Indian Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles Shri Piyush Goyal is talking to media on EU-India trade relations. India will waive tariffs on industrial imports from four European nations for a $100 billion investment over 15 years, ending nearly 16 years of negotiations.
India will fabricate its first chip in two years, Commerce Minister Piyush Goyal told CNBC during a one-on-one interview in New York.
India’s push into semiconductors comes as more U.S. chipmakers set their sights on India. Nvidia, AMD, Micron are among the U.S. companies that have pledged to expand in the country.
“I’m in touch with the Micron CEO regularly, and they are making good progress,” Goyal said.
Goyal added that Indian behemoth Tata and other domestic companies are working to make India’s semiconductor dream a reality.
It’s unlikely India will manufacture the most cutting-edge chips without the expertise of companies like Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung which build some of the world’s most advanced chips.
“It is a tough job, but we have the talent, we have the skills,” said Goyal. The minister referenced a recent trip to Silicon Valley where he visited several U.S. semiconductor companies and “saw tons of Indians working on the shop floor [and] on management teams,” recounts Goyal.
The minister, spearheading U.S. corporation expansion efforts under Prime Minister Narendra Modi, is confident India will be able to deliver the first chip by 2026-2027.
Apple has already found success in India as it has looked to diversify its supply chain away from China. Goyal says 14% of the world’s iPhones are manufactured in India, with that number “expected to grow.” Apple increased assembly in the country in the last two years while boosting its retail presence to attract new iPhone buyers. And according to Goyal, Indian customers are increasingly opting for the more expensive iPhones.
Apple has also begun manufacturing other products, including iPads, AirPods and Apple Watches in the country. “They’re increasing production,” Goyal added.
Apple’s expansion efforts in India have brought 150,000 jobs across manufacturing facilities in India, making it the biggest employer in the country’s electronics industry, according to India’s Commerce department. An Apple spokesperson was not immediately available to comment.
Apple’s foray into India comes amid ongoing growth challenges in China.
On the recent bout of optimism around China’s economic story and the latest stimulus measures, Goyal suggested that India’s success is not predicated on China’s troubles.
“India… is not dependent on China. We stand on our own competencies, on our capabilities, and we believe we an offering that is far superior to China,” said Goyal.
Goyal met with a few Wall Street investors on Monday including executives from BlackRock, Warburg Pincus and KKR. Goyal said almost all the U.S. private equity players are looking to build and develop data centers across the country.
Google, Microsoft and Nvidia are among the tech companies that are bringing artificial intelligence expertise to India, which Modi’s government has been receptive to. But analysts warn that India must continue tackling larger issues including poor infrastructure, bureaucracy and red tape that have slowed down corporate expansion plans.
While Nvidia’s spectacular surge remains the biggest story in the technology industry, the AI chipmaker’s performance on the market has been dwarfed this year by a digital advertising company with a specialty in gaming.
AppLovin has soared 310% in 2024, beating every U.S. tech company with a market cap of at least $5 billion, according to FactSet data. Nvidia, which has led the artificial intelligence boom and become the world’s second-most valuable public company, is up 173% this year.
Founded 12 years ago, AppLovin went public in 2021, riding a Covid-era wave of excitement in online games. Now, the company’s games unit generates relatively slow growth, but its online ad business is bustling from advancements in AI that have improved ad targeting.
Great returns bring great expectations, and AppLovin has a lot to prove in its earnings report on Wednesday, as investors look for proof that the rally is warranted. In its third-quarter report, analysts are expecting revenue growth of 31% to $1.13 billion, according to LSEG, following two straight quarters of growth above 40%.
More than revenue, AppLovin has shown a massive increase in profit. Based on LSEG’s consensus, EPS is expected to more than triple to 92 cents, while analysts see operating income more than doubling to $424.2 million, according to FactSet.
AppLovin attributes much of its growth to its AI advertising engine called AXON, particularly since releasing the updated 2.0 version last year. The technology helps put more targeted ads on the mobile gaming apps the company owns, and works for other studios that license the software.
“AXON enhancements through ongoing self-learning and our dedicated development efforts have fueled robust business performance this quarter,” AppLovin said in its second-quarter shareholder letter in August. Revenue in the software business jumped 75% in the second quarter to $711 million, accounting for about two-thirds of total sales.
Analysts have gotten increasingly bullish.
Wells Fargo initiated AppLovin with the equivalent of a buy rating on Oct. 29, calling the company a share gainer. Analysts at BTIG lifted their price target last week to $202, the highest among firms tracked by FactSet. Oppenheimer, Stifel Nicolaus and Jefferies also raised their targets in October.
According to analysts at Wedbush, the ad opportunity in the mobile gaming industry will grow from $10 billion today to $50 billion over the next decade.
“Investors have bought into the story, driving APP shares to all-time highs, and we think that the rally is warranted,” Wedbush analysts wrote in a note on Oct. 11. They said the company’s “real opportunity” is to catch the influx in brand advertising towards mobile gaming from more conventional channels like social media or legacy broadcasting.
Because of its position in digital advertising, AppLovin faces potential competition from some of the most well-capitalized companies on the planet. In its latest annual filing, AppLovin named Google, Amazon and Facebook as competitors. The company also relies on a small set of mobile platforms, most notably from Apple and Google, for distribution.
AppLovin didn’t respond to a request for comment.
Among the biggest financial beneficiaries of AppLovin’s historic rally is founder and CEO Adam Foroughi, whose stake has soared to about $5 billion in value.
Things could’ve turned out very differently.
In September 2016, several years before the IPO, Foroughi agreed to sell a majority stake in AppLovin to Chinese investment firm Orient Hontai Capital in a deal valued at $1.4 billion. The transaction never materialized as the agreement came at a time when the U.S. government was clamping down on Chinese involvement in the domestic tech sector.
More recently, AppLovin was supposed to be on the other side of a deal that ultimately got scuttled. In 2022, AppLovin gave up on efforts to buy gaming software developer Unity Software for $20 billion, after Unity shareholders rejected the bid.
Unity has since struggled mightily, losing more than half its value. Over that same stretch, AppLovin’s market cap has ballooned by almost sixfold.
Chey Tae-won, chairman of SK Group, during the SK AI Summit in Seoul, South Korea, on Monday, Nov. 4, 2024. SK Hynix is working with Nvidia to resolve the supply bottleneck, Chey said.
Jean Chung | Bloomberg | Getty Images
Shares of SK Hynix rallied 6.5% on Monday after the business announced a next-generation memory chip and the parent company’s chair said that the South Korean semiconductor firm sped up the supply of a key product to Nvidia.
Speaking at the company’s event on Monday, Chey Tae-won, chair of SK Group, ran through an anecdote in which he said Nvidia CEO Jensen Huang asked him if SK Hynix could move the supply of high-bandwidth memory (HBM) chips called HBM4 forward by six months. SK Hynix’s CEO at the time said it was possible to do so, according to Chey.
It’s unclear if this will shift SK Hynix’s production timeline from the previously-announced second-half of 2025.
High-bandwidth memory is a key component of Nvidia’s chips, which are in turn used to train huge artificial intelligence models. Tech giants around the world have been snapping up Nvidia chips in a bid to produce the most powerful models and applications.
SK Hynix is a key supplier to Nvidia, and the huge demand for the American company’s products has helped the South Korean firm to achieve rapid growth this year and record profits.
SK Hynix shares are up around 36% this year.
On Monday, the company also announced a new product that helped support its share price rally. Samples of the chip — a 16-layer HBM — will be provided to customers in early 2025, SK Hynix said.
HBM is a type of dynamic random access memory, known as DRAM, where chips are vertically stacked to save space and reduce power consumption. Adding more layers to a HBM will, in theory, give it more capacity to handle complex AI applications.
The aggressive roadmap from SK Hynix comes as its closest rival Samsung, which has fallen behind in HBM, tries to stage a comeback and get its most advanced chips certified for use by Nvidia.
PayPal Inc. co-founder and Affirm’s CEO Max Levchin on center stage during day one of Collision 2019 at Enercare Center in Toronto, Canada.
Vaughn Ridley | Sportsfile | Getty Images
LONDON — Buy now, pay later firm Affirm launched Monday its installment loans in the U.K., in the company’s first expansion overseas.
Founded in 2012, Affirm is an American fintech firm that offers flexible pay-over-time payment options. The company says it underwrites every individual transaction before making a lending decision, and doesn’t charge any late fees.
Affirm, which is authorised by the Financial Conduct Authority, said its U.K. offering will include interest-free and interest-bearing monthly payment options. Interest on its plans will be fixed and calculated on the original principal amount, meaning it won’t increase or compound.
The company’s expansion to the U.K. marks the first time it is launching in a market outside the U.S. and Canada. Globally, Affirm counts over 50 million users and more than 300,000 active merchants, including Amazon, Shopify and Walmart.
Among the first merchants offering Affirm as a payment method in the U.K. are Alternative Airlines, the flight booking website, and payments processing firm Fexco. Affirm said it expects to onboard more brands over the coming months.
Max Levchin, CEO of Affirm, told CNBC that the company had been working on its launch in the U.K. for over a year. The reason Affirm chose Britain as its first overseas expansion target was because it saw a lot of demand from merchants in the country, according to Levchin.
“It is a huge market, it’s English-speaking,” making it a great fit for the business, Levchin said in an interview last week ahead of Affirm’s U.K. launch. Affirm will eventually expand into other markets that aren’t English-speaking but this will take more work, he added.
“There are lots of competitors here who are doing a sensible job serving the market. But when we started doing merchant outreach, just to find out locally, is the market saturated? Does everybody feel well served?” Levchin said. “We got such an enormous amount of market pull. It kind of sealed the deal for us.”
Fierce competition
Competition is fierce in the U.K. financial technology space. In the buy now, pay later segment Affirm focuses on, the company will find no shortage of competition in the form of sizable players like Klarna, Block’s Clearpay, Zilch, and PayPal, which entered the BNPL market in 2020.
Where Affirm differs to some of those players, according to Levchin, is that its range of financing products offer customers the ability to pay purchases off over much lengthier periods. For example, Affirm offers payment programs that last as long as 36 months.
Affirm’s launch in the U.K. comes as the government is consulting on plans to regulate the buy now, pay later industry.
Among the key measures the government is considering, is plans to require BNPL providers to provide clear information to consumers, ensure people aren’t paying more than they can afford, and give customers rights for when issues arise.
“Generally speaking, we welcome regulation that is thoughtful, that pushes the work onto the market to do the right thing, but also knows how not to be too cumbersome on the end-customer,” Levchin said.
“Telling us do lots of work in the background before you lend money is great. We’re very good at automating. We’re very good at writing software. We’ll go do the work,” he added. “Pushing the onus on the consumer is dangerous.”
Affirm secured authorization from the Financial Conduct Authority, the country’s financial services watchdog, after months of discussions with the regulator, Levchin said. He added that the firm’s “pristine reputation” helped.
“We’ve never charged a penny of late fees. We don’t do deferred interest. We don’t do any sort of the anti-consumer stuff people struggle with,” Levchin told CNBC. “So we have this good, untarnished reputation of being just very thoughtfully pro-consumer. And merchants love that.”
