Chip chemicals and cyber crime crackdowns

By News Room Last updated Jul 25, 2024

Hi everyone!

I hope you’re having a great summer. This is Cheng Ting-Fang, your #techAsia host for this week, writing from my home office as the first typhoon of the year sweeps through Taiwan with strong winds and heavy rain.

A few days ago, I visited the newly expanded workspace of Advantest, the world’s largest maker of chip-testing equipment, in northern Hsinchu. Wu Wan-Kun, president and CEO of Advantest Taiwan, gave us a tour. I was surprised to find that the office was a stark departure from the typical, dull workspace often seen in much of Asia. Instead, it resembled the trendy co-working spaces of US tech giants like Google. With various open areas, ample natural light and flexible seating, employees are free to choose where they sit when they come in. The office also includes a dedicated quiet zone equipped with large monitors and ergonomic chairs. There is even a small indoor putting green for golf. This modern and cozy office design suggests a post-pandemic shift in the chip industry away from the traditionally rigid work culture, aimed at attracting top young talent.

“Many of the young staff love to work in the cafeteria. It’s flexible,” Wu said. Advantest is considering adding offices and additional team members for engineering and sales in more Taiwanese cities, including Chiayi, a traditionally agricultural town where TSMC is currently building its first facility, an advanced chip packaging plant for AI computing chips.

“Our business in Taiwan is growing very fast thanks to the AI and high-performance computing boom,” he said, adding that demand was “much, much higher than expected” because new AI chips require more complicated testing processes. This has created a happy problem for Advantest. Its machines are in such high demand that delivery times are getting longer and longer, according to Wu. “It’s more than six to eight months.”

Not everyone is so optimistic, however. US stocks had their worst day since 2022 on Wednesday as investor sold off tech stocks. The sentiment continued into Asian trading, with SK Hynix’s shares dropping sharply on Thursday morning despite reporting robust AI-fuelled earnings.

Chemical reactions

The surge in demand for AI chips is driving growth at the other end of the supply chain: the chemicals sector.

Nikkei Asia’s Cheng Ting-Fang spoke with Philippe Kehren, CEO of Belgian chemical giant Solvay, about the latest trends and his upbeat outlook for the sector. For example, the company targets up to 25 per cent annual growth over the next five years in its electronics-grade hydrogen peroxide, a key chemical in microchip production.

Solvay is also helping Europe with its goal of onshoring at least 30 per cent of its supply of rare earth elements, which are currently controlled by China. Kehren says the company is expanding a plant in France to support the bloc’s localisation efforts and added that Solvay aims to eventually supply countries like Japan, which also seeks to reduce its reliance on China for critical metals.

But the CEO also offered a candid assessment of the challenges involved in shifting supply chains. “We have to have the support of the whole value chain,” he said. “If the customers still want to continue to buy 100 per cent from China, it won’t work.”

Open to AI

Japan has attracted some of the world’s largest technology groups, sparking alarm from the creative industry that the country’s copyright rules allow widespread use of copyrighted material to train artificial intelligence models, write Kana Inagaki and David Keohane for the Financial Times.

In the past two years, global tech industry executives including Meta’s Mark Zuckerberg and OpenAI’s Sam Altman have flocked to Tokyo to meet Prime Minister Fumio Kishida, lured to the huge potential of AI in an economy confronting ageing demographics and a chronic labour shortage. OpenAI later chose Tokyo for its first Asia office.

But critics say some AI companies are drawn to the market because they are widely allowed to use copyrighted images and other material for commercial purposes without obtaining permission or paying fees.

Japan’s open-armed approach to AI stands out at a time when other places, such as the US, EU and China, are developing stricter rules over how tech companies train their AI models.

Little red handbook

Social platform Xiaohongshu — whose name literally means “little red book” — has been described by some outside observers as China’s version of Instagram, but users say the service is more like a combination of X, Google, Yelp and Tripadvisor all rolled into one. The user base is young and overwhelmingly female, with half of the users born after 1995.

A privately held company, it is still relatively unknown beyond China, where 90 per cent of its 300mn monthly active users are based, but it is gaining momentum in Malaysia, Taiwan, Hong Kong and the US, writes Cissy Zhou of Nikkei Asia.

But despite its popularity and reputation as a “lifestyle encyclopedia,” the platform’s key challenge ahead is finding ways to better monetise its influential user base.

More oversight for websites

Malaysia and Singapore are broadening their scrutiny of social media platforms and messaging apps, including Facebook, TikTok and WhatsApp, as part of accelerating efforts to clamp down on online scams and other cybercrimes, write Nikkei Asia’s Norman Goh and Tsubasa Suruga. Malaysia has mandated that online platforms register for an annual license, with failure to do so making the site illegal. The regulation is set to take effect by the end of the year. Singapore has demanded operators proactively identify and address scams and malicious activities.

But concerns have also arisen that these stricter social media regulations could be misused to suppress government criticism, potentially undermining freedom of speech in south-east Asian countries.

Chip chemicals and cyber crime crackdowns

Chemical reactions

Open to AI

Little red handbook

More oversight for websites

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