India will break ground on its first semiconductor assembly plant next month and begin producing the country's first domestically manufactured microchips by the end of 2024, according to a senior government official who is overseeing New Delhi's $10bn chipmaking foray. From a report: Ashwini Vaishnaw, India's minister of electronics and information technology, said US semiconductor company Micron Technology, which is setting up a chip assembly and test facility in Gujarat, would start construction in August on the $2.75bn project, which includes government support. Vaishnaw said the India Semiconductor Mission spearheaded by Narendra Modi's government was also doing "extensive work" to marshall support from other supply chain partners, including suppliers of chemicals, gases and manufacturing equipment, alongside companies interested in setting up silicon wafer fabrication plants.

"This is the fastest for any country to set up a new industry," Vaishnaw said in an interview with the Financial Times. "I'm not just saying a new company -- this is a new industry for the country." He added: "Eighteen months is when we have targeted for [the first] production to come out of this factory -- that is, December of '24." The minister's remarks set a demanding timeline for Modi's government as it strives to build up India's capacity in producing smartphones, batteries, electric vehicles and other electronics. The country's tech manufacturing sector lags behind those of east Asia's export-led economies, notably China, which began earlier and offered more subsidies to industry.

July 3 was the hottest day ever recorded globally, according to data from the U.S. National Centers for Environmental Prediction. From a report: The average global temperature reached 17.01 degrees Celsius (62.62 Fahrenheit), surpassing the August 2016 record of 16.92C (62.46F) as heatwaves sizzled around the world. The southern U.S. has been suffering under an intense heat dome in recent weeks. In China, an enduring heatwave continued, with temperatures above 35C (95F). North Africa has seen temperatures near 50C (122F). And even Antarctica, currently in its winter, registered anomalously high temperatures. Ukraine's Vernadsky Research Base in the white continent's Argentine Islands recently broke its July temperature record with 8.7C (47.6F).

The Biden administration is preparing to restrict Chinese companies' access to U.S. cloud-computing services, WSJ reported Tuesday, citing people familiar with the situation, in a move that could further strain relations between the world's economic superpowers. From the report: The new rule, if adopted, would likely require U.S. cloud-service providers such as Amazon.com and Microsoft to seek U.S. government permission before they provide cloud-computing services that use advanced artificial-intelligence chips to Chinese customers, the people said. The Biden administration's move would follow other recent measures as Washington and Beijing wage a high-stakes conflict over access to the supply chain for the world's most advanced technology.

Beijing Monday announced export restrictions on metals used in advanced chip manufacturing, days ahead of a visit to China by Treasury Secretary Janet Yellen. The proposed restriction is seen as a means to close a significant loophole. National-security analysts have warned that Chinese AI companies might have bypassed the current export controls rules by using cloud services. These services allow customers to gain powerful computing capabilities without purchasing advanced equipment -- including chips -- on the control list, such as the A100 chips by American technology company Nvidia.

The European Union (EU) is seeking closer cooperation with Japan in areas such as artificial intelligence to reduce reliance on China. CNBC reports: EU Commissioner Thierry Breton is meeting with the Japanese government on Monday, and artificial intelligence will be "very high" on his agenda, he said in a video posted on Twitter on Sunday. "I will engage with [the] Japanese government ... on how we can organize our digital space, including AI based on our shared value," Breton said.

Breton also said there will be an EU-Japan Digital Partnership council, to discuss areas including quantum and high-performance computing. The EU held a similar council with South Korea last week, in which the two sides agreed to cooperate on technologies such as AI and cybersecurity. Partnerships with key Asian countries with strong technology sectors come as the EU looks to "de-risk" from China -- a different approach from that of the U.S., which has sought to decouple its economy from Beijing. Part of that EU strategy involves deepening the relationship with allied countries around technology.

Breton told Reuters on Monday that the bloc and Japan will cooperate in the area of semiconductors. Japan is a key country in the semiconductor supply chain, and Tokyo has been looking to strengthen its domestic industry. Last week, a fund backed by the Japanese government proposed to buy domestic chipmaking firm JSR for around 903.9 billion yen ($6.3 billion). The EU has also been looking to strengthen its own semiconductor industry across the bloc.

An anonymous reader quotes a report from Bloomberg: China imposed restrictions on exporting two metals that are crucial to parts of the semiconductor, telecommunications and electric-vehicle industries in an escalation of the country's tit-for-tat trade war on technology with the US and Europe. Gallium and germanium, along with their chemical compounds, will be subject to export controls meant to protect Chinese national security starting Aug. 1, China's Ministry of Commerce said in a statement Monday. Exporters for the two metals will need to apply for licenses from the commerce ministry if they want to start or continue to ship them out of the country, and will be required to report details of the overseas buyers and their applications, it said.

Impact on the tech industry "depends on the stockpile of equipment on hand," said Roger Entner, an analyst with Recon Analytics LLC. "It's more of a muscle flexing for the next year or so. If it drags on, prices will go up." China is the dominant global producer of both metals that have applications for electric vehicle makers, the defense industry and displays. Gallium and germanium play a role in producing a number of compound semiconductors, which combine multiple elements to improve transmission speed and efficiency. China accounts for about 94% of the world's gallium production, according to the UK Critical Minerals Intelligence Centre.

Still, the metals aren't particularly rare or difficult to find, though China's kept them cheap and they can be relatively high-cost to extract. Both metals are byproducts from processing other commodities such as coal and bauxite, the base for aluminum production. With restricted supply, higher prices could draw out production from elsewhere. "When they stop suppressing the price, it suddenly becomes more viable to extract these metals in the West, then China again has an own-goal," said Christopher Ecclestone, principle at Hallgarten & Co. "For a short while they get a higher price, but then China's market dominance gets lost -- the same thing has happened before in other things like antimony, tungsten and rare earths."

Mark Zuckerberg in late 2021 had a question for those working on Meta Platforms' strategy for its virtual-reality headset: If Apple can sell iPhones in China, and Tesla can sell cars, why can't we sell our devices there? From a report: The question, posed on a video call, led to a push by Meta to restart its China business by selling its Quest headsets in the country, according to a person familiar with the matter, more than a decade after Facebook was blocked there. The company held discussions with several Chinese tech companies and has made progress with videogame powerhouse Tencent, people familiar with the matter said. But the effort faces challenges, in part because Chinese executives worry that Zuckerberg isn't seen as friendly to China, according to people familiar with the matter.

In recent years the Meta founder has accused China of stealing technology and taken aim at ByteDance, the Chinese owner of video-sharing platform TikTok. That has undermined a charm offensive Zuckerberg undertook in Beijing in 2016 and bolstered negative views of the entrepreneur in Beijing, the people said. Officials' perceptions of Zuckerberg could add uncertainty should Meta and its partner seek licenses and approvals for their products and services in China, some of the people said. Meta's refusal to comply with Beijing's censorship rules led to its being blocked in 2009, officials have said. Both Facebook and Twitter were cut off that year after unrest in China's Xinjiang region, with state media saying social media was used to stir riots.

Apple has been forced to make drastic cuts to production forecasts for the mixed-reality Vision Pro headset, unveiled last month after seven years in development and hailed as its most significant product launch since the iPhone. From a report: The complexity of the headset design and difficulties in production are behind the scaling back of targets, while plans for a more affordable version of the device have had to be pushed back, according to multiple people with direct knowledge of the manufacturing process.

Apple has already flagged that the $3,500 "spatial computing" headset device will not go on sale until "early next year," a lengthy gap from its June 5 launch. Analysts have interpreted this as being more to do with supply chain problems than allowing developers time to create apps for the Vision Pro. Two people close to Apple and Luxshare, the Chinese contract manufacturer that will initially assemble the device, said it was preparing to make fewer than 400,000 units in 2024. Multiple industry sources said Luxshare was currently Apple's only assembler of the device. Separately, two China-based sole suppliers of certain components for the Vision Pro said Apple was only asking them for enough for 130,000 to 150,000 units in the first year.

China is shoring up its position as the world leader in renewable power and potentially outpacing its own ambitious energy targets, a report has found. The Guardian: China is set to double its capacity and produce 1,200 gigawatts of energy through wind and solar power by 2025, reaching its 2030 goal five years ahead of time, according to the report by Global Energy Monitor, a San Francisco-based NGO that tracks operating utility-scale wind and solar farms as well as future projects in the country.

It says that as of the first quarter of the year, China's utility-scale solar capacity has reached 228GW, more than that of the rest of the world combined. The installations are concentrated in the country's north and north-west provinces, such as Shanxi, Xinjiang and Hebei. In addition, the group identified solar farms under construction that could add another 379GW in prospective capacity, triple that of the US and nearly double that of Europe. China has also made huge strides in wind capacity: its combined onshore and offshore capacity now surpasses 310GW, double its 2017 level and roughly equivalent to the next top seven countries combined. With new projects in Inner Mongolia, Xinjiang, Gansu and along coastal areas, China is on course to add another 371GW before 2025, increasing the global wind fleet by nearly half.

An anonymous reader quotes a report from Reuters: When former Samsung executive Choi Jinseog won a contract with Taiwan's Foxconn in 2018, he tapped his former employer's supplier network to steal secrets to help his new client set up a chip factory in China, a sealed indictment by South Korean prosecutors alleges. Prosecutors announced the indictment on June 12, saying the theft caused more than $200 million in damages to Samsung Electronics, based on the estimated costs Samsung spent to develop the stolen data. The announcement did not name Choi and gave only limited details, although some media subsequently identified Choi and his links with Foxconn. The unreleased 18-page indictment, reviewed by Reuters, provides details in the case against Choi, including how he is alleged to have stolen Samsung's trade secrets and details about the planned Foxconn plant.

Choi, who has been detained in jail since late May, denied all the charges through his lawyer, Kim Pilsung. Choi's Singapore-based consultancy Jin Semiconductor won the contract with Foxconn around August 2018, according to the indictment. Within months, Choi had poached "a large number" of employees from Samsung and its affiliates and illegally obtained secret information related to building a chip factory from two contractors, prosecutors allege. Jin Semiconductor illegally used confidential information involving semiconductor cleanroom management obtained from Cho Young-sik who worked at one of the contractors, Samoo Architects & Engineers, the indictment alleges. Clean rooms are manufacturing facilities where the enclosed environment is engineered to remove dust and other particles that can damage highly sensitive chips. Samoo had participated in the 2012 construction of Samsung's chip plant in Xian, China. Prosecutors allege Choi's company also illegally obtained blueprints of Samsung's China plant from Chung Chan-yup, an employee at HanmiGlobal, which supervised its construction and floor layouts involving the chip manufacturing process. They have yet to establish how the information on floor layout was obtained, according to the indictment.

Choi signed a preliminary consulting contract in around 2018 with Foxconn to build the chip factory potentially in Xian, his lawyer said. However, Foxconn ended the contract just a year later and only paid salaries related to the project, the lawyer said. He declined to comment on why Foxconn ended the contract or to provide further details, citing the sensitivity of the matter. The person with direct knowledge of the case said prosecutors found Foxconn had agreed to provide 8 trillion won ($6 billion) to build the factory, and Foxconn also paid several million dollars to Choi's company every month until it pulled out of the contract for reasons the indictment did not disclose. Jin Semiconductor's financial statement in 2018 said it entered into an arrangement with "a major customer" for the provision of qualified manpower in the next five years. The customer paid an advance of $17,994,217 to the company, according to the statement. Choi's lawyer said his client may be a scapegoat in a campaign by the South Korean government, caught in a rivalry between China and the United States, seeking seek to slow China's progress in chip manufacturing. [...] Choi is charged along with five other former and current Jin Semiconductor employees and a Samsung contractor employee. Trial is set to begin on July 12, court records show.

Carl Zimmer writes in The New York Times: In its first week, a fertilized human egg develops into a hollow ball of 200 cells and then implants itself on the wall of the uterus. Over the next three weeks, it divides into the distinct tissues of a human body. And those crucial few weeks remain, for the most part, a black box. "We know the basics, but the very fine details we just don't know," said Jacob Hanna, a developmental biologist at the Weizmann Institute of Science in Israel. Dr. Hanna and a number of other biologists are trying to uncover those details by creating models of human embryos in the lab. They are coaxing stem cells to organize themselves into clumps that take on some of the crucial hallmarks of real embryos.

This month, Dr. Hanna's team in Israel, as well as groups in Britain, the United States and China, released reports on these experiments. The studies, while not yet published in scientific journals, have attracted keen interest from other scientists, who have been hoping for years that such advances could finally shed light on some of the mysteries of early human development. Ethicists have long cautioned that the advent of embryo models would further complicate the already complicated regulation of this research. But the scientists behind the new work were quick to stress that they had not created real embryos and that their clusters of stem cells could never give rise to a human being. "We do it to save lives, not create it," said Magdalena Zernicka-Goetz, a developmental biologist at the University of Cambridge and the California Institute of Technology, who led another effort. [...]

If scientists can create close, reliable models of embryos, they will be able to run large-scale experiments to test potential causes of pregnancy failures, such as viral infections and genetic mutations. The models could lead to other medical advances too, noted Insoo Hyun, a member of the Harvard Medical School Center for Bioethics who was not involved in the new studies. "Once you get the embryo models in place and you can rely on them, that can be an interesting way to screen drugs that women take when they're pregnant," he said. "That would be an enormous benefit." Dr. Hanna [...] also saw a possibility of using embryo models as a new form of stem-cell treatment for diseases such as cancer.

The Associated Press reports from the Paris Air Show, where developers of electric vertical take-off and landing aircraft (or eVTOLs) demonstrated their surprisingly quiet electrically-powered craft. And in one year the Paris region "is planning for a small fleet of electric flying taxis to operate on multiple routes when it hosts the 2024 Olympic and Paralympic Games next summer." Unless aviation regulators in China beat Paris to the punch by green-lighting a pilotless taxi for two passengers under development there, the French capital's prospective operator — Volocopter of Germany — could be the first to fly taxis commercially if European regulators give their OK...

The limited power of battery technology restricts the range and number of paying passengers they can carry, so eVTOL hops are likely to be short and not cheap at the outset. And while the vision of simply beating city traffic by zooming over it is enticing, it also is dependent on advances in airspace management. Manufacturers of eVTOLs aim in the coming decade to unfurl fleets in cities and on more niche routes for luxury passengers, including the French Riveria. But they need technological leaps so flying taxis don't crash into each other and all the other things already congesting the skies or expected to take to them in very large numbers — including millions of drones.

Starting first on existing helicopter routes, "we'll continue to scale up using AI, using machine-learning to make sure that our airspace can handle it," said Billy Nolen of Archer Aviation Inc. It aims to start flying between downtown Manhattan and Newark's Liberty Airport in 2025. That's normally a 1-hour train or old-fashioned taxi ride that Archer says its sleek, electric 4-passenger prototype could cover in under 10 minutes. Nolen was formerly acting head of the Federal Aviation Administration, the U.S. regulator that during his time at the agency was already working with NASA on technology to safely separate flying taxis.

Just as Paris is using its Olympic Games to test flying taxis, Nolen said the 2028 Los Angeles Olympics offer another target for the industry to aim for and show that it can fly passengers in growing numbers safely, cleanly and affordably. "We'll have hundreds, if not thousands, of eVTOLs by the time you get to 2028," he said in an interview with The Associated Press at the Paris show. The "very small" hoped-for experiment with Volocopter for the Paris Games is "great stuff. We take our hats off to them," he added. "But by the time we get to 2028 and beyond ... you will see full-scale deployment across major cities throughout the world."
The article includes a skeptical quote from Richard Aboulafia of aerospace consultancy AeroDynamic Advisory.

"You and I can take air taxis right now. It's called a helicopter."

Interesting Engineering reports: Chinese authorities have officially given the green light to commission a working thorium-based molten salt nuclear reactor. Currently under construction since 2018, the reactor in question, "Thorium Molten Salt Reactor — Liquid Fuel 1" (TMSR-LF1), is being built at the Hongshagang Industrial Cluster, Wuwei City, Gansu Province.

If successful, the TMSR-LF1 has the potential to open doors for developing and constructing a more extensive demonstration facility by 2030. Additionally, it could lead to constructing a TMSR fuel salt batch pyro-process demonstration facility, which would enable the utilization of the thorium-uranium cycle by the early 2040s...

It runs on a combination of thorium and uranium-235, enriched at 19.75 percent by weight, and can operate at a maximum temperature of 650C for up to 10 years. The liquid fuel design is based on the Molten-Salt Reactor Experiment conducted by Oak Ridge National Laboratory in the 1960s...

China intends to construct a reactor with a capacity of 373 MWt by 2030 if the TMSR-LF1 succeeds.
Thorium is more abundant than uranium, notes the South China Morning Post — and China is thought to have one of the world's largest thorium reserves. But a thorium reactor should also produce less waste, and using molten salts as both a fuel and a coolant "potentially eliminates the need for large quantities of water, which is a significant advantage in areas where water resources are limited."

India has also been pursuing thorium-based nuclear technologies, including MSRs. The Indian Molten Salt Breeder Reactor project, initiated in the 1980s, aimed to develop a thorium-based breeder reactor. However, the project has faced challenges related to materials compatibility, fuel reprocessing and overall system complexity and has not progressed to commercial-scale use...

China reportedly plans to sell small thorium reactors to other countries as part of the Belt and Road Initiative, Beijing's global infrastructure plan.
Thanks to Slashdot reader sonlas for sharing the news.

Reuters reports: U.S. intelligence agencies found no direct evidence that the COVID-19 pandemic stemmed from an incident at China's Wuhan Institute of Virology, a report declassified on Friday said.
America's Director of National Intelligence was responding to March legislation requiring declassification (within 90 days) of any information on possible links between the Wuhan Institute of Virology (or "WIV") and the origin of the COVID-19 pandemic. One key finding in the just-released report?

"We continue to have no indication that the Wuhan Institute of Virology's pre-pandemic research holdings included SARS-CoV-2 or a close progenitor, nor any direct evidence that a specific research-related incident occurred involving WIV personnel before the pandemic that could have caused the COVID pandemic." The information available to the U.S. Intelligence Community "indicates that the WIV first possessed SARS-CoV-2 in late December 2019, when WIV researchers isolated and identified the virus from samples from patients diagnosed with pneumonia of unknown causes."

And in addition, "All Intelligence Community agencies assess that SARS-CoV-2 was not developed as a biological weapon."

Beyond that, the report also emphasizes that "Almost all Intelligence Community agencies assess that SARS-CoV-2 was not genetically engineered," adding "Most agencies assess that SARS-CoV-2 was not laboratory-adapted; some are unable to make a determination." The National Intelligence Council and four other Intelligence Community agencies assess that the initial human infection with SARS-CoV-2 most likely was caused by natural exposure to an infected animal that carried SARS-CoV-2 or a close progenitor, a virus that probably would be more than 99 percent similar to SARS-CoV-2...

The Central Intelligence Agency and another agency remain unable to determine the precise origin of the COVID-19 pandemic, as both hypotheses rely on significant assumptions or face challenges with conflicting reporting.
The only two outliers appear to be the Department of Energy, which gives "low confidence" support to the lab-leak theory, and the FBI (whose Trump-appointed director "said he couldn't share many details of the agency's assessment because they were classified.")

Addressing rumors online, the report notes that the lab has performed public health-related research with the army, such as work on vaccines and therapeutics. This included working "with several viruses, including coronaviruses, but no known viruses that could plausibly be a progenitor of SARS-CoV-2."

And while several researchers were ill in the fall of 2019, their symptoms "were consistent with but not diagnostic of COVID-19... [T]he researchers' symptoms could have been caused by a number of diseases and some of the symptoms were not consistent with COVID-19... [T]hey experienced a range of symptoms consistent with colds or allergies with accompanying symptoms typically not associated with COVID-19, and some of them were confirmed to have been sick with other illnesses unrelated to COVID-19." And there's no indication any of them were ever hospitalized for COVID-19 symptoms.

The US government is providing a conditional $9.2 billion loan to Ford for the construction of three battery factories, the largest government backing for a US automaker since the 2009 financial crisis. "The enormous loan [...] marks a watershed moment for President Joe Biden's aggressive industrial policy meant to help American manufacturers catch up to China in green technologies," reports Bloomberg. From the report: The new factories that will eventually supply Ford's expansion into electric vehicles are already under construction in Kentucky and Tennessee through a joint venture called BlueOval SK, owned by the Michigan automaker and South Korean battery giant SK On Co. Ford plans to make as many as 2 million EVs by 2026, a huge increase from the roughly 132,000 it produced last year. The three-factory buildout by BlueOval plus an adjacent Ford EV assembly unit have an estimated price tag of $11.4 billion. BlueOval was previously awarded subsidies by both state governments. That means taxpayers would be providing low-interest financing for almost all of the cost.

Ford's cars and SUVs made with domestic batteries will also be eligible for billions of dollars in incentives embedded in the Inflation Reduction Act's $370 billion in clean-energy funding, part of the historic climate measure narrowly passed into law about a year ago. The US government will subsidize manufacturing of batteries, and buyers could qualify for additional tax rebates of up to $7,500 per vehicle.

The rush of incentives, government lending and private-sector investment has led to a manufacturing boom in the wake of the IRA. More than 100 battery and electric-vehicle production projects are announced or already under construction in the US, representing about $200 billion in total investments. "Not since the advent of the auto industry 100 years ago have we seen an investment like that," says Gary Silberg, KPMG's global automotive sector leader.

Heatwaves are pushing power grids to their brink around the world -- a risk that can make an already dangerous situation deadly. From a report: When temperatures spike, people tend to need air conditioning the most. But that can put a lot of pressure on a power grid, potentially triggering a blackout if there isn't enough electricity on hand. That's the worst-case scenario grid operators across the world are scrambling to prevent. Close to 28.8 million people are under heat alerts today in the US. Texas grid operator ERCOT broke its June record for electricity demand on Monday after issuing a "weather watch" for June 15th through 21st and asking residents to voluntarily conserve energy. In Texas and across the border in Mexico, temperatures soared above 110 degrees Fahrenheit (43 degrees Celsius). A state of emergency was briefly declared Tuesday by Mexico's National Center for Energy Control as electricity supplies dipped to their lowest levels since a 2021 cold snap.

India and China have been suffering through extreme heatwaves since April. Power outages in India this week have also robbed people of air conditioning and running water. Recently, the heat has killed scores of people in northern India, flooding hospitals and morgues. Beijing shattered a June temperature record today of around 106 degrees Fahrenheit (41 degrees Celsius). Cities that are industrial powerhouses in southern China urged residents and businesses to save energy, and the country's National Energy Administration staged an emergency drill last Thursday to prepare for possible outages this summer.

The European Commission will unveil on Tuesday possible measures, such as screening of outbound investments and export controls, to keep prized EU technology from countries such as China and prevent it being put to military use by rivals. From a report: The European Union executive will present its Economic Security Strategy as a "communication" to EU lawmakers and countries, whose leaders are set to discuss relations with China in Brussels next week. While not a formal legislative proposal, the communication will lay out strategies the 27-nation EU should consider as it seeks to "de-risk" from China and avoid sensitive technology leaking out through exports or investments abroad.

The Commission will need to tread carefully because granting of export licences and weighing security interests are national competences that EU governments will want to retain. A Dutch plan that effectively bars Chinese companies from buying the most advanced lithography tools of ASML, which are used to make semiconductors, is a case in point. The Dutch acted alone, but wanted restrictions throughout the EU. EU officials point out there is no clear way to do this.

"I predict that Generative Artificial Intelligence is going to go a long way toward keeping Moore's Law in force," writes long-time tech pundit Robert X. Cringely, "and the way this is going to happen says a lot about the chip business, global economics, and Artificial Intelligence, itself." The current el cheapo AI research frenzy is likely to subside as LLaMA ages into obsolescence and has to be replaced by something more expensive, putting Google, Microsoft and OpenAI back in control. Understand, too, that these big, established companies like the idea of LLMs costing so much to build because that makes it harder for startups to disrupt. It's a form of restraint of trade, though not illegal...

[T]here is an opportunity for vertical LLMs trained on different data — real data from industries like medicine and auto mechanics. Whoever owns this data will own these markets. What will make these models both better and cheaper is they can be built from a LLaMA base because most of that data doesn't have to change over time... Bloomberg has already done this for investment advice using its unique database of historical financial information. With an average of 50 billion nodes, these vertical models will cost only five percent as much to run as OpenAI's one billion node GPT-4...

[I]t ought to be pretty simple to apply AI to chip design, building custom chip design models to iterate into existing simulators and refine new designs that actually have a pretty good chance of being novel.

And who will be the first to leverage this chip AI? China... Look for fabless AI chip startups to spring-up around Chinese universities and for the Chinese Communist Party to put lots of money into this very cost-effective work. Because even if it's used just to slim-down and improve existing designs, that's another generation of chips China might otherwise not have had at all.

New submitter ole_timer shares a report from Wired: TikTok to Huawei routers to DJI drones, rising tensions between China and the US have made Americans -- and the US government -- increasingly wary of Chinese-owned technologies. But thanks to the complexity of the hardware supply chain, encryption chips sold by the subsidiary of a company specifically flagged in warnings from the US Department of Commerce for its ties to the Chinese military have found their way into the storage hardware of military and intelligence networks across the West. In July of 2021, the Commerce Department's Bureau of Industry and Security added the Hangzhou, China-based encryption chip manufacturer Hualan Microelectronics, also known as Sage Microelectronics, to its so-called "Entity List," a vaguely named trade restrictions list that highlights companies "acting contrary to the foreign policy interests of the United States." Specifically, the bureau noted that Hualan had been added to the list for "acquiring and ... attempting to acquire US-origin items in support of military modernization for [China's] People's Liberation Army."

Yet nearly two years later, Hualan -- and in particular its subsidiary known as Initio, a company originally headquartered in Taiwan that it acquired in 2016 -- still supplies encryption microcontroller chips to Western manufacturers of encrypted hard drives, including several that list as customers on their websites Western governments' aerospace, military, and intelligence agencies: NASA, NATO, and the US and UK militaries. Federal procurement records show that US government agencies from the Federal Aviation Administration to the Drug Enforcement Administration to the US Navy have bought encrypted hard drives that use the chips, too. The disconnect between the Commerce Department's warnings and Western government customers means that chips sold by Hualan's subsidiary have ended up deep inside sensitive Western information networks, perhaps due to the ambiguity of their Initio branding and its Taiwanese origin prior to 2016. The chip vendor's Chinese ownership has raised fears among security researchers and China-focused national security analysts that they could have a hidden backdoor that would allow China's government to stealthily decrypt Western agencies' secrets. And while no such backdoor has been found, security researchers warn that if one did exist, it would be virtually impossible to detect it.

"If a company is on the Entity List with a specific warning like this one, it's because the US government says this company is actively supporting another country's military development," says Dakota Cary, a China-focused research fellow at the Atlantic Council, a Washington, DC-based think tank. "It's saying you should not be purchasing from them, not just because the money you're spending is going to a company that will use those proceeds in the furtherance of another country's military objectives, but because you can't trust the product." [...] The mere fact that so many Western government agencies are buying products that include chips sold by the subsidiary of a company on the Commerce Department's trade restrictions list points to the complexities of navigating the computing hardware supply chain, says the Atlantic Council's Cary. "At minimum, it's a real oversight. Organizations that should be prioritizing this level of security are apparently not able to do so, or are making mistakes that have allowed for these products to get into their environments," he says. "It seems very significant. And it's probably not a one-off mistake."

Chinese President Xi Jinping met with Bill Gates to discuss the global rise of artificial intelligence, expressing his support for U.S. companies bringing their AI technology to China. Reuters reports: Xi also discussed Microsoft's business development in China during their meeting in Beijing, one of the sources said. The comments on AI made at the meeting between Xi and Gates were not disclosed in reports of the meeting published by Chinese state media or in a Friday post by Gates reflecting on his China trip. Xi has previously said China needs to seize opportunities to use AI to drive economic development, but has also cautioned about its risks, with the country weighing up a new law on the technology as well as rules for generative AI.

An anonymous reader quotes a report from the BBC: iPhone maker Foxconn is betting big on electric cars and redrawing some of its supply chains as it navigates a new era of icy Washington-Beijing relations. In an exclusive interview, chairman and boss Young Liu told the BBC what the future may hold for the Taiwanese firm. He said even as Foxconn shifts some supply chains away from China, electric vehicles (EVs) are what will drive its growth in the coming decades. As US-China tensions soar, Mr Liu said, Foxconn must prepare for the worst.

"We hope peace and stability will be something the leaders of these two countries will keep in mind," 67-year-old Mr Liu told us, in his offices in Taipei, Taiwan's capital. "But as a business, as a CEO, I have to think about what if the worst case happens?" The scenarios could include attempts by Beijing to blockade Taiwan, which it claims as part of China, or worse, to invade the self-ruled island. Mr Liu said "business continuity planning" was already under way, and pointed out that some production lines, particularly those linked to "national security products" were already being moved from China to Mexico and Vietnam. He was likely to be referring to servers Foxconn makes that are used in data centers, and can contain sensitive information. [...]

Foxconn's hopes to capture about 5% of the global electric vehicle market in the next few years -- an ambitious target given the firm has only made a handful of models so far. But it is a gamble that Mr Liu is confident will pay off. "It doesn't make sense for you to make [EVs] in one place, so regionalized production for cars is very natural," he added. Foxconn car factories will be based in Ohio in the US, in Thailand, Indonesia and perhaps even in India, he said. For now, the company will keep focusing on what it does best -- making electronic products for clients. But perhaps not too far in the future, Foxconn will do the same for clients with electric cars. Either way, with the foray into electric cars, Foxconn is diversifying not just production but also supply lines -- both of which, Mr Liu believes, hold the key to the company's future.