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TSMC, Intel suppliers delay US plants on surging costs, labor crunch

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Taiwan Semiconductor Manufacturing Co (TSMC) and at least five suppliers to Intel have postponed building plants in Arizona, a sign that rebuilding the US chip supply chain is proving more difficult than expected, according to Nikkei Asia.

Chemical and materials manufacturers LCY Chemical, Solvay, Chang Chun Group, Chang Chun Group, KPPC Advanced Chemicals (Kanto-PPC) and Topco Scientific had announced plans and purchased land to build facilities in Arizona after TSMC and Intel, the world’s two largest chipmakers, launched multi-billion dollar investments in the state.

However, several chip industry executives briefed by Nikkei Asia said that the construction of these facilities, which are vital to building a complete chip supply chain, has been suspended or significantly scaled back.

In some cases, the delays are expected to be temporary, while in others the projects will be reviewed later and there is no clear timeframe for when they will be operational again.

Many of those affected blame the delays on the rising cost of building materials and labour, as well as a shortage of construction workers. Investment pouring into the state for a wide range of industries, including chips and automobiles, is straining the construction sector.

Suppliers also cited slower-than-expected progress on expansions at Intel and TSMC for the delays.

The fact that several suppliers have slowed their projects shows that the problem is not caused by one or two companies, but is more structural.

Three chip materials executives told Nikkei Asia that the cost of building a plant in Arizona was four or five times higher than in Asia and ‘several times’ higher than they had previously expected.

LCY Chemical CEO Vincent Liu said his company would ‘adjust the pace’ of the Arizona plant, citing rising costs. Instead of rushing to build a production facility, LCY, a supplier to TSMC, Intel and Micron, will initially ship chemicals by sea to the US to supply its US-based customers. “When it comes to chemicals, it is critical that you have economic scale to have economic efficiency,” Liu said.

Belgium’s Solvay, one of the world’s leading suppliers of high-purity hydrogen peroxide used in chipmaking, has postponed construction of its Arizona plant for later review, sources familiar with the matter said. The sources cited cost concerns as well as the longer-than-expected wait for its main customers Intel and TSMC to expand production.

Chang Chun Group, another leading producer of semiconductor-grade hydrogen peroxide, has significantly scaled back construction of its new plant in Arizona. The Taiwanese chemical group has started building part of the plant on a much smaller scale than planned. A source familiar with the matter said the costs were ‘several times’ higher than expected.

KPCT Advanced Chemicals, a joint venture between Kanto-PPC and Chemtrade, has also postponed the construction of a high-purity sulphuric acid plant in Arizona. Topco, a leading distributor of chemicals and materials, has suspended its planned logistics centre in Arizona, a company executive told Nikkei Asia.

“The key factor is that local demand does not yet require a lot of local supply. So there’s no rush for us to spend resources so quickly. … It’s not just the plant itself. We have to make some additional investments to build roads and connect water and electricity around our campus,” he said.

All five companies have made plans and purchased land in Casa Grande, southeast of Phoenix. The location is attractive because it is relatively close to the world’s two largest chipmakers: a 30-minute drive from where Intel is expanding its facilities in Chandler, and just over an hour’s drive from TSMC’s facility in northwest Phoenix.

ASIA

Syria will not follow Afghanistan’s Taliban model of governance

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In an astonishing statement, Ahmed Shará, also known as Abu Mohamad Jolani, the leader of the Hayat Tahrir al-Sham (HTS) said that he will allow the girls to go to schools and will not turn Syria like Afghanistan under the rule of the Taliban.

Jolani, the de facto ruler of Syria, said that he will distance himself from the Taliban’s strict policies on women’s rights, and said that Syria will not follow the Taliban’s mode of governance.  

Jolani, who brought down the government of Bashar al-Assad and also widely welcomed by the Taliban, said that he believes in the education of women and girls and will not make Syria like Afghanistan.

“Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal. The Afghan model cannot be applied here,” Jolani told a BBC reporter.

Jolani says that Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal.

Jolani’s comment came when the Taliban congratulated the HTS-led victory by Jolani over Assad’s regime after years of fighting. The Afghan Foreign Ministry celebrated Jolani’s victory through a statement and hoped Jolani can bring peace and stability in the country.

“It is hoped that the power transition process is advanced in a manner that lays the foundation of a sovereign and serve-oriented Islamic government in the line with the aspiration of the Syrian people; that unifies the entire population without discrimination and retribution through adoption of a general assembly; and a positive foreign policy with world countries the safeguard Syria from a threat of negative rivalries of foreign actors and creates conditions for the return of millions of refugees,” the statement by Taliban Foreign Ministry.

However, Jolan’s position on the rights of women and girls is in great contrast with the current view of the Taliban leadership. Women and girls have been banned from education and work since the return of the Taliban in August 2021, following the collapse of the Republic System and withdrawal of the US troops from Afghanistan. Girls and women are even banned from medical institutions and visiting public spaces.

Jolani says he has a plan to create a government based institution and a council chosen by the people. 

The situation got worse when the Taliban’s Ministry for the Promotion of Virtue and Prevention of Vice called women’s voices “immodest” compounding their exclusion from public life. This year, it has been marked as three years since girls were banned from pursuing education over sixth grade. Besides that, on December 20, 2022, the Taliban’s Ministry of Higher Education announced that women would be barred from attending public and private universities.    

In an interview with CNN, Jolani said that he has a plan to create a government based on institutions and a “council chosen by the people.”

“When we talk about objectives, the goal of the revolution remains the overthrow of this regime. It is our right to use all available means to achieve that goal,” said Jolani.

“The seeds of the regime’s defeat have always been within it… the Iranians attempted to revive the regime, buying it time, and later the Russians also tried to prop it up. But the truth remains: this regime is dead.”

Moreover, he also said the Syrian people are the “rightful owners” of the country after the ouster of Assad, and declared a “new history” has been written for the entire Middle East.

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Yoon summoned again for questioning on treason charges

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A joint law enforcement team investigating South Korea’s martial law case announced on Friday that it has issued a second summons to ousted President Yoon Suk Yeol, requesting his presence for questioning next week. The inquiry concerns his alleged involvement in the failed implementation of martial law.

The team has scheduled the questioning for 10:00 a.m. next Wednesday at the Corruption Investigation Office for Senior Officials (CIO) headquarters in Gwacheon, located just south of Seoul. This marks the second summons after Yoon refused to cooperate with the initial notice earlier this week.

The decision to hold the questioning on a public holiday appears to be a strategic move by the CIO, likely aimed at addressing security concerns. The office confirmed that the summonses were delivered via express mail and electronically to both Yoon’s residence and the presidential office in Yongsan. Notably, after Yoon’s team refused to accept the first subpoena, the CIO opted against delivering the documents in person for this round.

The investigation focuses on Yoon’s role in the December 3 martial law declaration, which he revoked following a vote in the National Assembly. If Yoon continues to disregard the summons without valid justification, the CIO may seek a court order to detain him for up to 48 hours.

Yoon faces allegations of sedition and abuse of office, charges that have gained traction since his dismissal by parliament last Saturday. His suspension from office remains in effect pending a decision by the Constitutional Court, which will determine whether he is permanently removed or reinstated.

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ASIA

Xi Jinping champions economic diversification during Macau visit

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During a three-day visit to Macau commemorating the 25th anniversary of its return to Chinese sovereignty from Portugal, President Xi Jinping emphasized the importance of economic diversification and maintaining the “one country, two systems” framework.

Speaking at the swearing-in ceremony for Macau’s new Chief Executive Officer, Sam Hou-fai, Xi urged the administration to make economic diversification the city’s primary focus. Sam, the fourth leader since the 1999 handover and the first mainland-born Chinese official to hold the position, is expected to align closely with Beijing’s objectives to reduce Macau’s reliance on gambling. The gambling industry, which accounts for approximately 80% of Macau’s tax revenue, has been the cornerstone of its rapid economic growth in recent years.

“Macau should prioritize proper economic diversification,” Xi stated, calling for enhanced policy support and investment in emerging sectors. He also reiterated the significance of the “one country, two systems” principle, stressing its role in ensuring the city’s “prosperity and stability” for the long term.

Xi’s visit included stops at the Macau University of Science and Technology, where he explored laboratories focusing on traditional Chinese medicine and planetary science. He also attended a cultural performance at the Macau Dome and met with local stakeholders, according to Chinese state media. His trip marked a shift in tone, with Anthony Lawrence, founder of Intelligence Macau, noting that it was the first time Xi publicly praised Macau for its progress rather than delivering critiques or instructions.

Since the liberalization of Macau’s gaming monopoly in 2002, the city has attracted significant foreign investment, including from prominent US casino operators such as Las Vegas Sands, MGM, and Wynn Resorts. However, the economy struggled during the COVID-19 pandemic due to travel restrictions, and recovery has only recently begun.

On Friday, Macau’s casinos were bustling with visitors, while non-gaming initiatives like a stamp exhibition co-organized by MGM China and Beijing’s Palace Museum showcased the city’s efforts to diversify its offerings.

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