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A general view shows the new semiconductor plant by Japan Advanced Semiconductor Manufacturing Company (JASM), a subsidiary of Taiwan’s chip giant TSMC.

Philip Fong | Afp | Getty Images

Taiwan Semiconductor Manufacturing Company opened its first chip plant in Japan on Saturday as it diversifies supply chains away from Taiwan amid intensifying U.S.-China trade tensions.

TSMC, which is the world’s largest contract chip manufacturer with clients such as Nvidia and Apple, has been courted by Europe, the U.S. and other countries to set up local operations.

Paul You, chairman of First Securities Investment Corporation said last month that the global semiconductor industry including Taiwan’s could be at risk from the U.S.-China chip war.

“I do believe the escalation between U.S. and China, especially like the chip war, will become higher and higher and that will dampen the growth for the global semiconductor [industry],” said You.

Located in Kumamoto, the chip fabrication plant in Japan will be equipped with a cleanroom — a controlled and sterile environment critical for chip making — with about 45,000 square meters of area, with production expected to start by the end of 2024, TSMC said.

Japan Advanced Semiconductor Manufacturing Inc., the manufacturing company majority-owned by TSMC, began construction of the plant in April 2022.

JASM was set up in Japan in 2021 with support from the Japanese government, Sony Semiconductor Solutions and Japanese automotive components maker Denso Corporation to fuel the growth of the country’s semiconductor ecosystem.

Japan has been striving to strengthen its semiconductor presence amid an intense rivalry with key chip making countries such as Taiwan and South Korea. Its chip-manufacturing industry is 10 years behind world leaders TSMC and Samsung, according to an August report from the Center For Strategic & International Studies.

TSMC Arizona's Brian Harrison building out semiconductor infrastructure in Arizona

Earlier this month, TSMC, Sony Semiconductor Solutions, automaker Toyota and Denso announced further investment into JASM to build a second chip fabrication plant, with construction set to start by year-end and operations to commence by end-2027.

With the two plants, which are expected to directly create more than 3,400 high-tech professional jobs, the Japanese government’s investment into JASM will total more than $20 billion.

TSMC’s two factories in Japan will focus on producing semiconductors for automotive, industrial, consumer uses and to meet high-performance computing-related needs.

The company is also building one of its largest overseas projects with a $40 billion investment in Arizona for two chip manufacturing plants aimed at meeting the U.S. annual demand.

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SEC sues Elon Musk, alleging failure to properly disclose Twitter ownership

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SEC sues Elon Musk, alleging failure to properly disclose Twitter ownership

Beata Zawrzel | Nurphoto | Getty Images

The SEC filed a lawsuit against Elon Musk on Tuesday, alleging the billionaire committed securities fraud in 2022 by failing to disclose his ownership in Twitter and buying shares at “artificially low prices.”

Musk, who is also CEO of Tesla and SpaceX, purchased Twitter for $44 billion, later changing the name of the social network to X. Prior to the acquisition he’d built up a position in the company of greater than 5%, which would’ve required disclosing his holding to the public.

According to the SEC complaint, filed in U.S. District Court in Washington, D.C., Musk withheld that material information, “allowing him to underpay by at least $150 million for shares he purchased after his financial beneficial ownership report was due.”

The SEC had been investigating whether Musk, or anyone else working with him, committed securities fraud in 2022 as the Tesla CEO sold shares in his car company and shored up his stake in Twitter ahead of his leveraged buyout. Musk said in a post on X last month that the SEC issued a “settlement demand,” pressuring him to agree to a deal including a fine within 48 hours or “face charges on numerous counts” regarding the purchase of shares.

Musk’s lawyer, Alex Spiro, said in an emailed statement that the action is an admission by the SEC that “they cannot bring an actual case.” He added that Musk “has done nothing wrong” and called the suit a “sham” and the result of a “multi-year campaign of harassment,” culminating in a “single-count ticky tak complaint.”

Musk is just a week away from having a potentially influential role in government, as President-elect Donald Trump’s second term begins on Jan. 20. Musk, who was a major financial backer of Trump in the latter stages of the campaign, is poised to lead an advisory group that will focus in part on reducing regulations, including those that affect Musk’s various companies.

In July, Trump vowed to fire SEC chairman Gary Gensler. After Trump’s election victory, Gensler announced that he would be resigning from his post instead.

In a separate civil lawsuit concerning the Twitter deal, the Oklahoma Firefighters Pension and Retirement System sued Musk, accusing him of deliberately concealing his progressive investments in the social network and intent to buy the company. The pension fund’s attorneys argued that Musk, by failing to clearly disclose his investments, had influenced other shareholders’ decisions and put them at a disadvantage.

The SEC said that Musk crossed the 5% ownership threshold in March 2022 and would have been required to disclose his holdings by March 24.

“On April 4, 2022, eleven days after a report was due, Musk finally publicly disclosed his beneficial ownership in a report with the SEC, disclosing that he had acquired over nine percent of Twitter’s outstanding stock,” the complaint says. “That day, Twitter’s stock price increased more than 27% over its previous day’s closing price.”

The SEC alleges that Musk spent over $500 million purchasing more Twitter shares during the time between the required disclosure and the day of his actual filing. That enabled him to buy stock from the “unsuspecting public at artificially low prices,” the complaint says. He “underpaid” Twitter shareholders by over $150 million during that period, according to the SEC.

In the complaint, the SEC is seeking a jury trial and asks that Musk be forced to “pay disgorgement of his unjust enrichment” as well as a civil penalty.

This story is developing.

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Intel to spin off venture capital arm as chipmaker continues to restructure

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Intel to spin off venture capital arm as chipmaker continues to restructure

Dado Ruvic | Reuters

Intel said Tuesday that it plans to spin off Intel Capital, its venture capital wing, into an independent firm, the latest in a series of structural changes announced by the chipmaker.

Turning Intel Capital, which has $5 billion in assets, into a standalone fund will allow it to raise money from outside investors, Intel said. Until now, the venture arm has been fully funded by Intel.

Intel is coming off its worst year on the stock market since the company went public in 1971 due to a series of missteps and hefty market share losses. The company has been cutting costs and simplifying its business as it spends heavily to build cutting-edge chip factories while vying to reinvigorate its PC chip unit.

In December, Intel ousted Pat Gelsinger as CEO following a troubled four-year tenure. He’s been replaced by two interim co-CEOs, David Zinzner and Michelle Holthaus.

Intel sold or wound down a slew of smaller divisions in the past two years under Gelsinger, and laid off employees last year as part of a cost-cutting plan.

Intel is currently spinning off Altera, a company that specializes in simple chips called FPGAs, with plans for it to become a publicly traded company. It also owns the majority of Mobileye, an Israel-based maker of self-driving parts and software. Last year, Intel took several steps in the direction of turning its foundry business into an independent unit, including naming a board of directors.

In Tuesday’s announcement, the company said Intel Capital’s workforce would continue with the investment firm when it becomes independent in the second half of 2025. A representative declined to comment on specific executives’ plans. Intel Capital could also be renamed.

Intel Capital was established in 1991 and was unique at the time as a venture arm of a large corporation.

Since then, that model has been replicated across Silicon Valley and in other industries, with companies including Google, Microsoft, Salesforce, Unilever and BMW jumping into the business. Comcast, the owner of CNBC’s parent, NBCUniversal, started Comcast Ventures in 1999.

While Intel was early to corporate venture capital, it isn’t the first tech company to spin out its investment arm. In 2011, SAP turned SAP Ventures into an independent firm, later naming it Sapphire Ventures.

Corporate venture capital peaked in 2021, when firms in the space raised $156 billion and participated in close to 3,800 deals, according to the National Venture Capital Association. That was the same year that the broader VC market hit record levels, but startup investment numbers have since declined dramatically due largely to higher interest rates, which began going up in 2022.

WATCH: Intel plans to take its chip subsidiary Altera public

Intel plans to take its chip subsidiary Altera public

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Microsoft pauses hiring in U.S. consulting unit as part of cost-cutting plan, memo says

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Microsoft pauses hiring in U.S. consulting unit as part of cost-cutting plan, memo says

Executive Chair and CEO of Microsoft Corporation Satya Nadella speaks during the “Microsoft Build: AI Day” event in Jakarta, Indonesia, on April 30, 2024.

Ajeng Dinar Ulfiana | Reuters

Microsoft plans to pause hiring in part of its consulting business in the U.S., according to an internal memo, as the company continues seeking ways to reel in expenses. 

The announced cuts come a week after Microsoft said it would lay off some employees. Those cuts will affect less than 1% of the company’s workforce, according to one person familiar with Microsoft’s plans.

Although Microsoft indicated earlier this month that it plans to continue investing in its artificial intelligence efforts, cost cuts elsewhere could lead to gains for the company’s stock price. Microsoft shares increased 12% in 2024, compared with a 29% boost for the Nasdaq Composite index.

The changes by the U.S. consulting division are meant to align with a policy by the Microsoft Customer and Partner Solutions organization, which has about 60,000 employees, according to a page on Microsoft’s website. The changes are in place through the remainder of the 2025 fiscal year ending in June.

To reduce costs, Microsoft’s consulting division will hold off on hiring new employees and back-filling roles, consulting executive Derek Danois told employees in the memo. Careful management of costs is of utmost importance, Danois wrote. 

The memo also instructs employees to not expense travel for any internal meetings and use remote sessions instead. Additionally, executives will have to authorize trips to customers’ sites to ensure spending is being used on the right customers, Danois wrote.

Additionally, the group will cut its marketing and non-billable external resource spend by 35%, the memo says.

The consulting division has grown more slowly than Microsoft’s productivity software subscriptions and Azure cloud computing businesses. The consulting unit generated $1.9 billion in the September quarter, down about 1% from one year earlier, compared with 33% for Azure.

Under the leadership of CEO Satya Nadella, Microsoft in early 2023 laid off 10,000 employees and consolidated leases as the company contended with a broader shift in the market and economy. In January 2024, three months after completing the $75.4 billion Activision Blizzard acquisition, Microsoft’s gaming unit shed 1,900 jobs to reduce overlap.

A Microsoft spokesperson did not immediately have a comment.

WATCH: Microsoft plans to spend $80 billion to build out AI this year

Microsoft plans to spend $80 billion to build out AI this year

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