China has blocked many of Taiwan’s exports in retaliation for U.S. House Speaker Nancy Pelosi’s visit to Taiwan on August 2, but certain goods including semiconductors and high-tech products have been spared because of China’s reliance on those products from Taiwan, experts say.

“It is unlikely that Beijing will take serious trade actions against electronic exports from Taiwan. Doing so would be China shooting itself in its own foot,” Dexter Roberts, a senior fellow at the Atlantic Council, told VOA.

Taiwan makes 65% of the world’s semiconductors and almost 90% of the advanced chips.

By comparison, China produces a little over 5% while the U.S. produces approximately 10%, according to market analysts. South Korea, Japan, and the Netherlands are the other sources of the product, which is at the heart of many electronic devices and machinery.

Though China produces some semiconductors, it depends heavily on supplies from Taiwan for advanced chips. Taiwan’s TSMC makes most of the advanced chips in the world and counts Advanced Micro Devices, Apple and Nvidia among its customers.

Semiconductor Manufacturing International Corp. (SMIC) in China, which has 5% of the global fabrication market, produces 14-nanometer chips. There is also evidence that SMIC has 7-nm technology, according to a TechInsights blog. These are considered less advanced than the 3-nm chips produced by TSMC.

Beijing may not block the flow of semiconductors even if the military confrontation escalates, analysts say.

“Taiwan-based TSMC is the biggest world producer of chips, and China and the rest of the world need TSMC semiconductors. Hence, I don’t expect China to target electronic exports,” said Lourdes Casanova, Gail and Rob Canizares director of the Emerging Markets Institute at Cornell University.

Though China’s People’s Liberation Army says it is rehearsing to impose a military blockade around Taiwan, it will be careful not to hurt semiconductor companies like TSMC, Casanova said.

“The stoppage of supply of TSMC semiconductors would be the worst scenario for China and for many other countries. TSMC’s semiconductors are used by Foxconn, another Taiwanese firm, which is the main manufacturer of the iPhone in plants based in China and elsewhere,” she said.

Fear of invasion

A military invasion of Taiwan could disrupt supplies of semiconductors and seriously hamper dozens of high-tech companies that depend on them. TSMC Chairman Mark Liu voiced that fear when he said a military invasion would make TSMC factories inoperable.

“Our interruption would create great economic turmoil in China — suddenly their most advanced component supply disappears. It is an interruption, I must say, so people will think twice on this,” Liu said.

“Nobody can control TSMC by force … because it is a sophisticated manufacturing facility that depends on the real-time connection with the outside world,” such as Europe, the U.S. and Japan, for materials, chemicals and engineering software, he said.

Even with China’s ban on certain imports from Taiwan, analysts said, Taiwan is unlikely to retaliate because it is heavily dependent on Beijing in terms of trade and investment.

“Companies like TSMC are deeply reliant simultaneously on both the U.S. and China markets. Unless the situation in the Taiwan Strait badly deteriorates and turns to outright open hostilities, Taiwan will try to avoid taking any drastic action which would be cutting off chips to China,” said Roberts, author of The Myth of Chinese Capitalism.

China’s domestic manufacturing

China has been pushing to boost its domestic semiconductor manufacturing capacity. Beijing has pledged $150 billion to expand the industry and be more self-reliant. Plans are in place for new semiconductor factories.

Just last year, China’s chip manufacturing grew by 33.3%, according to China’s National Bureau of Statistics.

“China’s rapid growth in semiconductor chip sales is likely to continue due in large part to the unwavering commitment from the central government and robust policy support in the face of deteriorating U.S-China relations,” the Semiconductor Industry Association said in a blog.

Much of what will be produced in China is expected to be chips containing more mature technologies, analysts say.

US action

Under President Joe Biden, the U.S. has intensified efforts to strengthen its chip-making capabilities and reduce the reliance on external sources.

On Tuesday, Biden signed the much-awaited CHIPS and Science Act, which allocates around $52 billion to promote the production of microchips, the powerful driver for high-end electronics used in a wide range of products, including smartphones, electric vehicles, aircraft and military hardware.

Biden said the legislation would help “win the economic competition in the 21st century.”

U.S. Commerce Secretary Gina Raimondo said last month that it was necessary to reduce the dependence on supplies from Taiwan.

“Our dependence on Taiwan for chips is untenable and unsafe,” she said on July 22. “This is a Sputnik moment for America,” Raimondo said, referring to the CHIPS Act. “I mean that very sincerely. And this is a project we’re working on.”

Taiwan’s TSMC website states it is building a fabrication plant in the U.S. state of Arizona with the aim of starting production in 2024. It will produce semiconductor wafers using 5-nm technology.  During her recent controversial visit to Taiwan, Pelosi met TSMC’s Liu. TSMC is expected to be one of the beneficiaries of the $52 billion CHIPS and Science Act.

The U.S. is also countering China’s semiconductor industry in different ways. It recently broadened its ban on sales of chip-making equipment to China, according to Tim Archer, the chief executive officer of Lam Research Corp., a California supplier of silicon wafer fabrication gear.

The restriction would affect the shipment of machinery to produce 14 nm chips in China. This is an extension of the earlier ban, which prevented the supply of machinery for making advanced technology nodes of 10 nanometers. The idea is to cover a wider range of semiconductor equipment going to China.

South Korea, a U.S. ally, has indicated it would also cut off the chip supply to China in case Washington imposed global sanctions on it. Cutting off supplies would put China and Russia at a major technological disadvantage and hamper their manufacture of advanced military hardware. 
…

U.S. President Joe Biden has signed the CHIPS and Science Act, which aims to boost U.S. competitiveness against China by allocating billions of dollars toward domestic semiconductor manufacturing and scientific research.

“The United States must lead the world in the production of these advanced chips. This law will do exactly that,” Biden said in remarks during the signing ceremony Tuesday. The president is recovering from COVID-19 and coughed repeatedly during his remarks.

He called the bipartisan legislation a “once in a generation investment” in the country and said it will create good jobs, grow the economy and protect U.S. national security.

Biden noted stiff competition with China in the chips industry. “It’s no wonder the Chinese Communist Party actively lobbied U.S. business against this bill,” he remarked.

Biden was joined on stage for the event by House Speaker Nancy Pelosi, Senate Majority Leader Charles Schumer, Commerce Secretary Gina Raimondo, and Joshua Aviv, CEO of Spark Charge, an electric vehicle charging network.

Schumer called the legislation the “largest investment in manufacturing science and innovation in decades” and thanked Republican Senator Todd Young for his partnership for over three years working on semiconductor-related legislation, beginning with what was then called the Endless Frontier Act.

The proposed act went through various iterations before it was passed as the $280 billion CHIPS and Science Act on a 243-187 vote in the House of Representatives and a 64-33 vote in the Senate in July.

Last year, a semiconductor shortage affected the supply of automobiles, electronic appliances and other goods, causing higher inflation globally and pummeling Biden’s public approval rating among American voters.

Catching up in the chips race

The CHIPS Act includes $52 billion in incentives for domestic semiconductor production and research, as well as an investment tax credit for semiconductor manufacturing. Advocates say it will allow the U.S. to catch up in the global semiconductor manufacturing race currently dominated by China, Taiwan and South Korea.

Following the passage of the bill, the White House noted that Micron, a leading U.S. chip manufacturer, will announce a $40 billion plan to boost domestic chip production while Qualcomm and GlobalFoundries will unveil a $4.2 billion expansion of a chip plant in New York.

The U.S. share of global semiconductor manufacturing capacity has decreased from 37% in 1990 to 12% today, largely because other governments have offered manufacturing incentives and invested in research to strengthen domestic chipmaking capabilities, according to a state of the industry report by the Semiconductor Industry Association.

Now China accounts for 24% of the world’s semiconductor production, followed by Taiwan at 21%, South Korea at 19% and Japan at 13%, the report said.

The CHIPS Act also includes $4.2 billion to fund defense initiatives and the U.S. mobile broadband market, particularly efforts to promote non-Chinese 5G equipment manufacturing.

Broadly, the legislation lays out a strategy for Washington as it aims for global technological and economic dominance – gaining production autonomy by leveraging allies, including South Korea and Japan and eliminating political dependencies on the global semiconductor supply chain.

That strategy puts the U.S. on a collision course with China, which also aims to be the global leader in semiconductors. In 2015, Beijing launched the Made in China 2025 project, which aimed to increase chip production from less than 10% of global demand at the time to 40% in 2020 and 70% in 2025.

The Taiwan factor

Taiwan — a self-governed island that Beijing claims to be its breakaway province — is the main producer of the world’s most high-tech chips. It lies at the heart of the semiconductor showdown, the latest battlefront in the increasingly tense U.S.-China strategic rivalry.

Taiwan accounts for 92% of the global production of 10 nm or smaller semiconductors, essentially creating what some observers have characterized as a “silicon shield” that ensures American support in the event of a Chinese attack, as well as a deterrence against such a move.

In a visit to Taipei that angered Beijing earlier this month, U.S. House Speaker Nancy Pelosi met with Mark Liu, chairman of Taiwan Semiconductor Manufacturing Co., the world’s biggest chipmaker.

Pelosi delivered all but one Democratic vote in the House of Representatives for the CHIPS Act. “Mr. President with the stroke of your pen, America declares our economic independence,” she said in her remarks Tuesday. “We strengthen our national security, and we enhance our family’s financial future.”

Following Pelosi’s Taiwan visit, Beijing halted key communication channels with Washington and conducted live-fire military drills, raining Dongfeng ballistic missiles into the waters near Taiwan’s eastern, southern, and northern coasts.

While most experts don’t believe a war over Taiwan is imminent, many fear a conflict there would disrupt semiconductor production and have disastrous effects on global manufacturing.
…

Offshore wind farms are to be permitted for the first time in Australia. The Climate Change Minister Chris Bowen has declared part of the Victoria coast an offshore wind zone and a 60-day community consultation process will soon begin.

The Australian government has designated the country’s first offshore wind zone, which gives developers permission to increase their planning and consultation for wind farm projects.

Australia currently has no offshore wind generation, which was seen as too expensive and hard to build compared to onshore wind or solar projects.

The Climate Change Minister Chris Bowen says there is no time to lose.

“We are way behind the game, way behind the rest of the world in producing wind off our coastline. Again, we have a lot of catching up to do. Offshore wind is jobs-rich and energy-rich,” he said.

The first official offshore wind zone is off the Gippsland coast in the state of Victoria. There are plans to install up to 200 wind turbines, with the closest located 7 kilometers from the coastline. It would be one of the world’s largest wind farms. Construction could begin in 2025.

Other areas will follow off the coasts of New South Wales, Tasmania and Western Australia.

Erin Coldham, the acting chief executive of the Danish-owned Star of the South wind project in the Bass Strait in Victoria, says the project will help reduce Australia’s reliance on fossil fuels.

“In the region where we are looking to put a project in Gippsland, it is a region that has been generating power for over 100 years and been working in the offshore oil and gas business. But those communities know those opportunities will not be around forever. So, there is a really strong sense of enthusiasm for technologies like offshore wind to continue that tradition into the future,” said Coldham.

Wind turbines have been identified as a key part in Australia’s plan to generate more than 80% of its energy needs with renewable sources by 2030.

In 2020, 24% of Australia’s electricity came from renewable energy, up from 21% in 2019.

Solar is Australia’s largest source of green power. A quarter of Australian homes have rooftop solar systems — the highest uptake in the world.

But despite this, Australia has been one of the world’s worst per capita emitters of greenhouse pollution. Coal and gas still generate most of its electricity. Analysts have said that for years it has been regarded as a climate laggard.

But that perception is now changing.

For the first time, Australia has a legislated target to cut greenhouse gas output.

Last week, new laws were passed by the federal parliament in Canberra that will cut carbon emissions by 43% by 2030.

 
…

President Joe Biden virtually joined Michigan Governor Gretchen Whitmer Tuesday to celebrate the CHIPS and Science Act, which aims to boost U.S. competitiveness against China by allocating billions of dollars toward domestic semiconductor manufacturing and scientific research.

“This bill makes it clear the world’s leading innovation will happen in America. We will both invent in America and make it in America,” Biden said. He was scheduled to join the event in person but had to remain in isolation after testing positive for COVID-19 again on Saturday in what his physician described as a “rebound” case.

In the coming days, Biden is expected to sign the legislation, which passed in a 243-187 vote in the House of Representatives and 64-33 vote in the Senate last week.

The $280 billion act includes $52 billion in incentives for domestic semiconductor production and research, as well as an investment tax credit for semiconductor manufacturing. Advocates say it will allow the U.S. to catch up in the global semiconductor manufacturing race currently dominated by China, Taiwan and South Korea.

Last year, a semiconductor shortage affected the supply of automobiles, electronic appliances and other goods, causing higher inflation globally and pummeling Biden’s public approval among American voters.

Michigan, a major hub for the American auto industry, has been one of the states hardest hit by the semiconductor shortage.

“This bill will mean humming factories and lower costs on electronics, medical devices, farm equipment and cars for working families,” Whitmer said.

The act includes $4.2 billion to fund defense initiatives and the U.S. mobile broadband market, particularly efforts to promote non-Chinese 5G equipment manufacturing.

Catching up with China

The U.S. share of global semiconductor manufacturing capacity has decreased from 37% in 1990 to 12% today, largely because other governments have offered manufacturing incentives and invested in research to strengthen domestic chipmaking capabilities, according to a state of the industry report by the Semiconductor Industry Association.

Now China accounts for 24% of the world’s semiconductor production, followed by Taiwan at 21%, South Korea at 19% and Japan at 13%, the report said.

With the CHIPS Act, the administration hopes to bring as much semiconductor manufacturing to the U.S. as practically possible, said Bonnie Glick, director of the Krach Institute for Tech Diplomacy at Purdue University.

“And what can’t be reasonably onshore, either because it’s cost prohibitive or other allied countries simply do it better, we can ally-shore manufacturing and support that,” she told VOA.

The two allies the administration has leveraged are South Korea and Japan, both of which Biden visited in May. In Seoul, he toured a Samsung computer chip factory that is the model for a $17 billion facility that the South Korean technology giant is setting up in the U.S. state of Texas.

Last week, the U.S. and Japan launched a new joint international semiconductor research hub under a “bilateral chip technology partnership” to bolster manufacturing for 2-nanometer chips as early as 2025.

Washington has also persuaded Taiwan Semiconductor Manufacturing Ltd. (TSMC) to open a U.S. foundry to produce advanced semiconductors. The $12 billion facility in the state of Arizona was completed last month and is scheduled to start production of 5 nm chips by 2024. TMSC also has plants in China.

“We’re back in the game,” Biden said Tuesday. “Remember, we invented these chips, we modernized these chips, we made them work, and there’s a lot more we can get done.”

The CHIPS Act has laid out a clear strategy for Washington, said Volker Sorger, director of the Devices & Intelligent Systems Laboratory at the George Washington University.

“Gain autonomy and eliminate political dependencies on these global supply chain values,” Sorger told VOA.

That strategy puts the U.S. on a collision course with China, which also aims to be the global leader in semiconductors. In 2015, Beijing launched the Made in China 2025 project, which aimed to increase chip production from less than 10% of global demand at the time to 40% in 2020 and 70% in 2025.

The Made in China 2025 program and the People’s Liberation Army’s goal of military-civil fusion make it “overtly clear that Beijing is seeking to dominate global technology and supply chains through anti-competitive trade practices and infiltration of dual-use technology research,” Glick said.

The U.S. government has been pushing for stricter export regulations to China by prohibiting export of equipment needed for manufacturing chips at 14 nm and below. “That would mark an escalation from the previous ban covering 10 nm and below,” Glick added.

Taiwan’s strategic importance

Taiwan — a self-governed island that Beijing claims to be its breakaway province — lies at the heart of the increasingly tense U.S.-China rivalry.

Taipei has dominated manufacture of the world’s most high-tech chips, accounting for 92% of the global production of 10 nm or smaller semiconductors, essentially creating what some observers have characterized as a “silicon shield” that ensures American support in the event of a Chinese attack, as well as a deterrence to such a move.

A military conflict over Taiwan could disrupt TMSC’s semiconductor production and have disastrous effects on global manufacturing.

U.S.-China tensions are already spooking technology investors. TSMC shares fell nearly 3% on Tuesday as U.S. House of Representatives Speaker Nancy Pelosi landed in Taipei in a visit she said demonstrated American solidarity with the Taiwanese people.

Beijing has condemned the visit, the first by a U.S. House speaker in 25 years, as a threat to peace and stability in the Taiwan Strait.

Rare earths

The CHIPS Act does not include provisions to secure supply chains of rare earths — and other critical minerals used in semiconductors and other high-tech elements — to reduce the nation’s dependence on China, a major producer of these elements.

“I don’t know that we have developed a coherent strategy on accessing both rare and nonrare elements,” Glick said.

Last June, following Biden’s executive order to improve supply chains, the administration released a report concluding that the U.S. was overly reliant on China for critical minerals. Currently, China controls 87% of the global permanent magnet market, 55% of rare earths mining capacity and 85% of rare earths refining.

Earlier this year, the administration announced actions it said would bolster the supply chain of these elements, including a contract for U.S. company MP Materials to process heavy rare earth elements at its California production site — the first processing and separation facility of its kind in the nation.  
…

US President Joe Biden virtually joined Michigan Governor Gretchen Whitmer on Tuesday to celebrate the CHIPS and Science Act, which aims to boost US competitiveness against China by allocating billions of dollars toward domestic semiconductor manufacturing and research. White House Bureau Chief Patsy Widakuswara has this report.
…

Kenyan ministers said the government has no intention of banning Facebook despite a watchdog last week accusing the social media platform of failing to stop hate speech ahead of Aug. 9 elections.

Kenya’s National Cohesion and Integration Commission (NCIC) last week gave Facebook one week to comply with regulations against ethnic hate speech or risk suspension.

The threat came after a report by rights group Global Witness said Facebook approved hate speech advertisements that promoted ethnic violence ahead of the election.

But Kenya’s Interior Cabinet Secretary Fred Matiangi accused the NCIC of making what he termed a careless decision on the matter.

He assured the public that the platform would not be shut down.

Kenya’s Minister of Information and Technology Joe Mucheru echoed that vow to VOA in a telephone interview Monday.

He said while the issues raised were valid, they did not warrant blocking Facebook.

“That is not within our legal mandate, and we have been working with Facebook and many other platforms,” Muchera said. “Facebook for example has in this electioneering period has deleted over 37,000 inflammatory comments.”

In a statement last week, Facebook admitted having missed hate speech messages in Kenya, where national data shows an estimated 13 million users of the platform.

A spokesperson for Facebook’s parent company, Meta, blamed human and machine error for missing some inflammatory content and said they had taken steps to prevent such content.

Kenya’s cohesion commission said this year’s election had seen less in-person hate speech as it migrated from political rallies to social media.

It said the main perpetrators were followers of Kenya’s two leading presidential candidates — former Prime Minister Raila Odinga and Deputy President William Ruto.
…

The United States and Japan launched a new high-level economic dialogue Friday aimed at pushing back against China and countering the disruption caused by Russia’s invasion of Ukraine.

The two longtime allies agreed to establish a new joint research center for next-generation semiconductors during the so-called economic “two-plus-two” ministerial meeting in Washington, Japanese Trade Minister Koichi Hagiuda said.

U.S. Secretary of State Antony Blinken, U.S. Commerce Secretary Gina Raimondo, Japanese Foreign Minister Yoshimasa Hayashi and Hagiuda also discussed energy and food security, the officials said in a news briefing.

“As the world’s first- and third-largest economies, it is critical that we work together to defend the rules-based economic order, one in which all countries can participate, compete and prosper,” Blinken told the opening session.

Hagiuda said “Japan will quickly move to action” on next-generation semiconductor research and said Washington and Tokyo had agreed to launch a “new R&D organization” to establish a secure source of the vital components.

The research hub would be open for other “like-minded” countries to participate in, he said.

The two countries did not immediately release additional details of the plan, but Japan’s Nikkei Shimbun newspaper earlier said it would be set up in Japan by the end of this year to research 2-nanometer semiconductor chips. It will include a prototype production line and should begin producing semiconductors by 2025, the newspaper said.

“As we discussed today, semiconductors are the linchpin of our economic and national security,” said Raimondo, adding that the officials had discussed collaboration on semiconductors, “especially with respect to advanced semiconductors.”

Taiwan now makes the vast majority of semiconductors under 10 nanometers, which are used in products such as smart phones, and there is concern about the stability of supply should trouble arise involving Taiwan and China, which views the island as part of its territory.

The United States and Japan said in a joint statement they would work together “to foster supply chain resilience in strategic sectors, including, in particular, semiconductors, batteries, and critical minerals.” They vowed to “build a strong battery supply chain to lead collaboration between like-minded countries.”

On ties with Russia, Hagiuda said he gained U.S. understanding about Japan’s intention to keep its stake in the Sakhalin-2 oil and gas project despite sanctions against Moscow by Washington, Tokyo and others following the Ukraine invasion.

“There are voices calling for withdrawal. But it would mean our stake goes to a third country and Russia earns an enormous profit. We explained how keeping our stake is in line with sanctions, and I believe we gained U.S. understanding,” he said.

Japanese trading houses Mitsui & Co and Mitsubishi Corp hold a combined 22.5% stake in the project.
…

The House on Thursday passed a $280 billion package to boost the semiconductor industry and scientific research in a bid to create more high-tech jobs in the United States and help it better compete with international rivals, namely China. 

The House approved the bill by a solid margin of 243-187, sending the measure to President Joe Biden to be signed into law and providing the White House with a major domestic policy victory. Twenty-four Republicans voted for the legislation. The Senate passed the bill Wednesday, 64-33.

“Today, the House passed a bill that will make cars cheaper, appliances cheaper and computers cheaper,” Biden said. “It will lower the costs of everyday goods. And it will create high-paying manufacturing jobs across the country and strengthen U.S. leadership in the industries of the future at the same time.” 

As the vote was taking place, Biden was discussing the economy with CEOs at the White House. During the event, he was handed a note informing him it was clear the bill would pass — a development that produced a round of applause before the tally was final. 

Most Republicans argued that the government should not spend billions to subsidize the semiconductor industry. GOP leadership in the House recommended a vote against the bill, telling members the plan would provide enormous subsidies and tax credits “to a specific industry that does not need additional government handouts.” 

Taxes, regulations

Representative Guy Reschenthaler, a Pennsylvania Republican, said the way to help the industry would be through tax cuts and easing federal regulations, “not by picking winners and losers” with subsidies — an approach that Representative Joseph Morelle, a New York Democrat, said was too narrow. 

“This affects every industry in the United States,” Morelle said. “Take, for example, General Motors announcing they have 95,000 automobiles awaiting chips. So, you want to increase the supply of goods to people and help bring down inflation? This is about increasing the supply of goods all over the United States in every single industry.” 

Some Republicans viewed passing the legislation as important for national security. 

Representative Michael McCaul of Texas, the top Republican on the House Foreign Affairs Committee, said it was critical to protect semiconductor capacity in the U.S. and that the country was too reliant on Taiwan for the most advanced chips. That could prove to be a major vulnerability should China try to take over the self-governing island that Beijing views as a breakaway province 

“I’ve got a unique insight in this. I get the classified briefing. Not all these members do,” McCaul said. “This is vitally important for our national security.” 

The bill provides more than $52 billion in grants and other incentives for the semiconductor industry as well as a 25% tax credit for those companies that invest in chip plants in the U.S. It calls for increased spending on various research programs that would total about $200 billion over 10 years, according to the Congressional Budget Office. 

The CBO also projected that the bill would increase deficits by about $79 billion over the coming decade. 

Senate health, climate package

A late development in the Senate — progress announced Wednesday night by Democrats on a $739 billion health and climate change package — threatened to make it harder for supporters to get the semiconductor bill over the finish line, based on concerns about government spending that GOP lawmakers said would fuel inflation. 

Representative Frank Lucas, an Oklahoma Republican, said he was “disgusted” by the turn of events. 

Despite bipartisan support for the research initiatives, “regrettably, and it’s more regrettably than you can possibly imagine, I will not be casting my vote for the CHIPS and Science Act today,” Lucas said. 

Representative Kevin McCarthy, the Republican leader in the House, likened the bill’s spending to “corporate welfare to be handed out to whoever President Biden wants.” 

Leading into the vote, it was unclear whether any House Democrats would join with Senator Bernie Sanders, a Vermont independent, in voting against the bill; in the end, none did. 

Democrats urged to step up

Commerce Secretary Gina Raimondo talked to several of the most progressive members of the Democratic caucus in a meeting before the vote, emphasizing that the proposal was a critical part of the president’s agenda and that Democrats needed to step up for him at this important moment. 

Some Republicans criticized the bill as not tough enough on China, and GOP leaders emphasized that point in recommending a “no” vote. Their guidance acknowledged the threat China poses to supply chains in the U.S. but said the package “will not effectively address that important challenge.” 

But, as McCaul pointed out, China opposed the measure and worked against it. The bill includes a provision that prohibits any semiconductor company receiving financial help through the bill from supporting the manufacture of advanced chips in China. 

Zhao Lijian, a Chinese Foreign Ministry spokesman, commenting before the House vote, said the U.S. “should not put in place obstacles for normal science, technology and people-to-people exchanges and cooperation” and “still less should it take away or undermine China’s legitimate rights to development.”
…

The U.S. Justice Department is investigating a cyber breach involving the federal court records management system, the department’s top national security attorney told lawmakers Thursday.

Matt Olsen, head of the Justice Department’s National Security Division, alluded to the threat of cyberattacks by foreign nations as he told the U.S. House of Representative Judiciary Committee that the incident was a “significant concern.”

Olsen made the remarks in response to questions from Representative Jerrold Nadler, the panel’s Democratic chairman, who said that “three hostile foreign actors” had attacked the courts’ document filing system.

Nadler said the committee learned only in March of the “startling breadth and scope” of the breach. Olsen said the Justice Department was working closely with the federal judiciary around the country to address the issue.

“While I can’t speak directly to the nature of the ongoing investigation of the type of threats that you’ve mentioned regarding the effort to compromise public judicial dockets, this is of course a significant concern for us given the nature of the information that’s often held by the courts,” Olsen said.

Olsen did not comment on who was behind the attack, but he noted that his division was focused generally on the risk of cyberattacks by foreign nations including China, Russia, Iran and North Korea.

The Administrative Office of the U.S. Courts in January 2021 said it was adding new security procedures to protect confidential or sealed records following an apparent compromise of its electronic case management and filing system.

The Administrative Office, the judiciary’s administrative arm, in a statement on Thursday called cybersecurity a high priority and said it has been taking “significant actions to protect our systems and the sensitive information they contain.”

Further details could not be immediately determined. A Justice Department spokesman said the department as a general policy does not confirm or deny the existence of specific investigations.

The federal judiciary has been working to modernize its electronic case management and filing system and the related online portal known as PACER, which is used to access records, citing the risk of cyberattacks on the aging electronic system.

“We are vulnerable,” U.S. Circuit Judge Amy St. Eve testified at a House committee hearing in May on the judiciary’s budget request. 
…

Located on the rooftops of commercial skyscrapers, apartment buildings and warehouses, micro solar plants are starting to play a larger role in America’s quest for a green electrical grid. Aron Ranen reports from New York City.
…

 Twitter Inc. does not object to Elon Musk’s proposal to start a trial on October 17 over Musk’s bid to walk away from his $44 billion acquisition deal but the social media company wants a commitment to complete the trial in five days, Twitter said in a court filing on Wednesday. 

Musk has said he needs time to complete a thorough investigation of what he says is Twitter’s misrepresentation of fake accounts, which he said breached their deal terms. 

He originally sought a February trial, but on Tuesday proposed an October 17 trial after a judge ruled the proceeding was to start in three months. 

Twitter has called the fake accounts a distraction and pushed for the trial to hold Musk to the deal to start as soon as possible, arguing that delay damages its business. It said in its court filing that Musk had offered no assurance a trial would be completed in five days, as ordered by the judge, Kathaleen McCormick of the Delaware Court of Chancery. 

“Twitter sought that commitment because it believes Musk’s objective remains to delay trial, render impracticable the Court’s expedition order, and thus avoid adjudication of his contractual obligations,” said the Twitter filing. 

Attorneys for Musk, the world’s richest person and chief executive of electric car maker Tesla Inc, did not respond to requests for comment. 

Twitter also dismissed Musk’s claims that the company was dragging its feet in responding to his demands for documents. 

Twitter said Musk is the one holding up the process by refusing to answer the company’s complaint, which it said would clarify the issues and any counterclaims he may assert. 

Shares of Twitter closed up 1.3% at $39.85 on Wednesday. 

Musk agreed to acquire the company for $54.20 a share. 
…

Meta Platforms Inc. issued a gloomy forecast after recording its first ever quarterly drop in revenue Wednesday, with recession fears and competitive pressures weighing on its digital ads sales. 

Shares of the Menlo Park, California-based company were down about 4.6% in extended trading. 

The company said it expected third-quarter revenue to be in the range of $26 billion to $28.5 billion, which would be a second consecutive year-over-year drop. Analysts were expecting $30.52 billion, according to IBES data from Refinitiv. 

Total revenue, which consists almost entirely of ad sales, fell 1% to $28.8 billion in the second quarter ended June 30, from $29.1 billion last year. The figure slightly missed Wall Street’s projections of $28.9 billion, according to Refinitiv. 

The company, which operates the world’s largest social media platform, reported mixed results for user growth. 

Monthly active users on flagship social network Facebook came in slightly under analyst expectations at 2.93 billion in the second quarter, an increase of 1% year over year, while daily active users handily beat estimates at 1.97 billion. 

Like many global companies, Meta is facing some revenue pressure from the strong dollar, as sales in foreign currencies amount to less in dollar terms. Meta said it expected a 6% revenue growth headwind in the third quarter, based on current exchange rates. 

Still, the Meta results also suggest that fortunes in online ads sales may be diverging between search and social media players, with the latter affected more severely as ad buyers reel in spending. 

Alphabet Inc., the world’s largest digital ad platform, reported a rise in quarterly revenue on Tuesday, with sales from its biggest moneymaker, Google search, topping investor expectations. 

Snap Inc. and Twitter both missed sales expectations last week and warned of an ad market slowdown in the coming quarters, sparking a broad sell-off across the sector. 

On top of economic pressures, Meta’s core business is also experiencing unique strain as it competes with short video app TikTok for users’ time and adjusts its ads business to privacy controls rolled out by Apple Inc. last year. 

The company is simultaneously carrying out several expensive overhauls as a result, revamping its core apps and boosting its ad targeting with AI, while also investing heavily in a longer-term bet on “metaverse” hardware and software. 

Meta executives told investors they were making progress in replacing ad dollars lost as a result of the Apple changes but said it was being offset by the economic slowdown. 

They added that Reels, a short video product Meta is increasingly inserting into users’ feeds to compete with TikTok, was now generating over $1 billion annually in revenue. 

However, Reels cannibalizes more profitable content that users could otherwise see and will continue to be a headwind on profits through 2022 before eventually boosting income, executives told analysts on Wednesday. 

“They are being greatly affected by everything,” Bokeh Capital Partners’ Kim Forrest said, referring to the economic slowdown as well as competition from TikTok and Apple.  

“Meta has a problem because they’re chasing TikTok and if the Kardashians are talking about how they don’t like Instagram … Meta should really pay attention to that.” 

On Monday, two of Instagram’s biggest users, Kim Kardashian and Kylie Jenner, shared a meme imploring the company to abandon its shift to TikTok-style content suggestions and “make Instagram Instagram again.” 

Not persuaded

CEO Mark Zuckerberg did not appear to be swayed, however. 

About 15% of content on Facebook and Instagram is currently recommended by AI from accounts users do not actively follow, and that percentage will double by the end of 2023, he told investors on the call. 

For now, at least, the metaverse part of Meta’s business remains largely theoretical. In the second quarter, Meta reported $218 million in non-ad revenue, which includes payments fees and sales of devices like its Quest virtual reality headsets, down from $497 million last year. 

Its Reality Labs unit, which is responsible for developing metaverse-oriented technology like the VR headsets, reported sales of $452 million, down from $695 million in the first quarter. 

Although Meta has recently slowed investments as cost pressures increased, executives reassured investors it was still on track to release a mixed-reality headset called Project Cambria later this year, focused on professionals. 

Meta broke out the Reality Labs segment in its results for the first time earlier this year, when it revealed the unit had lost $10.2 billion in 2021. 

Its second-quarter operating profit margin fell to 29% from 43% as costs rose sharply and revenue dipped. 

In November, Chief Financial Officer David Wehner will become Meta’s first chief strategy officer. Susan Li, Meta’s current vice president of finance, will become CFO.
…