Third Crackdown in 3 Years on China's Chip Industry |Business Matters (Dec. 02)

It's that time of the day for business matters, and we have Don Ma here with us. Don, it's good to see you. Yeah, good to see you as well. After a week off, after Thanksgiving, your first day back. So let me get started on the chip industry, actually. So an AI chip startup is getting a big boost to compete with market leader NVIDIA. Bloomberg reports that Amazon founder Jeff Bezos, LG Electronics and Fidelity are investing 700 million dollars in TensorTorrent. The money will go toward building its engineering team and AI training services, servers rather, as well as investing in its global supply chain. The funding puts TensorTorrent's value at 2.6 billion dollars. Cyber Monday has arrived and virtual shopping carts are full. Apparently, Adobe Analytics expects consumers to spend a record 13 billion dollars today. That's a more than 6% jump from last year. This would make Cyber Monday the season's and the year's biggest online shopping day. In fact, shopping online is expected to peak tonight between 8 and 10 p.m. During that time, it's estimated that spending will reach close to 16 million dollars a minute. The National Retail Federation expects holiday shoppers to spend more this year, both in stores and online, compared to last year. Carmakers, Delantis and its CEO are headed in different directions. Carlos Tavares has resigned from the company, which owns Chrysler, Jeep, Fiat and Peugeot, among other brands. In a statement, Stellantis said Tavares and the board of directors had different views, which led to his resignation. Tavares was central in merging Peugeot and Fiat Chrysler into what is now Stellantis. He was set to retire at the end of his contract next year, but resigned amid differing views and disappointing sales. The company said the process to find a replacement is already underway. Meanwhile, Stellantis is charging forward with electric vehicles. The carmaker has entered a joint venture with Samsung SDI. The duo won a seven and a half billion dollar loan from the U.S. government to build the two plant, two plants in Indiana, battery plants. That is, the Energy Department said the plants would make battery cells and modules for EVs at full capacity. The plants would be able to make enough batteries for about 670,000 vehicles a year. The department said that the loan still needs to be finalized. A stowaway causes trouble on a second flight. Law enforcement sources say a woman accused of sneaking onto a Delta flight from New York to Paris was removed from the returning flight for causing a disturbance. Few details have been released on how she got through multiple layers of security at the airport, but onboard flight attendants said they noticed the woman before takeoff because of frequent and long visits to the restroom. Another flight to return the woman to the U.S. has not yet been scheduled. Moana 2 has sailed to the biggest Thanksgiving weekend performance ever. The sequel, combined with Universal's Wicked and Paramount's Gladiator 2, brought in a combined 420 million dollars over the five day holiday. This is the biggest Thanksgiving holiday haul in movie history. Moana 2 led the way with 221 million dollars. That beats out the Frozen sequel for the highest Thanksgiving performance of a film ever. President Biden is fulfilling a promise made earlier in his presidency to visit Africa. He is spending three days in Angola, where he will focus on a railroad project designed to redirect critical minerals away from China. The project is partially funded with a U.S. loan and links the resource rich Democratic Republic of Congo and Zambia to the Angolan port of Lobito on the Atlantic Ocean. That offers a fast and efficient route for exporters to the West. At stake are vast supplies of minerals like copper and cobalt, which are found in Congo and are a key component of batteries and other electronics. China is the most active investor in Congo, something Washington is concerned about. Former Trump officials say Trump is likely to continue backing the Lobito corridor. And it was a record breaking Black Friday for online shopping. New numbers from Adobe Analytics show that online shoppers spent 10.8 billion dollars on Black Friday and up a billion from last year. MasterCard reports online Black Friday sales were up nearly 15 percent, while in-store sales grew less than 1 percent. So what did people buy? MasterCard said jewelry, electronics and apparel were the top purchases. Americans are expected to spend 902 dollars per person on gifts, food, decorations and other items this holiday season. That's according to an estimate from the National Retail Federation. The FBI San Francisco field office is warning shoppers and charitable donors about potential scams this holiday season. The bureau says criminals are employing increasingly sophisticated tactics to steal money and personal information. The FBI says online shopping, charity, cryptocurrency, gift card and social media scams are the most prevalent. The bureau recommends verifying websites and offers. Like the saying goes, if it looks too good to be true, it probably is. The FBI also urges consumers to avoid clicking on suspicious links or ads. They recommend strong passwords for banking, shopping and rewards accounts and to research charities and avoid those soliciting donations via gift cards or wire transfers. In a press release last week, a special agent in charge, Robert Tripp, added, quote, Criminals don't take holidays off. Workers at nine Volkswagen car and component plants across Germany walked off the job today, bringing assembly lines to a halt. The strike comes as employees and management clash over the future of the automaker's German operations. Thousands gathered at Volkswagen headquarters in Wolfsburg. Workers also demonstrated at Hangover, Emden, Salzgitter and Brunswick facilities. The strikes could escalate into long term stoppages if a deal isn't reached in the next round of negotiations. Last week, the union proposed foregoing bonuses for 2025 and 2026. Volkswagen has demanded a 10 percent wage cut. The automaker has also threatened to close plants in Germany for the first time in its 87 year history. A fourth round of negotiations is scheduled for December 9th. UPS, FedEx and other delivery companies could handle more than two billion deliveries and returns between now and New Year's Eve. That's according to shipping consultancy Ship Matrix. Retailers can rake in more than half of their annual revenue during the holidays, and daily package volumes can double. Ship Matrix said delivery companies are prepared to handle 120 million packages per day during the peak holiday season. The analytics company estimates a daily demand of just 106 million. But any major storms that hit in mid to late December could spark a last minute surge in demand for e-commerce deliveries. But expectations for overall holiday retail sales are muted as inflation strains budgets. Consulting firm Deloitte estimates that retailers could experience their slowest holiday sales growth since 2018. Meanwhile, an entrepreneur is offering a genuine treasure hunt to people who read his new book. John Collins Black is author of There's Treasure Inside. It gives hints to help readers find more than two million dollars worth of treasure that he's hidden in chests across the country. He says a similar hunt in 2010 served as his inspiration, but he has multiple troves to enable more people to participate. The treasures include everything from gold to rare Pokemon cards, sports memorabilia, and even a brooch once owned by Jackie Kennedy on Asus. Now, Sunday lived up to its hype as one of the busiest travel days of the year. The Transportation Security Administration says more than three million people were screened at airports across the country, making it the busiest day ever for air travel. Sunday eclipsed the previous record set in July. The U.S. today launched its third crackdown in three years on China's semiconductor industry. The Commerce Department is curbing exports to 140 companies, including chip equipment makers and chip tool makers. The package includes curbs on China bound shipments of high bandwidth memory chips, critical for high end applications like AI training. It also has new curbs on 24 additional chip making tools and three software tools and new export curbs on chip making equipment made in countries like Singapore and Malaysia. Among Chinese companies facing new restrictions are nearly two dozen semiconductor companies, two investment companies and over 100 chip making tool makers. The U.S. says the latest actions aim to prevent China from advancing its domestic semiconductor manufacturing system, which it will use to support its military modernization. And an investigation found tomato puree sold in several UK and German supermarkets and marketed as Italian may contain tomatoes grown and picked using forced labor in China. There is no suggestion the supermarkets were aware of this, but that these Chinese tomatoes entered somewhere higher up in the supply chain. NTD's international correspondent Malcolm Hudson has more for us. A number of British supermarkets are alleged to be selling Italian tomato puree sold under their own brand name, made using tomatoes grown not just in Italy, but also in China, particularly in the Xinjiang region, and allegedly using forced labor from Uyghur people. BBC World Services commissioned testing of 64 different tomato purees sold in the UK, Germany and the United States. The testing found 17 products sold by retailers in the UK and Germany are likely to contain some Chinese tomatoes. That's despite the name or description of these purees having the word Italian. The BBC's testing included products from British supermarkets such as Tesco's, Waitrose, Asda and Morrison's. All the supermarkets whose products the BBC tested have said they take the allegations very seriously. Tesco suspended supply and German supermarkets chain Roux immediately withdrew the products. Others say that after carrying out their own internal investigations, they found no evidence of Chinese tomatoes. There is no suggestion in the BBC's investigation that the supermarkets were aware the products allegedly contained Chinese tomatoes. China produces one third of the world's tomatoes and most of these are grown in the Xinjiang region. Xinjiang production is linked to forced labor of Uyghur and other largely Muslim minorities. The United Nations also reported human rights issues such as torture and abuse. The United States last month banned imports from around 30 Chinese companies over alleged forced Uyghur labor ties. These new measures included a restriction on tomato paste. U.S. homeland security said they urged companies to take responsibility, know their supply chain and act ethically. A British business department spokesperson said that they are clear that no U.K. company should have forced labor in their supply chain and that they keep their approach to tackling forced labor in supply chains under continual review. Malcolm Hudson, Entity News, London. And let's talk about Christmas in New York. People from all over the world have come to experience the magic of the Big Apple during the holiday season. Going to see world famous light displays at stores like Macy's and along Fifth Avenue makes for the perfect winter outing. But who's behind this pageantry of holiday cheer? American Christmas is a Christmas lighting design company based an hour north of Manhattan. They've been making holiday magic happen since 1968. Entity's Chris Beers went to their headquarters to learn how this New York City Christmas maverick prepares for the holiday. Hey, Bob, how are you, Chris? Good. Nice to see you again. Nice to meet you. American Christmas is a full service Christmas lighting display company serving the likes of Macy's, Saks Fifth Avenue and Radio City Music Hall. The company's president, Bob Soloff, showed me around. So in a lot of ways, I would say that we're a design company first. So we do a lot of designs, in-house designs. A lot of times a client will come to us with an idea and then we'll collaborate with a client. But there are quite often times where a client will say, you're the experts. Just come up with an idea and just let us know. Give us some options and you take care of it all. They don't want to be bothered. It's a one stop shop and it's full service. And that goes to where we can do the installation. This company goes way beyond the ordinary Christmas decorations. Last year, American Christmas designed a daring spectacle for Saks Fifth Avenue. I did get to see it. It was incredible. That was pretty special. And it's like this whole full on light show as well. Yes, it goes. That goes way beyond Christmas lights on a tree. That raised the bar for everybody on Fifth Avenue. It was a huge project. There were many different companies, very many different vendors were involved in that process. And so behind that door. Behind this door is the staircase to we have three floors upstairs of office. And then if you go straight through, we have the first floor of our warehouse space. The building is one hundred ten thousand square feet. And then we have a second floor warehouse as well. And that's where all the magic happens. So this is the main the main space. Yeah, this is this is the main floor. This is the warehouse. And this is where most of production happens. You could I mean, just take a look. You can see as you look around. It is massive. Yes, yes. Each area is segmented off and you can see they're working on Garland here. They're doing lights, they're doing ornaments. And over there we have another area where there are a whole group of crew working on another project. So this is like someone's attic or someone's basement where they keep all their Christmas decorations times like one hundred and ten thousand. Right. But a little more a little more organized. Yeah, right. Right. We don't have we don't have to open the box to figure out what it is. It's got a label. You'll see there are labels. Everything is labeled. Bob tells us the entire warehouse we're seeing will be empty by the second week in December. So these are getting shipped out. So right now it's production and they're working on a project. And once they're done with this, it goes back into the box and then it goes on the shelf waiting to be delivered and installed. So we're right at the peak where installations have started. So right now we're working on Macy's overnight that's being installed. One day you walk into Macy's and there's nothing there and you come back the next day and it's instant Christmas. So who did that? Right. It didn't just you guys. Right. It didn't just happen. Right. It's not magic. If you come in at night, we start when Macy's closes or any office building lobby or any department store come in at night with a crew and we just attack and we do a full install, work until six, seven, eight in the morning and get it done. It's almost like a military operation. Like the U.S. Navy SEALs. Yeah, it truly is. The Army Rangers of Christmas. Yeah, I know you said it's not magic, but I do know that every great company has a certain magic to it. Yes. What is the magic? What is magical? What makes American Christmas work? I think what makes us work is the passion and the love we have for what we do. The company is just a great company to be a part of. It's a season that everybody loves. I feel lucky every day to work here and to be part of this. I truly do. In recent years, American Christmas has opened their doors to the public during the holiday season. Guests enjoy an immersive Christmas light experience at the company's Mount Verdon, New York headquarters. So here we are. This is Holiday Lane. And here we are. Whoa. Wow. So this is Holiday Lane. Yes. And this is what people will pay nominal fee to come in and bring their kids and they can walk around, take their own pictures. There are a ton of photo opportunities. And this is where 100 percent of the proceeds go back to the three Mount Verdon charities. The decorations in this space stay exactly as they are year round. That's because Holiday Lane is a family experience during the holidays and a showroom for clients during the offseason. Decorations become product offerings. And all this product we sell. Oh, OK. So this is almost like a shopping experience. Exactly. Yeah. To the consumer. This we call our showroom. The break room at American Christmas features Christmas trees all year long. Bob tells me it's always Christmas here. He shared a funny story before I left. I did a speech for a garden club in Omaha, Nebraska, and there were about 250 women there. And at the end of the speech, there was a question and answer period. And one of the women at the end, finally, she said, so how do you decorate your house? And I said, I don't. I put up a menorah. Reporting from Mount Vernon, New York, Chris Beers, NTD News. The Supreme Court hears a case today on flavored vape regulations. Makers of flavored e-cigarettes are challenging the FDA's refusal to approve them. The FDA argues flavored vapes pose health risks, especially for youth. Two companies claim the FDA unfairly charged changed standards during reviews. They say flavored vapes help adults quit smoking and reduce harm. The FDA disagrees, citing a lack of evidence supporting such health claims. This case tests the FDA's authority under the Tobacco Control Act. The court's decision could reshape vape products rules nationwide. Intel CEO Pat Gelsinger has retired effective yesterday, though the company made the announcement today. Why Intel is struggling to keep up with its peers. Here's the story. This is a period of rebuilding the company. Intel CEO Pat Gelsinger has abruptly retired. Gelsinger worked to rebuild the struggling chip maker as the explosive success of competitors like NVIDIA and AMD left Intel in the shadows. Intel has, you know, kind of bit the same bullet that Hewlett-Packard and some of these other great technology companies that have just got set in their ways and didn't innovate. Tech consultant Bob Bilbrook says Intel was very dependent on making central processing units, or CPUs, which act as the brains of personal computers. They handle general purpose computing like Microsoft Word. But Intel missed out on the smartphone revolution. The company turned down Steve Jobs' offer to use its chips in the first ever iPhone. Intel was concerned about the iPhone's profit margins. Intel also missed out on the AI revolution. AI uses primarily graphics processing units, or GPUs, not Intel's CPUs. I see them being more of a M&A target. The most logical partner there would be Qualcomm. The reason why that is, is for the manufacturing capacity. And Qualcomm's got the technology to kind of lead the way there. Bilbrook, a former Qualcomm consultant, says Intel's days of dominance are over. During its peak, Intel was the preeminent supplier of CPUs during the 1990s PC revolution. But Bilbrook says stagnation and lack of experimentation have led to the situation today. And real quick before we go here, markets, NASDAQ and S&P ended higher today, boosted by tech related shares after the market posted a strong November. Also with investors awaiting this week's economic data, including the key monthly job support, which is coming out on Friday. The Dow was down slightly on the day. Now, both the Dow and S&P 500 recorded their biggest monthly percentage gains in a year on Friday last week. All right, that's all for today's Business Matters. Back to you guys. Thanks for that, Don. Well, I guess it's Cyber Monday and holiday shopping is in full swing. Any thoughts? Yeah, I mean, I'm taking advantage of the online deals on Cyber Monday. I've been spending a little bit more than usual this month, and that's mainly due to Cyber Monday and Black Friday sales. Yeah, I can say I am very excited. I will be doing some gift shopping. Hopefully I find something for myself as well. But I love it. I love it. For some people, it's a source of stress. And for others, it's a source of excitement, you know, going out looking for deals and or just finding that perfect thing for that special somebody. Yeah, that's for sure. I've been talking to a few people on Black Friday. And, you know, some people really do prefer that in-store experience over the online shopping. It's not for me particularly, because some people told me at Macy's, for example, when the doors opened, there was a huge rush in. People are fighting for like gift cards and people elbowing each other. I mean, some people, I guess, enjoy that, but that's not for me. Well, I like in-person shopping, that's for sure. Not that rush, though. I'll go a couple of days after Black Friday or Cyber Monday because, you know, there's still deals out there even after the day up. So, life hack. That's right. Yeah. Well, I guess there'll be a lot to report on over the next few weeks as we lead to the end of the year and, of course, the Christmas holiday season. So thanks, Don. We'll see you back here tomorrow. Yeah, see you.