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Russia-Ukraine conflict halts half of world’s neon output for chips

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Ukraine’s two leading suppliers of neon, which produce about half the world’s supply of the key ingredient for making chips, have halted their operations due to the armed conflict in the country, threatening to raise prices and aggravate the semiconductor shortage.

Some 45 to 54 percent of the world’s semiconductor-grade neon, critical for the lasers used to make chips, comes from Ukrainian companies Ingas and Cryoin, according to Reuters calculations based on figures from the companies and market research firm Techcet. Global neon consumption for chip production reached about 540 metric tonnes last year, Techcet estimates.

Both firms have shuttered their operations, according to company representatives contacted by Reuters, as armed conflicts intensified throughout Ukraine.

The stoppage casts a cloud over the worldwide output of chips, already in short supply after the coronavirus pandemic drove up demand for cellphones, laptops and later cars, forcing some firms to scale back production.

Production could halt if conflicts drag on

While estimates vary widely about the amount of neon stocks chipmakers keep on hand, production could take a hit if the conflict drags on, according to Angelo Zino, an analyst at CFRA.

“If stockpiles are depleted by April and chipmakers don’t have orders locked up in other regions of the world, it likely means further constraints for the broader supply chain and inability to manufacture the end-product for many key customers,” he said.

Before the armed conflict, Ingas produced 15,000 to 20,000 cubic meters of neon per month for customers in South Korea, China and its Taiwan region, the U.S. and Germany, with about 75 percent going to the chip industry, Nikolay Avdzhy, the company’s chief commercial officer, said in an email to Reuters.

The company is based in Mariupol, which has witnessed fierce fighting recently.

Cryoin, located in Odessa, which produced roughly 10,000 to 15,000 cubic meters of neon per month, halted operations on February 24 to keep employees safe, according to business development director Larissa Bondarenko.

Bondarenko said the company would be unable to fill orders for 13,000 cubic meter of neon in March unless the conflict stopped. She said the company could weather at least three months with the plant closed, but warned that if equipment were damaged, that would prove a bigger drag on company finances and make it harder to restart operations quickly.

She also said she was unsure the company could access additional raw materials for purifying neon.

The world’s largest contract chip maker TSMC in China’s Taiwan region said that firms there had already made advanced preparations and had “safety stocks” of neon, so it did not see any supply chain problems in the near term. The statement to Reuters echoed similar remarks from the region’s bank management sector earlier on Friday.

Small chipmakers hit harder

But smaller chipmakers may be harder hit, according to Lita Shon-Roy, president of Techcet.

“The largest chip fabricators, like Intel, Samsung and TSMC, have greater buying power and access to inventories that may cover them for longer periods of time, two months or more,” she said.

“However, many other chip fabs do not have this kind of buffer,” she added, noting that rumors of companies trying to build up inventory have begun to circulate. “This will compound the issue of supply availability.”

Ukrainian neon is a byproduct of Russian steel manufacturing. The gas, which is also used in laser eye surgery, is produced in China as well, but Chinese product’s prices are rising.

Bondarenko says prices, already under pressure after the pandemic, had climbed by up to 500 percent from December. According to Chinese commodity market information provider biiinfo.com, the price of neon gas (99.9 percent content) in China has quadrupled from 400 yuan per cubic meter in last October to more than 1,600 yuan per cubic meter in late February.

Neon prices rose 600 percent in the run-up to the Russia-Ukraine conflict in 2014, according to the U.S. International Trade Commission.

Companies elsewhere could initiate neon production but it would take nine months to two years to ramp up, according to Richard Barnett, chief marketing officer of Supplyframe, which provides market intelligence to companies across the global electronics sectors.

But CFRA’s Angelo Zino noted that companies may be unwilling to invest in that process if the supply crunch is seen as temporary.

 

Source: CGTN

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Google trial wraps up as judge weighs landmark U.S. antitrust claims

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Google and the U.S. Justice Department wrapped up closing arguments on Friday over claims that the Alphabet unit has unlawfully dominated web search and related advertising, in a case the government contends could shape the “future of the internet.”

U.S. District Judge Amit Mehta in Washington for hours grilled both sides with questions, probing whether competitive platforms such as ByteDance’s TikTok and Meta’s Facebook and Instagram are competitive substitutes for search advertising dollars.

Mehta said a central issue was platform “substitute-ability” for advertisers, which the court must resolve. He will now begin preparing to render a major decision on whether Google’s conduct broke civil antitrust law. He did not indicate when he would rule, but experts say he could potentially order changes to Google’s business practices.

Mehta also questioned whether Google assesses competitors’ pricing while considering its own adjustments. Google’s advertising business is responsible for about three-quarters of its revenue.

U.S. government lawyer David Dahlquist argued that “advertising revenue is what drives Google’s monopoly power today.”

Google has boasted it feels no real market pressures, Dahlquist said, arguing that the company does not fear increasing its pricing or not improving its products.

“Only a monopolist can make a product worse and still make more money,” Dahlquist argued.

Google’s lawyer John Schmidtlein countered that Google’s share of U.S. digital advertising revenue has steadily decreased. He touted the advertising power of rival platforms ByteDance’s TikTok, Meta’s Facebook and Instagram, and Amazon.

That’s because it’s not made from plastic, but wheat straw and has seeds nestled inside.

Schmidtlein argued that Google is “constrained” by rival platforms “where the eyeballs are,” because advertisers know there are overlapping audiences and can spend their dollars elsewhere.

He also asserted that Google was continually moving to innovate its search advertising products. “If Google is a monopolist, why improve anything? Why not just jack the price up?” he told the court. He later argued that “Google has won with a superior product.”

The Justice Department has hammered away at Google in a trial that started on September 12, contending the search engine giant is a monopolist that illegally abused its power to boost profits.

Witnesses from Verizon, Android maker Samsung Electronics and Google itself testified about the company’s annual payments, $26.3 billion in 2021, to ensure that its search is the default on smartphones and browsers, and to keep its dominant market share.

Mehta also took up the government’s claim that Google intentionally destroyed internal documents that were relevant to the issues in the lawsuit.

The government asked Mehta to presume that Google deleted chats that were unfavorable to the company.

Mehta repeatedly questioned Google’s prior policies, which he said left document retention decisions to its employees.

“They should have been preserved. Should there be some consequence for what at a minimum was far from best practices?” the judge asked.

A lawyer for Google, Colette Connor, defended its data preservation practices, calling them reasonable, and urged the court not to sanction the company.

The case, filed by former U.S. President Donald Trump’s administration, was the first of several aimed at reining in the market power of tech leaders.

Another case, against Facebook parent Meta, was also filed during the Trump administration. U.S. President Joe Biden’s antitrust enforcers have followed with a second case against Google and cases against Amazon.com and Apple Inc.

Source(s): CGTN

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UN adopts first global artificial intelligence resolution to ensure AI is safe

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The United Nations General Assembly unanimously adopted the first global resolution on artificial intelligence on Thursday, encouraging countries to safeguard human rights, protect personal data, and monitor AI for risks.

The nonbinding resolution, proposed by the United States and co-sponsored by China along with over 120 other nations, also advocates for the strengthening of privacy policies.

“Today, all 193 members of the United Nations General Assembly have spoken in one voice, and together, chosen to govern artificial intelligence rather than let it govern us,” U.S. Ambassador to the United Nations Linda Thomas-Greenfield said.

The resolution is the latest in a series of initiatives – few of which carry significant enforceability – by governments around the world to shape AI’s development amid fears it could disrupt democratic processes, turbocharge fraud, or lead to dramatic job losses, among other harms.

“The improper or malicious design, development, deployment and use of artificial intelligence systems … pose risks that could … undercut the protection, promotion and enjoyment of human rights and fundamental freedoms,” the measure states.

In November, the U.S., Britain and more than a dozen other countries unveiled the first detailed international agreement on how to keep artificial intelligence safe from rogue actors, pushing for companies to create AI systems that are “secure by design.”

Europe is ahead of the United States, with EU lawmakers adopting a provisional agreement this month to oversee the technology. The Biden administration has been pressing lawmakers for AI regulation, but a polarized U.S. Congress has made little headway. In the meantime, the White House sought to reduce AI risks to consumers, workers, and minorities while also bolstering national security with a new executive order in October.

The resolution aims to close the digital divide between rich developed countries and poorer developing countries to ensure that all are included in discussions on AI. It also aims to ensure that developing countries have the technology and capabilities to take advantage of AI’s benefits, including detecting diseases, predicting floods, helping farmers, and training the next generation of workers.

The resolution recognizes the rapid acceleration of AI development and use and stresses “the urgency of achieving global consensus on safe, secure and trustworthy artificial intelligence systems.”

It also acknowledges that “the governance of artificial intelligence systems is an evolving area” that requires further discussions on possible governance approaches and emphasizes that innovation and regulation are mutually reinforcing – not mutually exclusive.

Source(s): CGTN

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Beijing still tops Nature Index global science city rankings

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Beijing has consistently ranked first in the global science city rankings for eight consecutive years, as measured by the Nature Index, according to Yin Yong, deputy secretary of the Communist Party of China (CPC) Beijing Municipal Committee and mayor of Beijing.

Nature Index tracks the authorship of articles in prestigious research journals and Beijing’s ranking has shown that the city remains the top science city in the world.

On Tuesday, China’s State Council Information Office held a press conference on leveraging Beijing’s strategic role as the national capital, initiating a new chapter in high-quality development. Yin made the remarks while he answered questions from the media at the press conference.

Yin also introduced the capital’s achievement in seeking scientific and technological innovation and attracting high-level talent in science and technology.

Beijing has 92 colleges and universities, and more than 1,000 research institutes and its numbers of national laboratories and large scientific installations are ranked first in the country.

Beijing’s investment in research and development has also been among the largest in the country. Every 10,000 people in Beijing hold an average of over 262 invention patents, ranking first in China.

The capital has a large talent pool with more than 550,000 scientific researchers. In the field of artificial intelligence, for instance, Beijing’s top talent accounts for about 43 percent of the country’s total.

An average of 337 technology-based enterprises are established in Beijing every day, and the number of national high-tech enterprises and unicorn enterprises rank first among all cities in the country.

Source(s): CGTN

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