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**Asia Tech Stocks Tumble Amid Intensifying Sino-US Chip War** The tech world has been witnessing seismic shifts, sending ripples across Asia's stock markets. On July 18, 2024, a significant downturn was observed in Asian tech stocks due to the escalating Sino-US chip war. The US has imposed strict restrictions on exporting advanced semiconductor technology to China, disrupting supply chains and affecting several Chinese tech giants. In response, China is accelerating its indigenous chip development but hasn't yet filled the market void, resulting in investor apprehension and capital outflows. Major tech companies like TSMC, Samsung, and Huawei have seen significant stock price drops, and the ripple effects are evident in broader economic impacts like job losses and currency fluctuations. The repercussions extend beyond financial markets. Research in advanced semiconductors has slowed, causing product shortages and price hikes in consumer electronics. The global supply chain for electronics is disrupted, affecting numerous countries. Concerns over intellectual property theft are rising as China advances its chip development, adding another layer of international tension. In the face of these challenges, companies are adapting by diversifying supply chains, forming strategic alliances, heavily investing in R&D, and lobbying for balanced policies. Investors should expect high volatility, consider emerging markets, focus on long-term investments, and employ strong risk management strategies. **Next steps**: Ensure financial resilience during these times of uncertainty. Reach out to our team at Together CFO or set up a call to discuss how we can optimize your tax strategies and secure your investments. Click here to schedule a call: **_https://lnkd.in/gNmSEaig.

Taiwan shares notched fresh all-time highs on Friday as a booming demand for artificial intelligence and semiconductor technology boosts investor optimism for the country’s tech firms. Market watchers expect the rally in Taiwan stocks to strengthen further. The Taiwan Weighted Index hit an intraday high of 20,296 before paring gains, according to data from Factset. It could go up to 24,000 before the year ends, according to Paul You, chairman of First Securities Investment Corporation. The global demand for AI has been robust in the past two to three months and remains “very promising,” You said. Asia-Pacific’s tech sector has been expanding on the back of the semiconductor boom even as other industries struggle amid global macro uncertainty. That’s setting the stage for an economic boom for the island, which boasts the “strongest supply chain for AI service manufacturing,” according to You. #Asia #China #market

Asia is expected to lead global economic growth in 2024, with China, India, and the broader region outpacing the US and Europe. Global manufacturing recovery, particularly the increased demand for semiconductors, will drive regional economic growth. Meanwhile, semiconductor stocks are expected to propel South Korea’s and Taiwan’s equity markets against a backdrop of growing investments in AI. Read the full article to discover how these unique potential opportunities in Asia can enhance your investment strategy: https://okt.to/y7r2sT #MultiAssetInvestment #AsiaInvestment #Semiconductor

Semiconductors are critical to the global economy, but the supply chain has been vulnerable due to geographic concentration and recent disruptions like the pandemic. Major economies like the U.S., EU, and China have announced industrial policies to incentivize geographic diversification of semiconductor manufacturing and innovation to improve resilience. Companies are responding with projected investments of $2.3 trillion from 2024-2032, with the U.S. capturing 28% compared to just 9% pre-CHIPS Act. However, challenges remain, such as industry cyclicality, workforce issues, and potential trade disruptions that could undermine the benefits of a global supply chain. #Semiconductors #CHIPS Boston Consulting Group (BCG)

NEWS JUST IN. A few days ago, at the inauguration of TSMC’s first chip plant in Japan, Morris Chang founder of TSMC, world’s largest chip company, declared that this will help their "chip renaissance" as the country attempts to regain the chipmaking glory of the 1980s. [see comments]. Earlier in the month, TSMC announced they are committing to build a second fab there too. Many don’t realise Japan was once a giant in semicon. Then she got slayed.  For being too successful.  The 1970s and early 1980s were characterised as the ‘Japanese economic miracle’ with impressive growth, low inflation, and rising living standards.  Sony pioneered consumer electronics like the Walkman and Trinitron. Panasonic became known for video recorders, TV sets and audio equipment. Sharp led on LCD screens. Even NEC and Toshiba dominated early personal computers. They each became household names. By investing in R&D, Japanese companies made breakthroughs in semiconductor technology and memory manufacturing. US companies like Intel chose to focus on processors. As the world sped towards a future driven by computers, the internet and data, Japan ended up capturing 80% of the DRAM market worldwide. That was the problem. Under the guise of reducing the US trade deficit between G-5 nations, the Plaza Accord was signed in 1985 to devalue the US dollar - to ‘stimulate global economic growth’.  This eroded Japan's global economic leadership and competitiveness. It had minimal impact on the other G-5 nations (US, UK, France, Germany). Economists refer to the 1990’s as ‘The Lost Decade’ for Japan. The rapid appreciation of the Yen caused unimaginable damage to Japan’s economy. Stagnant growth. High unemployment. Banking crisis. GDP growth averaged less than 1%. Prices fell year on year, leading to a deflationary spiral; consumers delayed spending, further slowing the economy. Property prices burst leading to widespread defaults and a credit crunch, making it difficult for businesses to borrow and invest. Throughout this period of immense economic hardship, the country managed to maintain a high standard of living, and continued to focus on technology. Society did not collapse. Japan still pushed ahead. Things have since improved. Japan is now making a comeback. With TSMC's investment (named JASM, Japan Advanced Semiconductor Manufacturing) and its own highly skilled workforce, the country has an opportunity to re-establish itself as a major player in the global semicon market. In NAND memory, CMOS sensors and power semiconductors. Perhaps others too. We need to watch this space. Indeed, the sun always rises from the East. Also watch out for friends inviting you to the table, you might be on the menu. [pix: at Osaka Castle after meetings at Panasonic during the hey days of the internet] Follow ET Tan for more provoking thoughts on tech and humanity, who had the privilege of working with many Japanese companies including Sony to develop cool products.

Tech Drops On China Restriction Fears The world’s largest technology companies got hammered as concern about tighter US restrictions on chip sales to China spurred a selloff in the industry that has led the bull market in stocks. Chipmakers faced intense pressure everywhere, from the United States to Europe and Asia. American powerhouses Nvidia, Advanced Micro Devices, and Broadcom pushed a widely watched semiconductor index down about 7%, the highest since 2020. Across the Atlantic, ASML Holding NV fell more than 10% despite the Dutch major reporting solid orders. Tokyo Electron drop drove the Nikkei 225 Stock Average lower. Wednesday’s action was consistent with a previous trend in which capitalization-weighted indices underperformed the typical stock due to weakness in the megacaps that dominate them. With companies like Apple Inc. and Microsoft Corp. accounting for 7% of the S&P 500, losses are difficult to counterbalance even when the majority of the index’s components are rising, as they are today. The Biden administration told allies it’s considering severe curbs if companies like Tokyo Electron and ASML keep giving China access to advanced semiconductor technology. The US is also weighing more sanctions on specific Chinese chip firms linked to Huawei Technologies. The S&P 500 index lost 1.4%. The Nasdaq 100 has its worst day since 2022. A measure of the “Magnificent Seven” largest corporations fell 3.4%. The Russell 2000 index of small enterprises fell 1.1%. Wall Street’s fear guage, the VIX, reached its highest level since early May. The bond market saw small moves. The Federal Reserve’s Beige Book showed slight economic growth and cooling inflation. The most- notable speaker on Wednesday was Governor Christopher Waller, who said the Fed is getting “closer” to cutting rates, but is not there yet. The yen led gains in major currencies, up almost 1.5%.

- Economic challenges early in the week with strong recovery! - HP’s strategic shift: Southeast Asia emerges as a new tech hub. - Infineon in Malaysia: A power move in the global semiconductor race. Asia continues to innovate and dominate, fueled by the storm brewing in the global economy. The uncertainty in the United States, coupled with China’s strategic withdrawal, has opened doors for nations like Malaysia and Thailand to rise. The changes in the last few weeks alone have been significant. HP’s aggressive shift away from China, moving a substantial part of its production to Southeast Asia, signals a new era. This move is not just about avoiding geopolitical risks but about tapping into the burgeoning potential of the region. Infineon’s massive investment in Malaysia underscores this shift, as the country positions itself at the forefront of the global semiconductor supply chain. The market was in freefall on Monday. Japan’s index hit its worst point drop ever. Taiwan’s TAIEX plunged too, losing over 1,800 points. The day before, Taiwan celebrated gold in badminton at the Paris Olympics, but the stock market had its own sale. Tuesday and Wednesday saw some recovery, but fear lingered. Big tech stumbled, Intel cut 15,000 jobs, and whispers of a U.S. recession grew. The yen surged, tensions in the Middle East simmered, and markets trembled. At Delta Electronics, the forecast dimmed again for electric vehicles. The demand that once surged had vanished. Now, it was a test of survival. As the West falters, Asia steps forward. The region’s agility and ability to adapt quickly to market changes demonstrate its resilience. With tech giants and manufacturers seeking new hubs, Asia is not just surviving; it’s thriving. The innovation that was once centered in China is now spreading across the continent, and the last few weeks have only confirmed this trend. #AsiaRising #TechInnovation #GlobalShift #ChinaWithdrawal #SupplyChain #SoutheastAsia #EconomicPowerhouse

Strengthening ties between Japan and the U.S. in the tech sector would be a strategic move toward mutual growth and innovation. Both sides have much to gain from key partnerships and investments, particularly as both countries are seeking to increase their domestic semiconductor capabilities. Collaboration today is key to promoting technological advancement and a more interconnected and resilient global economy. #Semiconductors #Japan #US

"China is seeking to dominate the market for less advanced chips (28nm and above), and the Western CHIPS Acts actually does not address this issue. The stated goal of the Western policy is chip supply chain independence for the United States and the EU. But China is expected to dominate 50% of the less advanced chip market by 2030 and, by this fact alone, the West will lose out on the supply chain control that it is aiming for. While the CHIPS Acts are not bad initiatives (...) they are insufficient if the goal is to control Western chip manufacturing. This is because the West is funding companies that are investing heavily in profitable chips; however, its vulnerability concerning lower-tech, yet equally critical chips, is set to persist. These chips are fundamental components in critical everyday objects, including medical instruments, cars, planes, and most importantly, military hardware. Roughly 70% of the produced chips in the world are low-tech or mature ones. Only about 30% belong in the advanced chips category. (...) the economics of operating a modern fab are staggering. A reasonably sized fab might cost around $5 billion in capital expenditures, which requires generating $50-$70 in revenue per second to achieve a 20% return at the outset. Even after it depreciates, it still has to generate $30-$40 (...) If everything goes well with implementation, it will increase the production capacity of the Western economies in the chips sector. But then to whom will these newly added mature chips be sold given that these economies are overwhelmingly de-industrialized?" #semiconductorindustry https://lnkd.in/e7H5Cbbi

⚡️ Taiwan’s Economic Evolution: Beyond Semiconductors ⚡️ As Taiwan continues to thrive in the global economy, its diversification strategy has expanded far beyond the semiconductor industry. From precision instruments to industrial PCs and server manufacturing, Taiwan’s commitment to innovation is driving growth across multiple sectors. This broadening of Taiwan’s industrial base not only strengthens its economy but also positions it as a leader in cutting-edge technology. Amidst this economic evolution, what opportunities will your business tap on to boom? If you are a Taiwanese startup seeking guidance to excel or an international business hoping to enter this thriving market, contact us at rachel@mesh-strategy.com or book our time at https://lnkd.in/gGH3SFEw For the complete article, read https://lnkd.in/gW6RwWFU Like this perspective? For more insights, follow Mesh Digital Strategy. #TaiwanEconomy #Innovation #TechIndustry #TaiwanStartups