Hello everyone! This is Lauly and sends me greetings from Summery Taipei.
It was a very fruitful few weeks for me. Although I caught a bad cold at the annual Computex fair in mid-May, I was able to talk to many suppliers about the latest AI server solutions, from advanced liquid cooling systems and power supplies to cables, GPU boards and final assembly. It was a valuable experience to be exposed to all these components and components and to hear directly from experts how these technologies come together to create the world’s most powerful AI supercomputer.
That being said, for me, the highlight of the past few weeks has been attending Lady Gaga’s Mayhem concert in Singapore right after Computex was over. Her performances are so powerful, her passion for music and art is so contagious that I clapped too hard and broke the lens of my iPhone camera. It took me a few hours to realize that that’s why all my photos of Gaga were so blurry.
After the show my friend and I were stuck in front of the National Stadium MRT station for over 30 minutes. However, the station staff clearly had a lot of experience handling these situations. One of them sings Gaga’s song to guide the crowd, waiting to enter the station.
Back at work, I had the rare opportunity to join a small group of reporters on a tour of two Yageo manufacturing facilities in Kao Sion, southern Taiwan last week. Yageo is the world’s second largest manufacturer of passive components after Japan’s Murata, with customers including Apple, Nvidia, HP, Dell and Tesla.
I was fascinated by how clean and automated Yageo plants are. I’ve heard a lot about passive components, but I was excited to see and touch the small components. The smallest components are smaller than ground pepper grains. They are so small that you can hold 3-4mn resistors at a time in your hand, but they are essential for everything from smartphones and notebooks to servers and cars.
Yageo is keen to help people outside of Taiwan learn more about the company. They are about to acquire a smaller peer, which is Japanese Shibaura electronics. This is a move that Yageo Chairman Pierre Chen considers to be “a favorable to both parties.”
Speaking of “winning,” US President Donald Trump looks forward to successful pushing to Onshore Tech Production: AI Servers, not at least soon, and not to the iPhone.
I recently met a longtime source who is a former iPhone Assembler executive. We talked about why it’s so difficult to make these devices in the US.
The source provided the following example: To install a WiFi module on an iPhone, you must first hand insert a small module into the side of the metal frame of the phone, hold it in place on the printed circuit board, then complete the process by eliminating a small amount of adhesive.
“No automated tools will immediately replace that process, let alone bringing the entire iPhone production flow to the US. Tom Cruise’s mission: more than impossible,” the source said.
I agree with him.
AI on iPhone
US President Donald Trump has repeatedly called on Apple CEO Tim Cook to iPhone Manufacturing Home, but is a quick formation of the supply chain for AI servers that could be his first “made in America” Tech Triumph, writing Nikkei Asia’s Lauly Li and Cheng Ting-Fang.
Nvidia, the world’s AI chip leader, announced in April it plans to invest $500 million to create a supercomputer in the US. Since then, at least eight suppliers have said they will build new capabilities in the country.
Foxconn, the world’s largest server builder and leading NVIDIA AI supplier, is fiercely expanding capacity in Houston, Texas for its American company. Taiwan’s contract electronics giant is planning to bring the majority of its production of graphics processing unit (GPU) modules and boards to the US for the first time. TSMC’s $165 billion Arizona expansion will play a key role in building the US AI server supply chain.
Ren speaks
Huawei founder Ren Zhengfei broke the silence about the company’s artificial intelligence chip efforts in a rare interview with Chinese state media earlier this week.
Speaking to people’s daily life, the hideout executive said the US was “exaggerating Huawei’s capabilities,” adding that Financial Times’ Eleanor Olcott wrote.
Ren’s comments show rare public intervention from the Huawei chief, who has withdrawn from the spotlight in recent years, and have not previously been addressed to the company’s AI chip series, Ascend.
His remarks came amid growing concern from the chief of Nvidia Jensen Huang, who recently warned that Huawei is emerging as a “formal” competitor. Huang argued that Washington’s restrictions on Washington’s chip exports to China have misrepresented the Chinese group’s position and inadvertently helped threaten the American lead in AI technology.
Ren admitted that Huawei’s chips are behind their counterparts in performance, but suggested that clustering multiple chips within the server could bridge the gap. He also highlighted China’s strengths in the AI race, citing its rich energy supply, vast population and advanced communications infrastructure.
Cat and mouse industry
Ukraine’s successful strike against Russian strategic bombers using cheap drones on June 1 highlighted how unmanned aerial vehicles (UAVs) could reconstruct modern warfare. UAVs, also known as drones, have emerged as important global business.
Japanese motorcycle manufacturer Kawasaki Motors and automaker Subaru are two examples of newcomers looking to enter the rapidly growing market. Kawasaki Motors, which works with French startup Voltaero, aims to produce 5,000 drone engines per year by 2030.
Meanwhile, Australia’s drone shields are growing rapidly behind the demand for counter-drone defenses, Nikko Asia’s Sean Turton writes. From around 90 employees two years ago to 275, the startup, founded in 2014, is currently an ASX listed company with a market capitalization of $1.3 billion ($848 million). Its drone shielding systems have been deployed in dozens of countries, including Ukraine.
Competition with time
Major gaming PC manufacturers and Nvidia graphics card suppliers MSI and Gigabyte are in a hurry to produce and ship as many products as possible to the US market before the Trump administration’s bounty period expires on July 9, writes Lauly Li of Nikkei Asia.
MSI Chairman Joseph Hsu said the Taiwanese company was building stocks in the US market ahead of the tariff war escalation in April. However, the latest products were only available around April, so there was little that could be done in advance.
“Take up Nvidia’s newly launched graphics card, for example. Even if you ship it to the US, it’s sold out quickly, so it’s hard to build stock there,” HSU said. “We’re competing against time.”
Gigabyte Chairman Dandy Yeh is also an AI server supplier for Nvidia, and his company said last month that he received a rush order as a US client wanted to ship more products due to the installation of tariff uncertainty. He said the tariff war and the White House’s unpredictable policies have led to uncertainty for the high-tech industry as a whole, particularly export-oriented companies.
Suggested Reading
Trump’s Eye Relaxing Our Chip Export Restrictions to Secure China’s Rare Earth (FT)
China’s key mineral curbs shake AI data center suppliers (Nikkei Asia)
Honda invests in Japanese chip maker Racquis (Nicki Asia)
Qualcomm launches AI R&D Centre in Vietnam (Nikkei Asia)
Prices of Chinese drone parts double export control bites (ft)
China’s INSTA360 targets US growth after a $270 million IPO despite the trade war (Nikkei Asia).
Can Japan hold that “essential” company? (ft)
Chinese regulators are trying to slow down the deployment of autonomous driving capabilities in cars (FT)
“I’m very interested” in talking about digital trade with Japan: Robbie (Nickey Asia)
FT Podcast: Trump’s Tech Brothers: Can Tim Cook Save Apple from the Trade War? (ft)
#Techasia is coded at Katherine Creel, Nikkei Asia in Tokyo, with support from FT Tech Desk in London.
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