Tariffs push Apple nearer to Asia and Alibaba challenges DeepSeek

Howdy everybody! That is Lauly, sending greetings from Taipei.

Normally, individuals in Taiwan get pleasure from a four-day vacation at first of April — Youngsters’s Day and Tomb-Sweeping Day (a little bit of an odd mixture, I do know). However this 12 months was totally different, no less than for individuals concerned within the tech and media industries, because of Donald Trump’s “reciprocal” tariffs. An business pal jokingly stated that the US president had turned the vacation into an actual “tomb-sweeping day”.

Personally, the primary two weeks after Trump’s announcement have been a nightmare as I chased sources throughout the provision chain for his or her reactions, tried to understand myself what was occurring, and on prime of that took care of my son, who was sick your complete time.

I used to be significantly surprised after I came upon {that a} scoop my colleague and I had drafted the evening earlier than had turn into practically ineffective the following morning after Trump out of the blue stated that each nation besides China would have a 90-day grace interval on the brand new tariffs. We needed to begin over, going again to sources and transforming the story. I shared my emotions with a longtime business pal and he stated, “Now you know how we have felt everyday since April 2.”

Virtually everybody I’ve met just lately has had large darkish circles underneath their eyes. Paul Peng, chair of main Taiwanese show maker AUO, stated: “People asked what we should do. I have only two pieces of advice: Eat well and sleep well.” I believe such a peaceful mindset is what I wanted, too.

After working feverishly for 3 weeks, together with weekends, I left every little thing behind and made a spontaneous brief journey with my household to Solar Moon Lake within the central Taiwanese metropolis of Nantou final week. It was the most effective resolution I made just lately. The climate was excellent and the turquoise lake, stretching out in direction of misty, forested mountains, radiated tranquility. Solar Moon Lake at all times has a magic potential to instantly chill out your muscle mass, make your breath deeper and calm your thoughts. If you happen to ever come to Taiwan, I extremely suggest a visit to Solar Moon Lake.

The brief journey — which included a beautiful night-time firefly tour that my son completely liked — helped recharge my power and reset my exhausted mind. The tariff battle was simply as chaotic after I returned to work this week, however I really feel I’ve extra capability to deal with the uncertainties.

And nothing lasts perpetually, in any case. A senior govt with an Apple provider who has been within the business for greater than 40 years advised me he thinks the tariff battle will de-escalate in two or three months after which the provision chain ought to have a clearer image of what to do subsequent. “And let’s see,” he added, “whether the tariff war will ‘Make America Great Again’ or ‘Make America Great Alone.’”

In different information, #techAsia might be taking a break subsequent week because of the Golden Week vacation in Japan. We might be again to our common schedule on Might 15. See you then!

Reverse consequence

What was the primary response by Apple when the Trump administration escalated tariffs on Chinese language imports to as excessive as 145 per cent? As a substitute of speeding to convey manufacturing dwelling, it doubled down on south-east Asia and India. The Cupertino-based tech big’s instant technique to cope with the tariff battle reveals simply how far off a “Made in America” iPhone stays, even when Trump and his commerce secretary, Howard Lutnick, insist in any other case, write Nikkei Asia’s Lauly Li and Cheng Ting-Fang.

Apple helped suppliers to purchase tools to spice up manufacturing, advised suppliers that almost all of US-bound iPhones, MacBooks and iPads should be made in India and Vietnam, and rushed extra element manufacturing to Thailand, as Nikkei Asia first reported in mid-April.

Nonetheless, the truth is that even south-east Asia and India — the place Apple and different electronics makers have been pushing laborious to diversify manufacturing for years — nonetheless battle to compete towards China and its ultra-efficient provide chain, by no means thoughts transferring such manufacturing to the US

Shifting a complete provide chain is extraordinarily difficult. For example, whereas some MacBooks, Mac Mini and iMacs are actually labelled “Made in Vietnam” or “Made in Thailand”, not the entire parts have been produced or the entire meeting carried on the market because of lack of adequate technicians, expert employees, whereas some low-margin parts usually are not but possible to be moved out of China.

Cluster impact

Chinese language tech big Huawei is making strides within the synthetic intelligence chip market, having began deliveries of its superior AI “cluster” to home purchasers, writes the Monetary Instances’ Zijing Wu.

The transfer comes as Chinese language firms face growing limitations on accessing Nvidia’s high-end semiconductors due to tightening US export controls.

Sources point out that Huawei has already offered over 10 units of its CloudMatrix 384, a system that interconnects a considerable variety of AI chips. These preliminary deliveries are destined for information centres serving varied Chinese language tech corporations.

Trade analysts have been impressed by Huawei’s speedy growth and deployment of CloudMatrix.

“The development of Huawei’s CloudMatrix 384 means China now has an AI system capable of beating Nvidia’s,” stated Dylan Patel, founding father of chip consultancy SemiAnalysis.

Huawei has advised purchasers its CloudMatrix performs considerably higher than Nvidia’s widespread NVL72 cluster by way of computing energy and reminiscence, in line with an organization presentation reviewed by the Monetary Instances and other people with data of the matter.

CloudMatrix 384 does have a number of disadvantages, together with larger power consumption and extra demanding software program upkeep. However given China’s considerable energy sources and engineering expertise, it nonetheless represents a compelling different for purchasers now restricted from Nvidia’s most superior expertise, stated individuals with data of the gross sales.

AI optimism

Unimicron, Taiwan’s main provider of chip substrate and printed circuit boards, expects sturdy demand from high-end AI information centres to drive larger development — if the tariff battle between the US and China doesn’t escalate additional, Nikkei Asia’s Cheng Ting-Fang and Lauly Li write.

“So far, we don’t see any customers adjusting their orders due to the tariffs, but overall we do have concerns that higher tariffs or escalating geopolitical tensions could hit global demand and eventually, directly or indirectly, impact orders,” firm chair TJ Tseng stated.

Unimicron, which counts Nvidia, Intel and Apple amongst its prospects, is presently constructing its first manufacturing facility in Thailand, with plans for it to enter manufacturing within the second half of this 12 months.

Tseng stated his firm has been contemplating investing within the US in response to current geopolitical developments, however has no concrete plans to take action in the meanwhile given the dearth of a provide chain and buyer demand to help such a transfer.

Alibaba’s DeepSeek riposte

The AI mannequin race in China is getting hotter and warmer. E-commerce big Alibaba launched Qwen3, the most recent era of its open-source massive language mannequin household, in a bid to problem DeepSeek in synthetic intelligence capabilities and effectivity, writes Nikkei Asia’s Cissy Zhou.

Alibaba stated Qwen3 sharply reduces computing energy in contrast with its friends and that its flagship Qwen3-235B-A22B outperforms quite a lot of fashions launched by main rivals — particularly DeepSeek-R1, OpenAI-o1, Grok-3 and Gemini-2.5-Professional — in a spread of benchmark exams. These embrace mathematical reasoning, coding proficiency, and gear and performance calling capabilities, a measure of a mannequin’s potential to pick and use the most effective exterior instruments for a process.

The extremely anticipated launch, which native media says took round seven months of labor, comes as competitors heats up amongst Chinese language AI firms, significantly for the reason that emergence of DeepSeek early this 12 months. Final week, Baidu launched two new AI basis fashions that it claims price “a fraction” of comparable choices from DeepSeek.