Hello from Tokyo. In last week's newsletter, I mentioned South Korean memory giant SK Hynix. This past Wednesday, the company's market capitalization surpassed $1 trillion , marking a major milestone in Asia's corporate history: There are now three Asian companies in the "trillion-dollar club," the other two being Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics. In Japan, SoftBank Group, one of OpenAI's backers, is closing in on longtime market-cap leader Toyota Motor. Asian tech companies are decisively riding the AI boom led by the U.S.
Meanwhile, Huawei, the Chinese tech giant that was placed under U.S. sanctions in 2019 and stricter regulations that followed, cutting it off from high-end technology and the market, has announced what could turn into a remarkable comeback . Due to sanctions, Huawei had been effectively barred from accessing cutting-edge semiconductor manufacturing tools, putting it at a disadvantage in ultra-fine chipmaking, an area dominated by TSMC and relied upon by tech juggernauts such as Nvidia and Apple. However, the privately held Shenzhen-based company unveiled a new approach to developing high-performance semiconductors this week that does not rely on industry-standard miniaturization.
For the past 60 years, the global semiconductor industry has been dominated by "Moore's Law," named after Gordon Moore, a legendary engineer and the cofounder of Intel. This law relies on chip performance improving through ever-smaller transistor scaling. Huawei, however, has developed an alternative approach . In a bold move, the company has dubbed this new principle "Her's Law," after a senior executive leading the initiative, and claims the method could allow it to produce semiconductors with capabilities comparable to TSMC's -- and only a few years behind it -- even under ongoing sanctions.
There is a line from the 1946 founding prospectus of Sony -- a startup born amid the postwar chaos and chronic supply shortages that would go on to become the global consumer electronics giant -- that reads: "We ... will even welcome technological difficulties." The prospectus reflects a belief that technical constraints can spark innovation. If U.S. sanctions, intended to weaken China's semiconductor industry, end up fueling breakthroughs at Huawei, the irony would be striking. Of course, significant challenges remain before "Her's Law" can truly emerge as a viable alternative to Moore's Law. Tech rivalry between the U.S. and China is a core strength of Nikkei Asia's coverage. We invite you to stay tuned for more in-depth reporting from us.
My suggested reads
1. Trading stocks using AI bots is now a reality for retail investors. But, as this week's Trading Asia digs into, AI is also blurring the lines between data analysis and investment advice, and some tests show that investment performance as assessed by AI varies widely. Even more problematic is that AI can't provide any basis for its reasonings. All this has regulators keeping a close eye on the fast-moving situation.
2. The effective closure of the Strait of Hormuz has been especially painful for Southeast Asia. But the region isn't sitting still -- Indonesia, Malaysia, Thailand and Vietnam are turning to palm oil and other local crops to fill the gap in fuel supplies and relieve upward pressure on prices. Big in Asia explores how this may only shift price pressures since turning food crops into fuel will leave less for people and animals to eat.
3. Thailand's homegrown food delivery app Line Man has increased its market share over the past few years by building a locally rooted ecosystem. Chief Executive Yod Chinsupakul says in an interview that the company plans to go public next year to raise funds for this expansion and technology investment, and that it will continue to focus on the domestic market.
Wishing you a wonderful weekend!
Akito Tanaka
Follow us on Threads and Instagram
Sign up for the weekly Editor-in-chief's picks newsletter here
Thank you for reading this newsletter. We are taking a short break and will be back in your inboxes on June 12.