China’s state investment funds can’t keep their hands off US tech. Despite restrictions from Washington, the FT found state run funds are continuing to buy up stakes in US semiconductor companies.
California-headquartered Pixelworks was one of the companies to recently receive investment from China’s main state-run semiconductor investment fund. Pixelworks designs video- and pixel-processing chips.
It’s a risky play for the mandarins in Beijing. Pixelworks’ revenue in the third quarter came in at $8m, half of what it had earned a year prior. Total revenue was also equal to its net loss for the period. (Its Nasdaq listed shares are down about 20 per cent for the year.)
In their all-out drive for chip self-sufficiency, Chinese officials have racked up more than a few bad bets. National champion Tsinghua Unigroup, which Beijing has poured tens of billions into, defaulted on a bond last month. A local government recently took over another $20bn chip fab that its former CEO called a “nightmare”.
Both pale in comparison to the tale of the “breakthrough” Hanxin chip developed at a leading Shanghai university. After being hailed for years by Chinese media, it turned out the academic behind them employed migrant workers to scratch off “Motorola” and paste on the Hanxin name. Industry insiders blame the scandal for setting back China’s semiconductor drive at least a decade.
With the investments in the US, Beijing may be more concerned with getting its hands on sensitive tech than returns — which is also the prime concern for Washington. Ted Cruz, the Republican from Texas, told the FT there were “too many loopholes” in US regulations.
The Internet of (Five) Things
1. Salesforce is buying Slack for $27.7bn
Salesforce capped cloud computing’s 2020 work-from-home boom with an announcement that it would pay $27.7bn for workplace chat app Slack, setting up a battle with Microsoft for pole position in one of the tech market’s hottest corners.
2. China’s Xiaomi raises $4bn
The world’s third largest phonemaker is raising about $4bn in debt and equity to fund an expansion drive and capture the global market share of its fallen rival Huawei. It may also be looking to design its own chips.
3. Apple faces European lawsuit over slow phones
Allegations that Apple engineered software updates to slow phones and induce users to buy newer models led to a class action suit in the US with a proposed settlement worth up to $500m. Now a consumer advocacy group is suing Apple for about €180m in four European countries over the same issue.
4. After failed IPO, Ant considers selling its Paytm stake
Jack Ma’s fintech group Ant is still reeling from its collapsed $37bn IPO. Now, facing escalating tensions between China and India, it is considering selling off its 30 per cent stake in Indian payments giant Paytm. Ant has poured Rmb2.9bn (440m) into Paytm over the past five years, but the company remains unprofitable.
5. Payments upstart Stripe extends lending program
Stripe is now letting other online platforms offer financing to their customers through Stripe Capital, an “end-to-end lending API”. The company is also said to be in talks to raise new funding at as much as a $100bn valuation.
Tech tools — one ring to rule sleep
Forget high tech bracelets and watches, the Oura Ring is the “smallest and most comfortable way” to monitor sleep. But that’s not all, the gadget meant for your ring finger can monitor your heart rate, temperature, calories and other activity as well. “Oura gets to know you” the company says, tracking and setting baselines so it knows when something is off. Oura adds that for the price of $399 it can help you “achieve your goals and reach your potential”.
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