By Fanny Potkin

(Reuters) – China’s Huawei plans to start mass-producing its most advanced artificial intelligence chip in the first quarter of 2025, even as it struggles to make enough chips due to U.S. restrictions, said two people familiar with the matter.

The telecoms conglomerate has sent samples of the Ascend 910C – its newest chip, meant to rival those made by U.S. AI chipmaker Nvidia (NASDAQ:NVDA) – to some technology firms and started taking orders, the sources told Reuters.

Huawei is at the heart of U.S.-China friction over trade and security. Washington has imposed a series of curbs on Huawei and other Chinese companies, arguing that their technological progress poses a national security risk to the U.S. Beijing, which is trying to make the world’s second-biggest economy self-sufficient in advanced semiconductors, denies such claims.

The restrictions have hampered Huawei’s ability to get the yield – the proportion of chips that come off the manufacturing line fully functional – of its advanced AI chips high enough for them to be commercially viable.

The 910C is being made by top Chinese contract chipmaker Semiconductor Manufacturing International Corp (SMIC) on its N+2 process, but a lack of advanced lithography equipment has limited the chip’s yield to around 20%, said one source who was briefed on the results.

Advanced chips need yields of more than 70% to be commercially viable.

Even Huawei’s current most advanced processor, the SMIC-made 910B, has a yield of only around 50%, forcing Huawei to slash production targets and delay filling orders for that chip, the sources said.

Huawei and SMIC did not respond to requests for comment on Thursday.

U.S. RESTRICTIONS BITE

TikTok’s Chinese parent, ByteDance, ordered more than 100,000 Ascend 910B chips this year but had received fewer than 30,000 as of July, a pace too slow meet the company’s needs, Reuters reported in September. Other Chinese technology companies that have ordered from Huawei have complained of similar problems, sources have said.

U.S. curbs include barring China since 2020 from obtaining extreme ultraviolet lithography (EUV) technology from Dutch manufacturer ASML (AS:ASML), used to make the world’s most sophisticated processors.

“Huawei knows there is no short-term solution, given the lack of EUVs, so it will give priority to strategic government and corporate orders,” the source said.

ASML has also stopped shipping its most advanced deep ultraviolet lithography (DUV) machines to China due to rules imposed by the Biden administration last year. Some fabs have also been restricted from buying older ASML DUV models.

SMIC demands a premium of up to 50% for chips made on its advanced nodes, which are less advanced than those of Taiwanese chip-making giant TSMC, and are made using enhanced ASML DUVs. Huawei has supplemented its SMIC-made chips with ones made by rival TSMC, according to analysts and sources.

TSMC notified the U.S. Commerce Department several weeks ago that one of its chips had been found in a Huawei 910B process. The U.S has placed Huawei on a trade list that requires suppliers to obtain licenses to ship any goods or technology to the company.

Washington has since clamped down further, ordering TSMC to halt shipments of advanced AI chips to Chinese customers, in a move targeting the diversion of chips to Huawei.

U.S. authorities are planning export controls on the semiconductor industry that will further restrict shipments for Chinese firms. Donald Trump, who was president from 2017 to 2021 and will return to the White House in January, has made tough-on-China trade policies core to his economic agenda.

By Krishna N. Das and Munsif Vengattil

NEW DELHI (Reuters) – Indian billionaire Gautam Adani, indicted in New York over a $265 million bribery scheme, is a first-generation tycoon whose phenomenal rise has been accompanied by a series of damaging controversies at home and abroad.

Asia’s second-richest person, who narrowly escaped death in 2008 as one of many people stuck inside Mumbai’s Taj Mahal Palace Hotel when gunmen went on a killing spree, faces a U.S. arrest warrant and criminal penalties over the fraud and bribery charges.

Adani’s businesses, ranging from power and ports to sugar and soybeans, lost more than $150 billion in combined market value last year after U.S.-based short seller Hindenburg Research accused his eponymous group of using offshore tax havens improperly. The group, which recouped some of the losses and now has a combined valuation of $141 billion, denied all of the allegations.

Before shares in Adani Group companies tanked last year, the 62-year-old high school dropout had briefly become the world’s wealthiest person after Tesla (NASDAQ:TSLA) CEO Elon Musk. Adani is now the 25th richest person with a net worth of about $57.6 billion, according to Forbes.

While the group’s coal and power projects and other deals have been questioned in countries such as Australia and Bangladesh, Indian opposition leaders have regularly used Adani to hit out at the government of Prime Minister Narendra Modi, alleging favouritism, including in giving Adani the contract to redevelop a massive slum in Mumbai.

Both sides have rejected the charges.

U.S. authorities said on Wednesday that Adani and seven other defendants had agreed to pay the bribes to Indian government officials to obtain supply contracts expected to yield $2 billion of profit over 20 years, and develop India’s largest solar power plant project. Adani Group has not responded to Reuters’ requests for comment on the charges.

Born on June 24, 1962 in Ahmedabad city in the western state of Gujarat – also Modi’s home state – Adani dropped out of school at age 16 after completing the 10th grade.

He set up Adani Group in 1988, beginning with commodities trading. He came from a middle-class textile family to build his riches, unlike many other billionaires who inherit their wealth.

Married to dentist Priti Adani, he has two sons, Karan and Jeet, both of whom are involved in the company businesses, like many others in the family.

According to one person with direct knowledge of his dealings, he has a “very hands-on” style of running his empire, which he said he aims to pass on to the next generation in the family when he turns 70.

In interviews with local and foreign media, Adani has called himself a shy person and credited the rise of his popularity in part to the political attacks he has faced.

He has been quick to praise politicians too.

Soon after Donald Trump’s victory in the U.S. election, Adani said on X that the U.S. president-elect was “the embodiment of unbreakable tenacity, unshakeable grit, relentless determination and the courage to stay true to his beliefs”.

Congratulating Trump, Adani said last week his group would invest $10 billion in U.S. energy and infrastructure projects, without providing details other than the investment aimed to create 15,000 jobs.

Investing.com – Australia stocks were lower after the close on Thursday, as losses in the Consumer Discretionary, Consumer Staples and A-REITs sectors led shares lower.

At the close in Sydney, the S&P/ASX 200 fell 0.04%.

The best performers of the session on the S&P/ASX 200 were St Barbara Ltd (ASX:SBM), which rose 4.48% or 0.02 points to trade at 0.35 at the close. Meanwhile, Amcor PLC (ASX:AMC) added 3.16% or 0.49 points to end at 16.00 and Northern Star Resources Ltd (ASX:NST) was up 3.10% or 0.53 points to 17.60 in late trade.

The worst performers of the session were Mesoblast Ltd (ASX:MSB), which fell 6.03% or 0.10 points to trade at 1.48 at the close. Resolute Mining Ltd (ASX:RSG) declined 5.81% or 0.03 points to end at 0.41 and Pilbara Minerals Ltd (ASX:PLS) was down 4.84% or 0.14 points to 2.75.

Falling stocks outnumbered advancing ones on the Sydney Stock Exchange by 619 to 427 and 411 ended unchanged.

The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was down 2.19% to 10.77.

Gold Futures for December delivery was up 0.26% or 6.90 to $2,658.60 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in January rose 0.32% or 0.22 to hit $68.97 a barrel, while the January Brent oil contract rose 0.29% or 0.21 to trade at $73.02 a barrel.

AUD/USD was unchanged 0.20% to 0.65, while AUD/JPY fell 0.08% to 101.06.

The US Dollar Index Futures was down 0.09% at 106.52.

Investing.com– Chinese equities may have bottomed out after surging to two-year highs last month, but their outlook remains volatile amid persistent doubts over more stimulus and economic growth, BCA Research said in a note. 

A Donald Trump presidency in the U.S. is also expected to provide more headwinds for China, especially given that Trump has vowed to impose steep trade tariffs on the country.

BCA Research was Overweight on Chinese A-shares, but was Neutral on Chinese offshore stocks and Underweight on Hong Kong. 

The brokerage warned that there was little fiscal stimulus expected from the country in the near-term, especially as Beijing sought to gauge just what a Trump presidency will entail for the country. 

The country is experiencing a liquidity trap, which makes “monetary easing less effective,” BCA said. The brokerage warned that China-related trades, such as commodity prices, remained vulnerable, with an economic recovery in the next six months appearing unlikely. 

“Even if Chinese stocks have bottomed, their performance will be very volatile,and risk-adjusted returns will be poor,” BCA Research analysts wrote in a note. 

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose sharply in early-October, hitting two-year highs after Beijing announced its most aggressive round of stimulus measures.

But Chinese stocks have since relinquished a bulk of their gains, amid doubts over the scale and implementation of the planned measures. A recent round of fiscal measures from Beijing also largely underwhelmed, pressuring local markets. 

For broader emerging markets, BCA recommended investors stay put, especially in the face of a positive outlook for the dollar in the coming months, which is expected to pressure EMs. 

By Jody Godoy

(Reuters) -Alphabet’s Google (NASDAQ:GOOGL) must sell its Chrome browser, share data and search results with competitors and take a range of other measures to end its monopoly on searching the internet, U.S. prosecutors argued to a judge on Wednesday.

Such changes would essentially result in Google being highly regulated for 10 years, subjecting it to oversight by the same Washington federal court that ruled the company maintained an illegal monopoly in online search and related advertising.

Google controls about 90% of the online search market.

“Google’s unlawful behavior has deprived rivals not only of critical distribution channels but also distribution partners who could otherwise enable entry into these markets by competitors in new and innovative ways,” the U.S. Department of Justice said in a court filing.

The court papers filed Wednesday night expand on an earlier outline on how the U.S. wants to end Google’s monopoly. Google called the proposals radical at the time, saying they would harm U.S. consumers and businesses and shake American competitiveness in AI. The company has said it will appeal.

The DOJ demands are wide-ranging, including barring Google from re-entering the browser market for five years and insisting Google sell its Android mobile operating system if other remedies fail to restore competition. The DOJ has also requested a prohibition on Google buying or investing in any search rivals, query-based artificial intelligence products or advertising technology.

The DOJ and a coalition of states want U.S. District Judge Amit Mehta to end exclusive agreements in which Google pays billions of dollars annually to Apple (NASDAQ:AAPL) and other device vendors to make its search engine the default on their tablets and smartphones.

Google will have a chance to present its own proposals in December.

Mehta has scheduled a trial on the proposals for April, though President-elect Donald Trump and the DOJ’s next antitrust head could step in and change course in the case.

Investing.com– Starbucks Corporation (NASDAQ:SBUX) is considering options for its China business, including a potential stake sale, as it attempts to revitalize sales and restore investor faith under new CEO Brian Niccol, Bloomberg reported on Thursday.

The coffee chain has been in talks with advisers over how to grow its Chinese business, including potentially introducing a local partner, Bloomberg reported. The company has drawn interest from several prospective investors, including local private equity firms. 

China is Starbucks’ second-largest market after the U.S., although the company has faced heightened competition in the country over the past few years from other foreign entrants, as well as local offerings, most notably Luckin Coffee (OTC:LKNCY). Starbucks has lost a major market share in China to Luckin.

In addition to its China woes, the company has seen waning sales in the U.S., and is also grappling with unionization attempts by its baristas, amid calls for better wages and benefits.

To this end, the company had named Niccol, known for turning around Mexican restaurant chain Chipotle Mexican Grill Inc (NYSE:CMG), as its CEO earlier this year. 

(Reuters) -Starbucks is exploring options for its Chinese operations, including the possibility of selling a stake in the business to a local partner, Bloomberg News reported on Wednesday, citing people with knowledge of the matter.

The coffee chain has also gauged interest from prospective investors, including domestic private equity firms, the report said.

In China, the company has grappled with weak consumer spending and stiff competition from local coffee chains such as Luckin’ Coffee in a weak macroeconomic environment.

Starbucks (NASDAQ:SBUX) did not immediately respond to a Reuters request for comment outside regular business hours.

The company currently operates more than 7,500 stores in over 250 cities on the Chinese mainland, according to its website.

Comparable sales in China, the company’s second-largest market after the U.S., have declined for three straight quarters, falling 14% in the fourth quarter.

By Hyunjoo Jin, Cynthia Kim and Kane Wu

SEOUL (Reuters) -A takeover battle over Korea Zinc is adding pressure on Seoul to pass legislative reforms to ensure better protections for all investors in a country with a stock market dominated by family-run conglomerates.

Korea Zinc Chairman Yun B. Choi, a grandson of a co-founder, last week agreed to scrap a controversial plan to issue new shares in the world’s largest zinc refiner to help fend off a takeover attempt from the co-founding family’s Youngpoong Corp and its partner, private equity group MBK Partners.

The share issue plan had infuriated many investors, as two days before it was announced, Korea Zinc finalised a buyback at a 25% higher price.

Choi backed down after a regulatory probe and intense shareholder pressure that brought international attention to corporate governance shortcomings in Asia’s fourth-largest economy.

But Korea Zinc’s actions under his leadership have fuelled scepticism over whether the government’s call for voluntary efforts by companies to boost depressed stock valuations is sufficient, according to interviews with more than a dozen investors, governance experts, regulators and lawmakers.

After Choi became chairman in 2022, Korea Zinc signed deals with LG Chem and Hanwha Corp (KS:00088K) to invest in each other, in an arrangement known as a cross-shareholding, though it sold shares in the latter this month to help repay debt. Under Choi, it also sold stock to strategic partners including Hyundai Motor (OTC:HYMTF) Group and Trafigura.

“Why do you use company funds, not your own money to increase your control?” asked Park Yoo-kyung, a managing director at Netherlands-based APG Asset Management, who noted Korea Zinc could have formed joint ventures or used other types of contracts.

Many companies in Japan are unwinding cross-shareholding deals, which have been criticised as negative for corporate governance because they can insulate management from having to meet the interests of shareholders.

Korea Zinc said the cross-shareholdings were needed to ensure stable partnerships as it expanded into battery materials, hydrogen and other businesses.

Hahm Yong-il, senior deputy governor of the Financial Supervisory Service, said Korea Zinc’s moves had fuelled investor doubts about board independence.

The regulator’s commitment to reforming and improving capital markets is being tested, said Hahm, whose agency is investigating allegedly unfair practices in Korea Zinc’s proposed share issue plan even after it was cancelled.

LEGISLATION PUSH

Korea Zinc’s actions show legislation is needed to protect the interests of minority shareholders and address the lack of board independence, particularly at family-run conglomerates known as chaebols, said the people interviewed by Reuters.

In South Korea, board members have a fiduciary duty to perform their duties in the company’s interests, but not to safeguard shareholders’ interests.

The Democratic Party, which has a majority in parliament, on Tuesday proposed a commercial law revision to extend the duty to shareholders, saying the Korea Zinc saga added urgency to long-delayed legislation.

But President Yoon Suk Yeol’s People Power Party and business groups have raised concerns that the legislation would hurt businesses.

A South Korean business association that includes conglomerates like Samsung (KS:005930) and Hyundai as members, though not Korea Zinc, issued a statement on Thursday warning businesses could be subject to shareholder lawsuits and attacks from “speculative” overseas funds if the law was amended.

Yoon can veto bills, and his office this month took a step back from its earlier positive stance on the commercial law changes.

In January, Yoon had pledged to address the so-called “Korea discount” to shore up support from the country’s more than 10 million retail investors, taking a leaf from Japan’s corporate governance reforms over the last few years that have drawn interest from global investors and sent Tokyo stocks to record highs this year.

The Korea discount refers to a tendency for South Korean companies to have lower valuations compared to their overseas peers due to low dividend payouts and the dominance of chaebols that often have weak governance practices.

Benchmark KOSPI index shares traded at a price-to-book multiple of 0.87 as of Wednesday, below an average of 1.2 for companies on Japanese exchanges and 4.8 for the S&P 500 in the U.S., according to data from the exchanges.

FIRST HOSTILE TAKEOVER

Korea Zinc’s Choi pledged to give up his role as chairman of the board and come up with measures to protect minority shareholders as he braces for a showdown with Youngpoong and MBK at a shareholder meeting early next year.

Their bid for control, if successful, would be the first hostile takeover of a South Korean company by a private equity fund, and should serve as a wake-up call for chaebols, according to LSEG data.

“What MBK is doing on Korea Zinc could potentially spur dozens of similar disputes at some 200 locally listed Korean companies,” said Mike Cho, a business school professor at Seoul’s Korea University.

The country has traditionally been a tough ground for activist investors such as Elliott, which over the last decade made unsuccessful attempts to block deals at Samsung affiliates and Hyundai Motor Group companies.

The number of activist campaigns annually in South Korea grew more than nine-fold between 2019 and 2023, according to Diligent Market Intelligence, though the outcomes have been mixed.

“There is a buzz among local capital market players that MBK’s deal with Korea Zinc could be a game changer,” said Sanghyun Park, an analyst at Clepsydra Capital. “It’s seen as a key step to tackle the Korea discount by shaking up ownership structures.”

(Reuters) – GQG Partners, which has a near 20% stake in India’s Adani Group, saw its Australia-listed shares plunge 23% on Thursday after Gautam Adani, the conglomerate’s chair, was indicted in the U.S. over charges of bribery and fraud.

GQG owns a combined stake of 19.37% in Adani Enterprises (NS:ADEL), Adani Power (NS:ADAN), Adani Green Energy (NS:ADNA) and Adani Energy Solutions, according to LSEG data.

The investment firm’s Australia-listed stock plunged as much as 23.1% to A$2.03, its lowest level since mid-March. The stock was last down about 22%, set for its worst day ever.

“Our team is reviewing the emerging details and determining what, if any, actions for our portfolios are appropriate,” GQG said in a statement.

Earlier, U.S. authorities said Adani and seven other defendants, including his nephew Sagar Adani, agreed to pay about $265 million in bribes to Indian government officials to obtain contracts expected to yield $2 billion of profit over 20 years, and develop India’s largest solar power plant project.

The Adani Group did not immediately respond to a Reuters request for comment.

By Ankur Banerjee

SINGAPORE (Reuters) – Asian equities fell on Thursday after AI darling Nvidia (NASDAQ:NVDA) disappointed investors with a subdued revenue forecast, while the dollar firmed and bitcoin hit a record high in anticipation of U.S. President-elect Donald Trump’s proposed policies.

Prevailing geopolitical concerns following the escalating conflict in Ukraine earlier this week led safe-haven assets higher, including gold and government bonds.

The spotlight though was on earnings from the world’s most valuable firm Nvidia, which projected its slowest revenue growth in seven quarters, sending its shares lower. Nasdaq futures slipped 0.47%, while S&P 500 futures eased 0.3%.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.23%, with tech heavy Taiwan stocks down 0.5%. Japan’s Nikkei fell 0.7%.

George Boubouras, head of research at Melbourne-based K2 Asset Management, said the market reaction to Nvidia’s earnings was partly a result of very high expectations for each quarterly result. “While they delivered impressive revenue growth and momentum, the market clearly wants more.”

Charu Chanana, chief investment strategist at Saxo, said Nvidia earnings were a clear indication that the momentum in AI was only extending, with supplies being the bigger headwind rather than demand.

“The structural AI tailwind could continue to be a key driver for equities into the next year.”

Elsewhere in Asia, stocks in China opened a shade lower, while Hong Kong’s Hang Seng fell 0.22% at the open as the market remains rangebound even as some global funds follow domestic money into market segments sheltered from tariffs.

Investor focus will also be on Indian conglomerate Adani Group after U.S. prosecutors said on Wednesday that Gautam Adani, billionaire chair of the group, has been indicted in New York over his role in an alleged multibillion-dollar bribery and fraud scheme.

Dollar bond prices for Adani companies fell sharply in early Asia trade on Thursday.

SOARING DOLLAR

The dollar has been on the rise since the U.S. election in early November on anticipation that proposed tariffs of the incoming Trump administration will likely be inflationary and keep rates higher for longer.

The dollar index, which measures the U.S. currency against six rivals, was at 106.56, not far from the one-year high of 107.07 it touched last week. The index has risen more than 2% since the Nov. 5 election. [FRX/]

The prospect of the Federal Reserve having to temper its rate cut cycle has also boosted the dollar. Markets were pricing in the Fed lowering borrowing costs by 25 basis points next month at 56%, down from 82.5% just a week ago, according to CME’s FedWatch Tool.

Two Federal Reserve governors on Wednesday laid out competing visions of where U.S. monetary policy may be heading, with one citing ongoing concerns about inflation and another expressing confidence that price pressures will continue to ease.

The rise in the dollar has led the Japanese yen back into intervention territory, leading to verbal warnings from officials. On Thursday, the Asian currency strengthened a bit and was last at 155.04 per dollar.

Bitcoin has been on a tear since the election as the Trump administration are expected to relax regulations and be crypto friendly.

The world’s largest cryptocurrency, bitcoin, soared to touch a record of $95,040 in early trading and was last at $94,787.

In commodities, supply concerns triggered by escalating geopolitical tensions amid the ongoing war between Russia and Ukraine led oil prices higher.

Brent crude futures for January rose 0.5% to $73.17, while U.S. West Texas Intermediate crude futures for January gained 0.5%, at $69.11.

Gold prices were on the rise for fourth straight session on safe asset demands. Spot gold rose 0.15% at $2.654 per ounce. [GOL/]