The first step in stock trading is to open a stock account. The chip industry is witnessing significant events! According to foreign media reports, the German government plans to provide approximately 2 billion euros in new subsidies to the chip industry. The new funds will be allocated to chip companies, involving 10 to 15 projects, including the production of unprocessed wafers and microchip assembly.
Earlier, the South Korean government announced an emergency injection of over 14 trillion won (approximately 100 billion USD) in policy financing to counter the uncertainty from the new U.S. administration and the increasingly fierce competition in the chip industry. Recently, reports indicated that tech giant Amazon is accelerating the development of a new AI chip, Trainium2, to challenge NVIDIA’s monopoly in the AI chip sector.
Compared to its predecessor, the new chip boasts a fourfold increase in performance, a threefold increase in memory capacity, and significant advantages in energy efficiency and cost.
According to Bloomberg, the German government is preparing to invest billions of euros in the country’s semiconductor industry. On Thursday, German Economy Ministry spokesperson Annika Einhorn stated in a declaration that the new funds will be provided to chip companies to develop modern production capabilities that ‘far exceed current technological levels.
‘ Einhorn did not disclose the specific subsidy amount, but two officials who attended this week’s funding event mentioned that the total subsidy is expected to be around 2 billion euros, with the final figure potentially subject to change. Earlier this month, the German Economy Ministry issued a call for chip companies to apply for new subsidies. The new German government, to be elected in February next year, may formulate its own budget, leaving uncertainty for chip companies currently applying for subsidies.
Governments worldwide have been investing public funds into the chip industry to achieve localized production of chip components, which control everything from cutting-edge artificial intelligence to everyday devices. The European Chips Act, passed in 2023, aims to strengthen the EU’s semiconductor ecosystem, doubling its market share by 2030 to 20% of global production capacity. However, recently, the German chip industry faced two setbacks.
Intel Corporation shelved plans to build a 30 billion euro chip factory in Magdeburg, which was expected to be the largest project supported by the EU Chips Act, receiving a 10 billion euro subsidy. The troubled U.S. company delayed its plans in September. Additionally, Wolfspeed Inc. and ZF Friedrichshafen AG also canceled plans to establish a chip joint venture in western Germany.
According to the European Chips Act, Germany’s first round of chip subsidies has been awarded to Intel, as well as a joint venture between Infineon and TSMC in Dresden.
The German Ministry of Economics hopes to use the newly proposed funding to finance 10 to 15 projects across various fields, including the production of unprocessed wafers and microchip assembly. Einhorn stated: “The funded projects should help Germany and Europe build a strong and sustainable microelectronics ecosystem.”
South Korea is also strongly supporting the chip industry. The South Korean government is planning to urgently inject over 14 trillion won (approximately $10 billion) in policy financing to save the domestic semiconductor industry facing crisis, in response to the uncertainty from the new US administration and the increasingly fierce competition in the chip industry. This comes after South Korea announced a 26 trillion won scale ‘Semiconductor Ecosystem Support Plan’ in June this year, marking a new measure introduced after five months.
The Ministry of Finance stated on the 27th that to continue implementing stimulus policies, financial support including loans from state-owned banks will be provided next year, amounting to 14.3 trillion won. In addition, the South Korean government announced in a statement that the government plans to bear ‘a large part’ of the 1.8 trillion won needed for laying underground cables in the chip industry clusters of Yongin and Pyeongtaek south of Seoul, to support businesses in the new chip park.
South Korea is building what is claimed to be the world’s largest high-tech chip manufacturing cluster, aiming to attract related enterprises. The South Korean government also plans to increase the tax credit rate for semiconductor-related companies by 10 percentage points by 2030 and build a national ‘AI Computing Center’ with a scale of 4 trillion won.
Recently, it was reported that Amazon is accelerating the development of a new AI chip, Trainium2, at its engineering laboratory in Austin, Texas. Compared to the previous generation, its performance has quadrupled, memory capacity has tripled, and it has significant advantages in terms of energy efficiency and cost. Amazon hopes that these optimizations will reduce the procurement costs of AI chips and enhance overall efficiency in data processing.
The chip is reported to be Amazon’s third-generation product in the AI hardware field, aimed at providing more efficient and cost-competitive solutions for machine learning model training. The product is planned to be tested and delivered by the end of this year. Amazon’s chip business is led by James Hamilton, who was one of the pioneers in the field of cloud computing. Hamilton’s team proposed the idea of developing their own chips as early as 2013.
Amazon’s first AI chip, Inferentia, was introduced in 2019, focusing on inference tasks, while the Trainium series is primarily aimed at the needs of training machine learning models. Currently, Amazon’s Trainium2 chip has begun deployment in data centers and is expected to be fully promoted in several core data centers, including Ohio, with Amazon’s goal to form clusters of up to 100,000 chips. Amazon’s push for in-house chip development aims to challenge NVIDIA’s monopolistic position in the AI chip sector.
However, with NVIDIA continuously leading in technology updates and market share, market insiders believe its competitive edge is hard to shake in the short term. Notably, Amazon has recently invested heavily in the AI field. On the 22nd, Amazon announced an additional investment of $4 billion in the artificial intelligence company Anthropic, bringing Amazon’s total investment in Anthropic to $8 billion.
Anthropic, considered a rival to OpenAI, indicates that the competition among tech giants in artificial intelligence is becoming increasingly fierce. Founded in 2021 and headquartered in San Francisco, Anthropic is a company established by former OpenAI executives, focusing on creating explainable, secure, and controllable AI systems. The company’s flagship AI model, Claude, operates on ‘Constitutional AI,’ an AI model that uses predefined principles to guide its outputs, avoiding erroneous or discriminatory responses.
Amazon’s ties with Anthropic are quite close. On one hand, Amazon is a significant investor in Anthropic, having previously invested twice, participating in a $1.25 billion funding round in September 2023 and a $2.75 billion round earlier this year. On the other hand, Amazon is a key supplier to Anthropic, from whom Anthropic procures a substantial amount of cloud computing and chip products, yet Amazon does not prevent Anthropic from collaborating with other suppliers such as Google and NVIDIA.
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