussed the plan by Microsoft to embed a nuclear reactor near its data center facility and help manage the load of thousands of GPUs running AI training/inference. However, this time, it is not just Microsoft. Other tech giants are reportedly thinking about nuclear as well. They all need to offload their AI expansion from the US national power grid and develop a nuclear solution. Nuclear power is a mere 20% of the US power sourcing, and DOE is currently financing a Holtec Palisades 800-MW electric nuclear generating station with $1.52 billion in funds for restoration and resumption of service. Microsoft is investing in a Small Modular Reactors (SMRs) microreactor energy strategy, which could be an example for other big tech companies to follow.

A manufacturing plant near Hsinchu, Taiwan's Silicon Valley, is among facilities worldwide boosting energy efficiency with AI-enabled digital twins. A virtual model can help streamline operations, maximizing throughput for its physical counterpart, say engineers at Wistron, a global designer and manufacturer of computers and electronics systems. In the first of several use cases, the company built a digital copy of a room where NVIDIA DGX systems undergo thermal stress tests (pictured above). Early results were impressive.

Making Smart Simulations
Using NVIDIA Modulus, a framework for building AI models that understand the laws of physics, Wistron created digital twins that let them accurately predict the airflow and temperature in test facilities that must remain between 27 and 32 degrees C. A simulation that would've taken nearly 15 hours with traditional methods on a CPU took just 3.3 seconds on an NVIDIA GPU running inference with an AI model developed using Modulus, a whopping 15,000x speedup. The results were fed into tools and applications built by Wistron developers with NVIDIA Omniverse, a platform for creating 3D workflows and applications based on OpenUSD.

According to Bloomberg's latest investigation, Huawei and Semiconductor Manufacturing International Corporation (SMIC) have submitted patents on the self-aligned quadruple patterning (SAQP) pattern etching technique to enable SMIC to achieve 5 nm semiconductor production. The two Chinese giants have been working with the Deep Ultra Violet (DUV) machinery to develop a pattern etching technique allowing SMIC to produce a node compliant with the US exporting rules while maintaining the density improvements from the previously announced 7 nm node. In the 7 nm process, SMIC most likely used self-aligned dual patterning (SADP) with DUV tools, but for the increased density of the 5 nm node, a doubling to SAQP is required. In semiconductor manufacturing, lithography tools take multiple turns to etch the design of the silicon wafer.

Especially with smaller nodes getting ever-increasing density requirements, it is becoming challenging to etch sub-10 nm designs using DUV tools. That is where Extreme Ultra Violet (EUV) tools from ASML come into play. With EUV, the wavelengths of the lithography printers are 14 times smaller than DUV, at only 13.5 nm, compared to 193 nm of ArF immersion DUV systems. This means that without EUV, SMIC has to look into alternatives like SAQP to increase the density of its nodes and, as a result, include more complications and possibly lower yields. As an example, Intel tried to use SAQP in its first 10 nm nodes to reduce reliance on EUV, which resulted in a series of delays and complications, eventually pushing Intel into EUV. While Huawei and SMIC may develop a more efficient solution for SAQP, the use of EUV is imminent as the regular DUV can not keep up with the increasing density of semiconductor nodes. Given that ASML can't ship its EUV machinery to China, Huawei is supposedly developing its own EUV machines, but will likely take a few more years to show.

Chinese e-commerce and cloud giant Alibaba announced its plans to launch a server-grade RISC-V processor later this year, and it showcased a RISC-V-powered laptop running an open-source operating system. The announcements were made by Alibaba's research division, the Damo Academy, at the recent Xuantie RISC-V Ecological Conference in Shenzhen. The upcoming server-class processor called the Xuantie C930, is expected to be launched by the end of 2024. While specific details about the chip have not been disclosed, it is anticipated to cater to AI and server workloads. This development is part of Alibaba's ongoing efforts to expand its RISC-V portfolio and reduce reliance on foreign chip technologies amidst US export restrictions. To complement the C930, Alibaba is also preparing a Xuantie 907 matrix processing unit for AI, which could be an IP block inside an SoC like the C930 or an SoC of its own.

In addition to the C930, Alibaba showcased the RuyiBOOK, a laptop powered by the company's existing T-Head C910 processor. The C910, previously designed for edge servers, AI, and telecommunications applications, has been adapted for use in laptops. Strangely, the RuyiBOOK laptop runs on the openEuler operating system, an open-source version of Huawei's EulerOS, which is based on Red Hat Linux. The laptop also features Alibaba's collaboration suite, Ding Talk, and the open-source office software Libre Office, demonstrating its potential to cater to the needs of Chinese knowledge workers and consumers without relying on foreign software. Zhang Jianfeng, president of the Damo Academy, emphasized the increasing demand for new computing power and the potential for RISC-V to enter a period of "application explosion." Alibaba plans to continue investing in RISC-V research and development and fostering collaboration within the industry to promote innovation and growth in the RISC-V ecosystem, lessening reliance on US-sourced technology.

According to the latest report by Reuters, the US government is preparing to announce a multi-billion dollar grant for Intel's chip manufacturing operations in Arizona next week, possibly worth more than $10 billion. US President Joe Biden and Commerce Secretary Gina Raimondo will make the announcement, which is part of the 2022 CHIPS and Science Act aimed at expanding US chip production and reducing dependence on China and Taiwan manufacturing. The exact amount of the grant has yet to be confirmed, but rumors suggest it could exceed $10 billion, making it the most significant award yet under the CHIPS Act. The funding will include grants and loans to bolster Intel's competitive position and support the company's US semiconductor manufacturing expansion plans. This comes as a surprise just a day after the Pentagon reportedly refused to invest $2.5 billion in Intel as a part of a secret defense grant.

Intel has been investing significantly in its US expansion, recently opening a $3.5 billion advanced packaging facility in New Mexico, supposed to create extravagant packaging technology like Foveros and EMIB. The chipmaker is also expanding its semiconductor manufacturing capacity in Arizona, with plans to build new fabs in the state. Arizona is quickly becoming a significant hub for semiconductor manufacturing in the United States. In addition to Intel's expansion, Taiwan Semiconductor Manufacturing Company (TSMC) is also building new fabs in the state, attracting supply partners to the region. CHIPS Act has a total funding capacity of $39 billion allocated for semiconductor production and $11 billion for research and development. The Intel grant will likely cover the production part, as Team Blue has been reshaping its business units with the Intel Product and Intel Foundry segments.

The US government is reported to be preparing a very healthy $3.5 billion investment in Intel Corporation—a mid-week published Bloomberg article proposes that the White House has authored a new "fast-moving spending bill." Congressional aides believe that Team Blue—upon official approval/signing off of funds—will be tasked with the production of advanced semiconductors for military and intelligence programs. Bloomberg posits that the resources will be sourced from a "Secure Enclave" project, seemingly linking to a wider tranche of funds within the US government's CHIPS and Science Act. The agreement/contract is expected to run over a period of three years. According to Bloomberg: "the Senate is expected to pass the legislation by a Saturday (March 9) deadline."

Reports from last November suggested that Intel leadership and US government representatives had engaged in negotiations regarding funds for military and intelligence chip applications—the construction costs for new manufacturing facilities were estimated to be in the $3 billion to $4 billion range. A Commerce Department statement was submitted to Bloomberg, but they only commented on an overall $10 billion budget: "We are still reviewing the effect of the appropriations text on the program...(we look) forward to continuing to work with Congress on implementing the Chips and Science Act in a manner the promotes our economic and national security." TSMC, Micron and Samsung are expected to receive "multi-billion-dollar awards" in the near future—these multinational corporations will assist in a bolstering of North American chip manufacturing capabilities.

NVIDIA's decision to shave off $200 from its GeForce RTX 4080 GPU tier has caused a run on retail since the launch of SUPER variants late last month—VideoCardz has investigated an apparent North American supply shortage. The adjusted $999 base MSRP appears to be an irresistible prospect for discerning US buyers—today's report explains how: "a week after its release, that GeForce RTX 4080 SUPER cards are not available at any major US retailer for online orders." At the time of writing, no $999 models are available to purchase via e-tailers (for delivery)—BestBuy and Micro Center have a smattering of baseline MSRP cards (including the Founders Edition), but for in-store pickup only. Across the pond, AD103 SUPER's supply status is a bit different: "On the other hand, in Europe, the situation appears to be more favorable, with several retailers listing the cards at or near the MSRP of €1109."

The cheapest custom GeForce RTX 4080 SUPER SKU, at $1123, seems to be listed by Amazon.com. Almost all of Newegg's product pages are displaying an "Out of Stock" notice—ZOTAC GAMING's GeForce RTX 4080 SUPER Trinity OC White Edition model is on "back order" for $1049.99, while the only "in stock" option is MSI's GeForce RTX 4080 Super Expert card (at $1149.99). VideoCardz notes that GeForce RTX 4070 SUPER and RTX 4070 TI SUPER models are in plentiful supply, which highlights a big contrast in market conditions for NVIDIA's latest Ada Lovelace families. The report also mentions an ongoing shortage of GeForce RTX 4080 (Non-SUPER) cards, going back weeks prior to the official January 31 rollout: "Similar to the RTX 4090, finding the RTX 4080 at its $1200 price point has proven challenging." Exact sales figures are not available to media outlets—it is unusual to see official metrics presented a week or two after a product's launch—so we will have to wait a little longer to find out whether demand has far outstripped supply in the USA.

The artificial intelligence boom is driving a sharp rise in electricity use across the United States, catching utilities and regulators off guard. In northern Virginia's "data center alley," demand is so high that the local utility temporarily halted new data center connections in 2022. Nation-wide, electricity consumption at data centers alone could triple by 2030 to 390 TeraWatt Hours. Add in new electric vehicle battery factories, chip plants, and other clean tech manufacturing spurred by federal incentives, and demand over the next five years is forecast to rise at 1.5%—the fastest rate since the 1990s. Unable to keep pace, some utilities are scrambling to revise projections and reconsider previous plans of closing fossil fuel plants even as the Biden administration pushes for more renewable energy. Some older coal power plans will stay online, until the grid adds more power production capacity. The result could be increased emissions in the near term and risks of rolling blackouts if infrastructure continues lagging behind demand.

The situation is especially dire in Virginia, the world's largest data center hub. The state's largest utility, Dominion Energy, was forced to pause new data center connections for three months last year due to surging demand in Loudoun County. Though connections have resumed, Dominion expects load growth to almost double over the next 15 years. With data centers, EV factories, and other power-hungry tech continuing rapid expansion, experts warn the US national electricity grid is poorly equipped to handle the spike. Substantial investments in new transmission lines and generation are urgently needed to avoid businesses being turned away or blackouts in some regions. Though many tech companies aim to power operations with clean energy, factories are increasingly open to any available power source.

According to new data from Chinese Customs, China's imports of integrated circuits suffered their steepest annual drop on record in 2023, falling 15.4% to $349.4 billion. The decline marks the second straight year of falling chip imports and can be attributed to economic uncertainty and US export controls on advanced semiconductors. Shipment volumes of imported chips also saw a substantial 10.8% year-over-year decrease as demand within China stagnated. The country's important tech manufacturing sector has struggled under strict zero-Covid policies and a lackluster recovery post-pandemic. Flagship manufacturing companies like TSMC recorded modest declines in 2023 sales, though TSMC still forecasts overall growth this year.

Sentiment plunged further when the Biden administration heightened restrictions on China's access to cutting-edge AI-capable chips from NVIDIA and other top American suppliers. The escalating US export controls have choked off China's pipeline to advanced semiconductors needed for AI and supercomputing applications. However, early positive signs for global semiconductor demand have emerged, with worldwide chip sales rising for the first time in over a year this past November. The increase was driven by growing demand for AI and other emerging technologies that rely on advanced computing chips. While the US seeks to limit China's progress in this key strategic area, an inflection point for the battered global chip sector may be nearing.

The United States is softening restrictions on the significant GPU maker NVIDIA, selling artificial intelligence chips to China. While still limiting advanced chip exports deemed strategically threatening, Commerce Secretary Gina Raimondo clarified this week that NVIDIA could supply some AI processors to Chinese commercial companies. Previously, Raimondo had sharply criticized NVIDIA for attempting to sidestep regulations on selling powerful GPUs abroad. Her comments followed rumors that NVIDIA tweaked chip designs to avoid newly imposed export controls narrowly. However, after discussions between Raimondo and NVIDIA CEO Jensen Huang, the Commerce Department says NVIDIA and other US firms will be permitted to export AI chips to China for general commercial use cases. Exports are still banned on the very highest-end GPUs that could enable China to train advanced AI models rivaling American developments.

Raimondo said NVIDIA will collaborate with the US to comply with the export rules. Huang reaffirmed the company's commitment to adherence. The clarification may ease pressures on NVIDIA, as China accounts for up to 25% of its revenue. While optimistic about recent Chinese approvals for US joint ventures, Raimondo noted frustrations linger around technology controls integral to national security. The nuanced recalibration of restrictions illustrates the balances the administration must strike between economic and security interests. As one of the first big US technology exporters impacted by tightened restrictions, NVIDIA's ability to still partly supply the valuable Chinese chip market points to a selective enforcement approach from regulators in the future.

TrendForce investigations reveal a significant leap in the DRAM industry for 3Q23, with total revenues soaring to US$13.48 billion—marking 18% QoQ growth. This surge is attributed to a gradual resurgence in demand, prompting buyers to re-energize their procurement activities. Looking ahead to Q4, while suppliers are firmly set on price hikes, with DRAM contract prices expected to rise by approximately 13-18%, demand recovery will not be as robust as in previous peak seasons. Overall, while there is demand for stockpiling, procurement for the server sector remains tentative due to high inventory levels, suggesting limited growth in DRAM industry shipments for Q4.

Three major manufacturers witnessed Q3 revenue growth. Samsung's revenue increased by about 15.9% to US$5.25 billion thanks to stable demand for high-capacity products fueled by AI advancements and the rollout of its 1alpha nm DDR5. SK hynix showcased the most notable growth among manufacturers with a 34.4% increase, reaching about US$4.626 billion and significantly narrowing its market share gap with Samsung to less than 5%. Micron's revenue rose by approximately 4.2% to US$3.075 billion—despite a slight drop in ASP—supported by an upswing in demand and shipment volumes.

Apple has announced a partnership deal with Amkor, one of the leading chip packaging and testing manufacturers, which will build a two billion US Dollar silicon packaging facility in Peoria, Arizona. Being the only US-based OSAT (outsourced semiconductor assembly and test) provider, Amkor has decided to invest its funds and apply for the CHIPS Act, hoping to get a part of the funding from the US government's grant budget. The state-of-the-art facility in Arizona will feature over 500,000 square feet (46,452 square meters) of cleanroom space for packaging and testing chips. Using Amkor's latest technologies, the plant will support advanced computing, automotive, and communications chip packaging. It is tailored to meet the capacity needs of major customer Apple starting in 2025-2026. Apple will be the largest customer, with the Amkor facility packaging Apple-designed chips produced at the nearby TSMC wafer fabrication plant.

Building a chip packaging facility in the US with advanced packaging types means that the domestic manufacturing of advanced silicon is now possible across almost the entire supply chain, with OSAT now being present on US soil as well. In the initial phase, this partnership will enable domestic advanced packaging capabilities for leading-edge chips down to 3 nm nodes, which Apple plans to utilize for its A and M series of processors. Along with the creation of an estimated 2,000 local jobs, the investment serves as a boost to the local economy as well. Additionally, Amkor is TSMC's strategic partner, meaning future designs and packaging will cooperate without any delays.

The Chinese chipmaker Loongson has launched its newest desktop processors, the 4-core, 8-thread 3A6000 series, based on the company's LoongArch microarchitecture. We have previously reported that the company wants to match Intel's "Willow Cove" and AMD's Zen 3 instruction per clock (IPC) levels with its 3A6000 CPU series, and today we have the first preview of the performance. Powered by the LA664 cores, 3A6000 is built on a 14/12 nm manufacturing process, with clock speeds going from 2.0 to 2.5 GHz and power consumption of up to 50 Watts. It features 256 KB of L2 cache and 16 MB of L3 cache in total.

While several hardware partners are announcing new Loongson-powered solutions, ASUS China's "Uncle Tony" managed to get his hands on one of them and overclocker the CPU to 2.63 GHz on air cooling. In overclocking tests using liquid nitrogen cooling, a 3A6000 processor reached 3.0 GHz, though there are indications that there is still overhead. In standard out-of-the-box configuration, the 3A6000 performs similarly to Intel's Core i3-10100 four-core CPU, an achievement for Loongson but still behind Intel's latest offerings that clock nearly twice as high. This rapid development of Loongson IP has led to a massive performance increase, matching the IPC of modern CPUs. We are still left to see more information about these 3A6000 series SKUs; however, early benchmarks suggest a significant improvement. You can see the CPU benchmarks below, which include UnixBench and SPEC CPU 2006.

Lenovo (United States) Inc., part of the global technology corporation, Lenovo Group, filed a patent infringement action on November 15th with the United States International Trade Commission (ITC) against ASUSTeK Computer Inc. and ASUS Computer International (ASUS) for infringement of a variety of Lenovo's patents related to software, hardware, and connectivity across multiple ASUS products. The action is in response to ASUS's August 2023 filings in the Regional Court of Munich related to cellular technologies, where Lenovo had offered a cross-licensing deal as a solution.

Lenovo is a strong proponent of cross-licensing agreements, open and transparent negotiations, and licensing within the industry on fair, reasonable, and non-discriminatory (FRAND) terms. This is evidenced by the Group's ongoing litigation with InterDigital, where it advocated for greater transparency and less discrimination in licensing negotiations and was proven by the UK Court to be a willing licensee. The action against ASUSTeK reflects the Group's commitment to protecting its significant contributions to technology innovation and industry "firsts" over the past 39 years, building a portfolio of over 28,000 patents with a further 14,000 applications pending.

NVIDIA is reportedly rushing shipments of GeForce RTX 4090 GPUs to China in anticipation of expected export restrictions. We have already reported that NVIDIA might be canceling 5 billion US Dollars worth of orders. The US government will require an export license for shipping RTX 4090s to China, effectively restricting sales to the country. NVIDIA's add-in-board (AIB) partners are reportedly working at full capacity to produce as many RTX 4090 products for the Chinese market as possible before the potential restriction on November 17. While it remains unclear whether the export restrictions will ultimately be implemented, the anticipation of such measures has prompted NVIDIA and its partners to accelerate their production.

The Tweet that feeds this information is coming from Zed Wang, a well-known hardware leaker with historically accurate insights into NVIDIA's operations, who claims that "NVIDIA has been shipping tons of AD102 for AICs this week to manufacture as much RTX 4090 as possible before the original restriction date of RTX 4090 in China. It is still unclear whether the restriction will become true or not. But all AICs are at their full power in producing RTX 4090, regardless of that."

The U.S. Commerce Department seems to have thrown a big spanner into the NVIDIA machinery, by informing the company that some US$5 billion worth of AI chip orders for China falls under the latest US export restrictions. The orders are said to have been heading for Alibaba, ByteDance and Baidu, as well as possibly other major tech companies in China. This made NVIDIA's shares drop sharply when the market opened in the US earlier today, by close to five percent, dropping NVIDIA's market cap below the US$1 Trillion mark. The share price recovered somewhat in the afternoon, putting NVIDIA back in the trillion dollar club.

Based on a statement to Reuters, NVIDIA doesn't seem overly concerned, despite what appears to be huge loss in sales, with a company spokesperson issuing the following statement "These new export controls will not have a meaningful impact in the near term". The US government will implement these new export restrictions from November, which obviously didn't give NVIDIA much of a chance to avoid them and it looks as if the company is going to have to find new customers for the AI chips. Considering the current demand for NVIDIA's chips, this might not be too much of a challenge for the company though.

The Chinese semiconductor industry is advancing, and interestingly, it is growing rapidly under sanctions, even with the blacklisting of companies by the US government. China's semiconductor industry is mainly represented by companies like Semiconductor Manufacturing International Corp (SMIC) and Huawei Technologies, who are leading the investment and progress in both chip manufacturing and chip design. According to the latest interview with Bloomberg, former TSMC Vice President Burn J. Lin said that the US government and its sanctions can not stop the advancement of Chinese semiconductor companies. Currently, Lin notes that SMIC and Huawei can use older machinery to produce more advanced chips.

Even so, SMIC could progress to 5 nm technology using existing equipment, particularly with scanners and other machinery from ASML. Development under sanctions would also force China to experiment with new materials and other chip packaging techniques that yield higher performance targets. SMIC has already developed a 7 nm semiconductor manufacturing node, which Huawei used for its latest Mate 60 Pro smartphone, based on Huawei's custom HiSilicon Kirin 9000S chip. Similarly, the transition is expected to happen to the 5 nm node as well, and it is only a matter of time before we see other nodes appear. "It is just not possible for the US to completely prevent China from improving its chip technology," noted Burn J. Lin.

Today, the US authorities published the updated version of the advanced computing and semiconductor manufacturing equipment rule, imposing additional restrictions on export of advanced chip manufacturing technology. These regulations will become effective after a period of 30 days. Given the length and complexity of the regulations, ASML will need to carefully assess any potential implications. However, as to our business, from the information we received, it is our understanding that the new regulations will be applicable to a limited number of fabs in China related to advanced semiconductor manufacturing.

These export control measures will likely have an impact on the regional split of our systems sales in the medium to long term. However, we do not expect these measures to have a material impact on our financial outlook for 2023 and for our longer-term scenarios for 2025 and 2030, as communicated during our Investor Day in November 2022. ASML will seek further clarification from the US authorities on the scope of these new regulations. ASML is fully committed to comply with all applicable laws and regulations including export control legislation in the countries in which we operate.

Today, Google announced its next generation of Chromebook devices, called the Chromebook Plus, said to improve upon the legacy set by Chromebooks over a decade ago. Starting at an enticing price point of $399, this new breed of Chromebooks integrates powerful AI capabilities and a range of built-in Google apps. Notably, it features tools like the Google Photos Magic Eraser and web-based Adobe Photoshop, positioning itself as a dynamic tool for productivity and creative exploration. In collaboration with hardware manufacturers such as Acer, ASUS, HP, and Lenovo, Google is launching a lineup of eight Chromebook Plus devices on the launch date, with more possibly coming in the future.

Each model boasts improved hardware configurations over the regular Chromebook, including processors like the Intel Core i3 12th Gen or the AMD Ryzen 3 7000 series, a minimum of 8 GB RAM, and 128 GB storage. Users are also in for a visual treat with a 1080p IPS display, ensuring crisp visuals for entertainment and work. And for the modern remote workforce, video conferencing gets a substantial upgrade. Every Chromebook Plus comes equipped with a 1080p camera and utilizes AI enhancements to elevate video call clarity, with compatibility spanning various platforms, including Google Meet, Zoom, and Microsoft Teams. Set to be available from October 8, 2023, in the US and October 9 in Canada and Europe, the Chromebook Plus is positioning itself as the go-to device for many users. On the other hand, the AI features are slated for arrival in 2024, when companies ensure their software is compatible.Below you can see the upcoming models.

International Data Corporation (IDC) today published its second forecast for the worldwide quantum computing market, projecting customer spend for quantum computing to grow from $1.1 billion in 2022 to $7.6 billion in 2027. This represents a five-year compound annual growth rate (CAGR) of 48.1%. The forecast includes base quantum computing as a service as well as enabling and adjacent quantum computing as a service.

The new forecast is considerably lower than IDC's previous quantum computing forecast, which was published in 2021. In the interim, customer spend for quantum computing has been negatively impacted by several factors, including: slower than expected advances in quantum hardware development, which have delayed potential return on investment; the emergence of other technologies such as generative AI, which are expected to offer greater near-term value for end users; and an array of macroeconomic factors, such as higher interest and inflation rates and the prospect of an economic recession.

The escalating challenges in acquiring high-performance x86 servers have prompted Chinese data center companies to accelerate the shift to Arm-based system-on-chips (SoCs). Investment banking firm Bernstein reports that approximately 40% of all Arm-powered servers globally are currently being used in China. While most servers operate on x86 processors from AMD and Intel, there's a growing preference for Arm-based SoCs, especially in the Chinese market. Several global tech giants, including AWS, Ampere, Google, Fujitsu, Microsoft, and Nvidia, have already adopted or developed Arm-powered SoCs. However, Arm-based SoCs are increasingly favorable for Chinese firms, given the difficulty in consistently sourcing Intel's Xeon or AMD's EPYC. Chinese companies like Alibaba, Huawei, and Phytium are pioneering the development of these Arm-based SoCs for client and data center processors.

However, the US government's restrictions present some challenges. Both Huawei and Phytium, blacklisted by the US, cannot access TSMC's cutting-edge process technologies, limiting their ability to produce competitive processors. Although Alibaba's T-Head can leverage TSMC's latest innovations, it can't license Arm's high-performance computing Neoverse V-series CPU cores due to various export control rules. Despite these challenges, many chip designers are considering alternatives such as RISC-V, an unrestricted, rapidly evolving open-source instruction set architecture (ISA) suitable for designing highly customized general-purpose cores for specific workloads. Still, with the backing of influential firms like AWS, Google, Nvidia, Microsoft, Qualcomm, and Samsung, the Armv8 and Armv9 instruction set architectures continue to hold an edge over RISC-V. These companies' support ensures that the software ecosystem remains compatible with their CPUs, which will likely continue to drive the adoption of Arm in the data center space.