This Week in Asia #12: China's AI, Semiconductors & EV Race against the US

In our 12th issue, we looked at China's AI, semiconductors and EV race against the US. The key one to watch out for is in semiconductors where Huawei pioneered a new technique that can cut reliance on advanced ASML lithography machines. Of course, things have slowed down on the TikTok front, with Bytedance taking the official stance that they would not divest the company. Of course, Japan has finally ended negative interest rates and we examine the most important issues that dominate the Asia Pacific after the Easter holiday in 2024.

What we are reading this week

AI

• Navigating the Challenges and Opportunities of Synthetic Voices by Open AI. Our Take: Open AI is taking a deliberative approach to the usage of synthetic AI voices.
• “The king is dead”—Claude 3 surpasses GPT-4 on Chatbot Arena for the first time by Ars Technica.

China's AI, Semiconductors and EV race

• Chinese Big Tech firms from Tencent to Kuaishou tout advancing generative AI models in a race to catch up by Ben Jiang from South China Morning Post. Our Take: The Chinese LLM race is heating up as Tencent and Kuaishou claim that they will catch up soon with OpenAI's GPT-4.
• China's Zhipu AI says that it is developing Sora-like technology as a path to artificial intelligence by Ben Jiang from SCMP. Our Take: The competition to be the dominant foundational models in China is heating up. No one in China wants to be left behind.
• Alibaba-backed Moonshot AI claims breakthrough in expanded Chinese-character prompt for Kimi Chatbot by Ben Jiang from SCMP. Our Take: With 2 million characters in a single prompt up from 200,000 characters, it means that you can stuff a book into their foundational model similar to what ChatGPT-4 can do now after the Open AI conference in Nov 2023.
• Apple Held Talks With China’s Baidu Over AI for Its Devices by Raffaele Huang in Wall Street Journal. Our Take: Apple is hedging by partnering with the foundational AI models from different companies, for example, Google in the US. The other possibility is that their own LLM is not ready for primetime.
• Tech war: China quietly making progress on new techniques to cut reliance on advanced ASML lithography machines by Che Pan from South China Morning Post. Our Take: Huawei Technologies has applied for a patent for a technique known as self-aligned quadruple patterning (SAQP). This technique allows for etching lines on silicon wafers multiple times, increasing transistor density and improving chip performance. By applying SAQP to deep ultraviolet (DUV) machines, China could potentially manufacture sophisticated 5-nanometre grade chips without needing the more advanced extreme ultraviolet (EUV) tools that are currently only sold by ASML.
• Xiaomi's EV buyers face up to seven-month wait for car, app shows by Channel News Asia. Our Take: Xiaomi has managed expectations well by manufacturing less supply to cope with over-demand for their SU7 models. Contrast this with Apple, which just gave up on the EV race.
• Chinese carmakers Li Auto, Nio, Xpeng and BYD report March sales rise, but ‘difficulties are looming’ as competition intensifies in the world’s largest EV market by Che Pan from South China Morning Post. We have no take but continuously be interested on what is going on.

The TikTok Ban in the US Saga continues

• ByteDance holds firm against selling TikTok despite the US ban threat by Du Zhihang, Guang Cong, Qu Yunxiu and Denise Jia from Caixin Global. Our Take: Both the US and Chinese governments are not backing down and if not handled well, could end badly for everyone.
• To Fight Ban Bill, TikTok’s Best Hopes Lie in First Amendment Challenge by Erin Woo and Juro Osawa from The Information. Our Take: There is still no clear path in the US to ban TikTok. It looks like they will survive another attempt at being banned in the US.

Crypto Bad Boys

• 3AC’s Kyle Davies on Why He’s Crypto’s Lloyd Blankfein and Why He’s Not Sorry by Laura Shin from Unchained Podcast. Our Take: Similar outcome to the one we did one year ago with Kyle Davies. Not much has changed.
• Crypto Fugitive Do Kwon out of Montenegro Jail Pending Extradition. Our Take: The Montenegro government cannot make up their mind about what to do with Do Kwon and where he should be extradited to: the US or South Korea.
• Do Kwon & Terra vs SEC: Day 1, Day 2 and Day 3 recap by Coinage. Our Take: The sentencing of SBF has suck all the energy out of the crypto bad boys' room, leaving Do Kwon's US$40 billion wipe out with less coverage. Yet, the Terra blowup sparked the crypto crash that led to the downfall of all the other crypto hedge funds and exchanges.

Japan

• BOJ ends negative rates, leaves questions over policy direction by Mitsuru Obe from Nikkei Asia Review.

Southeast Asia

• Taiwan bets on Vietnam, Indonesia for future chip-industry talent by Hideaki Ryugen from Nikkei Asia. Our Take: Vietnam is getting competitive in semiconductors given its AI advantage.

Infographic of the Week: Alibaba's Shattered Dreams by Bloomberg as the company walks back much of its grand breakup plan.

Upcoming Events:

• Token 2049: Dubai, 18-19 April 2024
• Tech in Asia: Founders Meetup, Singapore, 24 April 2024
• Super AI, 5-6 June 2024 and Analyse Asia is their official media partner.

Our Sponsor:

Do you manage your IT for distributed teams in Asia? You know how painful it is! Esevel helps your in-house team by taking cumbersome tasks off their hands and giving them tools to manage IT effectively. Get help across 8 countries in the Asia Pacific from on and offboarding, and procuring devices, to real-time IT support and device management. With their state-of-the-art platform, gain complete control of all your IT infrastructure in one place. Our team of IT support pros are keen to help you grow! Check out Esevel and get a demo today. Use our referral code “ASIA” for 3 months Free. Terms and conditions apply.

Our Ask:

If you like this newsletter, please like and share it. You can subscribe to our newsletter here or on our main site. Follow and subscribe on YouTube, Apple Podcasts, Spotify, X (formerly known as Twitter), Threads and TikTok.

Image Credits:

The picture is generated with the following prompt using DALLE-3: "Create an image of China challenging the US on semiconductors, AI and electric cars." The conceptual artwork depicting China challenging the US in the fields of semiconductors, AI, and electric cars has been created. The image metaphorically represents a technological race, with elements like semiconductor chips, AI robotics, and electric vehicles, and includes symbols representing both China and the US to highlight the competitive dynamic in these key tech sectors. The Gen ID of this image is S2Zm3QyyIcnx5Huq.