Arizona's chip awakening and China's memory boost

Hi everyone, this is Cheng Ting-Fang, your #techAsia host for this week. During my visit to Arizona in October, I met people who shared a common story: They came from elsewhere but found new purpose and opportunities in the Grand Canyon State. Arthur Chang, 25, was born in the U.S. and educated in Taiwan. After graduating from college, he returned to America to pursue his passion for automobiles and advanced car repair techniques. He is now renovating an old garage in Phoenix, transforming it into a modern auto service center aimed at the city's rapidly growing tech community. Arthur's mother, Amy Shen, formerly the chief operating officer at Gudeng Precision, a key supplier to Taiwan Semiconductor Manufacturing Co. (TSMC) and Intel, asked Arthur to show me around Phoenix. Having recently retired, she has decided to move to Arizona to be closer to her son. When Arthur showed me the blueprints for his mechanic shop, I could see his eyes gleaming with excitement. "I've always loved cars and enjoy repairing all kinds of vehicles," he said. "At first, I thought about California to start my own business, but my mom said, 'Why not Arizona? With TSMC building massive chip plants here, a new tech community is bound to grow.' It's a new trailblazing opportunity." I also met several dedicated engineers and project coordinators at United Integrated Services (UIS), a cleanroom and chip facility builder and a key TSMC partner. Their work forms the hidden backbone of semiconductor plant construction. Among them is Vincent Murry, who relocated to Arizona from New York; Thomas Liu, a former international student at Arizona State University who began his career locally as an electrical engineer; and Kelley Dykes, a construction coordinator who moved from Louisiana to take part in the largest single-site chip investment in the U.S. All of them told me that this is the most complicated type of construction project imaginable, as well as the biggest and most complex job they had ever worked on. Murry described the level of precision such construction requires: Imagine, he said, a 650,000 square foot cleanroom, where each installation of equipment and components must be perfectly aligned, with no deviation allowed. "Everything -- control and delivery systems, exhaustion and scrubber systems -- all needs to be precise," he said. Several senior executives I met were visiting Arizona for the first time. As the global chip investment landscape shifts, many are now seriously considering overseas expansion and believe the timing may finally be right. "The crowds visiting chip industry fairs are growing significantly in the U.S.," a chip material provider told me. "Previously, sometimes, it was a bit quiet and empty, but now it's a totally different, vibrant atmosphere." Arizona ambitions Arizona has become a unique hub, the only place in the world where both TSMC and Intel are making some of their most advanced semiconductors. And they are continuing to expand. Nikkei Asia's Cheng Ting-Fang visited not just these two titans but the army of suppliers helping them build a semiconductor ecosystem in and around Phoenix. Several of these companies are venturing overseas for the first time and, like their client TSMC, many have faced significant challenges setting up shop in the Grand Canyon State. Gradually, however, the delays and bottlenecks have been overcome and the light at the end of the tunnel is growing brighter. Cheng's reporting underscores the complexity of building a semiconductor supply chain, which requires far more than chip researchers and production engineers. It depends on a vast range of expertise, ranging from facility construction to mechanical specialists, equipment technicians and materials and chemical experts. The ultimate lesson from Arizona is that no chipmaker can succeed alone; advanced semiconductor manufacturing rests on a broad and deeply interconnected network of suppliers working together. Home sweet home Jack Ma's family has added to their international property portfolio with the purchase of a London mansion that used to serve as the Italian embassy, the Financial Times' Julie Steinberg and Ryan McMorrow write. Cathy Ying Zhang, the wife of the billionaire Alibaba founder, bought the Belgravia home for 19.5 million pounds last autumn, according to Land Registry records and people familiar with the deal. The property adds to the family's vast portfolio of real estate beyond China's borders. After angering top Chinese officials in 2020, Jack Ma has spent most of his time out of the country, maintaining a low profile and for a time living in Tokyo. The Grade II listed townhouse was used as the Italian embassy in the 1920s and also functioned as the office of the Italian defence attache. Measuring 7,948 sq. feet, it was later converted into a residence and features a cinema, lift and six bedrooms, according to marketing materials seen by the Financial Times. The buyer was named in a document provided to the FT by SourceMaterial, an investigative journalism organisation. Alibaba and the Jack Ma Foundation declined to comment on behalf of Ma and Zhang. China's memory maker China's top NAND flash memory maker, Yangtze Memory Technologies Corp. (YMTC), has begun building its third chip plant in Wuhan, aiming to start operations in 2027, while also ramping up production at its second facility to meet surging domestic demand driven by localization and the AI boom, Nikkei Asia's Cheng Ting-Fang writes. The company is up against the biggest NAND flash memory makers in the world, such as Samsung, Kioxia and SK Hynix. YMTC was placed on the U.S. trade blacklist in 2022, which cut off its access to advanced chipmaking tools and at one point caused severe supply chain disruptions. The company has gradually overcome some of these chokepoints, sources told Nikkei Asia. It got back on its feet by producing less advanced NAND flash memory for the domestic market and is now expanding production capacity more aggressively than almost any other memory maker in the world, though it still primarily serves local demand. YMTC is also considering entering the DRAM sector, which produces the foundational memory chips for making high bandwidth memory used in AI computing, as it looks to further broaden its role in China's push for semiconductor self-sufficiency. SoftBank sells out Japan's SoftBank Group has sold its entire stake in AI chip leader Nvidia for $5.83 billion as part of its ongoing strategy of "divesting and reinvesting" to fund major new bets in artificial intelligence, particularly in OpenAI, the developer of ChatGPT, Nikkei Asia's Tsubasa Suruga reports. The move is in line with CEO Masayoshi Son's statement that SoftBank is "all in" on OpenAI and will be the leader in "artificial super intelligence." Since September, the Japanese group has made multiple investments in OpenAI and has committed up to $30 billion in new funding following the American startup's recent restructuring as a for-profit entity. The deal is set to be finalized before the end of 2025. SoftBank's bet on OpenAI has fueled questions over whether such massive AI investments will pay off and who will emerge as the big winner in the new AI race. Suggested reads 1. China accuses US of carrying out $13bn bitcoin hack (Nikkei Asia) 2. Sony launches cheaper Japan-only PlayStation 5 console (FT) 3. UK investigates whether buses made in China can be turned off from afar (FT) 4. Japan to publish list of makers, importers of suspicious power banks (Nikkei Asia) 5. Nexperia chip exports from China have resumed, says car parts supplier (FT) 6. Singaporean tech group Sea's Q3 profit jumps 140% (Nikkei Asia) 7. Huawei flags $630m in revenue from licensing patents and technology (Nikkei Asia) 8. Kawasaki Heavy targets Southeast Asia with 'direct air' carbon capture (Nikkei Asia) 9. Shares in rival robotaxi start-ups tank after Hong Kong listings (FT) 10. Czech automaker Skoda to produce EVs in Vietnam, Hanoi says (Nikkei Asia) Podcast: Tech Latest Foxconn continues aggressive U.S. expansion with AI servers and humanoid robots Welcome to the Tech Latest podcast. Hosted by our tech coverage veterans, Katey Creel and Shotaro Tani, every Tuesday we deliver the hottest trends and news from the sector. In this episode, our host Shotaro speaks with Taipei tech correspondent Lauly Li about her recent interview with Foxconn's CEO where he reveals the company's aim to double down on the U.S. market by using artificial intelligence humanoid robots to make AI servers in Texas. Find us on Apple Podcasts | Spotify | Amazon Music | Voicy | YouTube | YouTube Music For more great stories like this delivered to your inbox every week, sign up to our #techAsia newsletter. Current subscribers, click here to update your newsletters preferences.