Category: TECHNOLOGY
Framework Ventures co-founder says DeFi gives hope following FTX collapse
FTX’s downfall will heighten the need for regulation but also pique long-term interest from venture capitalists looking to invest in decentralized finance (DeFi), according to Michael Anderson, co-founder of Framework Ventures.
“It just seems obvious that DeFi is the only way that we can continue to do these types of financial services operations in the crypto ecosystem,” Anderson said to TechCrunch. “It gives us hope and strengthens our resolve that the things we’re pushing for are the right things to be working on.”
In April, Framework Ventures launched its third fund at $400 million, with about half of it earmarked for web3 gaming. Anywhere from half to 70% of pitches the firm gets are gaming-related companies, Anderson said. But the recent situation with FTX has the firm “doubling and tripling down on everything we believe in,” which includes DeFi and regulation of centralized finance (CeFi).
And while some firms like Multicoin have seemingly lost capital stored on FTX’s crypto exchange, Vance Spencer, co-founder of Framework Ventures, said the firm had no exposure.
“Regulation is not something we should be against or preventing,” Anderson said. “Sensible regulation makes sense and now that [former FTX CEO Sam Bankman-Fried] has been removed from the table, we can move forward and get more vocal about centralized finance versus DeFi and the pros and cons of each.”
Framework Ventures co-founder says DeFi gives hope following FTX collapse by Jacquelyn Melinek originally published on TechCrunch
SpaceX, Relativity and others urge FCC to stay in its lane
Major space companies, including SpaceX and Relativity, are urging the U.S. Federal Communications Commission (FCC) to stick to its purview — spectrum usage — as it looks to potentially update its rules for in-space servicing, assembly and manufacturing (ISAM) missions.
There is plenty that the FCC could — and should do — to support ISAM missions that sit squarely within its regulatory bounds, the companies said. SpaceX and others, as well as startups like Orbit Fab, which wants to build refueling depots in space, and Starfish Space, which is developing a satellite servicing vehicle, submitted recommendations related to spectrum and ISAM. The commission also heard from Blue Origin, Lockheed Martin, United Launch Alliance and other space companies and industry groups.
“The biggest chunk of this proceeding is the question of, do we need new spectrum allocation for ISAM?” Brian Weeden, executive director of The Consortium for Execution of Rendezvous and Servicing Operations (CONFERS), explained to TechCrunch in a recent interview. “And that is absolutely within the FCC’s existing authority.”
The FCC requested comments from industry after it opened a new proceeding on ISAM in August. In a statement, the commission said it specifically sought to understand how it could “update, clarify, or modify its rules and licensing processes” to support these emerging capabilities in space. SpaceX, Relativity and others said in their responses that the FCC should bring its considerable authority to bear on issues related to spectrum use and licensing — and only issues related to spectrum use and licensing.
“The Commission must handle this potentially important but still nascent industry with care, exercising caution not to unintentionally stifle innovation by stepping outside the authority expressly delegated to it by Congress,” SpaceX said.
Relativity Space and the industry association Commercial Spaceflight Federation separately argued that the FCC’s involvement in issues outside of those related to spectrum could result in duplicative approvals processes. These could be especially challenging for smaller startups and newer space entrants to navigate.
The new proceeding is one of a handful of actions the commission has taken in recent months to keep pace with the growing commercial space industry. In September, the FCC also updated rules related to spacecraft deorbiting and orbital debris management, voting that satellite operators must deorbit satellites in low Earth orbit five years after their mission conclusion, rather than 25.
But such actions have raised questions as whether the FCC has sufficient authority to pass such rules. As of yet, Congress has made no gesture toward expanding or extending that authority.
FCC Chairwoman Jessica Rosenworcel appeared to tacitly acknowledge these concerns in a speech to the Satellite Industry Association, announcing that the FCC will establish a new bureau dedicated to handling space activities.
“The changes I am announcing today are not about taking on new responsibilities at the FCC,” she said. “They are about performing our existing statutory responsibilities better and freeing up resources to focus on our mission.”
SpaceX, Relativity and others urge FCC to stay in its lane by Aria Alamalhodaei originally published on TechCrunch
https://techcrunch.com/2022/11/11/spacex-relativity-and-others-urge-fcc-to-stay-in-its-lane/
Pixxel’s Awais Ahmed talks going hyperspectral in dual-use at TC Sessions: Space
Orbital imagery is becoming commonplace in industries and defense, but looking beyond the visible spectrum has yet to break through into the mainstream. Pixxel is poised to change that with its hyperspectral imaging satellites, and co-founder Awais Ahmed will join us at TC Sessions: Space in Los Angeles on December 6 to tell us why this tech matters.
Hyperspectral imagery includes wavelengths well beyond what people and traditional cameras see, allowing satellites to detect things like polluting gases, the hydration level of soil or concentrations of desirable minerals. Pixxel’s approach is modern and adaptable, with a new imaging stack that slices the wider spectrum into extremely thin slices, allowing very specific detections that would normally take a spectrometer or science mission.
Pixxel raised a $25 million A round earlier this year, a coup for the young founders, Ahmed and Kshitij Khandelwal, his fellow graduate from BITS Pilani in Rajasthan, India. The two set out to change orbital imagery and are now in pole position as numerous industries, the military, and climate-monitoring authorities are all seeing the benefits of hyperspectral image data.
Ahmed told TechCrunch recently that the new push toward ESG, as well as a large new tranche of federal funding for climate solutions, is reinforcing existing interest from stakeholders in this area, from climate activists to gas and oil companies. And of course the strategic importance of this type of data is easy to see, which is why Ahmed will be joining us for a discussion of the evolving dual-use sector where startups like Pixxel have twice the opportunity — but also double the responsibility.
TC Sessions: Space takes place on December 6 in Los Angeles. Buy your pass today, and then join us to see and learn about the latest space tech from the industry’s most beautiful minds, network for opportunities and build a stronger startup to the stars.
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Pixxel’s Awais Ahmed talks going hyperspectral in dual-use at TC Sessions: Space by Devin Coldewey originally published on TechCrunch
Pet insurance startups chase the market as pet ownership booms among Gen Z and Millennials
Walk through any public park these days and you will see a hell of a lot more dogs than you might have done three years ago. The loneliness of the pandemic lockdowns led to an explosion in pet ownership. Plus, The demographic of pet ownership has shifted. Whereas previously it was Granny or Grandpa who tended to be the pet owner, now, Gen Z and Millennials represent around 70% of pet owners, according to some statistics. This has created a big fight between insurers over this new market, and has of course predictably led to new startups in the arena.
In the UK you can find UK ManyPets, Waggle, PetPlan, while in the US there’s Lemonade, Figo, ManyPets and Trupanion. Over in the EU you’ll find Dalma (France), Lassie (Sweden) and ManyPets (Sweden).
Meanwhile, pet insurance start-up Napo has decided to take a particular angle on this topic, not only offering pet insurance but also pet health prevention information, pet ownership education, and additional services.
It’s now raised a £15m Series A funding round, led by DN Capital, and with the participation of the petcare-focussed Companion Fund as well as Helvetia Venture Fund, M Tech Capital, Picus Capital, dmg ventures, Sarona Partners, T0 Ventures and FJ Labs.
Napo claims to have insured over 35k pets in the year since its launch last December. It offers access to 24/7 online vet consultations, obesity awareness resources, and access to expert-led live classes to help puppy train their dogs.
In a statement, co-founder and CEO Jean-Philippe Doumeng said: “Our mental model is fundamentally different from traditional pet insurance. We are aligning all stakeholders to look in the same direction by helping people to take better care of their pets.”
Guy Ward Thomas, who led the deal at DN Capital, added: “We met all of the ‘neo pet-insurers’ in Europe… What set Napo apart was their focus on building a virtuous circle between educating owners, providing veterinary care and improving pet health – all leading to lower claims, lower premiums and happier customers in the long-term.”
Pet insurance startups chase the market as pet ownership booms among Gen Z and Millennials by Mike Butcher originally published on TechCrunch
Thomson Reuters to acquire tax automation company SurePrep for $500M
Thomson Reuters has announced plans to acquire SurePrep, a tax automation software company based in Irvine, California.
The transaction, which Thomson Reuters said it expects to close in Q1 2023, values SurePrep at $500 million, which will be paid entirely in cash.
Founded in 2002, SurePrep is one of numerous software providers that help tax professionals and accountants gather and file 1040 tax returns on behalf of their clients. Integrating with existing tax software systems, SurePrep offers products that support uploading documents at regular intervals through the year via automated document requests, with support for mobile scanning, esignatures, and more. Built-in AI smarts automatically extract and repopulates data in companies’ tax compliance software of choice, removing many of the manual paperwork steps involved.
SurePrep’s TaxCaddy product
In 2019, SurePrep raised an undisclosed “significant” minority investment from private equity firm Bregal Sagemount, its only known external investment in its 20 year history.
Taxing times
SurePrep is the latest in a long recent line of tax management software companies to be acquired. In August, Vista Equity Partners announced plans to acquire automated tax compliance company Avalara for $8.4 billion, while earlier this month private equity firm Cinven revealed it was buying online tax preparation software provider TaxAct for $720 million. Last year, Stripe bought TaxJar for an undisclosed amount.
Thomson Reuters, though perhaps best known for its news agency, has a number of business units spanning legal, government, and tax and accounting. Indeed, it has in fact been partnering with SurePrep for the past six months, according to Thomson Reuters, “providing complementary solutions” for tax and accounting workers — this has effectively meant Thomson Reuters serving as a reseller for SurePrep’s software.
For SurePrep, this deal will give it extensive reach into Thomson Reuters’ existing customer base, while for Thomson Reuters it gets an arsenal of automated tools to bolster its existing tax products.
Thomson Reuters to acquire tax automation company SurePrep for $500M by Paul Sawers originally published on TechCrunch
https://techcrunch.com/2022/11/11/thomson-reuters-acquires-tax-automation-company-sureprep-for-500m/
FTX files for bankruptcy, CEO Sam Bankman-Fried steps down
The once-third-largest crypto exchange FTX has fallen from prestige in the past week and has now announced it filed for Chapter 11 bankruptcy in the U.S.
FTX CEO and founder Sam Bankman-Fried has resigned from his role, and Enron turnaround veteran John J. Ray III has been appointed as the new CEO.
About 130 additional affiliated companies — including FTX US and Alameda Research — have also begun the bankruptcy process, FTX said in a statement. The exchange’s Bahamian subsidiary, FTX Digital Markets, and its U.S. options platform LedgerX, alongside FTX Australia and FTX Express Pay are not included in the proceedings, it stated.
“The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders,” Ray said in a statement.
This news comes after a week-long collapse of the FTX empire as the company attempted to keep itself afloat, seeking out acquisitions and fresh capital from market players.
On Tuesday, the world’s largest crypto exchange Binance signed a letter of intent to acquire FTX. But just a bit over 24 hours later, Binance backed out of the plan after reviewing FTX’s structure and books.
“Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance said on Wednesday.
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations, we have decided that we will not pursue the potential acquisition of [FTX],” Binance said in a tweet.
On Thursday, Bankman-Fried said in a series of tweets that FTX International was looking to raise liquidity and was in talks with a “number of players.” He added that any money raised and existing collateral “will go straight to users.”
FTX has fallen from being the third largest crypto exchange to 62nd, according to CoinMarketCap data. FTX US division is 54th. The third largest crypto exchange is now Kraken, behind Coinbase and Binance.
This story is developing and may be updated as new information arises.
FTX files for bankruptcy, CEO Sam Bankman-Fried steps down by Jacquelyn Melinek originally published on TechCrunch
https://techcrunch.com/2022/11/11/ftx-files-for-bankruptcy-ceo-sam-bankman-fried-steps-down/
DeviantArt provides a way for artists to opt out of AI art generators
DeviantArt, the Wix-owned artist community, today announced a new protection for creators to disallow art-generating AI systems from being developed using their artwork. An option on the site will allow artists to preclude third parties from scraping their content for AI development purposes, aiming to prevent work from being swept up without artists’ knowledge or permission.
“AI technology for creation is a powerful force we can’t ignore. . . . It would be impossible for DeviantArt to try to block or censor this art technology,” CEO Moti Levy told TechCrunch in an email interview. “We see so many instances where AI tools help artists’ creativity, allowing them to express themselves in ways they could not in the past. That said, we believe we have a responsibility to all creators. To support AI art, we must also implement fair tools and add protections in this domain.”
As AI-generated artwork began to proliferate on the web earlier this year, fueled by the release of text-to-image tools like Stable Diffusion and DALL-E 2, art-housing platforms were forced to take a policy stance. Some, including Newgrounds, PurplePort and Getty Images, banned AI-generated art altogether, concerned both about the impact to artists and the legal ramifications of art created by tools that were developed on copyrighted works.
Today’s bleeding-edge AI art tools “learn” to generate new images from text prompts by “training” on billions of existing images, which often come from data sets that were scraped together by trawling public image hosting websites like Flickr and ArtStation. Some legal experts suggest that training AI models by scraping public images — even copyrighted ones — will likely be covered by fair use doctrine in the U.S. But it’s a matter that’s unlikely to be settled anytime soon — particularly in light of contrasting laws being proposed overseas.
OpenAI, the company behind DALL-E 2, took the proactive step of licensing a portion of the images in DALL-E 2’s training data set. But the license was limited in scope, and rivals so far haven’t followed suit.
“Many creators are rightfully critical of AI-generation models and tools. For one, they do not give creators control over how their art may be used to train models, nor do they let creators decide if they authorize their style to be used as inspiration in generating images,” Levy continued. “As a result, many creators have seen AI models being trained with their art or worse: AI art being generated in their style without the ability to opt out or receive proper credit.”
Art created with DeviantArt’s DreamUp tool. Image Credits: Digitonaut / DeviantArt
DeviantArt’s new protection will rely on an HTML tag to prohibit the software robots that crawl pages for images from downloading those images for training sets. Artists who specify that their content can’t be used for AI system development will have “noai” and “noimageai” directives appended to the HTML page associated with their art. In order to remain in compliance with DeviantArt’s updated terms of service, third parties using DeviantArt-sourced content for AI training will have to ensure that their data sets exclude content that has the tags present, Levy says.
“DeviantArt expects all users accessing our service or the DeviantArt site to respect creators’ choices about the acceptable use of their content, including for AI purposes,” Levy added. “When a DeviantArt user doesn’t consent to third party use of their content for AI purposes, other users of the service and third parties accessing the DeviantArt site are prohibited from using such content to train an AI system, as input into any previously trained AI system or to make available any derivative copy unless usage of that copy is subject to conditions at least as restrictive as those set out in the DeviantArt terms of service.”
It’s an attempt to give power back to artists like Greg Rutkowski, whose classical painting styles and fantasy landscapes have become one of the most commonly used prompts in the AI art generator Stable Diffusion — much to his chagrin. Rutkowski and others have expressed concern that AI-generated art imitating their styles will crowd out their original works, harming their income as people start using AI-generated images for commercial purposes.
The tools have set off firestorms of controversy in recent months. A system trained to imitate the style of acclaimed South Korean illustrator Kim Jung Gi, who passed away suddenly in early October, was condemned by many in the art community as a tasteless stunt. After winning a prize at the Colorado State Fair’s art competition, artwork made by AI set off a fierce backlash. Elsewhere, character designers like Hollie Mengert have decried what they see as poor AI imitations of their style that are nevertheless inexorably tied to their names.
For DeviantArt’s part, it’s encouraging creator platforms to adopt artist protections and says it’s already in discussions about implementation with “several players.” But it’s unclear whether it’ll be able to rally the broader industry behind its approach; less scrupulous actors could theoretically ignore DeviantArt’s terms of service to scrape images regardless of HTML tag. Technologists Mat Dryhurst and Holly Herndon are spearheading a separate effort called Source+ to let people disallow their work or likeness to be used for AI training purposes. Meanwhile, Shutterstock is banning all AI art not created with DALL-E 2 to mitigate copyright issues (and likely to preserve its partnership with OpenAI).
Image Credits: Digitonaut / DeviantArt
Unlike Shutterstock, DeviantArt has allowed — and will continue to allow — art generated with third-party AI tools on its platform, Levy says, though it encourages users uploading AI-generated art to tag it as such. He claims that tens of thousands of images tagged as “AI-art” are being submitted to DeviantArt each month, growing over 1,000% in the last four months.
“Since DeviantArt’s inception, we’ve never believed in blocking any art genres or categories. We have always made room for and supported all types of creators and their works,” Levy said.
Beyond simply allowing AI art, DeviantArt is committing to supporting it through a new in-house AI art generator, DreamUp, which Levy says is designed to enable “safe and fair” AI image generation. Built on top of Stable Diffusion, DreamUp uses DeviantArt-specific models to guide the generation process toward styles that frequently trend on the platform.
When it launches this week, DreamUp will be offered as part of DeviantArt’s premium Core plans, which start at $3.95 per month. All DeviantArt members can sample the tool with up to five free prompts.
Levy didn’t say whether DreamUp will automatically filter out subjectively objectionable content like graphic violence and gore, similar to DALL-E 2 and most other commercial AI art tools. But he noted that art produced by DreamUp will be bound by DeviantArt’s terms of use and etiquette policy, which prohibits deepfakes, hateful imagery and explicit art.
DreamUp-created images will be automatically tagged as “#AIart” on DeviantArt and contain a visible watermark. In an effort to credit the artists whose works were used to train DreamUp, DeviantArt will show the styles that inspired DreamUp-generated art and link to the artists’ usernames where applicable.
Image Credits: DeviantArt
Recognizing that some users would prefer not to see any AI-generated art on a platform like DeviantArt, Levy says that account holders will be able to set preferences to hide all images tagged #AIart. “We are committed to continue to research and learn new creator and web technologies, but most importantly, we’ll continue to listen to all users to understand what they want and need to grow and succeed on their creative journey,” he added.
DeviantArt provides a way for artists to opt out of AI art generators by Kyle Wiggers originally published on TechCrunch
Polestar doubles Q3 revenue, narrows losses
Polestar said it’s still on track to deliver 50,000 cars worldwide this year, even as other electric vehicle makers falter amid higher costs, supply chain crunches and production challenges.
The Volvo spinoff, which went public in a SPAC deal in June, delivered more than 30,424 globally for the first nine months of the year, including 9,249 in the third quarter. CEO Thomas Ingenlath said he expects the fourth quarter to be the automaker’s strongest, with higher vehicle prices offsetting rising material costs.
The company is one of a handful of startup brands that managed to mass produce an EV on a global scale. It benefits from shared resources with Volvo and its parent company, Geely, as well as a $3 billion agreement to sell 65,000 EVs to Hertz over the next five years.
“Unlike most of our peers, our global targets are a reality, not an aspiration,” Ingenlath said Friday on a call with analysts.
He said Polestar, which forecasts full-year revenue of $2.4 billion, would have exceeded its production goal if not for a wave of pandemic-related lockdowns in Shanghai that stymied global automakers in the spring.
The company reported a third-quarter operating loss of $196.4 million, down from $292.9 million for the year-ago period. Revenue more than doubled to $435.4 million, from $212.9 million.
The arrival of the Polestar 3 SUV, a new entrant in a profitable, fast-growing segment, could be a game-changer. The five-passenger crossover is designed to compete with a forthcoming crop of battery-electric luxury SUVs from Mercedes-Benz, Maserati and the like.
Priced from $83,900, the 489-horsepower SUV will achieve an estimated 300-mile range and share some equipment and features with Volvo’s upcoming EX90 battery-electric SUV, including bidirectional charging, which allows the car’s battery to feed power back to the grid when not in use.
The company will begin building the Polestar 3 at Volvo Cars’ plant in Chengdu, China, next summer and its Ridgeville, South Carolina, facility in mid-2024. The SUV is expected to arrive in showrooms in the U.S., Europe and China late next year, followed by the Middle East and Asia Pacific.
Polestar plans to sway SUV customers to the new brand with a cutting-edge technology palette, which includes hardware from lidar supplier Luminar and software from Zenseact, Volvo’s division for advanced driver assistance systems. Analysts note that certain new Volvo safety features may debut in Polestar models first.
Polestar plans to continue launching new models at a steady clip, starting with the 2024 arrival of the Polestar 4 SUV coupe. The Polestar 5 4-door GT and Polestar 6, an 884-horsepower hard-top convertible, are slated to follow.
Polestar doubles Q3 revenue, narrows losses by Jaclyn Trop originally published on TechCrunch
https://techcrunch.com/2022/11/11/polestar-doubles-q3-revenue-narrows-losses/
Why digital sourcing platform Fictiv stays in China when others are leaving
As many businesses shift supply chains out of China in response to the uncertainties of geopolitical tensions and Beijing’s “zero COVID” policy, Fictiv is solidifying its outpost in the country.
San Francisco-based Fictiv runs a platform that aims to simplify the hardware sourcing process and connects hardware firms to suppliers around the world. When it comes to procuring high-end parts for products like medical equipment, surgical devices, and even rockets, there probably isn’t a better place than China. That’s why Fictiv set up an office there to be closer to its network of suppliers. Within five years, it has grown the team to 60 people in the southern industrial hub of Guangzhou.
Despite challenges around COVID restrictions and geopolitics, “the China manufacturing base is not going away,” said Fictiv’s founder and CEO Dave Evans in an interview with TechCrunch. “Thirty years ago, Shenzhen was a fishing village, and now it’s the center of the world for manufacturing. It’s going to take a while for other third ecosystems to really catch up,” he said, adding that Apple and its contract manufacturer Foxconn have offered a strong playbook for a generation of factory owners in the country.
Digital sourcing proves especially useful in COVID times. The conventional way, according to Evans, is a manual process that relies on face-to-face encounters: In China, you will need to find a shifu — a skilled craftsman in Chinese — who will sit back, sip some tea, and then slowly tell you from his 30 years of experience in molding to change this and that on your 3D drawing. Fictiv is using AI to replace that arbitrary human interaction by letting product developers run simulations on 3D designs and get a quote and estimated time on manufacturing.
Despite its focus on digitization, Fictiv stresses the importance of on-the-ground teams in its sourcing destinations. Evans used to travel to China every quarter or so but hasn’t been since the COVID outbreak, which has ushered in strict inbound travel restrictions. Huaqiangbei, the world’s largest electronic trading market located in the heart of Shenzhen, used to attract floods of foreign hardware makers. Now foreigners are a rare sight.
“Because it’s so hard to access China in the last years, the value we have in combining software, technology and all the AI that we built with boots on the ground right next to our manufacturing partners has built a really compelling offering for all customers because they can’t fly to China,” said the CEO.
While China remains an integral part to Fictiv, the company is also diversifying. “When the next big major thing happens, how is your business going to shift? And that’s what I would tell all the founders who are thinking about this — are you building a truly resilient supply chain?” Evans asked.
That’s in part why Fictiv recently opened an office in India, which “is very strong and getting stronger by the month” thanks to “a large population, relatively low costs, and the increasing talent there.”
The firm has built a global network of 250 vetted manufacturing partners, a third of which are in China, where production capacity is often larger. The rest of its suppliers are from India and the U.S. To date, Fictiv has produced some 20 million parts for thousands of customers. It runs a team of just over 300 employees around the world.
An OS for product developers
Nine years after its launch, Fictiv is carving out a new business line. The company’s selling point has been to enable early-stage product development, that is, the long-tail volume that Foxconn would find too small. Rather than contracting factories to make tens of thousands of units, it works with companies trying to get from 10 to 1,000.
The company’s new service is a work collaboration platform for everyone involved in the lifecycle of product development. Unlike its sourcing platform, which has its profit margin built into the manufacturing model, the service charges an annual membership fee. Using the software, the engineer can upload a product design with specifications on the material used and etc. Then the supply chain specialist may come in to estimate the lead time and target price, followed by the quality control person who makes further comments. Finally, the manager will approve the pricing before the buyer goes ahead to purchase it.
The idea is to capture the conversation and quality control process of product development in an integrated platform rather than having them scattered across emails and spreadsheets, which is how communication used to happen.
“For engineers who have a team, it’s almost like a 3x improvement [on productivity] because of all the tasks that you’re eliminating. For design firms or people that are managing many clients, [the software] helps them organize a lot of their workflows, and that gives them an easier way of filling and tracking all the different projects that are going on,” Evans noted.
Why digital sourcing platform Fictiv stays in China when others are leaving by Rita Liao originally published on TechCrunch
SoftBank, NEC, Sony, Toyota + more team up for Rapidus, Japan’s bid for next-gen chip domination
As the tech war between the U.S. and China intensifies, Japan has spotted an opening to build a viable alternative for semiconductors — not least so that its own consumer electronics firms do not run out of memory chips. Now, eight major Japanese tech firms and car makers, including Kioxia, NEC, NTT, SoftBank, Sony and Toyota, are teaming up in a consortium to launch an advanced chip maker. Rapidus, as it will be called, aims to develop and mass-produce the next generation of logic semiconductors by 2027.
The Japanese government said Friday it will back Rapidus with 70 billion yen (~$500 million), joining the eight tech corporations to reduce its dependency on chip production in other countries like Taiwan. According to Japan’s industry ministry, each participating company will invest approximately 1 billion yen (~$ 7 million) in Rapidus, with MUFG Bank injecting 300 million yen.
“Semiconductors are going to be a critical component for developing new leading-edge technologies such as AI, digital industries and health-tech,” Minister of Economy, Trade and Industry Yasutoshi Nishimura said at a news conference today. “Semiconductors are becoming even more important from an economic security perspective” due to the rising geopolitical risks.
Last week, Japan unveiled its plan to allocate 350 billion yen ($2.38 billion) to build a joint research center with the U.S. with the goal of developing 2-nanometer advanced chips. A number of research institutions and semiconductor companies in the U.S, Japan and Europe will participate in the research hub to collaborate. In addition to the new joint research hub investment, the Japanese government plans to invest 450 billion yen in advanced production and 370 billion yen in securing materials required for manufacturing.
IBM is reportedly partnering with Rapidus, which will have to get a license from IBM to manufacture sub-2 nanometer chip technology in Japan.
Rapidus aims to develop 2-nanometers chips, which can be used for 5G, quantum computing, data centers, self-driving vehicles and digital smart cities.
Japan has previously subsidized global semiconductor allies, including Taiwan Semiconductor Manufacturing, Micron, and Western Digital, to expand their chip production in Japan. The idea here is to strengthen its competitiveness in the semiconductor sector with R&D and production of its own advanced chips, primarily for Japanese car makers and tech companies’ use, but potentially for others, too.
While global competitors have outperformed in the industry, Japan’s latest logic semiconductor production lines are for 40-nm chips, per media outlet.
Samsung has started mass production of 3 nm this year, and TSMC plans to begin its 3 nm mass production late this year.
SoftBank, NEC, Sony, Toyota + more team up for Rapidus, Japan’s bid for next-gen chip domination by Kate Park originally published on TechCrunch