Display makers dip into chips and a start-up struggles to deliver

admin 21 July 2022 Technology & Digitalization 0

Hi everyone, this is Lauly. I have just come back to Taipei from a weekend trip to the southern Taiwanese island of Liuqiu, where I went snorkelling among the area’s many sea turtles. It was almost enough to make me forget all the troubles and disruptions happening in the tech industry.

Back to reality. This week the US Senate has finally moved forward on a scaled-back version of the CHIPS Act more than a year after the bill was first introduced. The legislation offers billions of dollars in subsidies and tax credits aimed at bringing chip production onshore to address economic and national security concerns. Voting on its final passage is expected next week.

The text of the latest version of the act has not yet been released, but when it is, the chip industry will scour it for any clause that might limit their investments in China if they receive subsidies from the US.

And of course, that’s not the only thing weighing on tech industry minds. Amid a widespread slowdown in demand, Taiwan Semiconductor Manufacturing Co, the world’s biggest contract chipmaker and a barometer of the industry, has warned that it will take several quarters for the industry to digest its inventory surpluses.

Dipping into chips

Display making is a volatile industry, affected by even slight changes in demand for consumer electronics. Tired of this constant buffeting, panel makers are making forays into the chip industry in search of more stable growth, write Nikkei Asia’s Cheng Ting-Fang and Lauly Li.

Taiwan’s two top display makers, Innolux and AUO, and Chinese display champions BOE Technology Group and China Star Optoelectronics Technology Co have all formed teams tasked with applying their panel production technologies to chip packaging and assembly.

Chip packaging is the final step in making chips before they are mounted on to printed circuit boards and assembled into electronic devices. The technological threshold for chip packaging is lower than for manufacturing the chips themselves.

Display makers are not alone in their efforts. Some of their most important suppliers, including Corning of the US and Japan’s Asahi Glass, are investing resources to develop glass carriers, or substrates, for use in advanced chip packaging techniques.

The display industry is under increasing pressure to find new sources of growth. After two years of booming demand thanks to the pandemic-fuelled stay-at-home economy, consumer appetite for TVs, computers and smartphones has dipped sharply this year. With a supply glut and price war looming, display makers cannot afford to stick to business as usual.

Missfresh sours

Chinese grocery delivery start-up Missfresh, which raked in tens of millions of dollars from Tiger Global and Goldman Sachs, is now fighting to survive as its cash runs out and it wallows in an accounting scandal.

The Chinese group has shut operations in most of its markets in recent months and desperately sought new backers to inject more cash, writes the Financial Times’ Ryan McMorrow, Nian Liu and Gloria Li.

Missfresh appears to have found a temporary salve with a Rmb200mn ($29.6m) deal last week to bring in a coal mining group as a shareholder. But the capital will not come cheap: Missfresh plans to issue 300mn shares — equating to a 30 per cent stake — for the coal group Shanxi Donghui.

The massive dilution caps a rough year for shareholders who were looking at large paper gains when Missfresh listed in New York last June with a $3bn valuation. Its current market value has sunk to $88mn.

The plunge marks another soured investment for Tiger, which has been hit by losses of about $17bn during this year’s sell-off of publicly traded technology stocks, marking one of the biggest dollar declines for a hedge fund in history.

The pain may not be over either. Missfresh has been unable to publish its annual report over problems getting its auditors to sign off on its financials.

Earlier this month, the company had to admit that employees in one business unit had created “questionable transactions” that led to revenues being overstated by Rmb677mn in the first nine months of last year.

Lessons in business

Column chart of $bn showing Funds raised by edtech start-ups

The US may be the birthplace of online learning, but Indian start-ups are keen to show they also know a thing or two about the business of edtech, Nikkei Asia’s Akito Tanaka and Sayan Chakraborty write.

Educational start-ups in the South Asian country have outraised their American counterparts this year by around $300mn as of mid-July. They are also making increasingly bold inroads into the US market — Bengaluru-based Scaler Academy sold $1mn worth of courses in its very first month operating in the country. Indian companies are also targeting south-east Asia, which has its own local champions.

But no matter where they come from, creating a global brand that can also cater to individual markets remains a tough test for any player.

Farming 2.0

Strawberries growing on the rocks. Romaine lettuce, basil and bok choy bursting from the stones. Welcome to the future of farming.

This visual-rich report by seven of Nikkei Asia’s talented reporters — Lien Hoang, Rurika Imahashi, Dylan Loh, Jada Nagumo, Francesca Regalado, Pak Yiu and Cissy Zhou — explores the agricultural tech revolutionaries tackling the crucial problem of how to feed a ballooning population amid a host of challenges.

Food prices have shot up across Asia, hitting their highest levels since 2011. Farmers face droughts and ice storms, rising costs of fertiliser and fuel, pandemic-related labour shortages, and supply chain disruptions exacerbated by the Russian invasion of Ukraine. Prices are expected to keep rising. Meanwhile, Asia’s population is projected to surge by 700mn to 5.3bn in 2050. Last year, more than 1.1bn people in the region lacked access to adequate food.

Pioneers in the emerging field of agtech believe that harnessing technology can help feed a hungry world. It is a belief that could fundamentally change the face of agriculture. In 2022 BC, farmers cultivated plants that suited their location — climate determined the crop. In 2022 AD, with cutting-edge greenhouses and indoor farms, the crop now determines the climate.

Display makers dip into chips and a start-up struggles to deliver