October 27, 2024: Indices Diverge Ahead Of Major News Events

Last week, Dow Jones fell 2.7%, S&P 500 was down ~ 1%, Nasdaq rose 0.2%, and hit a record high Friday, 10-year Treasury yield rose 16 bps to 4.23%. In the near term, aside from the US Presidential election, investors will get a first read on Q3 GDP, October jobs, a Fed meeting, and mega cap earnings from Google, Microsoft, Meta, Apple, and Amazon. Wiz hopes to hit US$1 billion in ARR in 2025 before an IPO. WeRide raised US$440.5 million through its US IPO and private placement. Jeff Bezos-backed Perplexity AI has begun fundraising talks in which it is looking to more than double its valuation to US$8 billion – a couple mega cap companies were also interested in acquiring the Company last year, at 1/40 of its current valuation per media reports. Tesla surprised Wall Street with strong profit margins and a projection that it would sell a record number of electric vehicles this year. Shares rose 12% in after-hours trading. Nvidia CEO Jensen Huang said on Wednesday a design flaw with its latest Blackwell AI chips which impacted production has been fixed with the help of longtime Taiwanese manufacturing partner TSMC. Meta’s Ray-Ban smart glasses are the best-seller in 60% of the Ray-Ban stores in Europe. Anthropic says its latest AI model can control users’ computers. Netflix has pulled back on its gaming expansion. TSMC achieved early production yields at its first plant in Arizona that surpassed similar factories back home, a significant breakthrough for its US expansion project. Arm cancelled Qualcomm’s license to design chips based on ARM technology. In Canada, Sophic Client Kraken Robotics, completed its $51.75 million Bought Deal public offering. Shareholders of Sophic Client OneSoft Solutions approved the Company’s take-out. Firan Technology will acquire FLYHT Aerospace Solutions in a cash and stock deal at a ~40% premium.

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) completes $51.75 million Bought Deal public offering.

Kraken Robotics Inc. is closed its previously announced “bought deal” short form prospectus offering (the “Offering”) of common shares of the Company (“Common Shares”). A total of 32,343,750 Common Shares were sold at a price of $1.60 per Common Share for gross proceeds of $51,750,000, inclusive of the full exercise of the over-allotment option by the Underwriters (as defined below). The Offering was led by Cormark Securities Inc. as lead underwriter, on behalf of a syndicate of underwriters including Canaccord Genuity Corp., Beacon Securities Limited, Raymond James Ltd., and Scotia Capital Inc. (the “Underwriters”). https://tinyurl.com/2pt3w6c8

Shareholders of Sophic Client OneSoft Solutions Inc. (OSS-TSXV, OSSIF-OTC) approve the acquisition by irth Solutions LLC pursuant to the Arrangement Agreement.

OneSoft Solutions Inc. announced the results of the special meeting of OneSoft shareholders (the “Shareholders”) held on October 24, 2024 at 9:00 A.M. (the “Meeting”) wherein Shareholders approved a special resolution (the “Arrangement Resolution”) approving the plan of arrangement announced on August 12, 2024 with irth Solutions LLC and its wholly owned subsidiary irth Acquisition Corp. (collectively, “Irth”), a Blackstone portfolio company (the “Transaction”). Pursuant to the Transaction, Irth will acquire all of the issued and outstanding common shares of OneSoft (the “Shares”) for $0.88 in cash per Share, representing a total cash equity value of approximately CDN $113.4 million on a fully-diluted basis. At the Meeting, 77.3% of the issued and outstanding Shares were voted by Shareholders, with 92.3% of the Shares voted in favour of the Arrangement Resolution (91.6% after excluding Shares required to be excluded under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions). https://tinyurl.com/44ymptvb

Sophic Client Xcyte Digital (XCYT-TSXV) appoints Tom Maurath as Head of Global Sales & Strategic Partnerships, bringing 25+ years of sales leadership expertise.

Xcyte Digital Corp., announced the appointment of Tom Maurath as the new Head of Global Sales and Strategic Partnerships. With over 25 years of distinguished leadership experience in direct sales and channel development, Mr. Maurath is poised to accelerate the expansion of Xcyte’s partner ecosystem, a critical component of the Company’s revenue growth strategy. Before joining Xcyte Digital, Mr. Maurath held key management roles at PGi (Premiere Global Services, Inc.), one of the largest conferencing service providers in the world. At PGi, Mr. Maurath grew the business channel ecosystem to US$75M+ in annual revenues via 120+ communication service providers, value-added resellers (VARs), marketing alliances, master agents, and reseller partners. At PGi, Tom Maurath led a high-performance team of 25+ sales managers, account executives and partner managers. Mr. Maurath’s appointment is effective immediately, reporting directly to the CEO. https://tinyurl.com/5y3y8x3a

Firan Technology Group Corporation (FTG-TSX) to acquire FLYHT Aerospace Solutions Ltd (FLY-TSXV).

Firan Technology Group Corporation has entered into a definitive arrangement agreement (the “Agreement”) with FLYHT Aerospace Solutions Ltd. to acquire all of the issued and outstanding shares of FLYHT (the “FLYHT Shares”) under a plan of arrangement under the Canada Business Corporations Act (the “Transaction”). Under the terms of the Transaction, FLYHT shareholders may elect to receive in exchange for each FLYHT Share, (i) CAD$0.1103 in cash and 0.0333 of a common share of FTG (each whole such share, an “FTG Share”), (ii) CAD$0.3379 in cash or (iii) 0.0495 FTG Shares, subject to pro-ration (collectively, the “Consideration”). The Consideration will be subject to a total maximum cash consideration of CAD$4.3 million and a total maximum share consideration of 1.3 million FTG Shares. The Consideration implies a price of CAD$0.3379 per FLYHT Share, representing a 41% premium to the closing price of the FLYHT Shares on the TSX Venture Exchange on October 21, 2024 and a 46% premium to the 10-day volume-weighted average price per Common Share for the period ended on October 21, 2024. https://tinyurl.com/572mxybc

Thomson Reuters acquires American portfolio company Materia AI.

Toronto-based business information services giant Thomson Reuters has acquired New York-based Materia AI for an undisclosed amount. Founded in 2022, Materia’s artificial intelligence (AI) assistant automates and assists in research and workflows for accounting uses such as taxes and audits. The platform can analyze and search through a centralized inventory of accounting documents, allowing users to quickly find and review the information they need. https://tinyurl.com/2sc9ra52

Planetary Technologies secures $15.8 million Series A to alkalize the oceans and fight climate change. Halifax-based ocean tech startup Planetary Technologies has closed US$11.4 million in Series A funding to fuel its efforts to fight climate change by alkalizing the ocean. The all-equity, all-primary round was led by cleantech-focused venture firm Evok Innovations, with participation from BDC Capital, Amplify Capital, DNX Ventures, and Iconiq Capital. This latest round brings Planetary’s total funding to more than $22 million. Founded in 2019, Planetary wants to contribute to the reduction of carbon dioxide (CO₂) in the Earth’s atmosphere through a process called ocean alkalinity enhancement. In 2022, Planetary closed its pre-seed and seed funding rounds totalling $7.8 million. https://tinyurl.com/36ethd56

Moment Energy secures $28.1 million from US Department of Energy to establish gigafactory in Texas.

Port Coquitlam, BC-based startup Moment Energy has been awarded $28.1 million (US$20.3 million) by the United States Department of Energy (DOE) to establish a new gigafactory in Taylor, Texas. A gigafactory refers to a facility designed for the production of batteries, particularly those used in electric vehicles (EVs). According to a statement from Moment Energy, the new facility will be dedicated to producing battery energy storage systems from repurposed EV batteries. After closing $3.5 million in seed funding in 2021, the startup entered a supply agreement with the energy storage subsidiary of Mercedes-Benz to reuse its used EV batteries. https://tinyurl.com/3dwap582

Wiz hopes to hit US$1 billion in ARR in 2025 before an IPO, after turning down Google’s US$23 billion.

Wiz co-founder and VP of R&D Roy Reznik told CNBC last week that the company has hit US$500 million in annual recurring revenue, and plans to double that in 2025 to US$1 billion. He also reiterated that the US$1 billion-mark is a prerequisite for the IPO that Wiz promised employees when it walked away from acquisition talks with Google last summer at a US$23 billion price tag. ARR at the cloud security startup was at about $350 million in May, but was already around US$500 million by July when it walked from Google, TechCrunch reported at the time. https://tinyurl.com/bdhuct6u

China’s WeRide raises US$440.5 million through US IPO, placement.

Self-driving startup WeRide raised a combined US$440.5 million in its U.S. initial public offering and a private placement on Friday, the latest Chinese firm to capitalize on improving investor sentiment and easing regulatory roadblocks. The number of Chinese companies that have pursued stock market flotations in the United States had dropped in the past few years, after ride-hailing giant Didi Global was forced to delist its shares following a backlash from Chinese regulators. WeRide sold 7.74 million American depositary shares in the offering at $15.50 a piece – the lower end of its targeted range – to raise roughly US$120 million. The IPO valued the company at over $4 billion. It also raised around US$320.5 million in a concurrent private placement. https://tinyurl.com/2p4vu7wr

Perplexity AI in funding talks to more than double valuation to US$8 billion, WSJ reports.

Jeff Bezos-backed Perplexity AI has begun fundraising talks in which it is looking to more than double its valuation to UD$8 billion or more, the Wall Street Journal reported last Sunday. Perplexity has told investors it is looking to raise around US$500 million in the new funding round, the Journal reported citing people familiar with the matter. https://tinyurl.com/2p8nwrp7

Tesla posts strong profit margins, predicts record sales for 2024.

Tesla surprised Wall Street with strong profit margins and a projection that it would sell a record number of electric vehicles this year, confounding predictions of a sales decline. Shares rose 12% in after-hours trading. Tesla said its gross profit margin in the quarter was 17.1% excluding US$739 million in regulatory credits it sold to other carmakers, beating the 14.9% consensus of analysts polled by Visible Alpha, a software subsidiary of S&P Global Market Intelligence. The results were surprising at a time when most other automakers are predicting slower EV sales than they previously expected. To surpass its 2023 sales of 1.8 million EVs, Tesla will have to sell more than 516,000 cars in the fourth quarter, which would be a record. After a slow start to the year, numerous analysts—including us—have forecast that Tesla would sell fewer EVs this year than it did in 2023. In a call with analysts, CEO Elon Musk predicted that EV sales will grow by 20% to 30% next year, meaning as many as 2.3 million units. https://tinyurl.com/4653xn58

IBM Reports weak growth, says AI is making customers rethink budgets.

IBM’s revenue grew just 1% to US$15 billion in the three months ending in September compared to the year prior, the company said on Thursday. The sluggish growth was primarily due to a slowdown in its consulting business, which makes up more than a third of IBM’s revenue. CFO Jim Kavanaugh attributed that slowdown to the rise of generative AI software across the tech industry, which is causing customers to “reprioritize their IT budgets” without increasing spending. Kavanaugh said IBM has seen an increase in customers seeking its consulting on generative AI technology, but that those customers are exhibiting caution around how they deploy AI, which is leading to smaller deals. Still, the company is optimistic that AI spending is beginning to grow: IBM’s bookings for AI consulting and software have exceeded US$3 billion since the company began tracking them in mid-2023, up from US$2 billion in July, Kavanaugh said. IBM’s software sales for the quarter grew 9.7% to US$6.5 billion compared to the same quarter a year prior, and its hardware sales fell 7% to US$3.04 billion, which the company attributed to the fact that its current computers have reached the end of their lifecycle and will be replaced with a new model next year. https://tinyurl.com/4z2mnm2b

Nvidia’s design flaw with Blackwell AI chips now fixed, CEO says.

Nvidia CEO Jensen Huang said on Wednesday a design flaw with its latest Blackwell AI chips which impacted production has been fixed with the help of longtime Taiwanese manufacturing partner TSMC. The AI chip giant’s shares fell around 2% in early trading. Nvidia unveiled Blackwell chips in March and had earlier said they would ship in the second quarter but were delayed, potentially affecting customers such as Meta Platforms, Alphabet, Google and Microsoft. “We had a design flaw in Blackwell,” Huang said. “It was functional, but the design flaw caused the yield to be low. It was 100% Nvidia’s fault.” According to media reports, the delay in production had caused tensions between Nvidia and TSMC but Huang dismissed that as “fake news”. “In order to make a Blackwell computer work, seven different types of chips were designed from scratch and had to be ramped into production at the same time,” he said. “What TSMC did, was to help us recover from that yield difficulty and resume the manufacturing of Blackwell at an incredible pace.” Nvidia’s Blackwell chips take two squares of silicon the size of the company’s previous offering and binds them together into a single component that is 30 times speedier at tasks like serving up answers from chatbots. At a recent Goldman Sachs conference the CEO said the chips will now ship in the fourth quarter. Huang was in Denmark on Wednesday to launch a new supercomputer named Gefion, which boasts 1,528 graphic processing units (GPUs) and was built in partnership with Novo Nordisk Foundation, Denmark’s Export and Investment Fund and Nvidia. https://tinyurl.com/msz5jwtz

Nvidia dethrones Apple as the world’s most valuable company.

Nvidia briefly eclipsed Apple to become the world’s most valuable company on Friday. It’s the first time Nvidia has been the world’s largest company since mid-June. Nvidia stock jumped as much as 3% on Friday to an intra-day high of US$144.13, catapulting its market valuation to US$3.53 trillion. In contrast, Apple traded up less than 1%, giving it a market valuation of US$3.52 trillion. The massive size of Nvidia is a testament to its quick ascent since OpenAI released its first version of ChatGPT in November 2022. Since then, shares of Nvidia, which supplies the technology world with AI-enabling GPU chips, have added US$3.1 trillion to their market valuation, with their stock price soaring more than 740%. Wall Street believes the gains can continue, with some analysts expecting the stock to eclipse a US$4 trillion valuation soon. https://tinyurl.com/2sn35evt

iPhone 16 orders cut by around 10 million units for 4Q24–1H25; no evidence yet that Apple Intelligence could boost iPhone shipments in the near term.

iPhone 16 orders were cut by around 10M units for 4Q24–1H25, with most of the cuts affecting non-Pro models. As a result, iPhone 16 production for 2H24 is now estimated at 84 million units (down from around 88 million previously). Following these cuts, total iPhone production for 4Q24, 1Q25, and 2Q25 is now forecast at around 80 million, 45 million, and 39 million units, respectively, all down YoY (vs. around 84 million, 48 million, and 41 million in 4Q23, 1Q24 and 2Q24, respectively). https://tinyurl.com/2f46vuc4

vivo retains top spot as Mainland China’s smartphone market grows 4% in Q3 2024.

According to Canalys research, Mainland China’s smartphone market continued to rebound in Q3 2024, driven by the summer and back-to-school shopping seasons. Q3 shipments rose 4% year on year to 69.1 million units. vivo maintained its lead with a 19% market share, thanks to new mid-range product launches that boosted offline sales and expanded its online presence. Overall, vivo’s shipments surged 25% year on year to 13.0 million units. Huawei ranked second with 10.8 million shipped units, capturing a 16% market share and growing 24%, driven by an active channel strategy to support its flagship products. Despite a 6% drop in shipments, Apple reclaimed fifth place, with demand for the iPhone 16 series expected to remain resilient, even in the absence of Apple Intelligence services. https://tinyurl.com/3yuwyc87

Meta Ray Bans sells strongly in Europe, EssilorLuxottica says.

Meta’s Ray-Ban smart glasses are the best-seller in 60% of the Ray-Ban stores in Europe, EssilorLuxottica CFO Stefano Grassi said on Monday, a sign of how popular the smart-glasses have become. EssilorLuxottica, a global eyewear giant and owner of the Ray-Ban brand, is Meta’s partner on the smartglasses, which let people stream music, make phone calls and take photos. Neither company has issued any details about how well the glasses have sold, until Grassi’s comments on Monday. Essilor and Meta said last month they had extended their partnership “into the next decade.” On an analyst call on Monday, Grassi said there were “certain aspects of exclusivity” to the partnership but we wouldn’t elaborate. https://tinyurl.com/37yzmd7s

Developers migrate to snap amid Meta’s AR studio shutdown.

Meta’s recent decision to shut down its augmented reality platform has prompted some frustrated developers to switch to Snap, according to Bloomberg News. Meta announced in August that it will shut down Meta Spark, which allows outside developers to build custom AR photo filters and effects for Facebook and Instagram, in January 2025. The short notice angered some developers interviewed by Bloomberg, who said they will no longer be able to make money from the filters they created on Meta Spark. Snap has been courting developers as it tries to build momentum around its AR glasses, named AR Spectacles. Meta also recently debuted a prototype of its AR glasses, known as Orion. Some developers told Bloomberg that in light of Meta’s decision to shutter Meta Spark, they are now turning their attention to Snap’s rival platform, Lens Studio. https://tinyurl.com/38rv84a8

Anthropic says latest AI model can control users’ computers.

Anthropic has enabled its artificial intelligence to control actions on a computer, including searching the internet, clicking buttons and inputting text, as companies increasingly seek to leverage the new technology to build virtual agents. The “Computer Use” feature, unveiled for developers on Tuesday, grants access to Claude, its AI model, to conduct actions on users’ behalf, with their consent, “like a human collaborator”, the company said — controlling the mouse and keyboard to browse the internet, schedule calendar appointments and fill in forms. On Monday, Microsoft announced the ability to create autonomous agents in its 365 product suite, while OpenAI recently launched developer access to its voice chat feature to build more agentic systems. Creating AI agents that can conduct mundane tasks, such as filing expenses or booking travel, is considered the future for AI companies and a way to generate revenue from their powerful but costly models. https://archive.ph/ZEDJD

Biden memo encourages military use of AI.

President Joe Biden on Thursday published the first national security memorandum on how government agencies should adopt artificial intelligence, as well as how they should police the private companies developing the technology. The memo encouraged agencies such as the Department of State, Department of Defense and the Department of Justice to “harness” AI and develop training programs for government workers. The memo was light on specifics, but a Biden Administration official told The Hill that there are clear national security applications of AI, “including in areas like cybersecurity and counterintelligence, not to mention the broad array of logistics and other activities that support military operations.” The memo also directs the U.S. government to provide AI developers with cybersecurity and counterintelligence to keep their inventions safe. It also empowers the AI Safety Institute, a federal government organization that can inspect AI before it is released to ensure it couldn’t aid terrorist groups in developing biological weapons, for instance. https://tinyurl.com/yc4rsv4z

Netflix pulls back on gaming expansion.

Netflix has shut down one of its videogaming studios and laid off staff associated with it, a sign that at least part of its much-heralded effort to expand into gaming has run into problems. The blog Game File reported that Netflix had shut down a studio known as team Blue, laying off several big name gaming veterans it had hired in the past couple of years to build the studio. In the past, Netflix executives have suggested their gaming unit could create games based on shows developed for the streaming service. But executives also talked about how mobile games were a way to engage with Netflix subscribers on their mobile devices. Netflix plans to focus on casual games in the future, The Wall Street Journal reported, which are suitable for mobile devices. https://tinyurl.com/5n89jeck

Meta strikes multi-year AI deal with Reuters.

Meta has struck a multi-year deal with Reuters to use its news content to provide real-time answers to user queries about news and current events in its Meta AI chatbot, sources familiar with the agreement told Axios. It’s the first news deal Meta has brokered in the AI era.Meta’s AI chatbot is integrated into the search and messaging features on Facebook, Instagram, WhatsApp and Messenger. Answers to user queries about news will cite Reuters’ stories and link out to its coverage. Reuters will be compensated for access to its journalism, a source said. https://tinyurl.com/bdefrsr2

New rules for U.S. tech investments in China under final review.

U.S. rules that would limit certain U.S. investments in China in sensitive technology areas such as artificial intelligence are now going through a final regulatory review, according to a posting on the U.S. government’s website. The posting suggests that the final rules could be released very soon. Under the rules, certain U.S. investments in areas such as AI, semiconductors and quantum computing in China would be either prohibited or require a notification to the U.S. Treasury. The rules are based on President Biden’s executive order last year that called for new restrictions on U.S. outbound tech investments in China. The rules are part of Washington’s broader effort to prevent China from using U.S. investments or U.S. technologies to enhance its military and surveillance capabilities. Biden’s order last year cited concerns about how investments in sensitive technologies in China could threaten U.S. national security. https://tinyurl.com/4h33z4af

News Corp sues AI search startup Perplexity for copyright infringement.

News Corp. on Monday sued artificial intelligence search startup Perplexity for allegedly “engaging in a massive amount of illegal copying of publishers’ copyrighted works and diverting customers and critical revenues away from those copyright holders,” according to the lawsuit. The plaintiffs in the case are Dow Jones & Co., publisher of the Wall Street Journal, and the New York Post. Perplexity CEO Aravind Srinivas declined to comment on the lawsuit. Other content publishers have taken aim at Perplexity, which provides conversational answers to search queries and was valued at $3 billion in a recent funding round. In July, magazine publisher Condé Nast sent a cease-and-desist letter to Perplexity, demanding that it stop using content from its periodicals, The Information reported. While some publishers like the New York Times have filed similar suits against companies such as OpenAI—whose ChatGPT chatbot may give answers that rely in part on news reports—other media firms are choosing instead to strike licensing or revenue sharing deals with AI startups including Perplexity. https://tinyurl.com/3855m7ds

CFPB fines Goldman, Apple $90 million over credit card failures.

The Consumer Financial Protection Bureau has banned Goldman Sachs from launching new credit cards without approval and fined the bank US$65 million for failing to properly handle customer disputes and making misleading claims related to its Apple card program. The CFPB also fined Apple $25 million after finding the company failed to send tens of thousands of transaction disputes to Goldman Sachs, and that the bank did not follow laws for investigating disputes. The watchdog said Goldman Sachs’ board pushed to launch the card despite warnings that the bank’s systems were not ready. That led to long waits for consumers to get refunds for disputed transactions, while some customers had incorrect negative information applied to their credit reports. If Goldman missed its launch deadline, it had to pay Apple $25 million every 90 days until the card went live. The Apple Card launched in 2019 as part of a suite of Goldman Sachs products aimed at consumers. Goldman is now retreating from its costly expansion into retail banking and attempting to transfer the Apple Card to another bank. A spokesman for Goldman said the bank “worked diligently to address certain technological and operational challenges that we experienced after launch and have already handled them with impacted customers.” https://tinyurl.com/5n9ym793

Walmart to add same-day pharmacy delivery nationwide.

Walmart plans to start offering same-day pharmacy deliveries in 49 U.S. states, the retail giant said Tuesday. The announcement comes shortly after Amazon announced an expansion of its own same-day pharmacy delivery service. Walmart is already offering same-day prescription deliveries in six states and will launch it in 49 states by the end of January, according to the company. Walmart did not say how many stores will offer same-day deliveries, but said the service would reach tens of millions of customers. Amazon, by contrast, said earlier in October that it plans to offer same-day prescription deliveries in 20 new U.S. cities next year, up from fewer than 10 currently. https://tinyurl.com/yu6xbca5

Wayfair launches rewards subscription.

Wayfair announced Tuesday it would launch a subscription membership with free shipping and other benefits as the e-commerce site looks to encourage repeat purchases and grow sales of home goods besides furniture. The subscription will cost US$29 per year, and includes 5% in store credits on all purchases, member-only sales and dedicated customer service. Wayfair’s chief commercial officer, Jon Blotner, said that the offering will help Wayfair deepen customer loyalty and encourage people to buy goods like linens and kitchen appliances in addition to furniture. “One of the things we have always wanted to do is make sure that customers know that they can rely on us for a much bigger share of those purchases,” Blotner said in an interview. Wayfair’s net revenue has slumped sharply from its peak in 2020. In its most recent quarter ending in June, revenue fell 1.7% from a year earlier. Wayfair has been hurt by a consumer pullback on big ticket items like furniture, as well as competition from bargain sites like Temu and Shein. Amazon is also launching a new low-cost storefront that will ship directly from China, and has set price caps for sellers including US$9 for bedding sets and US$20 for sofas, The Information reported Tuesday. https://tinyurl.com/mthtfazt

TSMC’s Arizona chip production yields surpass Taiwan’s in win for US push.

Taiwan Semiconductor Manufacturing Co. has achieved early production yields at its first plant in Arizona that surpass similar factories back home, a significant breakthrough for a US expansion project initially dogged by delays and worker strife. The share of chips manufactured at TSMC’s facility in Phoenix that are usable is about 4 percentage points higher than comparable facilities in Taiwan, Rick Cassidy, president of TSMC’s US division, told listeners on a webinar Wednesday, according to a person who participated. The success rate, or yield, is a critical measure in the semiconductor industry because it determines whether companies will be able to cover the enormous costs of a chip plant. The accomplishment is a sign of progress for Washington’s efforts to revitalize American semiconductor manufacturing. TSMC, the main chip manufacturing partner for Nvidia Corp. and Apple Inc., is in line to win US$6.6 billion in government grants and US$5 billion in loans — plus 25% tax credits — to build three fabrication facilities, or fabs, in Arizona. The award, like almost all others from the 2022 Chips and Science Act, isn’t yet finalized. The latest yield advancement is notable for TSMC because it has historically kept the most advanced and efficient plants in its home island of Taiwan. Its Arizona site got off to a rocky start, as the company couldn’t find enough skilled staff to install advanced equipment and workers struggled with safety and management issues. TSMC reached an accord with construction labor unions late last year. The chipmaker originally planned to have its first Arizona plant start full production in 2024, but pushed back the target to 2025 over the labor issues. It later delayed the start date for its second fab to 2027 or 2028, from an initial target of 2026. That fueled concerns that the company might not be able to make chips in the US as efficiently as in Taiwan. https://tinyurl.com/486sh6x3

Arm cancels Qualcomm’s license to design chips based on its technology.

Arm, whose chip technology powers most of the world’s mobile devices, is canceling a license that allows Qualcomm to design chips based on its intellectual property, Bloomberg reported. The move is an escalation of a dispute that the two companies have had since 2021 after Qualcomm purchased Nuvia, a chip startup. Arm sued Qualcomm in 2022, saying it should be paying higher royalties for Arm’s chip designs now that it owns Nuvia. This could have negative financial ramifications if Qualcomm is forced to halt development of its newest Arm-based chips that go into Windows PCs. The cancellation also could have negative consquences for Arm given that Qualcomm is one of Arm’s largest customers. A Qualcomm spokesperson said the cancelation was an “unfounded threat” and designed to “strong arm” Qualcomm. “With a trial fast approaching in December, Arm’s desperate ploy appears to be an attempt to disrupt the legal process, and its claim for termination is completely baseless,” the spokesperson added. An Arm spokesperson declined to comment. https://tinyurl.com/2s2f5tpf

Mercedes-Benz electric car sales plunge by a third as Chinese competition and stuttering demand hit home.

Europe’s automakers are struggling amid falling demand and increased competition from China, with Mercedes-Benz the latest to sound the alarm over plunging EV sales. The German carmaker said it had seen a 31% drop in sales of battery-powered cars from a year earlier as it reported its third-quarter earnings on Friday. Sales of all Mercedes cars in China also slumped by 10% in the first nine months of the year amid waning demand for luxury vehicles. Registrations of new EVs in August dropped 44% in Europe and a massive 69% in Mercedes’ home market of Germany, industry data shows. Although they recovered slightly in September, sales of new electric vehicles this year still remain nearly 6% lower than at the same point in 2023, according to data from the European Automobile Manufacturers’ Association. https://tinyurl.com/3n3au877

Sophic Insights: Sophic Client American Aires (WIFI-CSE, AAIRF-OTCQB) – Clearing The Aires.

In Sophic Capital’s Dialing Up Danger? report, we detailed that the potential of harmful effects from Electromagnetic Field (EMF) radiation from consumer devices such as mobile phones, Wi-Fi routers, or baby monitors is a polarizing topic. For people concerned about EMF radiation, there are several solutions that increase protection, albeit with limitations. As a result, there is a niche, but large and growing market for consumer products that provide EMF radiation protection in various forms. In this report, Sophic Capital introduces our client American Aires Inc., a pioneer in cutting-edge technology designed to protect against the potentially harmful/negative effects electromagnetic radiation and optimize human health. We will showcase American Aires’ technology and family of products. https://bit.ly/48lYTCA