What’s up with… Samsung, China’s chip strategy, EdgeConneX

  • Samsung lands $6.4bn in US Chips and Science Act funding
  • China’s telcos are ordered to remove foreign chips 
  • EdgeConneX adds $1.9bn to its green funding

In today’s industry news roundup: Samsung is the latest chip manufacturing giant to land federal funding to help build out new US facilities; China’s telcos have reportedly been ordered to rip and replace foreign chips currently deployed in their networks; datacentre operator EdgeConneX raises a further $1.9bn in sustainability-linked financing; and more!

Samsung is the latest semiconductor giant to be awarded financial assistance by the US government. The South Korean giant is to receive up to $6.4bn in direct funding under the Chips and Science Act to “strengthen the resilience of the US semiconductor supply chain, advance US technology leadership, and fuel US global competitiveness,” the US Department of Commerce announced on Monday morning. That funding will add to the $40bn-plus that Samsung – “the only leading-edge semiconductor company that is a leader in both advanced memory and advanced logic technologies,” the commerce department noted – is expected to invest in the US in the coming years, supporting the creation of more than 20,000 jobs. “The proposed investment would turn Samsung’s existing presence in Texas into a comprehensive ecosystem for the development and production of leading-edge chips in the United States, including two new leading-edge logic fabs, an R&D fab, and an advanced packaging facility in Taylor, as well as an expansion to their existing Austin facility,” noted the US government department. “By continuing to develop the technologies of the future in the United States, Samsung is taking steps that would work towards strengthening US economic and national security and increasing the resilience of both the US and global semiconductor supply chains. Because of investments like Samsung’s, the United States is projected to be on track to produce roughly 20% of the world’s leading-edge logic chips by 2030,” it added. Currently, the US and other nations are largely reliant on Taiwan for chip production, while China is rapidly ramping up its own capabilities. Kye Hyun Kyung, president and CEO of the device solutions (DS) division at Samsung Electronics, noted: “We’re not just expanding production facilities; we’re strengthening the local semiconductor ecosystem and positioning the US as a global semiconductor manufacturing destination. To meet the expected surge in demand from US customers, for future products like AI chips, our fabs will be equipped for cutting-edge process technologies and [will] help advance the security of the US semiconductor supply chain,” he added. The news comes a week after Taiwanese giant TSMC (Taiwan Semiconductor Manufacturing Company) was awarded $6.6bn in direct funding by the US government, while Intel bagged up to $8.5bn in March. 

News of Samsung’s funding came in the wake of a Wall Street Journal report that the Chinese government has told the country’s telcos – China Mobile, China Telecom and China Unicom – that they need to replace “foreign” chips in their networks with domestic alternatives by 2027, a move that would hit US chipmakers Intel and AMD. According to the report, China's Ministry of Industry and Information Technology (MIIT) instructed the telcos to identify where non-Chinese chips were deployed in their networks and formulate plans to replace them with locally produced technology.  

Datacentre firm EdgeConneX has raised an additional $1.9bn in “sustainability-linked financing” to fund its expansion in the Europe, Middle East and Africa (EMEA) region, taking the company’s total “green investments” to more than $7bn in the past two years. “With a rapidly growing European footprint of over 20 facilities, EdgeConneX continues to expand its presence in the region, driven by strong global customer demand for cloud and AI infrastructure,” the company noted in this announcement. It added: “A highlight of this financing arrangement is the inclusion of sustainability-linked margin adjustments. This feature directly ties the interest rate to EdgeConneX’ achievement of predetermined sustainability objectives, symbolising the company’s deep commitment to achieving carbon neutrality, eliminating its waste and water footprint, and powering its entire datacentre platform with renewable energy sources by 2030.” EdgeConneX CFO Joe Harar noted that this latest successful addition to its sustainability-linked funding “reconfirms our status as an industry-leading datacentre developer and operator and reinforces our belief that responsible growth and operational excellence go hand in hand… This is a significant milestone in our journey towards leading the industry in sustainable practices, and we are excited about the future possibilities this opens up for EdgeConneX and our stakeholders.” 

Telenor has announced that its EVP and CFO Tone Hegland Bachke is to step down to join the executive board of directors in Dutch trading company SHV Holdings. She will continue working at Telenor until 1 August at the latest. “During her six years in Telenor and her four years as group CFO, Tone has worked relentlessly to contribute to Telenor’s strategic development and performance,” commented Sigve Brekke, CEO of Telenor Group. Bachke will be succeeded by Kasper Wold Kaarbø, SVP of performance and ownership at Telenor Group, who will serve as acting CFO from 8 May. Kaarbø has been with Telenor for around 20 years and is a member of the board of Malaysian telco CelcomDigi.

It’s getting a bit Shakespearean… Patrick Drahi, the billionaire telecom tycoon and biggest shareholder (24.47% stake) in the UK’s incumbent telco BT, is under pressure from family members, including his children, to sell some of his BT shares and invest instead in other industries, reports MSN. However, he is refusing to do so. Meanwhile, the debt saga of Altice, Drahi’s telecom and media conglomerate, continues, as it struggles to get to grips with its €55bn debt mountain across all divisions. Altice did recently strike a €1.55bn deal to sell the media interests of Altice France, but that is just a drop in the ocean, while the process to try and sell Altice Portugal (from which Drahi is hoping to raise €8bn-€10bn) is ongoing. Meanwhile, the value of Drahi’s stake in BT since he first acquired 12% of the telco’s stock back in 2021 has plummeted – BT’s share price has almost halved since the summer of that year and currently trades at 106 pence on the London Stock Exchange giving it a market valuation of about £10.6bn – but he remains committed to holding on to all his shares, presumably in the Micawberish belief that “something will turn up”. 

Opportunity already lost? The UK government’s Wireless Infrastructure Strategy (WIS) is just a year old but a new report claims the targets the strategy set for 5G, even at this early stage, are at risk of being missed. That’s according to the findings of a report, ‘Rebalancing Act: Unlocking the Potential of the UK's Mobile Industry’, commissioned by Mobile UK, the trade body for Britain’s mobile network operators. According to the report’s authors, urgent change to the investment environment is needed to plug the £25bn cash gap that has opened up. The report finds that crucial infrastructure upgrades are too reliant on an under-resourced planning system. The £25bn hole where investments in advanced 5G standalone (SA) networks will have to be filled quickly if the promised generation of an additional £159bn to the UK economy by 2035 (as laid out in detail in the WIS) is to be achieved. The UK government lists “communications” as one of Britain’s 13 critical national infrastructure sectors (CNIS) along with chemicals, civil nuclear, defence, emergency services, energy, finance, food, government, health, space, transport and water. At least six of those sectors are in dire straits after 14 years of government neglect and are in need of massive and immediate investment. As far as 5G is concerned, the government is long on talk, short on action and even shorter in the pocket. Hamish MacLeod, CEO of Mobile UK, commented, “It’s clear the industry is delivering strong value through the generation of £5 return to the wider economy for every £1 invested by the operators, and so enabling a positive investment environment for the sector must be the clear priority of government. As a country, we are not making enough progress to meet the objectives of the Wireless Infrastructure Strategy, which acknowledges the power of mobile technology and the ambition to be a leader in 5G. Reductions in spectrum licence fees, reforming traffic management regulations and business rates holidays for new mobile infrastructure would incentivise investment. In addition, adequately funding the planning system and appointing digital champions in local authorities would help streamline network rollout and get the UK back on track to achieve its targets.” The report identifies several key challenges that need to be met, starting with the aforementioned investment gap. It points out that the UK’s mobile comms sector is funded almost entirely by private capital, but stagnant revenue flows, ever-increasing costs and the requirement continuously to deploy new, and upgrade existing, communications infrastructure are putting off would-be investors who believe they will get little return for their money in the foreseeable future and almost none in the short term. This state of affairs is exacerbated by what the report calls “regulatory burdens and economic pressures” that are “impacting mobile network operators’ profitability, further constraining investment.” The Mobile UK report makes four recommendations, the first of which is “at a minimum” to “follow through on policies and actions outlined in the Wireless Infrastructure Strategy.” Yes, that would be a help, but don’t hold your breath. The second recommendation is to “explore further policy actions designed to remove barriers to network rollout.” The third is to implement fiscal measures that will have a direct and immediate impact on improving mobile operator investment outlook and the fourth is to consider further actions that can be taken to support private capital being deployed in the UK by mobile operators. Meanwhile, the UK government is already looking beyond 5G and  is “developing a UK 6G vision and advocating for it at international fora,” it noted in its announcement last year about the WIS. Splendid!

News now of some mind-bending light bending… US researchers at Providence, Rhode Island-based Brown University and Rice University in Houston, Texas, have found a way to make light beams bend around walls, buildings, furniture and other obstructions (including people). The naturally healthy Brown/Rice R&D team exploited the properties of “self-accelerating beams” of electromagnetic waves that naturally bend or curve to one side as they move through space and preserve their shape whilst propagating along curved trajectories in free space or on a surface. A paper on the subject, ‘Curving THz wireless data links around obstacles’, is published in the current edition of Communications Engineering. It explains that the ever-increasing volumes of data being transmitted over microwave wireless networks are affecting performance, so network operators are lobbying for a new data transmission standard for terahertz (THz) spectrum bands. Such a standard would permit the carriage of 100 times more data than is possible across current wireless links, but it also comes with the challenge that millimetre-wave and THz wireless networks are line-of-sight methodologies, which means data transmission can be blocked by most solid objects. The Brown/Rice solution is based on the presumption that users are “likely to be located within the electromagnetic near-field of the base station, which opens the possibility to engineer wave fronts for link maintenance”, adding that curved beams “carrying data at high bit rates, can realise a link by curving around an intervening obstacle.” The results show that trajectory engineering of near-field wave fronts (ie. the part of an electromagnetic field closest to the emitting source) will be an important tool in future physical layer implementations of wireless networks. It is known that different beams are required to establish links in different conditions, and, as is the case where beam steering with phased arrays is necessary today, transmitters will require sensing capabilities to determine the precise parameters of the curved beam needed to close the link, and that obviously depends on the type, size and shape of an obstacle itself. The paper claims the development “opens vast new possibilities for wave front management in directional wireless networks.” While the researchers accept that their efforts do not solve all data transmission challenges, it shows that engineered wave fronts can (literally) get around obstacles without the need to rely on complex non line-of-sight paths and the paper envisages the development of base stations that can dynamically reconfigure from one wave front to the next as conditions change. 

- The staff, TelecomTV

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