This summer, for the first time, Facebook and Twitter removed a network of fake user accounts promoting pro-Western policy positions to foreign audiences and critical of Russia, China and Iran, according to a new report.

The accounts, which violated the companies’ terms of service, “used deceptive tactics to promote pro-Western narratives in the Middle East and Central Asia” and were likely a series of covert campaigns spanning five years, according to the report from Stanford University and Graphika, a social media analytics firm.

Twitter and Facebook, which shared their data about the accounts with the researchers, haven’t publicly identified what entities or organizations were behind the campaigns, the researchers said. Twitter identified the U.S. and Britain as the campaigns’ “presumptive countries of origin,” and Meta, the parent company of Facebook and Instagram, identified the U.S. as the country of origin, according to the report.

In recent years, internet firms have shut down online influence operations stemming from authoritarian regimes in China, Russia and Iran. The discovery of a U.S.-based online influence operation using many of the same techniques, such as fake people and fake followers to push a narrative, raises questions about who is behind the effort, its goals and whether the operation is effective.

When asked Thursday by VOA whether the U.S. military had created the fake accounts, Air Force Brigadier General Pat Ryder, the Pentagon’s press secretary, said officials would need to look at the data provided by Facebook or Twitter. He said that the U.S. military does conduct “military information support operations around the world.”

“Obviously, I’m not going to talk about ongoing operations or particular tactics, techniques and procedures, other than to say that we operate within prescribed policies,” he said.

Linking to media, other sites

The researchers noted that the fake social media accounts often posted links to sham media sites as well as “sources linked to the U.S. military,” such as websites in Central Asia that name U.S. Central Command as their sponsor.

In addition, these inauthentic accounts linked to articles from Voice of America, the federally funded international broadcaster, and its sister organization, Radio Free Europe/Radio Liberty, the report said. Sham media sites copied stories from BBC Russia, VOA and other sources.

Several suspended social media accounts were linked to sham media accounts operating in Persian, such as Dariche News, which claimed to be an independent media outlet and had some original content. But, the report added, “many of their articles were explicit reposts from U.S.-funded Persian-language media, including Radio Free Europe/Radio Liberty’s Radio Farda and VOA Farsi.”

USAGM responds

On Thursday, the United States Agency for Global Media, the agency that oversees VOA and RFE/RL, said it didn’t have knowledge of these accounts.

“USAGM maintains only its own official social media accounts and websites, using the highest standards to ensure that official accounts are fact-based, accessible and verifiable,” said Lesley Jackson, a spokesperson, in an email.

USAGM doesn’t work with other U.S. government agencies or other groups to promote news content through fake social media accounts, Jackson confirmed. 

“With its mission to inform, engage and connect people around the world in support of freedom and democracy, USAGM will always promote the free flow of credible information to those in need and stand against misinformation, disinformation and censorship,” Jackson said.

Tactics

The online influence campaigns’ tactics were similar to those of other such campaigns and included doctoring photos to create fake accounts and using hashtags and petitions to attempt to build support.

One set of accounts in Central Asia focused on Russia’s military activities in the Middle East and Africa, but shifted in February to the war in Ukraine, “presenting the conflict as a threat to people in Central Asia,” the report said.

The accounts linked to a petition, whose authorship was unclear, “calling for the Kazakh government to ban Russian TV channels,” the report said.

The researchers said that the tactics of the inauthentic accounts didn’t really work to generate engagement. Most of the posts and tweets received only a handful of likes or retweets. A majority of the accounts had fewer than 1,000 followers.

Pentagon correspondent Carla Babb contributed to this report. 
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Microelectronics produced in the United States and allied countries are crucial components of Russian weapons systems used in the Ukraine invasion, according to a report by Britain’s Royal United Services Institute.

The RUSI report, Silicon Lifeline: Western Electronics as the Heart of Russia’s War Machine, says more than 450 foreign-made components have been found in Russian weapons recovered in Ukraine. The report’s authors say Moscow acquired critical technology from companies in the United States, Europe and Asia in the years before the invasion.

Ukraine says Russia fired more than 3,650 missiles and guided rockets into its territory in first five months of the war. Most of the weapons rely highly on Western-made microelectronic technologies, according to report co-author Gary Somerville, a research fellow at RUSI’s Open-Source Intelligence and Analysis Research Group.

“It doesn’t appear that they actually have the ability to reproduce – at least to the same level of sophistication and at scale – a lot of these critical microelectronics. These are the ones that would be absolutely essential for, for example precision-guided munitions which have very sophisticated processing units,” Somerville told VOA.

That includes Russia’s Iskander 9M727 cruise missile, one of its most advanced weapons. RUSI researchers recovered some missiles in the field inside Ukraine and inspect the microelectronics inside.

They found several Western-sourced components, including digital signal processors, flash memory modules and static RAM modules made by U.S.-based companies including Texas Instruments, Advanced Micro Devices and Cypress Semiconductor, along ethernet cabling that originated from American, Dutch and German companies.

Russia’s Kh-101 cruise missiles, some of which targeted the Ukrainian capital Kyiv, were found to contain 31 foreign components.

Common chips

All the microelectronics companies cited in the report said they comply with trade sanctions and they have stopped selling components to Russia. There is no suggestion in the report that the companies broke any export control laws.

“How is Russia possibly getting hold of this stuff? When we actually looked through a lot of these components, they are quite prosaic and in many ways ubiquitous, they can be found in any sort of electronics really – microwaves, dishwashers,” Somerville said.

Such microelectronics were freely available to Russia before its invasion of Ukraine.

However, RUSI also identified at least 81 components classified as “dual-use” by the U.S. Commerce Department and subject to U.S. export controls.

They include a high-performance CMOS static RAM microchip originally made by U.S.-based Cypress Semiconductor, found inside a handheld navigational system used by Russia’s special forces to pinpoint their position and estimate coordinates for precision artillery and air strikes.

“The component is a high-speed, ultra-low-power memory chip148 that is classified as a dual-use good for export purposes,” according to the RUSI report.

Two-thirds of the foreign components found in Russian weapons systems were manufactured by U.S.-based companies. Japan was the second-biggest supplier.

Export bans

Many of the microelectronics found in the weapons were decades old and, following Russia’s invasion of Ukraine in February, many states have banned the export of such components to Russia.

Somerville pointed to Russia’s history of using elaborate methods to procure technology, Somerville said.

“It’s through the use of a number of front companies that, on the surface when you conduct a due diligence check, appear to be legitimate — but in reality are actually, or can be somewhat affiliated with, large Russian companies that are actually members of the military-industrial complex,” he said.

The report details how Russia also uses false end-user certificates and transshipment companies based in third countries, including several in Hong Kong, to obscure the final destination.

It cites Russian customs records showing that in March 2021, one company imported $600,000 worth of electronics manufactured by Texas Instruments through a Hong Kong-based distributor. Seven months later, the same company imported another $1.1 million worth of microelectronics made by Xilinx, according to RUSI.

U.S. and allied sanctions imposed on Russian weapons manufacturers and companies supplying them with components must be tightened, Somerville said.

“What the sanctions and effective enforcement of these sanctions can do is raise the costs on Russia to acquire these particular microelectronics,” he said.

The report’s authors say Russia is now scrambling to procure microelectronics in bulk, and that its military could be permanently weakened if the supply can be cut off.

Some of the information in this report was provided by Reuters.
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China’s global dominance in the solar industry is a supply chain and national security risk, according to some industry observers, and one of the reasons that the United States has been trying to boost domestic solar manufacturing capacity.

U.S. President Joe Biden Tuesday signed into law the sweeping Inflation Reduction Act, which includes tax incentives for the development of a more robust solar industry. The White House aims to triple domestic solar manufacturing by 2024.

The law responds to longstanding calls by some in the solar industry for U.S. action to boost domestic manufacturing and to level the playing field between the United States and China. Many U.S. firms complain that China can manufacture solar panels and other hardware more cheaply than they can.

China has been expanding solar panel production and innovation that has helped drive down global manufacturing costs, according to a July International Energy Agency (IEA) report.

Another industry observer, the National Renewable Energy Laboratory, said it saw prices drop sharply over a 10-year period starting in 2010.

However, the risks of a global dependence on China have become apparent during the pandemic. The high cost of shipping from China has led to price increases. The price of polysilicon, the material used to make solar cells, quadrupled in the last year because an oversupply caused manufacturers to slow down production, which then led to a shortage when demand for the product increased. Forty percent of the global polysilicon manufacturing comes from China’s Xinjiang region.

“This level of concentration in any global supply chain would represent a considerable vulnerability; solar PV (photovoltaics) is no exception,” stated the IEA report’s executive summary.

China dominates manufacturing

China is involved in manufacturing more than 80% of solar components, according to the IEA.

“If we don’t have the supply chain here in the U.S., we look at it as a national security concern,” said Mamun Rashid, chief executive officer of California-based Auxin Solar, one of the few U.S. manufacturers of solar panels.

“If you have a renewable energy grid and it is powered by solar and the solar equipment is being deployed and you don’t have the ability to supply it yourself at any moment, the faucet can be turned off,” explained Rashid.

Beijing dismissed the concerns and accused the U.S. of thinly veiled protectionism that will harm Chinese businesses.

“China urges the U.S. to stop hobbling Chinese enterprises, quit the erroneous practice of disrupting the supply chain and industrial chain, and create favorable conditions for China-U.S. cooperation on clean energy and climate change,” Chinese embassy spokesperson Liu Pengyu told VOA.

This year, a succession of actions in Washington has directly or indirectly impacted the solar industry in China and the U.S.

In February, the U.S. extended tariffs on solar products containing crystalline silicon from China. Additionally, the Uyghur Forced Labor Prevention Act, banning products including solar components from China’s Xinjiang region, went into effect in June.

China has been criticized over its treatment of its Muslim Uyghur minority and others in Xinjiang province by rights organizations and Western governments. The U.S. accuses Beijing of forced labor practices among its Uyghur minority in the Xinjiang region, which China has denied, saying its employment programs have helped improve the financial situation for Uyghurs.

China reacts to US action

China has taken issue with Uyghur-related legislation enacted by Washington.

“Having implemented the so-called ‘Uyghur Forced Labor Prevention Act’ on the pretext of ‘forced Labor’ in Xinjiang, the U.S. is illegally suppressing and unilaterally sanctioning China’s PV industry without justification,” Liu said in an emailed response to VOA.

“This is seriously against the law of the market and WTO (World Trade Organization) rules and detrimental to the international trade order and the stability of global PV industrial and supply chains and global climate response,” the Chinese embassy’s Liu told VOA, adding, “The U.S. needs to immediately stop spreading lies and stop enforcing this malicious legislation.”

Trade law investigation

Separately, while the Inflation Reduction Act provides tax credits to further develop the U.S. solar industry, Rashid is pushing for the U.S. to enforce its trade laws.

“You’re dealing with China. It’s not a free market economy. You can never out-subsidize China, so that won’t be enough,” said Rashid.

Auxin Solar’s concerns about the pricing of Chinese products prompted a U.S. Department of Commerce investigation earlier this year into whether some solar panels coming to the U.S. from Cambodia, Malaysia, Thailand and Vietnam were actually Chinese products and that Beijing was attempting to dodge U.S. anti-dumping tariffs.

Many U.S. solar projects were halted, fearing the impact of retroactive tariffs. In response, Biden announced a two-year tariff freeze on solar components from the four Southeast Asian countries.

“When you have product that’s selling in the market that’s lower than (what) your bill of materials cost, something is wrong there. The U.S. worker hasn’t even had a chance to enter the race and they’ve lost the race,” Rashid said.

In a press release, U.S. Commerce officials said their findings will be applied when the two-year period ends in 2024.

In the coming years, “based on current manufacturing capacity under construction,” the IEA predicts China will account for some 95% of solar components made for the global supply chain.

Steven Gute contributed to this report.
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In the past year, there has seen a dramatic transformation in the way customers pay for their purchases in Banuri, a village in the Himachal Pradesh state of North India. Whether at a small grocery store or a street cart, instead of handing over cash, they use a simple system that involves scanning a code on a smartphone to make an online payment.

“Even if someone buys only half a kilogram of vegetables, he can pay digitally. We do the smallest of transactions,” said Nishant Sharma, a vegetable vendor in Banuri as he hands over a cauliflower to a customer that costs 75 cents. “It is much easier than handling cash.”

In recent years, a government initiative called “Digital India” has helped millions plug into new digital technologies as internet access expands to distant areas. One of them is a payments system that is transforming the way retail business is transacted in vast rural areas and small towns, where more than two thirds of India’s 1.4 billion people live.

Much like glitzy city stores, street vendors to small shops are making the switch to digital payments. But instead of credit or debit cards, they use India’s Unified Payment Interface popularly known as UPI. It is a payment system that involves no merchant fees and can be used for the smallest of transactions to make instant transfers across bank accounts. It was developed under the initiative of India’s Central Bank.

“It is the ease of the technology and overall reduction in transaction cost that has made this system popular. It takes place with the click of a button, it is cost-effective, and easy to manage,” said economist N.R. Bhanumurthy, Vice Chancellor at D.R. Ambedkar School of Economics University in Bengaluru. “It is certainly a huge transformation from what we did in the past and has changed the way we do business.”

Its expansion has also been helped by a massive push in recent years to bring more people into the banking system. More than 80% of adults now have bank accounts, compared to just one-third of adults some years ago. Affordable smartphones that cost as little as $50 are in the hands of about 750 million people. The COVID-19 pandemic, when cash transactions were discouraged, also prompted many to switch to digital payments.

“The Digital India Movement can bring about revolutionary changes in India and the lives of the common man,” Prime Minister Narendra Modi said at an Independence Day address on Monday. According to the Indian leader, 40% of the real-time digital transactions made in the world now take place in India.

Whether in big towns, cities, or small villages, India’s retail sector is dominated by millions of small stores and shops, who for decades only did business in cash.

The speed and scale with which they are embracing the new payment system is evident in Banuri village. The owner of a chemist shop, Akhilesh Sharma, said about 70% of his customers pay online. It has eased his life.

“Whenever I open PhonePe or Google Pay app, all the transactions are done in my business account,” said Sharma. “In cash, I have to count the money at the end of the day, and it is a little long process. Then I have to go to bank and deposit the cash.”

Economists say digital payments boost business by facilitating transactions. Small town and village residents, especially younger customers, are also discovering the benefits of going cashless.

“I don’t have to worry about carrying money,” said Vikas Sharma, a resident of Palampur. “Earlier when I went to a crowded place, I worried about getting my wallet stolen. Now all I need is my phone.”

Digital transactions are just one of the benefits that the internet has brought people living in outlying areas. For older people such as a retired government employee, Romesh Dogra, the biggest benefit is connecting via video calls with his three daughters who live outside his district.

“I get energized daily when I talk to my grandchildren,” said Dogra, a retired official. “I can watch them growing up. Life has become good.”

There are still gaps to plug in — internet speeds can pose a challenge, especially in villages and small towns. And while the numbers of people with access to the internet have doubled to nearly 700 million in the last five years, millions are still not connected. But with rapid progress, it may not take long for India’s digital footprint to expand.
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In India, an initiative to bring internet access across the country has helped millions plug into new digital technologies. One of them is a payments system that is transforming the way business is being done in the vast rural areas of the country. Anjana Pasricha has a report.
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Ukraine’s top cyber official addressed a room full of security experts at a hackers convention following a two-day trip from Kyiv to a casino in Las Vegas.

During his unannounced visit, Victor Zhora, deputy head of Ukraine’s State Special Communications Service, told the so-called Black Hat convention Wednesday that the number of cyber incidents that have hit Ukraine tripled in the months following Russia’s invasion of his country in late February.

“This is perhaps the biggest challenge since World War II for the world, and it continues to be completely new in cyberspace,” Zhora told an audience at the annual conference.

Ukraine faced a number of “huge incidents” in cyberspace from the end of March to the beginning of April, Zhora said, including the discovery of the “Industroyer2” malware that could manipulate equipment in electrical utilities to control the flow of power.

Russian hackers also hit Ukraine at the onset of the war though a cyberattack that took down regional satellite internet service.

Since the beginning of the year, Ukraine had detected over 1,600 “major cyber incidents,” Zhora said.

Zhora told Reuters in an interview that Microsoft, Amazon and Google had offered pro bono cloud computing services to the Ukrainian government as it moves its data out of the country, away from the destruction wreaked by Russian bombs and missiles.

Some of Ukraine’s data archives are being held within data centers across “multiple [European] countries,” he added, without elaborating.

Zhora said his trip to Las Vegas took two days. He traveled to neighboring Poland to stay a night before flying to the United States.

Zhora said he would not waste time on the slot machines at the sprawling Mandalay Bay casino, where the Black Hat conference is being held: “It would be inappropriate for me to gamble here while Ukrainian soldiers are defending our land.” 
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U.S. teens have left Facebook in droves over the past seven years, preferring to spend time at video-sharing venues YouTube and TikTok, according to a Pew Research Center survey data out Wednesday.

TikTok has “emerged as a top social media platform for U.S. teens” while Google-run YouTube “stands out as the most common platform used by teens,” the report’s authors wrote.

Pew’s data comes as Facebook-owner Meta is in a battle with TikTok for social media primacy, trying to keep the maximum number of users as part of its multibillion-dollar, ad-driven business.

The report said some 95% of the teens surveyed said they use YouTube, compared with 67% saying they are TikTok users.

Just 32% of teens surveyed said they log on to Facebook — a big drop from the 71% who reported being users during a similar survey some seven years ago.

Once the place to be online, Facebook has become seen as a venue for older folks with young drawn to social networks where people express themselves with pictures and video snippets.

About 62% of the teens said they use Instagram, owned by Facebook-parent Meta, while 59% said they used Snapchat, researchers stated.

“A quarter of teens who use Snapchat or TikTok say they use these apps almost constantly, and a fifth of teen YouTube users say the same,” the report said.

In a bit of good news for Meta’s business, its photo and video sharing service Instagram was more popular with U.S. teens than it was in the 2014-2015 survey.

Meanwhile, less than a quarter of the teens surveyed said they ever use Twitter, the report said.

The study also confirmed what casual observers may have suspected: 95% of U.S. teens say they have smartphones, while nearly as many of them have desktop or laptop computers.

And the share of teens who say they are online almost constantly has nearly doubled to 46 percent when compared with survey results from seven years ago, researchers noted.

The report was based on a survey of 1,316 U.S. teens, ranging in age from 13 years old to 17 years old, conducted from mid-April to early May of this year, according to Pew.
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China has blocked many of Taiwan’s exports in retaliation for U.S. House Speaker Nancy Pelosi’s visit to Taiwan on August 2, but certain goods including semiconductors and high-tech products have been spared because of China’s reliance on those products from Taiwan, experts say.

“It is unlikely that Beijing will take serious trade actions against electronic exports from Taiwan. Doing so would be China shooting itself in its own foot,” Dexter Roberts, a senior fellow at the Atlantic Council, told VOA.

Taiwan makes 65% of the world’s semiconductors and almost 90% of the advanced chips.

By comparison, China produces a little over 5% while the U.S. produces approximately 10%, according to market analysts. South Korea, Japan, and the Netherlands are the other sources of the product, which is at the heart of many electronic devices and machinery.

Though China produces some semiconductors, it depends heavily on supplies from Taiwan for advanced chips. Taiwan’s TSMC makes most of the advanced chips in the world and counts Advanced Micro Devices, Apple and Nvidia among its customers.

Semiconductor Manufacturing International Corp. (SMIC) in China, which has 5% of the global fabrication market, produces 14-nanometer chips. There is also evidence that SMIC has 7-nm technology, according to a TechInsights blog. These are considered less advanced than the 3-nm chips produced by TSMC.

Beijing may not block the flow of semiconductors even if the military confrontation escalates, analysts say.

“Taiwan-based TSMC is the biggest world producer of chips, and China and the rest of the world need TSMC semiconductors. Hence, I don’t expect China to target electronic exports,” said Lourdes Casanova, Gail and Rob Canizares director of the Emerging Markets Institute at Cornell University.

Though China’s People’s Liberation Army says it is rehearsing to impose a military blockade around Taiwan, it will be careful not to hurt semiconductor companies like TSMC, Casanova said.

“The stoppage of supply of TSMC semiconductors would be the worst scenario for China and for many other countries. TSMC’s semiconductors are used by Foxconn, another Taiwanese firm, which is the main manufacturer of the iPhone in plants based in China and elsewhere,” she said.

Fear of invasion

A military invasion of Taiwan could disrupt supplies of semiconductors and seriously hamper dozens of high-tech companies that depend on them. TSMC Chairman Mark Liu voiced that fear when he said a military invasion would make TSMC factories inoperable.

“Our interruption would create great economic turmoil in China — suddenly their most advanced component supply disappears. It is an interruption, I must say, so people will think twice on this,” Liu said.

“Nobody can control TSMC by force … because it is a sophisticated manufacturing facility that depends on the real-time connection with the outside world,” such as Europe, the U.S. and Japan, for materials, chemicals and engineering software, he said.

Even with China’s ban on certain imports from Taiwan, analysts said, Taiwan is unlikely to retaliate because it is heavily dependent on Beijing in terms of trade and investment.

“Companies like TSMC are deeply reliant simultaneously on both the U.S. and China markets. Unless the situation in the Taiwan Strait badly deteriorates and turns to outright open hostilities, Taiwan will try to avoid taking any drastic action which would be cutting off chips to China,” said Roberts, author of The Myth of Chinese Capitalism.

China’s domestic manufacturing

China has been pushing to boost its domestic semiconductor manufacturing capacity. Beijing has pledged $150 billion to expand the industry and be more self-reliant. Plans are in place for new semiconductor factories.

Just last year, China’s chip manufacturing grew by 33.3%, according to China’s National Bureau of Statistics.

“China’s rapid growth in semiconductor chip sales is likely to continue due in large part to the unwavering commitment from the central government and robust policy support in the face of deteriorating U.S-China relations,” the Semiconductor Industry Association said in a blog.

Much of what will be produced in China is expected to be chips containing more mature technologies, analysts say.

US action

Under President Joe Biden, the U.S. has intensified efforts to strengthen its chip-making capabilities and reduce the reliance on external sources.

On Tuesday, Biden signed the much-awaited CHIPS and Science Act, which allocates around $52 billion to promote the production of microchips, the powerful driver for high-end electronics used in a wide range of products, including smartphones, electric vehicles, aircraft and military hardware.

Biden said the legislation would help “win the economic competition in the 21st century.”

U.S. Commerce Secretary Gina Raimondo said last month that it was necessary to reduce the dependence on supplies from Taiwan.

“Our dependence on Taiwan for chips is untenable and unsafe,” she said on July 22. “This is a Sputnik moment for America,” Raimondo said, referring to the CHIPS Act. “I mean that very sincerely. And this is a project we’re working on.”

Taiwan’s TSMC website states it is building a fabrication plant in the U.S. state of Arizona with the aim of starting production in 2024. It will produce semiconductor wafers using 5-nm technology.  During her recent controversial visit to Taiwan, Pelosi met TSMC’s Liu. TSMC is expected to be one of the beneficiaries of the $52 billion CHIPS and Science Act.

The U.S. is also countering China’s semiconductor industry in different ways. It recently broadened its ban on sales of chip-making equipment to China, according to Tim Archer, the chief executive officer of Lam Research Corp., a California supplier of silicon wafer fabrication gear.

The restriction would affect the shipment of machinery to produce 14 nm chips in China. This is an extension of the earlier ban, which prevented the supply of machinery for making advanced technology nodes of 10 nanometers. The idea is to cover a wider range of semiconductor equipment going to China.

South Korea, a U.S. ally, has indicated it would also cut off the chip supply to China in case Washington imposed global sanctions on it. Cutting off supplies would put China and Russia at a major technological disadvantage and hamper their manufacture of advanced military hardware. 
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U.S. President Joe Biden has signed the CHIPS and Science Act, which aims to boost U.S. competitiveness against China by allocating billions of dollars toward domestic semiconductor manufacturing and scientific research.

“The United States must lead the world in the production of these advanced chips. This law will do exactly that,” Biden said in remarks during the signing ceremony Tuesday. The president is recovering from COVID-19 and coughed repeatedly during his remarks.

He called the bipartisan legislation a “once in a generation investment” in the country and said it will create good jobs, grow the economy and protect U.S. national security.

Biden noted stiff competition with China in the chips industry. “It’s no wonder the Chinese Communist Party actively lobbied U.S. business against this bill,” he remarked.

Biden was joined on stage for the event by House Speaker Nancy Pelosi, Senate Majority Leader Charles Schumer, Commerce Secretary Gina Raimondo, and Joshua Aviv, CEO of Spark Charge, an electric vehicle charging network.

Schumer called the legislation the “largest investment in manufacturing science and innovation in decades” and thanked Republican Senator Todd Young for his partnership for over three years working on semiconductor-related legislation, beginning with what was then called the Endless Frontier Act.

The proposed act went through various iterations before it was passed as the $280 billion CHIPS and Science Act on a 243-187 vote in the House of Representatives and a 64-33 vote in the Senate in July.

Last year, a semiconductor shortage affected the supply of automobiles, electronic appliances and other goods, causing higher inflation globally and pummeling Biden’s public approval rating among American voters.

Catching up in the chips race

The CHIPS Act includes $52 billion in incentives for domestic semiconductor production and research, as well as an investment tax credit for semiconductor manufacturing. Advocates say it will allow the U.S. to catch up in the global semiconductor manufacturing race currently dominated by China, Taiwan and South Korea.

Following the passage of the bill, the White House noted that Micron, a leading U.S. chip manufacturer, will announce a $40 billion plan to boost domestic chip production while Qualcomm and GlobalFoundries will unveil a $4.2 billion expansion of a chip plant in New York.

The U.S. share of global semiconductor manufacturing capacity has decreased from 37% in 1990 to 12% today, largely because other governments have offered manufacturing incentives and invested in research to strengthen domestic chipmaking capabilities, according to a state of the industry report by the Semiconductor Industry Association.

Now China accounts for 24% of the world’s semiconductor production, followed by Taiwan at 21%, South Korea at 19% and Japan at 13%, the report said.

The CHIPS Act also includes $4.2 billion to fund defense initiatives and the U.S. mobile broadband market, particularly efforts to promote non-Chinese 5G equipment manufacturing.

Broadly, the legislation lays out a strategy for Washington as it aims for global technological and economic dominance – gaining production autonomy by leveraging allies, including South Korea and Japan and eliminating political dependencies on the global semiconductor supply chain.

That strategy puts the U.S. on a collision course with China, which also aims to be the global leader in semiconductors. In 2015, Beijing launched the Made in China 2025 project, which aimed to increase chip production from less than 10% of global demand at the time to 40% in 2020 and 70% in 2025.

The Taiwan factor

Taiwan — a self-governed island that Beijing claims to be its breakaway province — is the main producer of the world’s most high-tech chips. It lies at the heart of the semiconductor showdown, the latest battlefront in the increasingly tense U.S.-China strategic rivalry.

Taiwan accounts for 92% of the global production of 10 nm or smaller semiconductors, essentially creating what some observers have characterized as a “silicon shield” that ensures American support in the event of a Chinese attack, as well as a deterrence against such a move.

In a visit to Taipei that angered Beijing earlier this month, U.S. House Speaker Nancy Pelosi met with Mark Liu, chairman of Taiwan Semiconductor Manufacturing Co., the world’s biggest chipmaker.

Pelosi delivered all but one Democratic vote in the House of Representatives for the CHIPS Act. “Mr. President with the stroke of your pen, America declares our economic independence,” she said in her remarks Tuesday. “We strengthen our national security, and we enhance our family’s financial future.”

Following Pelosi’s Taiwan visit, Beijing halted key communication channels with Washington and conducted live-fire military drills, raining Dongfeng ballistic missiles into the waters near Taiwan’s eastern, southern, and northern coasts.

While most experts don’t believe a war over Taiwan is imminent, many fear a conflict there would disrupt semiconductor production and have disastrous effects on global manufacturing.
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Offshore wind farms are to be permitted for the first time in Australia. The Climate Change Minister Chris Bowen has declared part of the Victoria coast an offshore wind zone and a 60-day community consultation process will soon begin.

The Australian government has designated the country’s first offshore wind zone, which gives developers permission to increase their planning and consultation for wind farm projects.

Australia currently has no offshore wind generation, which was seen as too expensive and hard to build compared to onshore wind or solar projects.

The Climate Change Minister Chris Bowen says there is no time to lose.

“We are way behind the game, way behind the rest of the world in producing wind off our coastline. Again, we have a lot of catching up to do. Offshore wind is jobs-rich and energy-rich,” he said.

The first official offshore wind zone is off the Gippsland coast in the state of Victoria. There are plans to install up to 200 wind turbines, with the closest located 7 kilometers from the coastline. It would be one of the world’s largest wind farms. Construction could begin in 2025.

Other areas will follow off the coasts of New South Wales, Tasmania and Western Australia.

Erin Coldham, the acting chief executive of the Danish-owned Star of the South wind project in the Bass Strait in Victoria, says the project will help reduce Australia’s reliance on fossil fuels.

“In the region where we are looking to put a project in Gippsland, it is a region that has been generating power for over 100 years and been working in the offshore oil and gas business. But those communities know those opportunities will not be around forever. So, there is a really strong sense of enthusiasm for technologies like offshore wind to continue that tradition into the future,” said Coldham.

Wind turbines have been identified as a key part in Australia’s plan to generate more than 80% of its energy needs with renewable sources by 2030.

In 2020, 24% of Australia’s electricity came from renewable energy, up from 21% in 2019.

Solar is Australia’s largest source of green power. A quarter of Australian homes have rooftop solar systems — the highest uptake in the world.

But despite this, Australia has been one of the world’s worst per capita emitters of greenhouse pollution. Coal and gas still generate most of its electricity. Analysts have said that for years it has been regarded as a climate laggard.

But that perception is now changing.

For the first time, Australia has a legislated target to cut greenhouse gas output.

Last week, new laws were passed by the federal parliament in Canberra that will cut carbon emissions by 43% by 2030.

 
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President Joe Biden virtually joined Michigan Governor Gretchen Whitmer Tuesday to celebrate the CHIPS and Science Act, which aims to boost U.S. competitiveness against China by allocating billions of dollars toward domestic semiconductor manufacturing and scientific research.

“This bill makes it clear the world’s leading innovation will happen in America. We will both invent in America and make it in America,” Biden said. He was scheduled to join the event in person but had to remain in isolation after testing positive for COVID-19 again on Saturday in what his physician described as a “rebound” case.

In the coming days, Biden is expected to sign the legislation, which passed in a 243-187 vote in the House of Representatives and 64-33 vote in the Senate last week.

The $280 billion act includes $52 billion in incentives for domestic semiconductor production and research, as well as an investment tax credit for semiconductor manufacturing. Advocates say it will allow the U.S. to catch up in the global semiconductor manufacturing race currently dominated by China, Taiwan and South Korea.

Last year, a semiconductor shortage affected the supply of automobiles, electronic appliances and other goods, causing higher inflation globally and pummeling Biden’s public approval among American voters.

Michigan, a major hub for the American auto industry, has been one of the states hardest hit by the semiconductor shortage.

“This bill will mean humming factories and lower costs on electronics, medical devices, farm equipment and cars for working families,” Whitmer said.

The act includes $4.2 billion to fund defense initiatives and the U.S. mobile broadband market, particularly efforts to promote non-Chinese 5G equipment manufacturing.

Catching up with China

The U.S. share of global semiconductor manufacturing capacity has decreased from 37% in 1990 to 12% today, largely because other governments have offered manufacturing incentives and invested in research to strengthen domestic chipmaking capabilities, according to a state of the industry report by the Semiconductor Industry Association.

Now China accounts for 24% of the world’s semiconductor production, followed by Taiwan at 21%, South Korea at 19% and Japan at 13%, the report said.

With the CHIPS Act, the administration hopes to bring as much semiconductor manufacturing to the U.S. as practically possible, said Bonnie Glick, director of the Krach Institute for Tech Diplomacy at Purdue University.

“And what can’t be reasonably onshore, either because it’s cost prohibitive or other allied countries simply do it better, we can ally-shore manufacturing and support that,” she told VOA.

The two allies the administration has leveraged are South Korea and Japan, both of which Biden visited in May. In Seoul, he toured a Samsung computer chip factory that is the model for a $17 billion facility that the South Korean technology giant is setting up in the U.S. state of Texas.

Last week, the U.S. and Japan launched a new joint international semiconductor research hub under a “bilateral chip technology partnership” to bolster manufacturing for 2-nanometer chips as early as 2025.

Washington has also persuaded Taiwan Semiconductor Manufacturing Ltd. (TSMC) to open a U.S. foundry to produce advanced semiconductors. The $12 billion facility in the state of Arizona was completed last month and is scheduled to start production of 5 nm chips by 2024. TMSC also has plants in China.

“We’re back in the game,” Biden said Tuesday. “Remember, we invented these chips, we modernized these chips, we made them work, and there’s a lot more we can get done.”

The CHIPS Act has laid out a clear strategy for Washington, said Volker Sorger, director of the Devices & Intelligent Systems Laboratory at the George Washington University.

“Gain autonomy and eliminate political dependencies on these global supply chain values,” Sorger told VOA.

That strategy puts the U.S. on a collision course with China, which also aims to be the global leader in semiconductors. In 2015, Beijing launched the Made in China 2025 project, which aimed to increase chip production from less than 10% of global demand at the time to 40% in 2020 and 70% in 2025.

The Made in China 2025 program and the People’s Liberation Army’s goal of military-civil fusion make it “overtly clear that Beijing is seeking to dominate global technology and supply chains through anti-competitive trade practices and infiltration of dual-use technology research,” Glick said.

The U.S. government has been pushing for stricter export regulations to China by prohibiting export of equipment needed for manufacturing chips at 14 nm and below. “That would mark an escalation from the previous ban covering 10 nm and below,” Glick added.

Taiwan’s strategic importance

Taiwan — a self-governed island that Beijing claims to be its breakaway province — lies at the heart of the increasingly tense U.S.-China rivalry.

Taipei has dominated manufacture of the world’s most high-tech chips, accounting for 92% of the global production of 10 nm or smaller semiconductors, essentially creating what some observers have characterized as a “silicon shield” that ensures American support in the event of a Chinese attack, as well as a deterrence to such a move.

A military conflict over Taiwan could disrupt TMSC’s semiconductor production and have disastrous effects on global manufacturing.

U.S.-China tensions are already spooking technology investors. TSMC shares fell nearly 3% on Tuesday as U.S. House of Representatives Speaker Nancy Pelosi landed in Taipei in a visit she said demonstrated American solidarity with the Taiwanese people.

Beijing has condemned the visit, the first by a U.S. House speaker in 25 years, as a threat to peace and stability in the Taiwan Strait.

Rare earths

The CHIPS Act does not include provisions to secure supply chains of rare earths — and other critical minerals used in semiconductors and other high-tech elements — to reduce the nation’s dependence on China, a major producer of these elements.

“I don’t know that we have developed a coherent strategy on accessing both rare and nonrare elements,” Glick said.

Last June, following Biden’s executive order to improve supply chains, the administration released a report concluding that the U.S. was overly reliant on China for critical minerals. Currently, China controls 87% of the global permanent magnet market, 55% of rare earths mining capacity and 85% of rare earths refining.

Earlier this year, the administration announced actions it said would bolster the supply chain of these elements, including a contract for U.S. company MP Materials to process heavy rare earth elements at its California production site — the first processing and separation facility of its kind in the nation.  
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US President Joe Biden virtually joined Michigan Governor Gretchen Whitmer on Tuesday to celebrate the CHIPS and Science Act, which aims to boost US competitiveness against China by allocating billions of dollars toward domestic semiconductor manufacturing and research. White House Bureau Chief Patsy Widakuswara has this report.
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Kenyan ministers said the government has no intention of banning Facebook despite a watchdog last week accusing the social media platform of failing to stop hate speech ahead of Aug. 9 elections.

Kenya’s National Cohesion and Integration Commission (NCIC) last week gave Facebook one week to comply with regulations against ethnic hate speech or risk suspension.

The threat came after a report by rights group Global Witness said Facebook approved hate speech advertisements that promoted ethnic violence ahead of the election.

But Kenya’s Interior Cabinet Secretary Fred Matiangi accused the NCIC of making what he termed a careless decision on the matter.

He assured the public that the platform would not be shut down.

Kenya’s Minister of Information and Technology Joe Mucheru echoed that vow to VOA in a telephone interview Monday.

He said while the issues raised were valid, they did not warrant blocking Facebook.

“That is not within our legal mandate, and we have been working with Facebook and many other platforms,” Muchera said. “Facebook for example has in this electioneering period has deleted over 37,000 inflammatory comments.”

In a statement last week, Facebook admitted having missed hate speech messages in Kenya, where national data shows an estimated 13 million users of the platform.

A spokesperson for Facebook’s parent company, Meta, blamed human and machine error for missing some inflammatory content and said they had taken steps to prevent such content.

Kenya’s cohesion commission said this year’s election had seen less in-person hate speech as it migrated from political rallies to social media.

It said the main perpetrators were followers of Kenya’s two leading presidential candidates — former Prime Minister Raila Odinga and Deputy President William Ruto.
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The United States and Japan launched a new high-level economic dialogue Friday aimed at pushing back against China and countering the disruption caused by Russia’s invasion of Ukraine.

The two longtime allies agreed to establish a new joint research center for next-generation semiconductors during the so-called economic “two-plus-two” ministerial meeting in Washington, Japanese Trade Minister Koichi Hagiuda said.

U.S. Secretary of State Antony Blinken, U.S. Commerce Secretary Gina Raimondo, Japanese Foreign Minister Yoshimasa Hayashi and Hagiuda also discussed energy and food security, the officials said in a news briefing.

“As the world’s first- and third-largest economies, it is critical that we work together to defend the rules-based economic order, one in which all countries can participate, compete and prosper,” Blinken told the opening session.

Hagiuda said “Japan will quickly move to action” on next-generation semiconductor research and said Washington and Tokyo had agreed to launch a “new R&D organization” to establish a secure source of the vital components.

The research hub would be open for other “like-minded” countries to participate in, he said.

The two countries did not immediately release additional details of the plan, but Japan’s Nikkei Shimbun newspaper earlier said it would be set up in Japan by the end of this year to research 2-nanometer semiconductor chips. It will include a prototype production line and should begin producing semiconductors by 2025, the newspaper said.

“As we discussed today, semiconductors are the linchpin of our economic and national security,” said Raimondo, adding that the officials had discussed collaboration on semiconductors, “especially with respect to advanced semiconductors.”

Taiwan now makes the vast majority of semiconductors under 10 nanometers, which are used in products such as smart phones, and there is concern about the stability of supply should trouble arise involving Taiwan and China, which views the island as part of its territory.

The United States and Japan said in a joint statement they would work together “to foster supply chain resilience in strategic sectors, including, in particular, semiconductors, batteries, and critical minerals.” They vowed to “build a strong battery supply chain to lead collaboration between like-minded countries.”

On ties with Russia, Hagiuda said he gained U.S. understanding about Japan’s intention to keep its stake in the Sakhalin-2 oil and gas project despite sanctions against Moscow by Washington, Tokyo and others following the Ukraine invasion.

“There are voices calling for withdrawal. But it would mean our stake goes to a third country and Russia earns an enormous profit. We explained how keeping our stake is in line with sanctions, and I believe we gained U.S. understanding,” he said.

Japanese trading houses Mitsui & Co and Mitsubishi Corp hold a combined 22.5% stake in the project.
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The House on Thursday passed a $280 billion package to boost the semiconductor industry and scientific research in a bid to create more high-tech jobs in the United States and help it better compete with international rivals, namely China. 

The House approved the bill by a solid margin of 243-187, sending the measure to President Joe Biden to be signed into law and providing the White House with a major domestic policy victory. Twenty-four Republicans voted for the legislation. The Senate passed the bill Wednesday, 64-33.

“Today, the House passed a bill that will make cars cheaper, appliances cheaper and computers cheaper,” Biden said. “It will lower the costs of everyday goods. And it will create high-paying manufacturing jobs across the country and strengthen U.S. leadership in the industries of the future at the same time.” 

As the vote was taking place, Biden was discussing the economy with CEOs at the White House. During the event, he was handed a note informing him it was clear the bill would pass — a development that produced a round of applause before the tally was final. 

Most Republicans argued that the government should not spend billions to subsidize the semiconductor industry. GOP leadership in the House recommended a vote against the bill, telling members the plan would provide enormous subsidies and tax credits “to a specific industry that does not need additional government handouts.” 

Taxes, regulations

Representative Guy Reschenthaler, a Pennsylvania Republican, said the way to help the industry would be through tax cuts and easing federal regulations, “not by picking winners and losers” with subsidies — an approach that Representative Joseph Morelle, a New York Democrat, said was too narrow. 

“This affects every industry in the United States,” Morelle said. “Take, for example, General Motors announcing they have 95,000 automobiles awaiting chips. So, you want to increase the supply of goods to people and help bring down inflation? This is about increasing the supply of goods all over the United States in every single industry.” 

Some Republicans viewed passing the legislation as important for national security. 

Representative Michael McCaul of Texas, the top Republican on the House Foreign Affairs Committee, said it was critical to protect semiconductor capacity in the U.S. and that the country was too reliant on Taiwan for the most advanced chips. That could prove to be a major vulnerability should China try to take over the self-governing island that Beijing views as a breakaway province 

“I’ve got a unique insight in this. I get the classified briefing. Not all these members do,” McCaul said. “This is vitally important for our national security.” 

The bill provides more than $52 billion in grants and other incentives for the semiconductor industry as well as a 25% tax credit for those companies that invest in chip plants in the U.S. It calls for increased spending on various research programs that would total about $200 billion over 10 years, according to the Congressional Budget Office. 

The CBO also projected that the bill would increase deficits by about $79 billion over the coming decade. 

Senate health, climate package

A late development in the Senate — progress announced Wednesday night by Democrats on a $739 billion health and climate change package — threatened to make it harder for supporters to get the semiconductor bill over the finish line, based on concerns about government spending that GOP lawmakers said would fuel inflation. 

Representative Frank Lucas, an Oklahoma Republican, said he was “disgusted” by the turn of events. 

Despite bipartisan support for the research initiatives, “regrettably, and it’s more regrettably than you can possibly imagine, I will not be casting my vote for the CHIPS and Science Act today,” Lucas said. 

Representative Kevin McCarthy, the Republican leader in the House, likened the bill’s spending to “corporate welfare to be handed out to whoever President Biden wants.” 

Leading into the vote, it was unclear whether any House Democrats would join with Senator Bernie Sanders, a Vermont independent, in voting against the bill; in the end, none did. 

Democrats urged to step up

Commerce Secretary Gina Raimondo talked to several of the most progressive members of the Democratic caucus in a meeting before the vote, emphasizing that the proposal was a critical part of the president’s agenda and that Democrats needed to step up for him at this important moment. 

Some Republicans criticized the bill as not tough enough on China, and GOP leaders emphasized that point in recommending a “no” vote. Their guidance acknowledged the threat China poses to supply chains in the U.S. but said the package “will not effectively address that important challenge.” 

But, as McCaul pointed out, China opposed the measure and worked against it. The bill includes a provision that prohibits any semiconductor company receiving financial help through the bill from supporting the manufacture of advanced chips in China. 

Zhao Lijian, a Chinese Foreign Ministry spokesman, commenting before the House vote, said the U.S. “should not put in place obstacles for normal science, technology and people-to-people exchanges and cooperation” and “still less should it take away or undermine China’s legitimate rights to development.”
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The U.S. Justice Department is investigating a cyber breach involving the federal court records management system, the department’s top national security attorney told lawmakers Thursday.

Matt Olsen, head of the Justice Department’s National Security Division, alluded to the threat of cyberattacks by foreign nations as he told the U.S. House of Representative Judiciary Committee that the incident was a “significant concern.”

Olsen made the remarks in response to questions from Representative Jerrold Nadler, the panel’s Democratic chairman, who said that “three hostile foreign actors” had attacked the courts’ document filing system.

Nadler said the committee learned only in March of the “startling breadth and scope” of the breach. Olsen said the Justice Department was working closely with the federal judiciary around the country to address the issue.

“While I can’t speak directly to the nature of the ongoing investigation of the type of threats that you’ve mentioned regarding the effort to compromise public judicial dockets, this is of course a significant concern for us given the nature of the information that’s often held by the courts,” Olsen said.

Olsen did not comment on who was behind the attack, but he noted that his division was focused generally on the risk of cyberattacks by foreign nations including China, Russia, Iran and North Korea.

The Administrative Office of the U.S. Courts in January 2021 said it was adding new security procedures to protect confidential or sealed records following an apparent compromise of its electronic case management and filing system.

The Administrative Office, the judiciary’s administrative arm, in a statement on Thursday called cybersecurity a high priority and said it has been taking “significant actions to protect our systems and the sensitive information they contain.”

Further details could not be immediately determined. A Justice Department spokesman said the department as a general policy does not confirm or deny the existence of specific investigations.

The federal judiciary has been working to modernize its electronic case management and filing system and the related online portal known as PACER, which is used to access records, citing the risk of cyberattacks on the aging electronic system.

“We are vulnerable,” U.S. Circuit Judge Amy St. Eve testified at a House committee hearing in May on the judiciary’s budget request. 
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 Twitter Inc. does not object to Elon Musk’s proposal to start a trial on October 17 over Musk’s bid to walk away from his $44 billion acquisition deal but the social media company wants a commitment to complete the trial in five days, Twitter said in a court filing on Wednesday. 

Musk has said he needs time to complete a thorough investigation of what he says is Twitter’s misrepresentation of fake accounts, which he said breached their deal terms. 

He originally sought a February trial, but on Tuesday proposed an October 17 trial after a judge ruled the proceeding was to start in three months. 

Twitter has called the fake accounts a distraction and pushed for the trial to hold Musk to the deal to start as soon as possible, arguing that delay damages its business. It said in its court filing that Musk had offered no assurance a trial would be completed in five days, as ordered by the judge, Kathaleen McCormick of the Delaware Court of Chancery. 

“Twitter sought that commitment because it believes Musk’s objective remains to delay trial, render impracticable the Court’s expedition order, and thus avoid adjudication of his contractual obligations,” said the Twitter filing. 

Attorneys for Musk, the world’s richest person and chief executive of electric car maker Tesla Inc, did not respond to requests for comment. 

Twitter also dismissed Musk’s claims that the company was dragging its feet in responding to his demands for documents. 

Twitter said Musk is the one holding up the process by refusing to answer the company’s complaint, which it said would clarify the issues and any counterclaims he may assert. 

Shares of Twitter closed up 1.3% at $39.85 on Wednesday. 

Musk agreed to acquire the company for $54.20 a share. 
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Meta Platforms Inc. issued a gloomy forecast after recording its first ever quarterly drop in revenue Wednesday, with recession fears and competitive pressures weighing on its digital ads sales. 

Shares of the Menlo Park, California-based company were down about 4.6% in extended trading. 

The company said it expected third-quarter revenue to be in the range of $26 billion to $28.5 billion, which would be a second consecutive year-over-year drop. Analysts were expecting $30.52 billion, according to IBES data from Refinitiv. 

Total revenue, which consists almost entirely of ad sales, fell 1% to $28.8 billion in the second quarter ended June 30, from $29.1 billion last year. The figure slightly missed Wall Street’s projections of $28.9 billion, according to Refinitiv. 

The company, which operates the world’s largest social media platform, reported mixed results for user growth. 

Monthly active users on flagship social network Facebook came in slightly under analyst expectations at 2.93 billion in the second quarter, an increase of 1% year over year, while daily active users handily beat estimates at 1.97 billion. 

Like many global companies, Meta is facing some revenue pressure from the strong dollar, as sales in foreign currencies amount to less in dollar terms. Meta said it expected a 6% revenue growth headwind in the third quarter, based on current exchange rates. 

Still, the Meta results also suggest that fortunes in online ads sales may be diverging between search and social media players, with the latter affected more severely as ad buyers reel in spending. 

Alphabet Inc., the world’s largest digital ad platform, reported a rise in quarterly revenue on Tuesday, with sales from its biggest moneymaker, Google search, topping investor expectations. 

Snap Inc. and Twitter both missed sales expectations last week and warned of an ad market slowdown in the coming quarters, sparking a broad sell-off across the sector. 

On top of economic pressures, Meta’s core business is also experiencing unique strain as it competes with short video app TikTok for users’ time and adjusts its ads business to privacy controls rolled out by Apple Inc. last year. 

The company is simultaneously carrying out several expensive overhauls as a result, revamping its core apps and boosting its ad targeting with AI, while also investing heavily in a longer-term bet on “metaverse” hardware and software. 

Meta executives told investors they were making progress in replacing ad dollars lost as a result of the Apple changes but said it was being offset by the economic slowdown. 

They added that Reels, a short video product Meta is increasingly inserting into users’ feeds to compete with TikTok, was now generating over $1 billion annually in revenue. 

However, Reels cannibalizes more profitable content that users could otherwise see and will continue to be a headwind on profits through 2022 before eventually boosting income, executives told analysts on Wednesday. 

“They are being greatly affected by everything,” Bokeh Capital Partners’ Kim Forrest said, referring to the economic slowdown as well as competition from TikTok and Apple.  

“Meta has a problem because they’re chasing TikTok and if the Kardashians are talking about how they don’t like Instagram … Meta should really pay attention to that.” 

On Monday, two of Instagram’s biggest users, Kim Kardashian and Kylie Jenner, shared a meme imploring the company to abandon its shift to TikTok-style content suggestions and “make Instagram Instagram again.” 

Not persuaded

CEO Mark Zuckerberg did not appear to be swayed, however. 

About 15% of content on Facebook and Instagram is currently recommended by AI from accounts users do not actively follow, and that percentage will double by the end of 2023, he told investors on the call. 

For now, at least, the metaverse part of Meta’s business remains largely theoretical. In the second quarter, Meta reported $218 million in non-ad revenue, which includes payments fees and sales of devices like its Quest virtual reality headsets, down from $497 million last year. 

Its Reality Labs unit, which is responsible for developing metaverse-oriented technology like the VR headsets, reported sales of $452 million, down from $695 million in the first quarter. 

Although Meta has recently slowed investments as cost pressures increased, executives reassured investors it was still on track to release a mixed-reality headset called Project Cambria later this year, focused on professionals. 

Meta broke out the Reality Labs segment in its results for the first time earlier this year, when it revealed the unit had lost $10.2 billion in 2021. 

Its second-quarter operating profit margin fell to 29% from 43% as costs rose sharply and revenue dipped. 

In November, Chief Financial Officer David Wehner will become Meta’s first chief strategy officer. Susan Li, Meta’s current vice president of finance, will become CFO.
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Located on the rooftops of commercial skyscrapers, apartment buildings and warehouses, micro solar plants are starting to play a larger role in America’s quest for a green electrical grid. Aron Ranen reports from New York City.
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The U.S. Senate voted 64-32 on Tuesday to advance legislation to dramatically boost U.S. semiconductor manufacturing in a bid to make the domestic industry more competitive with China.

The legislation provides about $52 billion in government subsidies for U.S. semiconductor production as well as an investment tax credit for chip plants estimated to be worth $24 billion.

The Senate is expected to vote on final passage in coming days and the U.S. House could follow suit as soon as later this week.

President Joe Biden and others have cast the issue in national security terms, saying it is essential to ensure U.S. production of chips that are crucial to a wide range of consumer goods and military equipment.

Commerce Secretary Gina Raimondo called the vote “a symbol of the strong bipartisan coalition working to build more chips in America. These chips keep our economy strong and our country safe.”

The bill aims to ease a persistent shortage that has dented production in industries including automobiles, consumer electronics, medical equipment and high-tech weapons, forcing some manufacturers to scale back production. Auto production has been especially hit hard.

“The pandemic made clear with unforgiving clarity how America’s chip shortage was creating a crisis,” the Senate’s Democratic majority leader, Chuck Schumer said before the vote.

The Semiconductor Industry Association said the vote is a “vital step toward enactment of legislation that will strengthen American chip production and innovation, economic growth and job creation, and national security.”

Biden pushed hard for the bill, which has been in the works for well over a year, with a version passing the Senate in June 2021 but stalling in the House. This frustrated lawmakers from both parties who view competition with China and global supply chain issues as top priorities.

Critics like Senator Bernie Sanders have called the measure a “blank check” to highly profitable chips companies.

Biden met virtually on Monday with the chief executives of Lockheed Martin Corp, Medtronic and Cummins Inc along with labor leaders as part of the administration’s push for the legislation.
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A bill to boost semiconductor production in the United States has managed to do nearly the unthinkable — unite the democratic socialist Sen. Bernie Sanders and the fiscally conservative right.

The bill making its way through the Senate is a top priority of the Biden administration. It would add about $79 billion to the deficit over 10 years, mostly as a result of new grants and tax breaks that would subsidize the cost that computer chip manufacturers incur when building or expanding chip plants in the United States.

Supporters say that countries around the world are spending billions of dollars to lure chipmakers. The U.S. must do the same or risk losing a secure supply of the semiconductors that power the nation’s automobiles, computers, appliances and some of the military’s most advanced weapons systems.

Sanders and a wide range of conservative lawmakers, think tanks and media outlets have a different take. To them, it’s “corporate welfare.” It’s just the latest example of how spending taxpayer dollars to help the private sector can scramble the usual partisan lines, creating allies on the left and right who agree on little else.

Sanders said he doesn’t hear from people about the need to help the semiconductor industry. Voters talk to him about climate change, gun safety, preserving a woman’s right to an abortion and boosting Social Security benefits, to name just a few.

“Not too many people that I can recall — I have been all over this country — say: ‘Bernie, you go back there and you get the job done, and you give enormously profitable corporations, which pay outrageous compensation packages to their CEOs, billions and billions of dollars in corporate welfare,'” Sanders said.

Sanders voted against the original semiconductor and research bill that passed the Senate last year. He was the only senator who caucuses with the Democrats to oppose the measure, joining with 31 Republicans.

While Sanders would like to see the spending directed elsewhere, several Republican senators just want the spending stopped, period. Sen. Mike Lee, a Republican, said the spending would help fuel inflation that is hurting the poor and middle class.

“The poorer you are, the more you suffer. Even people well-entrenched in the middle class get gouged considerably. Why we would want to take money away from them and give it to the wealthy is beyond my ability to fathom,” Lee said.

Conservative mainstays such as The Wall Street Journal’s editorial board, the Heritage Foundation and FreedomWorks have also come out against the bill.

“Giving taxpayer money away to rich corporations is not competing with China,” said Walter Lohman, director of the Heritage Foundation’s Asian Studies Center.

The opposition from the far left and the far right means that Senate Democratic Majority Leader Chuck Schumer, and fellow Democrat, House Speaker Nancy Pelosi, will need help from Republicans to get a bill over the finish line. Support from at least 11 Republican senators will be needed to overcome a filibuster. A final vote on the bill is expected in the coming week.

Republican Sen. Mitt Romney is among the likely Republican supporters. Asked about the Sanders’ argument against the bill, Romney said that when other countries subsidize the manufacturing of high technology chips, the U.S. must join the club.

“If you don’t play like they play, then you are not going to be manufacturing high technology chips, and they are essential for our national defense as well as our economy,” Romney said.

The most common reason that lawmakers give for subsidizing the semiconductor industry is the risk to national security from relying on foreign suppliers, particularly after the supply chain problems of the pandemic. Nearly four-fifths of global fabrication capacity is in Asia, according to the Congressional Research Service, broken down by South Korea at 28%, Taiwan at 22%, Japan, 16%, and China, 12%.

“I wish you didn’t have to do this, to be very honest, but France, Germany, Singapore, Japan, all of these other countries are providing incentives for CHIP companies to build there,” Commerce Secretary Gina Raimondo said Sunday on CBS’s “Face the Nation.”

“We cannot afford to be in this vulnerable position. We need to be able to protect ourselves,” she said.

The window for passing the bill through the House is narrow if some progressives join with Sanders and if most Republicans line up in opposition based on fiscal concerns. The White House says the bill needs to pass by the end of the month because companies are making decisions now about where to build.

Two key congressional groups, the Problem Solvers caucus and the New Democrat Coalition, have endorsed the measure in recent days,

The Problem Solvers caucus is made up of members from both parties. Rep. Brian Fitzpatrick of Pennsylvania, the group’s Republican co-chair, said Intel Corp. wants to build its chip capacity in the United States, but much of that capacity will go to Europe if Congress doesn’t pass the bill.

Rep. Derek Kilmer, a Democrat, said he believes the legislation checks a lot of boxes for his constituents, including on the front-burner issue of the day, inflation.

“This is about reducing inflation. If you look at inflation, one-third of the inflation in the last quarter was automobiles, and it’s because there’s a shortage of chips,” Kilmer said. “So this is about, one, making sure that we’re making things in the United States, and two, about reducing costs.”
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From his small office in Singapore, Kelvin Pang is ready to wager a $23 million payday that the worst of the chip shortage is not over for automakers – at least in China.

Pang has bought 62,000 microcontrollers, chips that help control a range of functions from car engines and transmissions to electric vehicle power systems and charging, which cost the original buyer $23.80 each in Germany.

He’s now looking to sell them to auto suppliers in the Chinese tech hub of Shenzhen for $375 apiece. He says he has turned down offers for $100 each, or $6.2 million for the whole bundle, which is small enough to fit in the back seat of a car and is packed for now in a warehouse in Hong Kong.

“The automakers have to eat,” Pang told Reuters. “We can afford to wait.”

The 58-year-old, who declined to say what he had paid for the microcontrollers (MCUs), makes a living trading excess electronics inventory that would otherwise be scrapped, connecting buyers in China with sellers abroad.

The global chip shortage over the past two years – caused by pandemic supply chaos combined with booming demand – has transformed what had been a high-volume, low-margin trade into one with the potential for wealth-spinning deals, he says.

Automotive chip order times remain long around the world, but brokers like Pang and thousands like him are focusing on China, which has become ground zero for a crunch that the rest of the industry is gradually moving beyond.

Globally, new orders are backed up by an average of about a year, according to a Reuters survey of 100 automotive chips produced by the five leading manufacturers.

To counter the supply squeeze, global automakers like General Motors, Ford and Nissan have moved to secure better access through a playbook that has included negotiating directly with chipmakers, paying more per part and accepting more inventory.

For China though, the outlook is bleaker, according to interviews with more than 20 people involved in the trade from automakers, suppliers and brokers to experts at China’s government-affiliated auto research institute CATARC.

Despite being the world’s largest producer of cars and leader in electric vehicles (EVs), China relies almost entirely on chips imported from Europe, the United States and Taiwan. Supply strains have been compounded by a zero-COVID lockdown in auto hub Shanghai that ended last month.

As a result, the shortage is more acute than elsewhere and threatens to curb the nation’s EV momentum, according to CATARC, the China Automotive Technology and Research Center. A fledgling domestic chipmaking industry is unlikely to be in a position to cope with demand within the next two to three years, it says.

Pang, for his part, sees China’s shortage continuing through 2023 and deems it dangerous to hold inventory after that. The one risk to that view, he says: a sharper economic slowdown that could depress demand earlier.

Forecasts ‘hardly possible’

Computer chips, or semiconductors, are used in the thousands in every conventional and electric vehicle. They help control everything from deploying airbags and automating emergency braking to entertainment systems and navigation.

The Reuters survey conducted in June took a sample of chips, produced by Infineon, Texas Instruments, NXP, STMicroelectronics and Renesas, which perform a diverse range of functions in cars.

New orders via distributors are on hold for an average lead time of 49 weeks – deep into 2023, according to the analysis, which provides a snapshot of the global shortage though not a regional breakdown. Lead times range from six to 198 weeks.

German chipmaker Infineon told Reuters it is “rigorously investing and expanding manufacturing capacities worldwide” but said shortages may last until 2023 for chips outsourced to foundries.

“Since the geopolitical and macroeconomic situation has deteriorated in recent months, reliable assessments regarding the end of the present shortages are hardly possible right now,” Infineon said in a statement.

Taiwan chipmaker United Microelectronics told Reuters it has been able to reallocate some capacity to auto chips due to weaker demand in other segments. “On the whole, it is still challenging for us to meet the aggregate demand from customers,” the company said.

TrendForce analyst Galen Tseng told Reuters that if auto suppliers needed 100 PMIC chips – which regulate voltage from the battery to more than 100 applications in an average car – they were currently only getting around 80.

Urgently seeking chips

The tight supply conditions in China contrast with the improved supply outlook for global automakers. Volkswagen, for example, said in late June it expected chip shortages to ease in the second half of the year.

The chairman of Chinese EV maker Nio, William Li, said last month it was hard to predict which chips would be in short supply. Nio regularly updates its “risky chip list” to avoid shortages of any of the more than 1,000 chips needed to run production.

In late May, Chinese EV maker Xpeng Motors pleaded for chips with an online video featuring a Pokemon toy that had also sold out in China. The bobbing duck-like character waves two signs: “urgently seeking” and “chips.”

“As the car supply chain gradually recovers, this video captures our supply-chain team’s current condition,” Xpeng CEO He Xiaopeng posted on Weibo, saying his company was struggling to secure “cheap chips” needed to build cars.

All roads lead to Shenzhen

The scramble for workarounds has led automakers and suppliers to China’s main chip trading hub of Shenzhen and the “gray market,” brokered supplies legally sold but not authorized by the original manufacturer, according to two people familiar with the trade at a Chinese EV maker and an auto supplier.

The gray market carries risks because chips are sometimes recycled, improperly labeled, or stored in conditions that leave them damaged.

“Brokers are very dangerous,” said Masatsune Yamaji, research director at Gartner, adding that their prices were 10 to 20 times higher. “But in the current situation, many chip buyers need to depend on the brokers because the authorized supply chain cannot support the customers, especially the small customers in automotive or industrial electronics.”

Pang said many Shenzhen brokers were newcomers drawn by the spike in prices but unfamiliar with the technology they were buying and selling. “They only know the part number. I ask them: Do you know what this does in the car? They have no idea.”

While the volume held by brokers is hard to quantify, analysts say it is far from enough to meet demand.

“It’s not like all the chips are somewhere hidden and you just need to bring them to the market,” said Ondrej Burkacky, senior partner at McKinsey.

When supply normalizes, there may be an asset bubble in the inventories of unsold chips sitting in Shenzhen, analysts and brokers cautioned.

“We can’t hold on for too long, but the automakers can’t hold on either,” Pang said.

Chinese self-sufficiency

China, where advanced chip design and manufacturing still lag overseas rivals, is investing to decrease its reliance on foreign chips. But that will not be easy, especially given the stringent requirements for auto-grade chips.

MCUs make up about 30% of the total chip costs in a car, but they are also the hardest category for China to achieve self-sufficiency in, said Li Xudong, senior manager at CATARC, adding that domestic players had only entered the lower end of the market with chips used in air conditioning and seating controls.

“I don’t think the problem can be solved in two to three years,” CATARC chief engineer Huang Yonghe said in May. “We are relying on other countries, with 95% of the wafers imported.”

Chinese EV maker BYD, which has started to design and manufacture IGBT transistor chips, is emerging as a domestic alternative, CATARC’s Li said.

“For a long time, China has seen its inability to be totally independent on chip production as a major security weakness,” said Victor Shih, professor of political science at the University of California, San Diego.

With time, China could build a strong domestic industry as it did when it identified battery production as a national priority, Shih added.

“It led to a lot of waste, a lot of failures, but then it also led to two or three giants that now dominate the global market.”
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The Senate this week took a key step toward passing a bill meant to provide $52 billion in subsidies to the semiconductor industry in the United States, part of an effort that lawmakers have characterized as protecting the country from supply shortages such as those that struck during the coronavirus pandemic.

The bill, called the CHIPS for America Act, also seeks to make the U.S. more competitive with China.

Semiconductors, commonly known as chips, are essential elements of modern manufacturing. They are used in computers, cellphones and automobiles as well as in various other capacities. During the pandemic, chip shortages slowed manufacturing in multiple industries to a crawl.

The legislation would create incentives for semiconductor manufacturers to build chip fabrication plants in the U.S. to bring back domestic production levels, which have fallen from more than one-third of total global capacity three decades ago to less than 12% now.

Discussing the legislation on the Senate floor, Senator Rob Portman, a Republican, said, “It is a plan to make America more competitive with China, and a plan to bring good jobs back to America.”

In a 64-34 procedural vote Tuesday, with more than a dozen Republicans voting with the overwhelming majority of Democrats, the Senate cleared the way for the legislation to come to a vote as soon as this week. The House of Representatives would need to pass the bill — which is still not in its final form — before President Joe Biden could sign it into law.

Making the case

Before the vote Tuesday, Senate Majority Leader Chuck Schumer told his colleagues that the bill “will fight inflation, boost American manufacturing, ease our supply chains and protect American security interests.”

He added: “America will fall behind in so many areas if we don’t pass this bill, and we could very well lose our ranking as the No. 1 economy and innovator in the world if we can’t pass this.”

Senator John Cornyn, the most senior Republican to vote in favor of advancing the bill, used Twitter to make his case ahead of the vote.

“If the US lost access to advanced semiconductors (none made in US) in the first year, GDP could shrink by 3.2 percent and we could lose 2.4 million jobs,” he tweeted. “The GDP loss would 3X larger ($718 B) than the estimated $240 B of US GDP lost in 2021 due to the ongoing chip shortage.”

The money in the bill comes with significant strings attached. Companies accepting the subsidies must agree not to use the funds for to buy back stock, pay shareholder dividends, or expand manufacturing in certain countries identified in the bill. Provisions allow the government to “claw back” the funds if a recipient violates any of the bill’s conditions.

Second try

If the bill advances to the House, it would mark the second time a bipartisan group of senators tried to secure money for the semiconductor industry. Last year, the Senate passed a $250 billion package that included broader research and development funding.

When the House received the bill, it waited nearly a year to pass its own version and made a number of additions that Senate Republicans would not agree to. The bill never advanced.

Now, however, things might be different. In a letter circulated to members of the House Democratic caucus on Wednesday, House Speaker Nancy Pelosi wrote in favor of the bill.

“With this package, the United States returns to its status as a world leader in the manufacturing of semiconductor chips,” Pelosi wrote, noting that the bill would create an estimated 100,000 well-paid government contracting jobs in the industry.

“Doing so is an economic necessity to lower costs for consumers and to win in the 21st Century Economy, as well as a national security imperative as we seek to reduce our dependence on foreign manufacturers,” Pelosi wrote.

Industry reacts

In an email exchange with VOA, Ajit Manocha, president and CEO of Semi, a global industry trade group, said, “We are pleased to see action to reverse the decline in the U.S. share of global semiconductor manufacturing capacity, which has fallen by 50 percent in the last 20 years and is forecast to shrink further.”

“The availability of robust incentives in other countries and the lack of a federal U.S. incentive have been key factors driving the location of more overseas manufacturing facilities,” Manocha added. “If the United States wants to maintain or increase its share of global semiconductor manufacturing capacity, the federal government absolutely needs to get in the game.”

Semiconductor Industry Association President and CEO John Neuffer said in a statement, “The Senate CHIPS Act would greatly strengthen America’s economy, national security, and leadership in the technologies that will determine our future.”

He added, “This is America’s window of opportunity to re-invigorate chip manufacturing, design, and research on U.S. shores, and Congress should seize it before the window slams shut.” 
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Twitter appeared to be working again after a widespread outage earlier Thursday.

The site Downdetector.com, which logs service outages, reported it was the first such outage since February and impacted people in the United States, the United Kingdom, Mexico, Brazil, Italy and others.

Starting around 8 a.m. on the U.S. East Coast, many users received the message “Tweets aren’t loading right now. We are currently investigating this issue,” the social media company posted on its status page.

Twitter was known for outages when it was a new company, but as it grew, the problems became less common.

The U.S.-based firm is suing businessman Elon Musk for violating his recent $44 billion agreement to buy the company.

Twitter, Inc. stock was slightly down in early trading Thursday at $36.51 per share.

Some information in this report comes from The Associated Press and Reuters.
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