Europe should invest in chip design, not a mega-fab: Think tank

BERLIN (Reuters) – Europe’s ambition to make the most powerful computer chips risks wasting billions of euros, a German think tank said in a report on Thursday, urging policy makers to focus instead on rebuilding the region’s chip design industry.

The EU executive’s new goal of doubling its global semiconductor share by 2030 is doomed to fail because the bloc lacks a meaningful market that any super-advanced chip foundry could sell into, author Jan-Peter Kleinhans said.

“For an EU foundry there is simply no business case at the moment in Europe, mainly for the lack of customers,” said Kleinhans, an analyst at the Stiftung Neue Verantwortung (SNV) think tank in Berlin.

The European Commission last month launched a 10-year plan, the Digital Compass, setting its sights on a 20% global semiconductor market share and building a fabrication plant, or fab, that can make superfast 2 nanometer chips.

The push has gained urgency due to supply-chain dislocations caused by a sharp recovery in demand for products ranging from smartphones to electric vehicles following a slump at the onset of the coronavirus pandemic a year ago.

The problem with the EU’s strategy is that, unlike the United States and Asia, Europe lacks a meaningful chip design industry that could justify the cost of a mega-fab, Kleinhans told Reuters in an interview.

“In terms of volume it’s simply not enough to fill a fab,” he said. “That would mean an EU foundry would need to attract foreign customers – this is extremely unlikely.”

Industry leaders TSMC and Samsung already plan investments in the United States to serve chip design leaders like Qualcomm or Nvidia that rely on contract manufacturers to produce their chips.

Plans by Intel to launch its own foundry service, or contract manufacturing operation, starting in the United States, would add to capacity and raise questions about the economics of expanding production in Europe, said Kleinhans.

Europe should instead focus on reviving its vestigial chip design industry, he said. Of its last two publicly listed “fabless” chipmakers one, Dialog, has just agreed to be bought for $6 billion by Japan’s Renesas.

Apple’s announcement that it will invest 1 billion euros ($1.2 billion) in a new chip design facility in Munich, Germany, shows where the EU should be focusing its efforts.

“Apple has single-handedly done more for European-based chip design than the Commission in the past 10 years,” said Kleinhans.

($1 = 0.8430 euros)

Reporting by Douglas Busvine; editing by David Evans

Verizon signs first private 5G contract in Europe

(Reuters) – Verizon Communications Inc, one of the largest U.S. telecom companies, on Thursday signed its first private 5G contract in Europe with Associated British Ports (ABP) to deploy the mobile network at the Port of Southampton.

Port of Southampton, on England’s south coast, is one of the largest ports for cars and cruises, handling about 900,000 cars and millions of cruise passengers annually. It will also become the first mainland port in the UK to have private 5G.

Verizon in October struck here deals with Microsoft and Nokia for deploying private 5G. In international markets, where Verizon doesn’t have its own network, it is working with Nokia to build private networks for manufacturing and logistics companies.

Private 5G networks remove the need for businesses to jostle for speed with others on a public network and help enable data-intensive applications that use computer vision, augmented reality and machine learning to increase productivity.

The new tech will help the port to enable the use of real-time analytics, asset tracking, autonomous guided vehicles and safety monitoring.

“We have been able to equip ABP to take advantage of the immediate benefits private 5G offers, and … take full advantage of new technology applications and real-time analytics which will digitally transform its services in the future,” said Tami Erwin, CEO, Verizon Business.

Covid: Europe’s vaccine rollout ‘unacceptably slow’ – WHO

The World Health Organization (WHO) has criticised the rollout of coronavirus vaccines in Europe as being “unacceptably slow”.

image captionEurope’s vaccination campaign has been hit by delays

It also says the situation in the region is more worrying than it has been for several months. 

Vaccination campaigns in much of Europe have been hit by delays and the number of infections is rising.

The EU has been criticised for the pace of its vaccination programme – only 16% of its population has received the jab, compared with 52% in the UK.

But the EU says the UK has had an unfair advantage in contracts it signed with vaccine manufacturers, some of whom are based within the EU.

“Vaccines present our best way out of this pandemic… However, the rollout of these vaccines is unacceptably slow” and is prolonging the pandemic in the wider Europe region, WHO director for Europe Hans Kluge said in a statement.

“We must speed up the process by ramping up manufacturing, reducing barriers to administering vaccines, and using every single vial we have in stock, now,” he added.

Last week saw increasing transmission of Covid-19 in the majority of countries in the WHO European region – which includes more than 50 countries and extends from Greenland to the far east of Russia – with 1.6 million new cases and close to 24,000 deaths, the WHO said. 

Only 10% of the nearly 900 million people in the region have had a single dose of coronavirus vaccine.

It remains the second most affected by the virus of all the world’s regions, with the total number of deaths fast approaching one million and the total number of cases about to surpass 45 million, it added.

It also warned of the risks of greater spread associated with increased mobility and number of gatherings over the forthcoming religious holidays of Passover, Easter and Ramadan. 

Some 27 countries of the more than 50 included in the WHO Europe region have implemented partial or full coronavirus lockdowns.

What else is happening around Europe?

• After President Emmanuel Macron announced new restrictions in France on Wednesday evening, Prime Minister Jean Castex said on Thursday morning at the National Assembly: “The third wave is here.” He announced more detailed measures including a ban on alcohol in public spaces. France is set to begin a limited lockdown for four weeks from Saturday night, with travel restrictions extended from 19 areas to the entire country
• Eurovision is to take place in Rotterdam’s Ahoy arena in May. The Dutch government wants to use the event as a test with 3,500 spectators allowed for all the rehearsals and the three big shows. There will be extensive safety measures for the 39 countries taking part
• As infections surge in Belgium, a Brussels court has ruled that all the country’s Covid measures have to be lifted within 30 days because the legal basis is not sound enough. The court backed a lawsuit from the League for Human Rights. Interior Minister Annelies Verlinden has appealed against the ruling
• Spain is seeing a new rise in cases with an average incidence of up to 152 cases per 100,000 over the last two weeks. Madrid and Navarre in the north are among the areas seeing a spike
• Cases are also rising in Germany, with 24,300 in the past 24 hours. Almost 90% of infections involve the UK (Kent) variant
• The Austrian capital, Vienna and two other provinces in the east have imposed an Easter lockdown to help ease the pressure on hospitals. Austrians have been told to stay at home, except for necessary activities such as food shopping, work, exercise and helping their families
• A new German survey suggests only 25% of people have faith in the government’s vaccination strategy. The Oxford-AstraZeneca vaccine has been limited to over-60s in Germany and 40% of those surveyed said they did not want it

Global chip supply chain vulnerable to massive disruption – Research finds

(Reuters) – A new study from a U.S. industry group found that the global semiconductor supply chain has become increasingly vulnerable to natural disasters and geopolitical disruptions because suppliers have become more concentrated in distinct regions.

The report comes amid a global chip shortage that started with overbooked factories in Taiwan late last year, but has since been exacerbated by a fire at a plant in Japan, a freeze that knocked out electricity in the U.S. state of Texas and a worsening drought in Taiwan this year. The shortage has idled some production lines at automobile factories in the United States, Europe and Asia.

Modern chipmaking involves more than a thousand steps and requires complex intellectual property, tools and chemicals from around the world. But the Semiconductor Industry Association, representing most U.S. chipmakers, on Thursday said it found more than 50 places in the supply chain where a single region has more than 65% market share.

Intellectual property and software to design cutting-edge chips, for example, is dominated by the United States, while special gases key to fabricating chips come from Europe. And the manufacturing of the most advanced chips is completely located in Asia – 92% of it in Taiwan.

If Taiwan were unable to make chips for a year, it would cost the global electronics industry almost half a trillion dollars in revenue, the report found: “The global electronics supply chain would come to a halt.”

Still, the study warned, a go-it-alone approach in which governments try to replicate the supply chain domestically is infeasible because it would cost $1.2 trillion globally – with up to $450 billion of that cost in United States alone – causing the price of chips to skyrocket.

In some cases, though, it called for incentives to create “minimum viable capacity” in regions that lack any part of the supply chain.

In the case of the United States and Europe, that would mean new advanced chip factories to balance concentration in Taiwan and South Korea.

“We don’t have enough semiconductor manufacturing in the United States … And it’s got to be fixed with the assistance of the U.S. government,” John Neuffer, chief executive officer of the association, told Reuters.

After H&M, more foreign retail brands under fire in China in Xinjiang fallout

BEIJING (Reuters) – More foreign retail brands came under criticism from social media in China on Thursday, in the wake of Beijing’s propaganda offensive against H&M over the Swedish company’s previously aired concerns on Xinjiang.

Earlier this week, China denied allegations of human rights abuses by its officials in the western region of Xinjiang after the European Union, United States, Britain and Canada imposed sanctions on the officials on Monday. Beijing hit back with retaliatory sanctions on European lawmakers, academics and institutions.

Chinese state media singled out H&M on Wednesday for a statement that was reported by media last year in which the Swedish retailer said it was deeply concerned by reports of accusations of forced labour in Xinjiang, and that it did not source products from the Chinese region. It was not clear why the H&M statement was back in the public eye.

A social media frenzy ignited by a government call to stop foreign brands from tainting China’s name sent internet users looking for other previously issued statements by foreign retailers on Xinjiang.

Nike Inc, which said earlier in an undated statement it was “concerned” about reports of forced labour, came under fire. And so did German sportswear firm Adidas.

Many internet users said they will stop buying Nike and will support local brands such as Li Ning and Anta, while others bluntly told Adidas to leave China.

Shares of Anta Sports Products Ltd jumped over 6% in Hong Kong on Thursday after issuing a statement saying it will continue to use cotton from Xinjiang. Li Ning Co’s shares surged over 7%.

Internet users also targeted the Better Cotton Initiative (BCI), a global group that promotes sustainable cotton production which had said in October it was suspending its approval of cotton sourced from Xinjiang for the 2020-2021 season, citing concerns over human rights.

“If you boycott Xinjiang cotton, we’ll boycott you. Either Adidas quits BCI, or get out of China,” one internet user wrote.

The BCI’s members include Nike, Adidas and Japan’s Fast Retailing.

Nike, Adidas and the BCI did not immediately respond to requests for comment.

In response to the furore, H&M said on Wednesday it respected Chinese consumers and that it was committed to long-term investment and development in China.

But by Thursday morning, H&M did not exist on some Chinese store locator maps. Searches for H&M stores on Baidu Maps yielded no results. The Swedish clothing retailer’s official store on Alibaba’s Tmall, an e-commerce platform, was inaccessible.

A department store in Urumqi, capital of Xinjiang, said on its website it had shut an H&M section and demanded an apology from the company for “spreading rumours” and harming the interests of the region and China. (mp.weixin.qq.com)

Overnight, People’s Daily, the main newspaper of the Communist Party, rolled out a social media campaign in support of cotton sourced from Xinjiang. The graphic “I support Xinjiang cotton” posted by the newspaper on the Twitter-like microblog Weibo has since attracted about 2.2 million likes.

Euro zone economy back to growth in March as factories roar: PMI

LONDON (Reuters) – Euro zone economic activity made a surprise return to growth this month as factories ramped up production to its fastest pace in over 23 years, offsetting a continuing slowdown in the bloc’s dominant services industry, a preliminary survey showed.

But with much of Europe suffering a third wave of coronavirus infections and renewed lockdown measures, as well as a slow vaccine rollout in the region, the final reading of the survey and April’s numbers could be more subdued.

IHS Markit’s flash composite PMI, seen as a good guide to economic health, bounced above the 50 mark separating growth from contraction to 52.5 in March compared to February’s 48.8, its highest since late 2018.

Even the most optimistic respondent in a Reuters poll had said it would rise to 51.0 and the median predicted only a modest increase to 49.1.

“The outlook has deteriorated, however, amid rising COVID-19 infection rates and new lockdown measures,” said Chris Williamson, chief business economist at IHS Markit.

“The service sector remains the economy’s weak spot, but even here the rate of decline moderated in March as companies benefited from the manufacturing sector’s upturn, customers adapted to life during a pandemic and prospects remained relatively upbeat.”

A flash PMI covering the services industry rose to 48.8 from February’s 45.7, still in contractionary territory but its highest reading since August, and well above the median expectation in a Reuters poll for 46.0.

A big jump in input costs led services firms to increase their prices for the first time in just over a year. The output prices index climbed to 50.8 from 48.1.

Any sign of increasing price pressures may be welcomed by the European Central Bank, which has struggled to get inflation anywhere near its target, but a Reuters poll earlier this month suggested the pick-up would be shortlived.

Meanwhile, booming demand for manufactured goods helped the flash factory PMI soar to 62.4 from 57.9, comfortably the highest reading since the survey began in June 1997 and well above all forecasts in a Reuters poll that predicted 57.7.

An index measuring output, which feeds into the composite PMI, jumped to a survey high of 63.0 from 57.6.

The manufacturing upturn was led by a record surge of factory production in Germany, accompanied by the fastest production growth since January 2018 in both France and the region as a whole, IHS Markit noted.

That jump in output came as euro zone factories tried to meet soaring demand, also at a survey high, with the new orders index at 64.2 versus February’s 57.8.

Meanwhile, hopes the vaccine programme would accelerate and allow a return to some sort of normal life, optimism remained elevated. The composite future output index only dipped from February’s three-year high of 67.0 to 66.8.

French Industry Minister: AstraZeneca CEO is ‘on a hot seat’

PARIS (Reuters) – The chief executive of AstraZeneca – whose COVID-19 vaccine has been temporarily suspended in several European countries – is “on a hot seat and knows it”, said French Industry Minister Agnes Pannier-Runacher.

Pannier-Runacher also told France Info radio on Tuesday that France needed more details from AstraZeneca regarding its COVID-19 vaccine production plans.

Close EU scrutiny of Brexit hubs to continue indefinitely, says regulator

By: Huw Jones

LONDON (Reuters) – Close scrutiny of UK financial firms’ European Union outposts will continue indefinitely, the bloc’s securities watchdog said, as regulators begin a round of new checks on how they are operating.

Hundreds of trading and investment firms from the City of London have set up shop in the EU to avoid disrupting business with the bloc by relocating staff and assets.

The costly investment was vindicated by an UK-EU trade deal that left UK financial services largely cut off from the continent after Britain left the EU’s orbit on Dec. 31.

The European Securities and Markets Authority (ESMA) had checked the licence applications from new hubs in case national regulators were offering sweeteners.

ESMA Chair Steven Maijoor said the watchdog has now begun reviewing how the licences are working on the ground in a process that will continue indefinitely to ensure sufficient activity and senior staff.

“How you structure your business between the UK and the EU, that will be an ongoing issue. There will be new business models, there will be new questions around how can you organise that,” Maijoor told Reuters.

“Although it will not be done in the context of Brexit, the UK and EU will continue to be very interconnected markets and so there will be on a continuous basis questions around how do you ensure proper supervisable entities in the EU.”

The close scrutiny will test post-Brexit relations between Britain and the bloc, already strained by clashes over Northern Ireland and COVID-19 vaccines.

Both sides aim to agree a cooperation pact in financial regulation by the end of March, a first step in restoring trust and potential UK market access further down the road.

A former regulator in the Netherlands, Maijoor is due to step down from ESMA after 10 years at the helm, having overseen a watchdog that has steadily increased its powers and reach.

There is no need for a U.S.-style super-regulator but it would be “very logical” for ESMA to build on the Brexit checks to become the EU regulatory gateway for market participants from any part of the world that want to operate in the bloc.

“If market participants can choose 27 member states to locate themselves then there is obviously a high risk of regulatory competition,” Maijoor said.

EU policymakers breathed a sigh of relief when there was no market disorder in January due to severing most of the City’s access to the bloc.

Maijoor said assessments by UK and EU regulators of risks to market stability ahead of Brexit had proved to be on the mark. EU curbs on City access led to swathes of euro stock and swaps trading leaving London for the bloc and New York without a hiccup.

Regulators focused on stability, not on avoiding splits in markets, he said.

“With Brexit comes fragmentation, that is what Brexit is about, it’s a decision by the UK to leave the EU.”

EU declared ‘LGBT freedom zone’ in response to Poland’s ‘LGBT-free zones’

The European Parliament has declared that the whole of the European Union is an “LGBTIQ Freedom Zone”. 

The symbolic resolution was passed in response to local authorities in Poland labelling themselves “LGBT ideology-free zones” in recent years.

Poland also plans to close a loophole that allowed same-sex couples to adopt.

The Polish government announced its proposal for the adoption ban just hours before the European Parliament’s declaration in support of LGBT rights.

Same-sex relationships are not legally recognised in Poland, and the country already bans same-sex couples from adopting children together.

However, as single people are permitted to adopt, some have managed to get around the ban by applying to adopt as single parents.

Under the new law, the authorities will be required to perform background checks on anyone applying to adopt a child as a single parent.

If a person is found to be applying as a single parent when they are in a same-sex relationship, they will be criminally liable.

Announcing the new plan, Deputy Justice Minister Michal Wojcik said: “We are preparing a change where… people living in cohabitation with a person of the same sex cannot adopt a child, so a homosexual couple will not be able to adopt a child.”

What is in the EU resolution?

The resolution declares that “LGBTIQ persons everywhere in the EU should enjoy the freedom to live and publicly show their sexual orientation and gender identity without fear of intolerance, discrimination or persecution”. 

It adds that “authorities at all levels of governance across the EU should protect and promote equality and the fundamental rights of all, including LGBTIQ persons”.

The resolution was supported by 492 MEPs, while another 141 voted against it and 46 abstained.

German MEP Terry Reintke, one of the people who put forward the resolution, praised the “overwhelming majority” in favour of it.

“Let’s use it,” she tweeted after the vote. “Let’s put it into concrete political action: better laws, better enforcement, better protection. Together we can do it.”

European Commission President Ursula von der Leyen had already backed the resolution before it went to a debate on Thursday.

“Being yourself is not an ideology. It’s your identity,” she tweeted on Wednesday. “No one can ever take it away. The EU is your home. The EU is a #LGBTIQFreedomZone.”

Last year, Ms von der Leyen said that Poland’s “LGBT-free zones” had “no place in our union”, and vowed to push all EU member states to recognise adoptions by same-sex couples.

Thursday’s resolution said that discrimination not only needed to be addressed in Poland, but that it was “an issue across the EU”.

Source: BBC

European Banking Authority hit by Microsoft Exchange hack

The European Banking Authority’s email servers have been compromised in a global Microsoft Exchange cyber-attack.

The EU body said personal data may have been accessed from its servers. And it had pulled its entire email system offline while it assessed the damage.

“The EBA is working to identify what, if any, data was accessed,” it said.

Microsoft Exchange servers are widely used for email by major businesses and governments. But few organisations have yet admitted being hit by the attack.

What happened?

The cyber-attack had exploited a vulnerability in Microsoft’s Exchange email system – or sometimes used stolen passwords – to look like someone who should have access to the system, Microsoft said.

Then, it would take control of the email server remotely – and steal data from the network.

US officials warned at the weekend the attack remained an “active threat”.

“Everyone running these servers – government, private sector, academia – needs to act now to patch them,” White House press secretary Jan Psaki said.

Microsoft believes a Chinese state-sponsored attacker called Hafnium is behind the hack.

But China denies any involvement. View original tweet on Twitter

The US National Security Council said compromised companies needed to take further steps – and encouraged all organisations to identify whether they had been affected.

Who has been attacked?

Initial estimates suggested some 30,000 US organisations may have been affected.

But there were now claims the attack had at least 60,000 known victims, Bloomberg reported, citing an anonymous former US official involved in the investigation.

Microsoft’s security officials said Hafnium, “primarily targets entities in the United States”, stealing information from organisations such as “infectious disease researchers, law firms, higher education institutions, defence contractors, policy think tanks and NGOs [non-governmental organisations]”.

But cyber-security group Huntress said it had seen 300 of its partners’ servers affected.

“These companies do not perfectly align with Microsoft’s guidance, as some personas are small hotels, an ice-cream company, a kitchen-appliance manufacture, multiple senior-citizen communities and other ‘less than sexy’ mid-market businesses,” it blogged.

It had also discovered affected local government, healthcare, banks and electricity companies