US lawmakers say five top venture capital (VC) firms, including Sequoia Capital, have fueled China’s technological rise with at least US$3 billion of investments in key strategic sectors.
Almost two-thirds of the investment from Sequoia and its peers — including Qualcomm Ventures, Walden International, GSR Ventures and GGV Capital — has gone to Chinese artificial intelligence (AI) companies that have supported the country’s military and enabled human rights abuses, the bipartisan US House Select Committee on China said in a report.
More than US$1 billion has gone to Chinese semiconductor firms, the panel said, as chip technology has become a key geopolitical battleground between Washington and Beijing.
Photo: Bloomberg
Some of the firms criticized the report as outdated or exaggerated. It follows a months-long investigation into years of China investments by the five VC giants.
The lawmakers called out investments into companies like ByteDance Ltd (字節跳動), TikTok’s Chinese parent company, as well as entities that are now blacklisted by the US.
VC firms also invested US$35 million in a Chinese semiconductor firm after it was sanctioned, the report says, without naming the specific firms involved.
Sequoia Capital said in a statement that “we take US national security issues seriously and have always had processes in place to ensure compliance with US law.” It said its Chinese offshoot is now “fully independent” with its own brand, HongShan (紅杉).
“Qualcomm Ventures invests in companies worldwide as part of its engagement with the global technology ecosystem,” spokesperson Christie Thoene said in a statement.
“Qualcomm’s investments are generally small in any given market compared to venture firms and constitute less than 2 percent of the total investments discussed in today’s report,” Thoene said.
The remaining three firms did not respond or could not immediately be reached for comment on the committee’s findings, which were reported earlier by the Wall Street Journal.
The US has been working to curb China’s development of advanced semiconductor technology and AI models, citing the prospect that cutting-edge technology could give Beijing a military edge.
US President Joe Biden has issued restrictions on shipments of chips and chipmaking equipment to China, and is standing up a screening program for US investments in key strategic sectors including AI, semiconductors and quantum computing.
A broad bipartisan effort to codify those investment restrictions failed late last year due to some Republican opposition, and key lawmakers have been meeting over the past several months to try to hash out a deal.
“Decades of investment — including funding, knowledge transfer, and other intangible benefits — from US VCs have helped build and strengthen” China’s priority sectors, the lawmakers wrote in their report.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
NEW MARKET: The partnership opens up India to the Dutch company, which already has a strong hold in the semiconductor market of South Korea, Taiwan and China ASML Holding NV entered into a partnership agreement with Tata Electronics Pvt Ltd aimed at ramping up India’s goal to develop domestic chip-manufacturing capabilities. The Dutch company’s technology would help power Tata Electronics’ planned 300 millimeter (mm) semiconductor foundry in Gujarat, according to a joint statement from the two companies on Saturday. The signing of a memorandum of understanding coincides with a visit by Indian Prime Minister Narendra Modi to the Netherlands, which is looking to deepen bilateral relations with New Delhi. ASML, whose top customers include Taiwan Semiconductor Manufacturing Co (台積電) and Samsung Electronics Co, makes lithography machines that can print
PORTFOLIO REBALANCING: The adjustments in three global equity indices reflect rising investor appetite for semiconductor and artificial intelligence-related stocks Taiwan’s weighting in major global equity indices compiled by MSCI Inc is to rise modestly following the latest quarterly review, underscoring the market’s expanding role in emerging-market portfolios, as global investors continue to favor the nation’s technology sector. Taiwan’s weighting in the MSCI Emerging Markets Index is to increase by 0.30 percentage points to 23.76 percent, after the changes take effect at the close of the May 29 session. Its weighting in the MSCI All-Country Asia ex-Japan Index is to rise 0.37 percentage points to 27.16 percent, while that in the MSCI All Country World Index is to edge up slightly to
The Hsinchu County Government’s Labor Affairs Department yesterday said that it has received a plan from cosmetics brand Taiwan Shiseido Co (台灣資生堂) detailing mass layoffs at its plant in Hukou Township (湖口). While the labor authorities did not disclose the number of employees to be laid off, Japanese news media earlier in the day reported that the closure of the company’s factory in Hukou would result in 170 employees losing their jobs. Shiseido followed the law by reporting its layoff plan, the department said, adding that authorities would closely monitor negotiations between the management and affected employees and step in if any
RSS