The Chicago Journal

Tesla slashes prices in the US and the UK

Edward Anderson Edward Anderson on April 10, 2023

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Tesla: The financial downturn has had an influence on every element of business and has caused companies to take complicated decisions.

While the majority of businesses have been using layoffs to reduce expenses, Tesla is adopting a different strategy.

Instead, the maker of electric vehicles is lowering costs in the US and Europe.

The news

Tesla is a business that creates and produces solar goods, energy storage devices, and electric vehicles (EVs).

Elon Musk founded the company in 2003 with the goal of accelerating the switch to renewable energy globally.

Its EVs are highly renowned for their powerful, long-range, and eye-catching designs.

The Model S, Model 3, Model X, and Model Y are some of the most well-known Tesla vehicles.

Tesla not only makes commercial cars but also provides electric powertrain systems and parts to other automakers.

On the company’s website on Thursday, a discount was touted.

Sales

Teslas have been doing well on the market.

The company’s earnings have been steadily rising, with notably strong growth in recent years.

Global Tesla vehicle deliveries surpassed 5 million in 2020.

Since 2018, the Model 3 has been the most popular electric vehicle in every country.

It is Tesla’s most inexpensive vehicle.

Additionally, Tesla has seen exceptional sales in China and Europe.

The company also hopes to increase manufacturing and sales in new regions in the near future.

Overall, Tesla’s sales performance has been strong, solidifying its position as a dominant player in the electric vehicle industry.

However, dropping US costs may make it easier for the business to obtain more federal EV tax credits and boost both local and global sales.

The Model 3 and Model Y are presently discounted in the following European countries:

  • Austria
  • France
  • Germany
  • The Netherlands
  • Norway
  • Switzerland
  • The UK

Read also: Tesla and Apple face major China headwinds

The models

Depending on the vehicle’s configuration, Tesla in Germany reportedly reduced the price of the Model 3 and Model Y by anywhere between 1% to over 17%.

In terms of popularity in Germany in December 2022, the Model Y trailed the Model 3.

In Germany, Volkswagen and its well-known EV, the ID.4, were overthrown by the American EV behemoth.

Volkswagen’s entry-level electric vehicle, the ID.3, is comparable to the Model 3 (at its reduced price).

According to TroyTeslike, an independent EV industry analyst, the cost of a brand-new Tesla Model 3 has decreased by 6% to 14% in the US.

Depending on the configuration, the price of Model Y decreased by roughly 19%.

The Model Y is a sport utility vehicle or crossover, while the Model 3 is Tesla’s entry-level sedan.

The more premium Model S sedan and the Model X SUV with falcon wings are now more affordable in the US.

Tax credits

Electric cars may be eligible for tax incentives in the US depending on its form factor, category, efficiency, mileage range, and manufacturer’s suggested retail price.

In order to give manufacturers the chance to qualify for a $7,500 clean car tax credit, the US government postponed until March the introduction of new regulations governing the acquisition of raw materials and battery components.

As a result, EV manufacturers can continue to purchase essential parts and supplies from global suppliers and also be eligible for EV subsidies.

The final automobile assembly of EVs is exempt from requirement under the existing interim legislation for individuals who are eligible for government incentives.

Discounts

Due to the current reductions, EV manufacturers will benefit from tax benefits both now and down the road.

This could annoy consumers who committed to paying more money to get new Tesla cars before the end of 2022.

After promising to accept deliveries at higher prices until the end of 2022, Tesla upset many Chinese customers by lowering the pricing of the Model 3 and Model Y.

According to Reuters, some consumers apparently protested and sought refunds.

However, Tesla is still standing.

Last month, the business offered a $7,500 discount on the Model 3 and Model Y to entice consumers to take delivery of their vehicles just before the end of the fourth quarter.

The manufacturers would also offer free Supercharging for 10,000 miles if US customers accepted.

Operations

Even with the discounts, the company reported that 439,701 vehicles were made and 405,278 vehicles were delivered in the fourth quarter.

The corporation anticipated a 50% increase in annual car deliveries; but, in the fourth quarter, both analyst forecasts and the annual goals were missed.

In Fremont, California, Tesla is now running its first assembly facility in the US.

Additionally, it has a brand-new facility in Gruenheide, Germany, a manufacturing facility abroad in Shanghai, and a brand-new factory in Austin, Texas.

Reference:

Tesla cuts prices in the US and Europe to stoke sales after lackluster year-end deliveries

Social media faces more regulations in 2023

Edward Anderson Edward Anderson on March 20, 2023

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Social media: The bipartisan spending bill passed by Congress last week essentially forbade the installation of TikTok on devices used by the government.

This year, advocates and legislators revealed proposals for tighter regulation of social media companies as 2023 kicks into gear.

TikTok

The video-sharing app, which receives more than 1 billion monthly users, is owned by the Chinese corporation ByteDance.

Christopher Wray, the director of the FBI, and lawmakers have publicly stated their positions on TikTik’s ownership structure.

They claimed that the structure exposes information about US users.

In addition, Chinese-based businesses are compelled by law to provide the government with user information on request.

The concern

The National Intelligence Law of 2017 and the Counter-Espionage Law of 2014 are the two Chinese laws that have alarmed the US government since 2019.

According to the Counter-Espionage law, businesses and individuals “may not refuse” to divulge information when the state security agency conducts an espionage investigation and discovers crucial information.

Organizations or people are expected to support, help, and cooperate with governmental intelligence initiatives, as stated in Article 7 of the Intelligence Law.

The state also protects those who assist them.

Response

Despite TikTok’s repeated assurances that US user data is not kept in China, little has changed from their comments.

TikTok has been compared to “digital fentanyl” by Wisconsin Republican Rep. Mike Gallagher.

Additionally, he thinks that the software has to be banned outright nationwide.

“It’s highly addictive and destructive,” said Gallagher.

“We’re seeing troubling data about the corrosive impact of constant social media use, particularly on young men and women here in America.”

Read also: Migrants delivered to Kamala Harris on Christmas

Social media regulation

Twitter, YouTube, and other social networking sites, like TikTok, use the same algorithms, claims Facebook whistleblower Frances Haugen.

She thinks that increasing the transparency of their operations should be the regulators’ first move.

According to Haugen, the majority of people are unaware of the US’s gap in social media regulation compared to other countries.

“This is like we’re back in 1965,” said Haugen. “We don’t have seatbelt laws yet.”

Tech bills in 2022

Congress failed to pass some of the most radical elements of technology-related legislation the year before.

Antitrust law and a bill aimed at protecting children were among the legislations that were vetoed.

Antitrust legislation

Early in 2022, lawmakers created a bill that specifically targeted Apple’s and Google’s app stores for mobile devices.

The legislation also placed limitations on developers.

The American Innovation and Choice Online Act was advanced, which has some of the same objectives.

The Act forbids larger companies from unfairly treating or preferring their own products over those of competitors.

The plan states that developers would not be required to use the platform’s payment method for distribution if the app store had more than 50 million US users.

Additionally, app developers cannot be punished for selling their products elsewhere for a lower price.

Kids Online Safety Act

In November, bipartisan legislation was launched by Senators Marsha Blackburn and Richard Blumenthal to put regulations on websites that children 16 and younger can view.

The proposed law would compel platforms to restrict content that could cause minor users bodily injury or psychological trauma, including the following:

  • Self-harm/suicide
  • Encouragement of addictive behavior
  • Enabling online bullying
  • Predatory marketing

Additionally, websites have to follow the law’s requirements regarding connection restrictions and default privacy settings.

Even after the legislation underwent changes, several organizations still opposed it.

Read also: Sherrod Brown looking to have cryptocurrency banned in the US

Change

There is still a patchwork of state rules dictating how to maintain customer data, even though Congress made significant progress toward a consensus measure on national privacy standards in 2022.

Many of the bills that have reached the Senate floor enjoy bipartisan support, according to Senator Amy Klobuchar.

However, she cautioned that the tremendous influence of the tech industry might cause huge bipartisan support to collapse over the next 24 hours.

According to Klobuchar, the American people won’t demand social media company reform until they declare that “enough is enough.”

“We are lagging behind,” said Klobuchar.

“It is time for 2023, let it be our resolution, that we finally pass one of these bills.”

References:

More social media regulation is coming in 2023, members of Congress say

Huawei says it would never hand data to China’s government. Experts say it wouldn’t have a choice

Senate committee advances bill targeting Google and Apple’s app store profitability

Kids Online Safety Act may harm minors, civil society groups warn lawmakers

Tesla and Apple face major China headwinds

Jason Robinson Jason Robinson on January 10, 2023

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Tesla: Apple and Tesla, two of the leading US tech firms, are currently experiencing problems with their stock values.

Because the two firms are facing significant challenges in China, investors are concerned.

Apple’s stock decreased by more than 3% as concerns about the iPhone lineup for the December quarter increased.

Tesla, however, saw a 12% drop on Tuesday when the company reported that deliveries missed the mark of analyst expectations.

China’s influence

Challenges in China may factor in the two tech giants’ stock values declining.

The country contributes 17% of Apple’s sales and 23% of Tesla’s income, making it a big market for both companies.

Daniel Ives of Wedbush Securities, offered his opinion on the companies’ issues.

“China is the heart and lungs of both demand and supply for both Apple and Tesla.”

“The biggest worry for the Street is that the China economy and consumer are reining in spending, and this is an ominous sign.”

He continued:

“In 2022, the worry was supply chain issues and zero Covid-related issues, 2023 is the demand worry and this has cast a major overhang on both Apple and Tesla, which heavily relied on the Chinese consumer.”

Tesla delivery

The share price of Tesla decreased as a result of the delay in vehicle deliveries.

Deliveries of cars fell short of expectations in the fourth quarter, falling to 405,278 from 427,000.

Both the supply chain and Chinese demand were factors in the drop.

During the entirety of 2022, Covid interruptions impacted Tesla’s Shanghai Gigafactory.

However, analysts have also voiced concerns about Chinese consumer demand.

“Tesla will point to supply disruptions and lockdowns as the main problem in China in 2022,” said Bill Russo, the CEO of Shanghai-based Automobility.

“While these are real headwinds, it cannot hide the fact that demand has softened for a variety of reasons, and their order backlog is 70% smaller than it was prior to the Shanghai lockdown.”

Shanghai saw lockdowns in the latter weeks of March 2022 as the authorities sought to contain an outbreak of Covid.

Headwinds

Investors are concerned that Tesla may reduce pricing to draw customers, which puts pressure on margins.

In October, Tesla lowered the price of the Model 3 and Model Y in China, returning to the 2022 pricing company had previously established.

Another obstacle for Tesla in China is the escalating domestic competition from companies like Nio and Li Auto.

Additionally, this year will see the launch of new models from domestic rivals at lower pricing.

“Tesla’s models have been in the market for a while and are not as fresh to the Chinese consumer as other alternatives,” offered Russo.

“What we are learning is, EV product life cycles are short as they are shopped for their technology features.”

“Buying an older EV is like buying last year’s smartphone,” he continued.”

“They need new or refreshed models to reignite the market. Just pricing lower can damage their brand in the long run.”

Read also: Prices of 2022: the highs and lows

iPhone factory problems

Investors are anticipating Apple’s fiscal first-quarter results, which will probably include the December holiday season.

The largest iPhone manufacturer in China, Zhengzhou, experienced a Covid incident in October.

Foxconn, the factory’s owner, placed restrictions.

By November, there had been numerous employee walkouts due to a salary dispute.

Foxconn tried to entice them back with incentives.

Since then, things have become more stable.

Additionally, according to Reuters, the factory was almost running at full capacity on Tuesday.

The incident exposed Apple’s reliance on China for iPhone production.

According to the tech titans, the facility was reportedly operating at significantly lower capacity due to the Covid ban.

Fears

According to Evercore ISI analysts, Apple had a $5 to $8 billion sales imbalance in the quarter ending in December.

However, according to Refinitiv’s estimate, the company may report a 1% yearly decline in revenue in the December quarter.

Investors who expected the iPhone 14 to do well have also expressed concern.

However, Apple is facing more than just supply chain issues.

China has modified its zero-Covid policy to reopen its economy.

But, widespread Covid-19 outbreaks in the country could affect iPhone demand.

IDC research manager Will Wong offered his opinion on the matter and stated:

“The key challenge is expected to be on the demand side, especially since resilient high-end consumers may have started to shift their spending to travel while some may have shifted their focus to medical supplies.”

“The shift in spending will pose a key challenge in the short term.”

Reference:

China risks loom over US tech giants Tesla and Apple as share prices plunge

TikTok ban might be pushed back due to its popularity

Jason Robinson Jason Robinson on January 2, 2023

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TikTok: Over the past few years, the video-sharing app has drawn a lot of attention, and a ban looks inevitable.

Security problems have plagued TikTok consistently from the former President Donald Trump’s administration.

However, the business has endured the Trump term.

Since then, it has gained popularity, becoming the most downloaded app in the US between 2020 and 2022.

If the ban were to go into effect, it would have an effect on numerous business owners who were successful on TikTok.

The future of TikTok

In 2020, there were over 100 million users of the video-sharing app.

Over the following years, TikTok’s influence on American culture, influencers’ lives, and business owners’ lives grew.

During that time, Republican governors had started to be cautious of the app.

They recently ruled that state employees are not allowed to install TikTok on devices that belong to the government.

While this was going on, an FCC panel with a Republican majority pressed Apple and Google to take more severe action against TikTok.

A bill to ban the app in the US was introduced by Sen. Marco Rubio and two other US lawmakers.

A thorough investigation into TikTok’s and other social media platforms’ effects on younger users is currently ongoing as the political witch-hunt continues.

On whether the content on TikTok is appropriate for teenage viewers, there are differences of opinions.

Since the TikTok algorithm could lead to the uploading of potentially harmful content, worries concerning it are also frequently voiced.

Criticism

Washington has criticized TikTok because of its parent company’s connections to China.

The concerns grew after a Buzzfeed News report this year revealed that some US user data had been accessed from China.

According to a worker cited in the article, China could see everything.

While this was going on, TikTok acknowledged that some Chinese employees had access to user data from the US.

Read also: Caroline Ellison and SBF responsible for FTX collapse

Negotiations

Negotiations between the video-sharing app and the Committee on Foreign Investment in the United States (CFIUS) date back a few years.

They have been working to reach a compromise that would meet national security concerns while still enabling the app to run.

However, there have been reports of negotiation delays.

According to national security experts, TikTok’s popularity just makes it more challenging to ban the program.

The effectiveness of a ban on TikTok has been questioned by some of its critics.

A bill written by Senator Josh Hawley forbids TikTok from being used on US government devices.

He said last week that he would be okay with a deal between TikTok and the US government that safeguards user data.

“But if they don’t do that then I think we’re going to have to look at more stringent measures,” said Hawley.

The community

Even as lawmakers have stepped up their calls for stricter rules on the app, TikTok users have been developing a sense of community.

The video-sharing app has become a source of income for many people.

Through TikTok, the following were made possible:

  • Culinary habits
  • Fashion and beauty trends
  • Reviving old music
  • Popularizing new songs

Additionally, US politicians have promoted their campaigns for the midterm elections using TikTok.

The renowned news organization Associated Press, which has been around for 176 years, just joined the app in an effort to reach new audiences.

“So many people, myself included, are always on TikTok,” said user Kahlil Greene.

“That’s where we get our entertainment from, our news from, our musical taste from, our social inside jokes we make with friends come from memes that started on TikTok.”

Green has amassed more than 580,000 followers as a result of his documentation of social and cultural issues, as the “Gen Z historian.”

The Biden administration ultimately took notice of his popularity and invited him to a White House press briefing about the Russian invasion of Ukraine.

“So much of our culture and lives are driven by TikTok,” Greene added.

“Now that it’s not just something you can rip away easily.”

Popularity

TikTok is unquestionably one of the most popular social networking services in the US.

The company, which is owned by Beijing-based ByteDance, is dedicated to moving user data to Oracle’s cloud platform.

Significant modifications are also being made to isolate US user data from that of other business sectors.

Weeks earlier, TikTok declared it will restructure its US-focused legal, policy, and content moderation teams in collaboration with a special internal committee led by US-based authorities.

In response to the bill, a TikTok spokesperson said:

“It’s troubling that rather than encouraging the Administration to conclude its national security review of TikTok, some members of Congress have decided to push for a politically-motivated ban that will do nothing to advance the national security of the United States.”

“We will continue to brief members of Congress on the plans that have been developed under the oversight of our country’s top national security agencies – plans that we are well underway in implementing – to further secure our platform in the United States.”

In addition, the spokesperson highlighted TikTok’s popularity by saying:

“TikTok is loved by millions of Americans who use the platform to learn, grow their businesses, and connect with creative content that brings them joy.”

Read also: The Federal Reserve influences 2022 stock market, Thursday market movement

Other notes

While other tech companies have been dismissing employees, TikTok has continued to hire staff, particularly American engineers.

Recent job listings suggest that the business may be attempting to build its own domestic warehouse network in an effort to overtake Amazon as the top online retailer.

TikTok’s enormous popularity poses issues for the federal government, according to Rick Sofield, a partner at Vinson & Elkins LLP who specializes in export restrictions, national security reviews, and economic penalties.

“I think their minds are made up that ByteDance owning is a national security concern,” said Sofield.

“The reason that we’ve been hung up is it’s too big to fail, and they’re trying to figure out a soft landing.”

“There’s a whole lot of things I think that would have to happen first, before there’s a ban.”

Reference:

TikTok might be too big to ban, no matter what lawmakers say

Elon Musk highlights macroeconomic factors for Tesla shares decline

Jason Robinson Jason Robinson on December 21, 2022

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Elon Musk: On Tuesday, shares of Tesla, the top producer of electric vehicles, fell 8% and hit a new 52-week low.

Elon Musk, the CEO, attributed the decline to macroeconomic factors.

The news

Tuesday’s market performance was mixed as Tesla shares slid to a 52-week low and finished at approximately $138 per share, down 8%.

Elon Musk tried to attribute the problem to macroeconomic factors.

Ross Gerber, a longtime backer of Tesla, tweeted:

“Tesla stock price now reflects the value of having no CEO. Great job tesla BOD – time for a shake up. $tsla.”

Gerber launched an unofficial campaign to convince Tesla’s stockholders to ratify his appointment to the board of directors.

“As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are not guaranteed,” Musk replied.

“People will increasingly move their money out of stocks into cash, thus causing stocks to drop.”

Stock

Since Musk said earlier this year that he would buy Twitter, Tesla’s stock has fallen more than those of other well-known manufacturers.

Tesla shares have dropped 59% since April compared to 26% and 12% for Ford and GM, respectively.

The S&P 500 is down 14% as well.

Distractions

Elon Musk, according to Ross Gerber, has been preoccupied.

He mentioned the issues that the new CEO and owner of Twitter had been causing with his social media site.

Late in October, Musk used a leveraged buyout to acquire Twitter.

As CEO of SpaceX, a large defense contractor, he also spends his time between those roles.

Read also: Elon Musk sells giant chunk of Tesla shares again

Twitter acquisition

Elon Musk sold his Tesla stock, including one, for $3.6 billion earlier in December to obtain money to buy Twitter.

In an effort to “save” the company last month, he laid off more than half the workers after selling his Tesla for billions of shares.

Then he made a number of modifications to the products and the policies, which he ultimately undid.

After layoffs, Musk called an all-hands meeting to motivate the remaining Twitter employees.

He sold Tesla stock, estimated to be worth $3.95 billion, at the start of November.

Musk also sold 19.5 million more Tesla shares, according to a filing sent to the Securities and Exchange Commission.

In April, Musk sold Tesla shares worth over $8 billion, and in August, he sold stock worth over $7 billion.

The CEO of Tesla extended an invitation to employees from previous companies he co-founded to join the Twitter team, as well as to supporters, friends, and autopilot engineers.

Tesla’s challenges

Since late October, Elon Musk has been focusing on his “Chief Twit” position.

Tesla has been offering discounts and incentives to sell automobiles in China, where the company has a sizable production site in Shanghai.

Additionally, the company has pushed to improve productivity in recently built facilities in Brandenburg, Germany, and Austin, Texas.

Additionally, despite Europe’s growing energy prices, Tesla continues to experience supply chain problems in the automotive industry.

The scenario in Europe may reduce drivers’ interest in electric automobiles.

Price targets

Due to the issues the company is now having, Mizuho Securities and Evercore ISI decreased their projections for the price of Tesla on Tuesday.

Analysts at Mizuho Securities warned of “potential weakness in Tesla sales as macro headwinds and a weaker consumer could drive lower demand for higher-priced EVs.”

The company, however, is upbeat about Tesla’s future and cites the following factors as potential boosters of rising domestic demand:

  • New Tesla factories could provide a competitive advantage
  • New electric vehicle tax credits in the United States

Early in 2023, China’s EV credits start to run out.

As a result, the group has a buy rating and a $285 price objective on Tesla’s shares.

Read also: NetChoice claims California law violates First Amendment, sues state

Tesla shares

Joshua White, an assistant professor at Vanderbilt University and a former economist for the US Securities and Exchange Commission, said:

“Only some of the drop in Tesla’s value can be blamed on interest rates. Twitter overhanging is one important component. China is another huge component.”

“We still don’t know if China will be open all the way, and we see there is supply and demand pressure here in light of the increase in Covid cases and disruption.”

White asserts that Elon Musk likely lost shareholders’ confidence in April when he said he didn’t sell any extra Tesla shares.

Musk persisted nonetheless, raising billions of dollars by selling more shares.

“He seems to sell equity in really large blocks, say ‘I’m done and I’m not selling anymore.’ But talk is cheap,” continued White.

“He says that and then sells more shares. So the more you say that and investors think he’s probably not done? The less confident they will be that the price is going to bounce back.”

References:

Elon Musk tries to explain why Tesla shares are tanking

Elon Musk tells Twitter staff he sold Tesla stock to save the social network

TikTok a security concern according to FBI

Claire Peterson Claire Peterson on December 12, 2022

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TikTok: FBI Director Chris Wray has warned people about the popular short video-sharing app and national security concerns.

Wray reminded people that TikTok, a Chinese-owned company, is run by a government that doesn’t share the same values as the United States.

The news

On Friday, Chris Wray raised nationwide concerns about the app.

He revealed that the FBI is concerned with the Chinese control of the app’s recommendation algorithm.

Having control allows the Chinese to manipulate the content and use it to influence operations.

Additionally, Wray says China may use TikTok to harvest user data for traditional espionage operations.

Statements

Chris Wray’s warning came at the Gerald R. Ford School of Public Policy at the University of Michigan last week.

“All of these things are in the hands of a government that doesn’t share our values and that has a mission that’s very much at odds with what’s in the best interests of the United States,” Wray told audiences.

“That should concern us.”

Moreover, the concerns expressed by the FBI director are similar to those raised during his congressional appearances in November.

Finally, Wray shared that it is part of an ongoing conversation in Washington.

Read also: TikTok one of the few tech companies to continue hiring

Concerns

The Trump administration previously threatened to ban TikTok in 2020 due to concerns about China’s influence.

Additionally, the administration pressured ByteDance to sell the app to a company in the United States.

Finally, US officials and TikTok are in talks for a deal to resolve the US security woes.

According to Wray, the process is taking place across US government agencies.

Negotiation

Brooke Overwetter, a TikTok spokeswoman, released a statement via email saying:

“As Director Wray has previously said, the FBI’s input is being considered as part of our ongoing negotiations with the US Government.”

“While we can’t comment on the specifics of those confidential discussions, we are confident that we are on a path to fully satisfy all reasonable US national security concerns and have already made significant strides toward implementing those solutions.”

Read also: Billy McFarland creates another “big” music festival

The company

Beijing-based ByteDance owns TikTok.

The statement from Friday said it was a private company.

It is also a reminder that TikTok is an American company bound by American laws.

During a Senate hearing in September, TikTok COO Vanessa Pappas answered questions from both sides.

She concluded that the company protects all US user data, noting that Chinese government officials do not have access to it.

“We will never share data, period,” said Pappas.

Reference:

FBI director raises national concerns about TikTok

Apple to see iPhone 14 models shipment setback

Claire Peterson Claire Peterson on November 10, 2022

Apple is struggling with the same crisis as the rest of the industry and the company is set to take another blow to its operations.

According to the tech giant, shipments of iPhone 14 models will be “temporarily affected” by Covid restrictions in China.

Last week, China’s largest iPhone assembling site faced a Covid outbreak that caused a problem for the tech giant.

Statement

On Sunday, Apple issued a statement to shed light on the situation.

The company says that its Zhengzhou assembly plant is operating at reduced capacity due to Covid restrictions.

“We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models,” Apple’s statement reads.

Despite the positive news, the company still expects fewer deliveries than expected for the Pro models.

They also point out that customers will have to wait longer to receive their new iPhones.

Read also: Apple continues positive streak amid inflation

Outbreak and lockdown

The Zhengzhou factory is one of the tech giant’s largest suppliers.

Foxconn, Apple’s largest supplier, operates the Zhengzhou factory.

Since mid-October, the facility has been fighting a Covid epidemic causing panic among migrant workers.

Last week, authorities ordered a seven-day shutdown of the factory site.

The lockdown, while necessary, is putting pressure on Foxconn and Apple, especially as the holiday season begins soon.

It also highlights the impact of China’s strict zero Covid policy, which is hurting domestic and international businesses.

China’s approach

Recently, global and Chinese companies across various industries have been facing severe business disruptions.

The disruption comes from China, which is stepping up its zero-covid approach.

While things are unlikely to improve anytime soon, China’s State Council reiterated its unwavering commitment to zero-covid policy at a press conference on Saturday.

The pledge statement comes after rumors were circulating that the Chinese government was easing restrictions on the pandemic and reducing quarantine days.

Read also: Flash report: EU looking to phase out Apple’s Lightning connector in favor of USB-C

Other notes

While the tech giant is the latest victim of China’s zero Covid policy, Apple is doing better than its compatriots in the tech industry despite the global economic downturn.

In October, Apple beat Wall Street analysts’ sales and earnings expectations for the September quarter.

Reference:

Apple expects iPhone 14 shipments to be hit by China’s Covid curbs

Huawei and ZTE gadgets in danger of FCC ban

Leah Cooper Leah Cooper on October 20, 2022

According to reports from Axios, the US government is planning to ban the purchase of new telecommunications equipment from Huawei and ZTE.

The two Chinese tech giants are under investigation in an expanding crackdown on perceived national security risks emanating from China.

The order

The reports come from restrictions outlined in proposed Federal Communications Commission (FCC) regulations.

It focuses on selling video surveillance equipment from three other companies: Hytera, Hikvision and Dahua.

The three companies also originate from China.

The draft ruling states that the ban applies only to new products that have not yet received FCC approval.

An FCC official confirmed that the proposal is more than just rumors.

They also said it would update the agency’s rules regarding the list of suppliers deemed unacceptable national risks if approved.

The proposal would also meet the agency’s congressional mandate under the Secure Equipment Act of 2021.

The ban

The proposed ban on Huawei and ZTE would go beyond previous FCC approaches to the companies.

According to US officials, network equipment could be used to intercept or trace US communications.

In the past, the FCC blocked US telecom carriers from using federal funds from Huawei, ZTE and other carriers on the agency’s so-called “covered list.”

The FCC has also created a program to help carriers remove and replace Huawei and ZTE devices from their networks.

However, the program’s estimated cost has risen to $5.6 billion, exceeding initial estimates by about $2 billion.

Many major mobile carriers in the United States have already stated that they do not use equipment made in China.

Telecom policy experts said Chinese-made phones could be found almost exclusively on smaller network networks to keep costs down.

Huawei

In 2019, the Trump administration put Huawei on the Commerce Department’s so-called list.

The list restricts experts to individuals and organizations appointed without a license from the US government.

A year later, the US government expanded the restrictions by devising a plan to remove Huawei from its suppliers using US manufacturing technology.

The policy has led to sharp drops in Huawei’s telephony and telecommunications sector, shifting the company’s focus.

From there, Huawei began developing automobiles, cloud computing, and its own mobile operating system.

Huawei’s founder and CEO previously said the company would never share data with the Chinese government.

Meanwhile, Western security experts said the country’s national security and intelligence laws require Chinese companies to comply with reporting obligations.

Reference:

FCC could ban all new purchases of Huawei and ZTE telecom gear

Tuesday witnessed US and Canadian warships voyage into the Taiwan Strait

Jason Robinson Jason Robinson on September 28, 2022

US and Canadian warships passed through the Taiwan Strait on Tuesday after US President Joe Biden announced his intention to defend Taiwan.

Defensive aid comes as a precaution in case of an attack from China.

Warships

US Navy spokesman Lt. Mark Langford released a statement saying the Arleigh Burke-class guided-missile destroyer USS Higgins made a “routine transit through the Taiwan Strait” on Tuesday. .

The US Navy vessel passed by the Royal Canadian Navy’s Halifax-class frigate, HMCS Vancouver.

According to Lt. Langford, the two ships passed through a corridor in the strait beyond the territorial sea of ​​a coastal state.

The transit is intended to demonstrate the commitment of the United States and its allies and partners to a “free and open Indo-Pacific.”

The trip marks the second time in more than three weeks that a U.S. Navy warship has made the trip, as cruisers USS Antietam and USS Chancellorsville traveled Aug. 28.

International tensions

When US House of Representatives Speaker Nancy Pelosi visited Taiwan early last month, Chinese military ships and submarines began to proliferate.

Although the transit is “routine”, it came after Biden fueled tensions between Washington and Beijing over Taiwan.

In a speech on CBS 60 Minutes last Sunday, he said he would deploy American troops to defend the island in the event of a Chinese invasion.

Beijing has claimed sovereignty over Taiwan, although the ruling Communist Party has never controlled the island.

They also claim sovereignty, sovereign rights and jurisdiction over the waters of the strait under Chinese law.

But the US Navy says much of the strait is in international waters, citing a United Nations Convention on the Law of the Sea (UNCLOS) definition of territorial waters extending 12 nautical miles from the coast. of a country.

The United States has made several transits and sent warships through the strait in recent years.

60 Minutes

During the 60 Minutes interview, Biden was asked if US forces would defend Taiwan in the event of a Chinese invasion, to which he said yes.

His comments reiterated a promise he had previously made to defend Taiwan.

On Sunday, however, Biden emphasized that American men and women would be involved in the effort.

Canadian aid

Daniel Le Bouthillier, Canada’s media director, confirmed that Canada joined the transit on Tuesday.

“Following port visits in Jakarta, Indonesia, and Manila, Philippines, HMCS Vancouver sailed through the Taiwan Strait along with the USS Higgins, as this was the most direct navigational route,” said Le Bouthillier.

“This sail was done in full accordance with international law, including high seas navigation rights as outlined in the UN Convention on the Law of the Sea.”

According to the US military, Chinese planes and ships were present as the US and Canadian warships passed.

However, Lt. Langford found interactions with foreign forces to be consistent with international standards and practices.

China responds

As news of Biden’s comments spread, Beijing reiterated its warning that China would take all necessary measures to defend its territorial integrity and sovereignty.

During a briefing on Monday, Mao Ning, spokesperson for China’s Foreign Ministry, issued a statement saying:

“The US remarks seriously violate the one-China principle and the provisions of the three US-China joint communiques.”

“It is also a serious violation of the important commitment made by the US side not to support Taiwan independence,” she added.

“It sent a serious wrong signal to the separatist forces of Taiwan independence.”

“China expresses its strong dissatisfaction and firm opposition, and has made serious representation to the US side.”

The last time American and Canadian warships sailed through the strait together was eleven months ago, when the destroyer USS Dewey and the frigate HMCS Winnipeg made the trip.

After this trip, Senior Col. Shi Yi, spokesperson for the People’s Liberation Army Eastern Theater Command, wrote a statement.

He says the United States and Canada have committed “provocations with odious nature” and created problems that have seriously threatened peace and stability in the Taiwan Strait.

Chinese leader Xi Jinping said China-Taiwan “reunification” was inevitable and refused to rule out the use of force.

Tensions between Beijing and Taipei have risen in recent decades, and the Chinese military has held major military exercises near the island.

Reference:

US and Canadian warships sail through Taiwan Strait after Biden vows to defend island

US government orders Nvidia and AMD to halt exports to China

Edward Anderson Edward Anderson on September 5, 2022

Due to their high quality craftsmanship, Nvidia (NVDA) and AMD are two of the leading US chipmakers in the tech industry. 

Recently, the US government ordered tech giants to stop selling their technology to China, even though China is one of their major customers.

The reason is that their technology can be used for artificial intelligence.

On Wednesday, the two chipmakers announced that the US government had ordered them to stop exporting high-quality chips to the world’s second-largest economy.

NVIDIA

Nvidia shared a filing motion in which U.S. officials said the decision was made because of a potential risk that the products could be used or diverted to a “military end user.”

The limitation falls on Nvidia’s A100 and upcoming H100 ICs, along with any systems that contain the two chips.

According to the company, the order is effective immediately.

Read also: SpaceX and T-Mobile could beam signals from space with their collaboration

How does this affect sales?

According to the filing, the decision could wipe out $ 400 million in deals for the company.

The numbers were compiled last week by the California-based tech giant as they discussed potential sales in China.

Therefore, their projection may be affected by the new requirement.

Both companies also suffered, with Nvidia shares down 6.6% in after-hour trading on Wednesday. Meanwhile, AMD’s shares fell 3.7%. 

Nvidia is currently working with its customers in China to try to “satisfy their planned or future purchases with alternative products and may seek licenses where replacements aren’t sufficient.”

AMD

AMD has also received new requirements from the US Department of Commerce, which will affect the shipment of its MI250 ICs to China.

The company released a statement about another set of components, stating:

“At this time, we do not believe that shipments of MI100 integrated circuits are impacted by the new requirements.”

“We do not currently believe it is a material impact on our business.”

Tensions between the United States and China

The latest order shows how tensions between the US and China are overshadowing the commerce and technology industries, among other things.

However, the two countries recently agreed to review Chinese companies listed in the United States, which has offered a breakthrough in their relationship.

Despite the progress, experts have warned that the deal will only play a minor role in addressing other important issues.

The orders for Nvidia and AMD also extend export bans to Russia.

The two companies said they currently do not sell any products there, as they stopped selling after the invasion of Ukraine earlier in the year.

Read also: Chinese students not as keen to study in the US, could affect the country’s economy

China responds

News of the decision reached the Chinese authorities, who opposed the decision. State media responded to the United States and said:

“Actions from the United States deviated from the principle of fair competition and violated international economic and trade rules.”

Beijing also released a statement stating:

“The US side should immediately stop its wrongdoing, treat companies from all over the world including China fairly, and do more things that are conducive to the stability of the world economy.”

Meanwhile, the US Department of Commerce responded to his statement.

“We are taking a comprehensive approach to implement additional actions necessary related to technologies, end-uses, and users to protect US national security and forreign policy interests,” said a Commerce Department spokesperson.

“This includes preventing China’s acquisition and use of US technology in the context of its military-civil fusion program to fuel its military modernisation efforts, conduct human rights abuses, and enable other malign activities.”

References:

US chip makers hit by new China export rule

US orders Nvidia and AMD to stop selling AI chips to China