China revs up on auto chips and HBM shakes up memory

Hi everyone! This is Cheng Ting-Fang, your #techAsia host for this week.

Despite being based in Taipei, I can feel the US presidential race heating up thousands of miles away.

China is one of the top themes of the Biden campaign, and on Tuesday his administration slapped significantly higher tariffs on multiple Chinese imports. Two items caught my eye: import duties on Chinese semiconductors are set to double to 50 per cent from 2025, and tariffs on Chinese EVs will hit 100 per cent this year

Washington cited concerns that dumping of cheap Chinese goods could harm the US job market and industries. But a closer look reveals that the seemingly drastic tariff hikes may be little more than paper tigers.

I dug into China customs data and found the country exported only $2.3bn worth of integrated circuits to the US in 2023, less than 5 per cent of its more than $500bn exports to the world’s biggest economy. And China shipped only $331mn worth of EVs to the US last year, less than 1 per cent of the export total.

The majority of key electronic devices, like smartphones and computers, are not assembled in the US. This means limited direct demand for chip imports for American-made end products from China. Similarly, with electric vehicles, Chinese brands have a minimal presence in the US. In short, the tariff hikes seem largely symbolic and unlikely to cause much disruption to US-China trade.

Nevertheless, a clear trend is emerging: Both countries are putting priority on protecting their domestic markets.

Supply chain executives increasingly use the term “China for China”, indicating a shift towards self-sufficiency and preferring local consumption. This trend, along with similar movements by other governments, reinforces the feeling that the world is moving towards a more bipolar economic landscape.

Chipping in

China has finally found a key sector where it has a chance of enhancing its semiconductor presence: automobiles.

The government has asked top carmakers, including SAIC Motor and BYD, to aggressively ramp up their use of locally made chips to as much as 25 per cent of the total by next year, with the eventual goal of having all chips sourced domestically, Nikkei’s Cheng Ting-Fang, Lauly Li, and Shunsuke Tabeta write.

Making car chips normally does not require the most cutting-edge chip production, so China’s efforts on this front will not be technically impaired by US export controls that have hampered the country’s access to advanced equipment.

“I’m not your mum”

Baidu public relations chief Qu Jing has become a symbol of the brutal workplace culture at Chinese tech companies after releasing a series of rants demeaning staff last week, writes Ryan McMorrow for the Financial Times.

In one of the videos, which went viral on Chinese social media, Qu said she did not care about how long hours and extensive business travel would affect her employees’ personal lives. “I’m not your mum,” she said. “I only care about results.”

She added that she had the power to make anyone “jobless” in China’s PR industry and that she was so devoted to Baidu that she didn’t know her son’s grade in school.

Qu posted the short videos to teach her team how to use social media to promote Baidu. Instead they struck a chord with workers tired of toiling under over-demanding bosses, landing the Chinese search giant under intense domestic scrutiny.

By the end of the week, Qu was out of a job.

A memorable shift

Bar chart showing HBM's share of the global DRAM market by revenue and by output from 2023 to 2025.

Artificial intelligence is driving a massive transformation in the previously “commodity-like” industry of dynamic random access memory (DRam), Kim Jaewon, Cheng Ting-Fang and Yifan Yu write.

DRam has long been vulnerable to market fluctuations and susceptible to major price swings. But high-bandwidth memory (HBM), a key technology in the AI race, helps add value to traditional DRAMs. HBM uses a stacking technique to connect several layers of DRam, like a stack of pancakes, to enable faster data transfer and computing. This approach increases bandwidth and with the AI boom still running hot, HBM is expected to capture over 30 per cent of the total DRam market value by next year.

All aboard

The US isn’t the only one putting up trade barriers to Chinese EVs. Washington’s steep tariffs have grabbed headlines, but Brazil is also set to launch several tariff hikes on EVs starting this summer.

In anticipation of the potential tariff hikes and other trade restrictions, Chinese EV makers including BYD have been rushing to ship more cars to Mexico and Brazil since March, write Yifan Yu, Lauly Li and Ryohtaroh Satoh of Nikkei Asia.

This, in turn, has pushed up demand for container transport, leading to a surge in prices on routes from China to South America — a 55.8 per cent increase between late January and late April. Prices have continued to rise in May.