DELIVERCHIP（HK）LIMITED — 29 July: This Week’s News

Highlights of the Week

1.Pegatron invests NT$785 million to expand its Mexican factory

2.SK Group Chairman: If AI fails to generate profits for businesses, Nvidia’s business model could collapse

3.Microsoft suffers global service outage, paralysing airlines, airports, banks and more

4.Samsung announces acquisition of UK AI start-up Oxford Semantic

Pegatron Invests NT$785 Million to Expand Mexican Plant

Pegatron is expanding production capacity at its Mexican plant. In an announcement on the 23rd, the company revealed it is investing NT$785 million to build staff accommodation on its own land, as it continues to drive forward its electric vehicle business. Commenting on this, Pegatron Chairman Tong Tzu-hsien stated today that the expansion is primarily in response to customer demand. Whilst the Mexican plant was still adapting to local regulations and the business environment a few years ago, the expansion is now progressing well.

PEGATRON Mexico S.A. de C.V., a subsidiary of Pegatron, announced that it would construct staff accommodation on land it owns. Pegatron has signed a construction contract with Constructora y Proveedora Fuentes S.A. de C.V., with the total contract value amounting to approximately NT$785 million.

In this regard, Tong Tzuhsien noted today that the expansion of Pegatron’s Mexican plant is currently progressing well; whilst a few years ago the company was still adapting to local regulations and the local environment, it has now adapted considerably better.

Tong Tzuhsien analysed that, in response to the global trend of manufacturing rebalancing, coupled with the declining birth rate and rising wages in mainland China, as well as the US-China trade tensions in recent years—given that many of Pegatron’s OEM and ODM clients are USbased companies, which have naturally been affected by these trade tensionsTaiwanese ODM manufacturers, upholding a spirit of service, have established operations in Mexico, India, Indonesia and Vietnam over the past four to five years at the request of their clients.

Pegatron’s Mexican plant primarily manufactures automotive products, with Tesla as its largest client. Pegatron previously stated that the electric vehicle industry remains buoyant, with revenue expected to grow by a double-digit percentage this year, whilst maintaining its target for the automotivebusiness to account for 10 per cent of revenue by 2025.

SK Group Chairman: If AI Fails to Generate Profits for Companies, Nvidia’s Business Model Could Collapse

According to a report by the South Korean newspaper *The Korea Times*, Choi Tae-won, Chairman of SK Group and the Korea Chamber of Commerce and Industry (KCCI), has warned that if the artificial intelligence (AI) technology sector fails to ensure sufficient profitability, Nvidia (NVDA-US) could lose its dominant position within a few years.

Choi Taewon predicts that Nvidia will maintain its leading position for at least the next three years, flourishing much like manufacturers of pickaxes and jeans did during the gold rush.However, Choi Taewon also emphasised that every gold rush eventually comes to an end; when gold is no longer easily obtained, mining tools lose their market. Similarly, if the AI industry cannot sustain profitability, this boom may rapidly subside, repeating the pattern of the gold rush.

The SK chairman pointed out that Microsoft (MSFT-US), Google (GOOGL-US) and Amazon (AMZN-US) all produce their own chips and, after weighing up the pros and cons, may cease using Nvidia’s products.

He said: “If AMD, Arm and other competitors of Nvidia sell high-quality chips at lower prices, Nvidia’s business model could collapse.”

A few weeks ago, he travelled to the US to meet with the CEOs of Amazon, Intel (INTC-US), Microsoft and OpenAI. In April, he also met with Nvidia CEO Jensen Huang.

Choi Tae-won said: “Major US tech companies have demonstrated strong demand for the efficient AI data centres built using our semiconductor and energy solutions. Although we cannot supply all the components required for AI data centres, we will utilise our technological and materials strengths to commit to building more efficient AI data centres.”

Microsoft suffers global service outage, paralysing airlines, airports, banks and more

Microsoft has experienced a major service outage, leaving businesses, financial institutions, airlines and emergency services worldwide unable to access computing systems.

Downdetector.com, a website that tracks service disruptions, received reports from thousands of users regarding issues with Microsoft 365 applications and services.

This Microsoft service disruption affected airlines including American Airlines, Delta Air Lines, United Airlines, Frontier Airlines, Turkish Airlines and Indigo Airlines, as well as airports in Mumbai (India), Berlin (Germany) and Sydney (Australia). South Africa’s Capitec Bank and several banks in New Zealand were also affected.

“We are investigating an issue affecting users’ ability to access various Microsoft 365 applications and services,” Microsoft’s Microsoft 365 Status account stated on the social media platform X earlier on Friday.

On the status page for Microsoft’s cloud computing platform, Azure, the company stated that the issue began before 10.00 pm Eastern Time on Thursday, affecting systems in the central United States. In an update, Microsoft said it had identified the cause and was working to restore user access.

Samsung announces acquisition of UK AI start-up Oxford Semantic

On 18 July, Samsung Electronics announced that it had agreed to acquire Oxford Semantic Technologies, a UK start-up specialising in technology for more complex artificial intelligence (AI) applications.

The value of the deal has not been disclosed.

In a statement, Samsung said that Oxford Semantic Technologies, founded in 2017, specialises in knowledge graph technology, which stores information as a network of interconnected concepts and processes data in a manner similar to human memory and reasoning. By integrating and linking data on individual habits and usage patterns, this technology is crucial for developing complex and personalised AI solutions.

Oxford Semantic Technologies has successfully commercialised its knowledge graph technology, optimising data processing and enabling advanced reasoning both in the cloud and on-device.

Samsung stated that, when combined with on-device AI technologies such as those found in the Samsung Galaxy S24 series, personal knowledge graph technology facilitates a hyper-personalised user experience whilst ensuring the security of sensitive personal data on the device. It will be applied across all Samsung products, extending beyond mobile devices to include televisions and home appliances.

Samsung stated that it has been collaborating with Oxford Semantic Technologies on various projects since 2018, including investments by Samsung Ventures. Through this acquisition, Samsung will secure access to the advanced core technology behind the personal knowledge graph.

The news in this article is sourced from the internet.