“It could not have been a warmer reception than what we received,” said American businessman Jeff Bowman after spending a week in China last month. Bowman is the CEO of the US materials science company Cocona, with his unique sweat-drying Masterbatch additive for yarn garnering significant interest in the China-basedContinue Reading
Only one company has bid for the commercial development of Krung Thep Aphiwat Central Terminal despite three firms having purchased invitations to tender, the State Railway of Thailand (SRT) announced on Friday.
Ekkarat Sriarayanpong, head of the SRT governor’s office, said the SRT had four projects that recently opened for bidding. First was the commercial use project the SRT expects to have a private company develop, covering 47,675 square metres at the central terminal.
Three companies procured invitations to tender: Central Pattana, King Power Suvarnabhumi and Prem Group Engineering. However, only Prem Group Engineering ended up bidding, Mr Ekkarat said.
The second project is managing a 2,303m² advertising space at the central grand station. Plan B Media and King Power International purchased invitations to tender, but neither has bid for the project, he added.
The third project is to develop a 3,759m² space at 12 stations on the Red Line electric commuter train service, which connects the central station to the Rangsit area in Pathum Thani. No one purchased an invitation to bid, Mr Ekkarat said.
The fourth project is to manage 2,080m² of advertising space at the 12 Red Line stations. Plan B Media and King Power International also bought invitations to tender but elected not to proceed.
Mr Ekkarat said after the deadlines to submit the bidding proposals for all four projects ended in the middle of this week, only one company — Prem Group Engineering — bid for the first project.
The SRT will review the company qualifications and will announce the result next Thursday, he said.
The SRT will then check its technical proposal on Aug 15 and open the bid proposal on Aug 16 the following day.
As for the remaining three projects for which the SRT has yet to find bidders, its selection committee will conclude a report for the next board meeting to find solutions, he said.
Krung Thep Aphiwat Central Terminal, formerly known as Bang Sue Grand Station, in Chatuchak district, Bangkok. (Photo: Nutthawat Wichieanbut)
The second big part is this: Received wisdom then and even now has always been that it’s very hard for old companies to change, it’s very hard for old people to change. And it’s something that I’ve never believed … look (at) those in their 40s and 50s and 60s. We’re all changing in our personal lives.
When people have changed in their personal lives, why do we think they can’t change in a company? I have this big belief that the problem is not with human beings; the problem is with the company.”
Gupta: When you’ve seen the bottom of the barrel, which is what I thought I was seeing (when his own business went bust during the dotcom crash), it changes your outlook. It changed my appetite for risk. At the end of the day, the change is so rapid and change is accelerating … without making some bets, without taking some moonshots, or taking some risks, you’re not going to succeed.
In my 20s and 30s, building a career was probably my single biggest driver. How do I make sure that I can get ahead, I get promoted, I get a bigger job, I become the youngest managing director?
The second big part is this: Received wisdom then and even now has always been that it’s very hard for old companies to change, it’s very hard for old people to change. And it’s something that I’ve never believed … look (at) those in their 40s and 50s and 60s. We’re all changing in our personal lives.
When people have changed in their personal lives, why do we think they can’t change in a company? I have this big belief that the problem is not with human beings; the problem is with the company.”
Gupta: When you’ve seen the bottom of the barrel, which is what I thought I was seeing (when his own business went bust during the dotcom crash), it changes your outlook. It changed my appetite for risk. At the end of the day, the change is so rapid and change is accelerating … without making some bets, without taking some moonshots, or taking some risks, you’re not going to succeed.
In my 20s and 30s, building a career was probably my single biggest driver. How do I make sure that I can get ahead, I get promoted, I get a bigger job, I become the youngest managing director?
China has called on the United States to take concrete actions to create a favorable environment for both sides to achieve mutual benefit.
Beijing hopes US Treasury Secretary Janet Yellen, a dovish American official who began a four-day trip to China on Thursday, will take home to President Joe Biden a message: There will be no winners in trade wars and an economic “decoupling.”
Following China’s unveiling earlier this week of export controls of gallium and germanium, raw materials of semiconductors, Yellen met with Chinese Premier Li Qiang at the Great Hall of the People in Beijing on Friday.
She told Li that the US seeks to have healthy economic competition, instead of a “winner-take-all” fight, with China, to benefit both countries over time. She also said that in certain circumstances the US would need to pursue targeted actions to protect its national security.
Yellen is the second high-ranking US official to visit China after US Secretary of State Antony Blinken met with Chinese President Xi Jinping in Beijing on June 19.
These talks were held against the backdrop of an intensifying chip war in which Japan and the Netherlands will restrict the exports of their chip-making raw materials and equipment to China on July 23 and September 1, respectively.
Media reports said last week that Washington will soon announce its plan to ban Nvidia from shipping its A800 and H800 artificial intelligence chips to China, and also restrict US funds from investing in China’s high-technology sectors later this month. To retaliate, China said Monday that it will require companies to apply for licenses to export gallium and germanium from August 1.
When Yellen arrived in Beijing on Thursday, she tweeted that she was going to “seek a healthy economic competition that benefits American workers and firms and to collaborate on global challenges.”
“We will take action to protect our national security when needed, and this trip presents an opportunity to communicate and avoid miscommunication or misunderstanding,” she said in the tweet.
Chinese officials and state media have so far used a more friendly tone to describe Yellen’s China trip than they did with Blinken’s.
“I am very happy to meet you in Beijing,” Li told Yellen at the beginning of their meeting on Friday. “Not only China and the United States, but also people in the whole world, are paying close attention to your visit to Beijing.”
“Yesterday, the moment you arrived at our airport and left the plane, we saw a rainbow,” he said. “I think it can apply to the US-China relationship too: after experiencing a round of winds and rains, we surely can see a rainbow.”
“I also often say to Chinese entrepreneurs that we always have to go through a difficult time,” he said. “When we say it’s bad this year, it can be worse next year. We must survive.”
He said Chinese enterprises must observe the world economy and look forward and cannot just look at the water under their feet on rainy days. He said this practice can also be applied in Sino-US relations.
Before a meeting with Li, Yellen had a “substantive conversation” with former Chinese Vice Premier Liu He and the outgoing governor of China’s central bank, Yi Gang, AFP reported. They discussed the global economic outlook and the respective economic outlooks for the US and China.
On Friday, China’s Ministry of Finance said in a statement that Yellen’s visit to China is a concrete measure to implement the important consensus of last November’s Xi-Biden meeting. It said the trip will strengthen communication and exchanges in the financial area between the two countries.
“The essence of Sino-US economic relations is to achieve mutual benefit and win-win results. There will be no winners in trade wars and ‘decoupling’,” said an unnamed spokesperson of the Finance Ministry. “We hope that the US will take concrete actions to create a favorable environment for the healthy development of economic and trade relations between the two countries.”
Su Xiaohui, deputy director of the Department of American Studies at China Institute of International Studies, remarks in a video released on Friday that Yellen’s China trip was decided by both the US and China, was not a result of an invitation from China, meaning that Beijing is not asking the US for help in anything.
Su says the fact that Yellen will stay longer in China than Blinken means that both the US and China want to discuss matters in detail.
She says Beijing is willing to receive American officials as it feels that Washington has been aware that suppressing and containing China will have a negative impact on the US. She says Washington knows clearly that American firms want to see stable Sino-US relations.
“From China’s perspective, Yellen’s trip does not mean that the US can make demands on China, or that it can unilaterally pressure China and force it to compromise,” she says. “Her trip should emphasize that the development of the relationship between the two countries must be equal and mutually beneficial.”
She says Beijing’s statement of “no winners in trade wars” may touch Yellen, who had once questioned the Trump administration’s tariffs placed on Chinese imports. She says the United States’s so-called “de-risking” or “decoupling” from China does not fulfil the spirit of achieving mutual benefit and win-win results.
In May, G7 leaders met in Japan and agreed that their members should “de-risk” from China. Beijing said there is no difference between “de-risking” and “de-coupling” as both will lead to the departure of foreign firms from China.
Yellen preferred to describe the United States’s strategy as “diversification.”
She told representatives of some China-based US firms in a Friday meeting that a decoupling of the US and Chinese economies would be “virtually impossible.”
“We seek to diversify, not to decouple. A decoupling of the world’s two largest economies would be destabilising for the global economy,” she said, adding that Washington was not seeking a “wholesale separation of our economies.”
Yellen said the US government is concerned by Beijing’s export controls on metals key to semiconductor manufacturing and is still evaluating the impact of these actions. She said the Chinese curbs reminded the US of the importance of building resilient and diversified supply chains.
“I also discussed concerns about barriers to market access, China’s use of non-market tools, and punitive actions against US firms,” she tweeted.
Luo Fuqiang, a military commentator, says in his latest vlog that he remains unconvinced that Washington will consider China’s interests and stop its suppression against China.
But he says US officials, who visit China, will continue to be received by higher-ranking Chinese officials as Beijing wants them to help send authoritative messages back to the US.
Some commentators say Beijing does not have high expectations for the outcome of Yellen’s trip as the US-China conflicts are related to the US Commerce Department and the Office of the United States Trade Representative, not the Treasury Department.
Read: China squeezes key metal supplies in chip war escalation
Follow Jeff Pao on Twitter at @jeffpao3
Imri Mokhtar completes term, succeeded by Amar Huzaimi as Group CEO
Azlan Hashim finishes term, succeeded by Zainal Abidin Putih as Chairman
Telekom Malaysia Bhd (TM), has announced key changes in its leadership effective 1 Aug 2023. The change sees Amar Huzaimi Md Deris as the new Managing Director/Group CEO of TM, succeeding…Continue Reading
The launch of social media app Threads as a competitor to Twitter is a game-changer.
Meta, which also owns Facebook and Instagram, launched the new platform yesterday, ahead of schedule. Threads was welcomed almost immediately – especially by hordes of Twitter users that have watched in dismay as their beloved platform crumbles in the hands of Elon Musk.
In less than 24 hours, Threads attracted some 30 million users. And with Meta already having more than two billion Instagram users who can directly link their accounts to it, Threads’ user base will grow fast.
With its simple black and white feed, and features that let you reply, love, quote and comment on other people’s “threads”, the similarities between Threads and Twitter are obvious.
The question now is: will Threads be the one that finally unseats Twitter?
In October of last year, Twitter users looked on helplessly as Elon Musk became CEO. Mastodon was the first “escape plan.” But many found its decentralized servers difficult and confusing to use, with each one having very different content rules and communities.
Many Twitter fans created “back up” Mastodon accounts in case Twitter crashed, and waited to see what Musk would do next. The wait wasn’t long. Platform instability and outages became common as Musk started laying off Twitter staff (he has now fired about 80% of Twitter’s original workforce).
Shortly after, Musk horrified users and made headlines by upending Twitter’s verification system and forcing “blue tick” holders to pay for the privilege of authentication. This opened the door for account impersonations and the sharing of misinformation at scale. Some large corporate brands left the platform, taking their advertising dollars with them.
Musk also labeled trusted news organizations such as the BBC as “state-owned” media, until public backlash forced him to retreat. More recently, he started limiting how many tweets users can view and announced that TweetDeck (a management tool for scheduling tweets) would be limited to paid accounts.
Twitter users have tried several alternatives, including Spoutible and Post. Bluesky, which came from Twitter co-founder Jack Dorsey, is gaining ground – but its growth has been limited due to its invitation-only registration process.
Nothing had quite captured the imagination of Twitter followers … until now.
Before Musk’s reign, Twitter enjoyed many years of success. It had long been a home for journalists, governments, academics and the public to share information on the key issues of the day. In emergencies, Twitter offered real-time support. During some of the worst disasters, users have shared information and made life-saving decisions.
While not without flaws – such as trolls, bots and online abuse – Twitter’s verification process and the ability to block and report inappropriate content was central to its success in building a thriving community.
This is also what sets Threads apart from competitors. By linking Threads to Instagram, Meta has given itself a significant head-start towards reaching the critical mass of users needed to establish itself as a leading platform (a privilege Mastodon didn’t enjoy).
Not only can Threads users retain their usernames, they can also bring their Instagram followers with them. The ability to retain community in an app that provides a similar experience to Twitter is what makes Threads the biggest threat yet.
My research shows that people crave authority, authenticity and community the most when they engage with online information. In our new book, my co-authors Donald O Case, Rebekah Willson and I explain how users search for information from sources they know and trust.
Twitter fans want an alternative platform with similar functionality, but most importantly they want to quickly find “their people.” They don’t want to have to rebuild their communities. This is likely why so many have stayed on Twitter, even as Musk has done so well to run it into the ground.
Of course, Twitter users may also be concerned about jumping from the frying pan into the fire. Signing up to yet another Meta app comes with its own concerns.
New Threads users who read the fine print will note that their information will be used to “personalize ads and other experiences” across both platforms. And users have pointed out you can only delete your Threads account if you delete your Instagram account.
This kind of entrenchment could be off-putting for some.
Moreover, Meta decided to not launch Threads anywhere in the European Union yesterday due to regulatory concerns. The EU’s new Digital Markets Act could raise challenges for Threads.
For example, the act sets out businesses can’t “track end users outside of [their] core platform service for the purpose of targeted advertising, without effective consent having been granted.” This may be in conflict with Threads’ privacy policy.
Meta has also announced plans to eventually move Threads towards a decentralized infrastructure.
In the app’s “How Threads Works” details, it says “future versions of Threads will work with the fediverse”, enabling “people to follow and interact with each other on different platforms, including Mastodon.”
This means people will be able to view and interact with Threads content from non-Meta accounts, without needing to sign up to Threads. Using the ActivityPub standard (which enables decentralized interoperability between platforms), Threads could then function the same way as WordPress, Mastodon and email servers – wherein users of one server can interact with others.
When and how Threads achieves this plan for decentralized engagement – and how this might impact users’ experience – is unclear.
As for Musk, he’s not going down without a fight. Just hours after Threads’ release, Twitter’s lawyer Alex Spiro released a letter accusing Meta of “systematic” and “unlawful misappropriation” of trade secrets.
The letter alleges former Twitter employees hired by Meta were “deliberately assigned” to “develop, in a matter of months, Meta’s copycat ‘Threads’ app.” Meta has disputed these claims, according to reports, but the rivalry between the two companies seems far from over.
Lisa M Given is Professor of Information Sciences & Director, Social Change Enabling Impact Platform, RMIT University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
As Janet Yellen kicks China’s economic tires in Beijing this week, she may be surprised by how often the attention is veering toward neighboring Japan.
It just so happens that Yellen’s first China trip as US Treasury secretary coincides with intense debate about Asia’s biggest economy experiencing a Japan-like “balance sheet recession,” one that, if true, will be devilishly hard to reverse.
The reference here is to economist Richard Koo’s oft-cited observation about why Japan plunged into deflation and stagnation in the 1990s. Specifically, this is when economic insecurity prods a critical mass of households and companies to prioritize boosting savings and paying down debt over consuming and investing.
Unlike a formal recession, where gross domestic product (GDP) contracts, the balance sheet variety condemns an economy to underperform for several years.
It’s clear that as 2023 unfolds, “investors are concerned that China may have entered a liquidity trap or is experiencing a balance sheet recession,” says economist Carlos Casanova at Union Bancaire Privée, with the caveat that for now “these fears might be overstated.”
Yet the trouble with Japan-like economic funks is how souring sentiment can take on a life of its own. Herein lies the greater risk for Chinese leader Xi Jinping and Premier Li Qiang.
“Chinese policymakers are going about tackling the different factors underpinning weak sentiment,” Casanova explains. “Given the scattered nature of this support, it may take time for upside pressures on domestic asset prices to build and the Chinese yuan to stabilize.”
Koo, too, thinks China “is entering a balance-sheet recession,” partly because “people are no longer borrowing money” due to worries about the growth outlook and stability of asset markets. As households and companies focus on reducing debt, China’s growth can’t return to pre-Covid levels, he worries.
“I hope Chinese policymakers understand and respond to these challenges, because this might be the last chance for China to reach the living standards of the First World,” Koo explains.
Economist Ting Lu at Nomura Holdings worries that “China’s real estate sector is now starting to look somewhat similar to Japan in the 1990s.” As of May, for example, contract sales among the mainland’s 100 top developers were down roughly 57% versus pre-Covid-19 levels in 2019.
Though Japan’s plunge into deflation had several causes, cratering land prices — and the high degree of exposure to those prices among the nation’s biggest banks — was a key catalyst. The overhang set in motion the bad loan crisis that was core to Japan’s multi-decade malaise.
Economist Alicia Garcia Herrero at Natixis says land sales are “one of the most important components of China’s local government revenue.” She adds that “given the challenges faced by China’s property market are largely structural, i.e., slower income growth, population aging, we expect the land sales revenue to continue being under stress down the road.”
Xi’s policymakers have sought to downplay such concerns. In March, Chinese Finance Minister Liu Kun argued that a 2 trillion yuan (US$276 billion) drop in land sales would only result in a 300 billion yuan loss to local governments’ fiscal positions. That neat assessment may or may not add, however.
Clearly, economists can take the Japan-China comparisons too far. In 2021, economist Lan Xiaohuan published a best-selling book, “Embedded Power: Chinese Government and Economic Development”, detailing the unique dynamics of local property markets.
As Lan explains, “the real power is not ‘land as fiscal finance,’” but “using land as collateral to accelerate bank lending and other forms of credit. When ‘land as fiscal-finance’ meets the capital market and adds leverage, it becomes ‘land finance’” with Chinese characteristics.
Extreme opacity is an added problem. Along with privately-owned real estate companies, the top power brokers are state-owned entities known as Local Government Financing Vehicles (LGFVs), which borrow to finance infrastructure, industrial parks and housing across Asia’s biggest economy.
LGFVs’ outsized revenue role is now among the “main obstacles for broad-based macro support” for an economy losing momentum, says Casanova. They’re at the core of “PBOC concerns about financial risks” along with “households remaining on the fence” about “deploying pandemic surpluses due to weak sentiment.”
However, Casanova notes, “without additional targeted measures, those two reinforce each other, resulting in a deflationary spiral and making it harder for the economic recovery to broaden its base.”
Yet Koo argues that China has a key advantage over Japan: it can learn from Tokyo’s mistakes.
The key lesson, Koo says, is that stimulus treats the symptoms of China’s troubles, not the underlying ailment. While it’s vital that Beijing steps forward to ensure that giant building projects are completed, reforms to repair the property sector and build robust social safety nets are the key to avoiding “Japanification” risks.
Stabilizing property is vital to improving the quality of economic growth and reducing the frequency of boom-bust cycles. Social safety nets are needed to prod households to save less and spend more.
The good news is that China has “a fairly strong administrative system which can put losses where they should be — where they can be easily absorbed,” Raghuram Rajan, former chief economist at the International Monetary Fund, told Bloomberg.
It may help, too, that the economic reform portfolio is now in Li’s hands. Unlike his predecessor, the newish premier appears to have Xi’s full confidence. That top-level buy-in is vital if Li is to pull off a monumentally difficult balancing act.
Li must support growth in the short run while maintaining the progress China has made in reducing extreme leverage and getting under the economy’s hood to recalibrate engines from exports to domestic consumption. Naturally, the People’s Bank of China (PBOC) will play a key role in smoothing out GDP.
Markets need to be “thinking about the likelihood of further easing ahead,” says economist Rob Carnell at ING Bank referring to benchmark Chinese interest rates. He adds that “we’re going to get plenty more of those” moves to add liquidity in coming months “to keep [the] yuan on the back foot.”
Economist Joey Chew at HSBC Holdings says “some think that more concrete, non-monetary stimulus measures will only come out at or after the Politburo meeting in end-July. If so, some foreign-exchange policy smoothing may be needed in the meantime as we head into the dividend outflow season for China.”
Not everyone is convinced big stimulus moves are coming. Goldman Sachs economist Maggie Wei notes that recent meetings with greater China region investors unearthed lots of doubt. “Local clients did not expect major policy easing measures or structural reform measures to be rolled out in the July Politburo meeting” later this month, Wei says.
To some extent, the yuan’s 5% drop this year limits the PBOC’s options. Indeed, additional rate cuts might weaken the yuan to levels that exacerbate trade tensions with Washington and Tokyo. At the same time, a weaker yuan would increase default risks for China’s bigger property developers.
“The lesson from Japan’s lost decades is that without a timely debt clean-up and demand stimulus, the deleveraging mindset could become entrenched in the private sector and, after a certain point, even zero interest rates would not be able to help,” says economist Wei Yao at Societe Generale. It follows that “such a danger seems increasingly relevant for China, as evident in households’ strong appetite for savings.”
In the interim, interest margins among mainland banks “will be under persistent downward pressure if more of their lending capacity is used for extending loans to LGFVs at below-market rates,” Yao says.
China also faces an imponderable that Japan didn’t in the 1990s: a full-blown trade war with Washington.
Yellen’s presence in Beijing this week speaks to the high drama complicating Li’s job in stabilizing the economy. To some observers, Yellen’s trip is meant to reduce the geopolitical temperature following US Secretary of State Antony Blinken’s recent visit.
“I would say it’s a little bit like good cop, bad cop, Blinken being the bad cop,” former IMF chief economist Ken Rogoff told the BBC. “And now Yellen going in as the good cop trying to say, look, you know, we have a lot in common. Let’s see what we can do together.”
Even so, Yellen manages to throw some sharp elbows. On Friday, she chided Beijing for policies toward US companies and a recent move to limit the export of gallium and germanium, niche minerals used in some chip-making.
“During meetings with my counterparts,” Yellen said, “I am communicating the concerns that I’ve heard from the US business community — including China’s use of non-market tools like expanded subsidies for its state-owned enterprises and domestic firms, as well as barriers to market access for foreign firms. I’ve been particularly troubled by punitive actions that have been taken against US firms in recent months.”
Xi’s government, of course, has its own gripes about US President Joe Biden’s efforts to make American manufacturers less reliant on Chinese production.
In the meantime, though, it’s hard to refute that “China’s economic development model resembles that of Japan over 30 years ago with high savings and high investment, but with restrained consumption and rigid institutions weighing increasingly on macroeconomic success,” notes George Magnus, a research associate at Oxford University’s China Centre.
Magnus adds that “China’s chronic over-investment and misallocation of capital, particularly in the property sector, pose a potentially bigger economic problem than Japan’s banking crisis in the 1990s.”
On the bright side, Magnus says, “China has some advantages over Japan, such as a state-owned financial system that can prevent significant banks from failing and a closed capital account that can protect the country’s banking system and the economy from the risk of significant capital flight. This however might not prevent China from taking the same economic trajectory [of] Japan.”
That requires urgent and creative moves to repair the property market, create robust social safety nets and put China on a path toward more productive economic growth. China can surely avoid Japan’s lost decades, but there’s not a moment to waste in shifting the narrative about the economy’s downward trajectory.
Follow William Pesek on Twitter at @WilliamPesek
Chinese tech companies are aggressively developing AI products after the ChatGPT chatbot by OpenAI ignited a generative AI boom. McKinsey estimates that generative AI could eventually add US$7.3 trillion in value to the world economy each year. Alibaba’s image generator will compete with OpenAI’s DALL-E and Midjourney Inc’s Midjourney, US-basedContinue Reading
TOKYO – Renesas, Japan’s top maker of automotive chips, has reached a 10-year supply agreement with America’s Wolfspeed, the world’s leading producer of the silicon carbide wafers used to make power semiconductors.
Both companies have ambitious plans to meet rapidly growing demand for electric vehicles (EVs) and charging infrastructure, renewable energy generation and storage, and industrial motor control and other power management.
A US$2 billion deposit from Renesas will support Wolfspeed’s capacity expansion plans in the state of North Carolina. Meanwhile, a guaranteed supply of Wolfspeed-made wafers will support Renesas’ power device manufacturing in Japan. The agreement was signed at Renesas’ headquarters in Tokyo on July 5.
Wolfspeed CEO Gregg Lowe said that “With the steepening demand for silicon carbide across the automotive, industrial and energy sectors, it’s critically important we have best-in-class power semiconductor customers like Renesas to help lead the global transition from silicon to silicon carbide.”
Renesas CEO Hidetoshi Shibata said, “The wafer supply agreement with Wolfspeed will provide Renesas with a stable, long-term supply base of high-quality silicon carbide wafers. This empowers Renesas to scale our power semiconductor offerings to better serve customers’ vast array of applications. We are now poised to elevate ourselves as a key player in the accelerating silicon carbide market.”
Compared with silicon, silicon carbide offers greater energy efficiency and reliability through resistance to higher voltages, tolerance of a wider range of temperatures and vibration, and longer device lifetimes. As production volumes rise and prices fall, the use of silicon carbide should also lead to lower power management system costs.
Wolfspeed, formerly known as Cree, has been making silicon carbide wafers and power devices for more than 35 years. It also produces radio frequency devices and gallium nitride materials. Its products are used in communications infrastructure, satellite communications, aerospace and defense.
In April 2022, Wolfspeed opened the world’s first 200mm (8-inch) silicon carbide wafer factory in New York. In September 2022, the company announced plans to build a big new silicon carbide materials facility in North Carolina that aims to boost production by more than 10 times by 2030.
This is in line with market research organizations’ forecasts of the silicon carbide market’s potential.
Phase one of the North Carolina facility, estimated at $1.3 billion is scheduled for completion in 2024. Industry sources estimate Wolfspeed’s share of the silicon carbide wafer market at more than 60%.
200mm wafers are 1.7x larger than the 150mm (6-inch) wafers that were previously the silicon carbide industry standard. Larger wafers mean more chips per wafer and a lower cost per chip. Wolfspeed will supply Renesas first with 150mm wafers and then with 200mm wafers as its production capacity increases.
Renesas manufactures semiconductor products for automotive, industrial, infrastructure, internet of things (IoT) and other applications. It is a world leader in microcontrollers for the auto industry.
The Japanese company also possesses embedded processing, analog, power management, radio frequency, SoC (system-on-chip) and other semiconductor technologies.
In May 2022, Renesas announced plans to refurbish and reopen its old Kofu factory and start making power semiconductors on 300-mm (12-inch) silicon wafers there in 2024.
In 2025, the company plans to start mass production of silicon carbide devices with wafers procured from Wolfspeed at its factory in Takasaki. At present, the Takasaki factory makes silicon power devices.
Renesas has doubled its revenues over the past five years, with growth in the auto, industrial, infrastructure and IoT markets accelerated by six acquisitions, namely:
Leveraging these strategic acquisitions, Renesas now plans to become a big producer of both silicon and silicon carbide power devices.
Their synergy with the company’s existing products and strong market demand point toward substantial growth ahead. Investors certainly think so: Renesas’ share price is up 2.3 times so far this year.
In July 2022, less than a month before President Joe Biden signed the CHIPS Act, CEO Shibata told the press that Renesas does not plan to make semiconductors in the US.
“When it comes to front-end production [the manufacture of chips on wafers],” he said, “I don’t necessarily believe there are good supplies of ingredients in geographies like Europe or the US”
By “ingredients,” he seems to have meant high costs and shortage of skilled labor – the same issues chip-making giant TSMC has been complaining about in Arizona.
Buying silicon carbide wafers from Wolfspeed, on the other hand, apparently makes more commercial sense to Renesas than sourcing them from smaller and less experienced manufacturers in Japan.
These companies, including Showa Denko, Central Glass, Mipox and Oxide, are part of a silicon-carbide development project run by Japan’s New Energy and Industrial Technology Development Organization (NEDO). Despite handsome government support, they did not win the Renesas contract.
Rohm, one of Japan’s leading makers of power devices, relies on SiCrystal, a German company it acquired in 2010, for its silicon carbide wafers. SiCrystal also sells wafers to other companies.
On June 29, Rohm signed a long-term agreement to supply silicon carbide power semiconductors to Vitesco Technologies, a German maker of electrified vehicle drive systems. This deal, too, appears to be economic rather than political.
Follow this writer on Twitter: @ScottFo83517667