Market Insights

Tech, AI and Semiconductor Industry News: Oct Week 1

1. Markets

Vietnam to Launch Plants and Transition to High-Tech Sectors by 2030

Vietnam is strategically transitioning from labour-intensive industries to high-tech sectors. Specifically, the country will establish at least one semiconductor fabrication plant and 10 packaging plants by 2030. The government’s aims to generate revenue of $25 billion by 2030 and cultivate a workforce of 50,000 semiconductor engineers. The long-term goal includes expanding to three fabrication plants and twenty packaging plants, targeting annual revenues of $100 billion by 2050.

Takeaway: To support this transition, Vietnam plans to launch a fund to assist foreign investors, addressing the challenges posed by the global minimum business tax.

Read the full article Vietnam’s industry transformation plans.

2. Business Moves

i. Samsung Invests US$1.8b in OLED Plant in Vietnam

Samsung Display is set to invest US$1.8 billion in a new factory in northern Vietnam’s Yen Phong industrial park in Bac Ninh province. This facility will focus on producing OLED displays for automotive and tech applications. The investment will increase Samsung’s total contributions to Bac Ninh from US$6.5 billion to US$8.3 billion.

Takeaway: The move reflects Vietnam’s growing appeal as a manufacturing centre for electronics firms.

Read the full article Samsung’s OLED plant in Vietnam.

ii. TSMC and Samsung Considers Having Chip Plants in the UAE

Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics are exploring the possibility of establishing significant chip manufacturing facilities in the UAE to meet the growing demand for AI computing. Executives from both companies have recently visited the UAE for discussions about plans that could potentially mirror TSMC’s advanced operations in Taiwan.

Takeaway: However, these initiatives are still in the early stages and face various technical and logistical challenges, alongside high costs that may possibly exceed US$100 billion. The UAE has been trying to position itself as a regional hub for AI and semiconductor production, as Gulf states look to diversify their economies away from oil dependency. However, efforts to build a semiconductor industry in the region have encountered hurdles due to a lack of necessary infrastructure to justify the construction of chip plants. There are also geopolitical concerns, particularly regarding the US government’s vigilance over sensitive technology transfers.

Read the full article TSMC and Samsung’s interest in the UAE.

iii. Alibaba Releases Open-Source AI Models and Text-to-Video Tech

Alibaba ramped up its AI initiatives by launching over 100 new open-source models derived from its Qwen 2.5 large language model, released in May. This move is part of a broader strategy to enhance its generative AI capabilities and compete against both domestic rivals and international players such as OpenAI. The newly released models, which vary in size from 0.5 to 72 billion parameters, are designed to support applications in various sectors including automotive, gaming, and scientific research. Alibaba also introduced a new text-to-video model within its Tongyi Wanxiang image generation lineup, joining the increasing number of Chinese tech companies venturing into this emerging market.

Takeaway: Unlike its competitors, who have leaned towards closed-source models, Alibaba is adopting a hybrid approach, investing in both proprietary and open-source AI development. Additionally, further positioning itself within the competitive landscape of generative AI.

Read the full article about Alibaba’s open-source AI models.

iv. Meituan Raises Money in China’s First Tech Debt Deal of 2024

Meituan, China’s largest delivery platform, successfully raised $2.5 billion through a two-part US dollar bond deal, marking the first offshore technology sector debt issuance in China for 2024. The deal consists of a 3.5-year bond that raised $1.2 billion, priced at 115 basis points over three-year Treasuries, and a five-year bond that brought in $1.3 billion, priced at 125 basis points over five-year Treasuries. Initially, Meituan aimed to raise $2 billion but exceeded this amount, reflecting strong investor interest amidst a recovering tech market.

Takeaway: Meituan’s successful bond issuance indicates growing investor confidence in the Chinese tech sector, setting a positive precedent for future financing opportunities in the industry, particularly as companies seek capital amid economic recovery efforts.

Read the full article about Meituan’s tech debt deal.

3. People Moves: OpenAI and Stability AI

OpenAI: Three high-ranking executives at OpenAI, including Chief Technology Officer Mira Murati, have announced their departures amidst significant organisational changes and ongoing fundraising efforts. The company is attempting to secure a $6.5 billion financing round, which would value it at $150 billion, while also transitioning to a for-profit benefit corporation model. Murati, who has been with OpenAI for over six years and briefly served as CEO, cited her desire for personal exploration as a reason for her departure. This comes after a series of exits from the company, raising concerns about the potential impact on fundraising efforts.

Stability AI: James Cameron, renowned for directing blockbuster films like “Titanic” and “Avatar,” has joined the board of Stability AI, an artificial intelligence startup aiming to innovate visual media. This move aligns with the growing interest from Hollywood in generative AI, especially following the success of OpenAI’s text-to-video tool, Sora.

Read the full article about the exit of OpenAI’s executives.

Read the full article about Cameron’s role at Stability AI.

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Image Credits:

• AFP
• Bloomberg