Mackenzie Hawkins

China Is Cutting Off Drone Supplies Critical to Ukraine War Effort China’s escalating conflict with the US over trade is now extending to the drones that have become a vital part of Ukraine’s defense.

in recent weeks, we'd heard that companies making drones for the war in Ukraine had seen supplies capped or cut off. next big escalation in trade war.

here's the story (w/ @mackhawk.bsky.social, @gmvolpi.bsky.social & others)🎁link

China imposed new export controls on the US for critical minerals. Will they be effective? We're skeptical. Read the full piece on the Terminal.

blinks.bloomberg.com/news/stories...

Microchip CEO Sanghi’s remarks about pausing the company’s Chips Act application speak to one of the key challenges of semiconductor industrial policy

Government officials have to make long-term bets in an industry that’s intensely cyclical:

Microchip Pauses Chips Act Application After Scaling Back Plans Microchip Technology Inc. is pausing its application for US semiconductor subsidies, people familiar with the matter said, making it the first known company to step back from a program designed to rev...

Microchip has paused its Chips Act application process, the CEO said Tuesday, confirming our earlier reporting

The company was in line for $162m. It’s struggling with too much inventory & said Monday it’ll shutter a plant in Arizona

www.bloomberg.com/news/article...

US Tightens Curbs on China’s Access to AI Memory, Chip Tools The US unveiled new restrictions on China’s access to vital components for chips and AI, escalating a campaign to contain Beijing’s technological ambitions but stopping short of earlier proposals that...

The Biden admin unveiled the new semiconductor controls yesterday, escalating a yearslong campaign to limit China’s chip progress — but stopping short of earlier proposals that would have sanctioned more key Chinese firms

www.bloomberg.com/news/article...

China Targets Critical Metals in Tit-for-Tat Response to US China announced an outright ban on exports of several materials with high-tech and military applications, in a tit-for-tat move after US President Joe Biden’s government escalated technology curbs on ...

In response to new US chip curbs:

- Beijing banned exports to US of gallium, germanium, antimony & superhard materials; will place tighter controls on graphite
- Chinese internet, semiconductor & auto industry groups urged caution when buying US chips

www.bloomberg.com/news/article...

Intel CEO Forced Out After Board Grew Frustrated With Progress Intel Corp. Chief Executive Officer Pat Gelsinger was forced out after the board lost confidence in his plans to turn around the iconic chipmaker, adding to turmoil at one of the pioneers of the techn...

Intel CEO Pat Gelsinger was forced out after the board lost confidence in his plans to turn around the iconic chipmaker, adding to turmoil at one of the pioneers of the technology industry

Via my colleagues Ian King, Liana Baker & Ryan Gould

www.bloomberg.com/news/article...

Japan Earmarks Extra $9.9 Billion for Chips and AI This Year Japan is allocating another ¥1.5 trillion ($9.9 billion) to boost its chip and artificial intelligence endeavors including moonshot foundry project Rapidus Corp.

Japan is spending another $9.9 billion in chips and AI to keep pace with China and the US on technologies policymakers see as key to national security www.bloomberg.com/news/article...

US Floats Tougher Trade Rules to Rein In China Chip Industry The Biden administration, facing pushback to its chip crackdown on China, has told allies that it’s considering using the most severe trade restrictions available if companies such as Tokyo Electron L...

For more on the past several months of chip toolmaker lobbying & US negotiations with Japan & the Netherlands…

1. www.bloomberg.com/news/article...

2. www.bloomberg.com/news/article...

3. www.bloomberg.com/news/article...

4. www.bloomberg.com/news/article...

US Weighs Sanctioning Huawei’s Secretive Chinese Chip Network The Biden administration is considering blacklisting a number of Chinese semiconductor firms linked to Huawei Technologies Co. after the telecom giant notched a significant technological breakthrough ...

Key change — as it stands today — is which Chinese firms will go on the entity list. Biden admin had mulled sanctioning 6 Huawei suppliers, incl. CXMT, & knew of at least 6 more

The latest rules sanction only some of those 6, a list we reported in March: www.bloomberg.com/news/article...

ASML, Tokyo Electron Gain on Report US Allies Exempt From Curbs The US is preparing to exclude semiconductor-equipment makers in the Netherlands and Japan from its latest round of restrictions targeting China, people familiar with the situation said, while warning...

The current proposal would still exempt Japan & the Netherlands (meaning Tokyo Electron & ASML) from additional restrictions on chip equipment sales, as we reported in July: www.bloomberg.com/news/article...

& would also curb HBM sales, as we reported then: www.bloomberg.com/news/article...

US Preps China Chip Curbs That Stop Short of Early Proposals The Biden administration is weighing additional curbs on sales of semiconductor equipment and AI memory chips to China that would escalate the US crackdown on Beijing’s tech ambitions but stop short o...

Biden admin plans to unveil new chip export controls on China as soon as next week, as WIRED first reported (though timing has slid before & could slide again)

Latest draft — not yet final — includes fewer Huawei supplier sanctions than earlier proposals
www.bloomberg.com/news/article...

South Korea Eyes $10 Billion in Support for Chipmakers in 2025 South Korea plans to bolster its fiscal support for domestic chipmakers next year, shoring up an industry that may face unfavorable policies from the incoming Trump administration and more intense cha...

South Korea is eyeing $10.2 billion in support for domestic chipmakers next year
www.bloomberg.com/news/article...

Intel’s German Plant Delay Lands a Blow to EU’s Chip Ambitions Intel Corp.’s decision to postpone its planned factory in Germany marks a setback for the European Union’s semiconductor ambitions and will reignite controversy in Berlin over where to allocate €10 bi...

Germany is actually trying to do this & earmarked €10b for Intel from the EU Chips Act

Then Intel delayed its Magdeburg fab by at least two years (along with delays in Poland & Malaysia)

www.bloomberg.com/news/article...

This is very kind!! Thank you for reading

Zooming out: The Biden admin has now finalized almost 50% of $39b in Chips Act manufacturing funds

Officials still have almost 20 preliminary deals to close — & more than $2b left to allocate (to say nothing of R&D funding)

Trump’s win sets a clear deadline: www.bloomberg.com/news/article...

7/7

Intel’s Money Woes Throw Biden Team’s Chip Strategy Into Turmoil The Biden-Harris administration’s big bet on Intel Corp. to lead a US chipmaking renaissance is in grave trouble as a result of the company’s mounting financial struggles, creating a potentially damag...

Things got trickier after Intel’s disastrous Aug. earnings report

Some sticking points in talks this fall:
1. How much info Intel would disclose about its tech roadmap: www.bloomberg.com/news/article...
2. What happens in the event of an acquisition or spinoff: www.bloomberg.com/news/article...

6/

The March spat over Intel’s military award delayed all the big preliminary announcements bc it wasn’t clear how Commerce would make up the shortfall

They ultimately scrapped a commercial R&D program — & folded some of the new obligations into Intel’s existing $

From Sept:

5/

Why did US officials reduce Intel’s grant?

It’s not bc of Intel’s business problems. It’s bc the Pentagon/Congress forced Commerce to spend $3b on Intel’s military chips award

We reported in March that the move could lower the total $ for Intel: www.bloomberg.com/news/article...

4/

Intel decided not to take $11b in loans

It’s the third major company to turn down loans, along w Samsung (all along) & GlobalFoundries (in final deal)

Chips Act $75b loan authority will be *way* underutilized. Important to note when thinking about future industrial policy

3/

First, the basics:

Intel’s grant will support projects in AZ, OR, NM & OH

The first 3 will get some $ this year because they’ve hit milestones. Ohio is delayed & hasn’t yet qualified for any $

The grant doesn’t cover Intel’s 2nd Ohio fab bc it’ll come online after 2030

2/

Intel Gets $7.9 Billion Chips Award for US Factory Expansion The Biden administration has finalized a deal to give Intel Corp. nearly $7.9 billion in federal grants, the largest direct subsidy from a program to boost domestic semiconductor manufacturing.

Intel has reached a final deal for a nearly $7.9b Chips Act grant & will get at least $1b of that this year

The award is smaller than what was proposed in March (not bc of Intel’s financial woes, but rather bc of a military chips deal)

Free link &🧵:

1/ www.bloomberg.com/news/article...