FTI Consulting News Bytes – 08 September 2023

FTI Consulting News Bytes

Back to school and back to tech news! Extreme weather is causing global concerns over the impact that the growing risk of drought may have on semiconductor supply chains. Elsewhere, Nvidia’s CEO, Jensen Huang, visited India’s Prime Minister this week, indicating India’s intentions to play a major part in global chip manufacturing. Closer to home, Didier Reynders was appointed the EU’s new competition chief, while UK-based Arm revealed it aims for a $52 bn valuation on the Nasdaq. Finally, Japan launched a lunar lander into space in its bid to become the world’s fifth country to land on the moon.

This week’s news

Water scarcity is a growing risk for semiconductors and AI 

Water scarcity is a growing risk for semiconductor businesses, reported the Financial Times this week. Semiconductor manufacturing is a water-intensive industry, and water scarcity risks are the latest wake-up call to chip investors about supply chain vulnerabilities brought on by global warming. Reports suggest that drought risks have not been fully appreciated by shareholders of semiconductor companies, especially where production is concentrated in water-stressed areas, such as Taiwan. Analysts have warned that water scarcity risks will likely worsen as AI infrastructure demand grows, and the world’s need for chips intensifies.

Nvidia CEO visits India’s PM 

India is gearing up to play its part in the chip manufacturing industry, according to Barron’s. Nvidia’s CEO, Jensen Huang, met with India’s Prime Minister, Narendra Modi earlier this week ahead of the Group of 20 summit in Delhi on 9-10 September. The visit from Huang points to India’s intention to establish itself as a new chip-manufacturing hub, with the biggest prize being able to potentially attract the world’s largest contract chip maker, Taiwan Semiconductor Manufacturing, which is currently investing in the US and several other countries to expand its facilities outside of Taiwan. Indian newspaper, The Economic Times, reported in July that Foxconn was in talks with Taiwan Semiconductor Manufacturing about a potential joint venture.

Didier Reynders appointed EU competition chief

It was announced this week that Justice Commissioner, Didier Reynders, will take over as the European Commission’s competition chief after Margrethe Vestager stepped down to run for presidency of the European Investment Bank. The role of competition chief is considered one of the most powerful in Brussels, and has a pivotal role in approving Europe’s largest proposed mergers, reports POLITICO. Like Vestager, Reynders belongs to Renew Europe; the centrist liberal group which also includes French president Emmanuel Macron. Reynders said in a statement that he will continue to ensure that EU competition policy and rules are vigorously enforced, according to Euractiv.

Arm aims for $52bn valuation

UK-based chip designer, Arm, revealed it plans to price its initial public offering between $47 and $51 a share on the Nasdaq, valuing the company at up to $52bn. Arm has signed up many of its major clients as cornerstone investors in its IPO, including Apple, Nvidia, Alphabet, Advanced Micro Devices, Intel and Samsung. Arm’s listing is expected to buoy the IPO market globally and fuel other startups toward going public as its success would signal the return of investor appetite for technology companies, according to Reuters. Tuesday’s filings also disclosed that Arm and Apple have signed a long-term agreement that allows the iPhone maker to develop processors based on Arm’s designs “beyond 2040.”

Japan launches lunar lander into space

Japan launched a lunar exploration spacecraft on Thursday aboard a Japan-made H-IIA rocket, hoping to become the world’s fifth country to land on the moon early next year. Dubbed the “moon sniper”, Japan aims to land SLIM within 100 metres of its target site on the lunar surface, reports the BBC. The $100-million mission is expected to start the landing by February after a long, fuel-efficient approach trajectory. SLIM is set to touch down on the near side of the moon close to Mare Nectaris, a lunar sea that appears as a dark spot when viewed from Earth,. Its primary goal is to test advanced optical and image processing technology. Japan also aims to send a Japanese astronaut to the moon later this decade as part of NASA’s Artemis programme.

Top Tweets of the Week

• Cristina Gallardo, a new senior reporter at Sifted tweets: “EXC: China invited to UK AI summit as 21 EU member states left out.” 
• Bill Gates tweets: “It’s interesting to see approaches teachers are implementing to engage students about complex subjects” in a link to the article: ‘3 reasons we use graphic novels to teach math and physics.’
• James Martin, banking editor of the Times, tweets: “Rising interest rates are set to cause further shockwaves in global markets in the coming months, the world’s top financial regulator has warned G20 leaders.”

Number of the Week

700K – Litres of clean water it took Microsoft’s US data centres to train ChatGPT-3, enough to produce 320 Tesla electric vehicles (Financial Times)