Monday Tech Briefing: June 4

BIG TECH COMPANIES
1. Micron Being
Investigated by Chinese Regulators
WHAT:
· Micron Technology Inc., the largest U.S. maker of computer memory
chips, confirmed that officials from China’s
State Administration for Market Regulation visited its China offices on May
31 seeking certain information
· Chinese media reported that memory chip
makers Samsung and SK Hynix also received similar visits
WHY IT’S IMPORTANT:
· About half of Micron’s sales came from China in
2017, and the investigation may open another front in the trade dispute between
China and the U.S.
BIG PICTURE:
· Many suspect Micron, Samsung and Hynix, which
dominate the memory market, agreed to collectively raise the price of computer
and phone memory from 2016 to 2017. There is a class action lawsuit against
them in the U.S.
· Chinese companies like Tsinghua Unigroup are setting up
factories to compete in the memory chip market. The Chinese government may want
to create a better environment for all companies to compete
Source: Bloomberg
2. Tencent Sues ByteDance for Defamation
WHAT:
· Tencent
Holdings is suing Beijing ByteDance Technology, operator of the popular Jinri Toutiao news app, and
short-video app Douyin, for defamation
· Tencent accuses ByteDance of “widely distributing and disseminating expressions, articles and videos to
defame Tencent since May 2018”
WHY IT’S IMPORTANT:
· The suit signals intensifying competition between
Tencent and ByteDance in areas such as news
aggregation services and short video
BIG PICTURE:
· China’s video-streaming industry generated 5.7 billion yuan ($895.6 million) in
revenue last year, and the figure is expected to rise to 36 billion yuan over the next three years
· Although Tencent’s revenues and profits are still huge, its core business growth has slowed significantly
Source:South
China Morning Post
POLICY
3. China to Roll Out
Financial Holding Company Regulations, with Ant Financial Involved in Pilot
WHAT:
· China is expected to roll out regulations for
financial holding companies later this year. Ant Financial Services, Suning Holdings Group and other companies have also been selected for the pilot
· Regulators are aiming to strengthen supervision
of non-financial companies that invest in financial organizations
WHY IT’S IMPORTANT:
· Domestic and international regulators are
struggling with how, and how much, to regulate this new internet finance sector
· A number of risky financial holding company
structures have emerged over the past few years, prompting China to move quickly
to regulate the group
BIG PICTURE:
· China’s financial industry has changed
dramatically in the last few years. Central government-owned firms, local
state-owned enterprises, and private companies have flocked to the sector as
Beijing opens it to outside investment
Source: Caixin
DEALS AND FUNDRAISING
4. Alibaba leads $300
million investment in China’s Red
WHAT:
· Chinese social e-commerce platform Red, or Xiaohongshu, said it has raised $300 million in series-D financing
· The financing, which values the company
at $3 billion, was led by Alibaba, with other contributors
including GSR Ventures, Tencent Investment, GGV Capital and K11 founder Adrian Cheng
WHY IT’S IMPORTANT:
· Red is one of China’s largest lifestyle
and social community operators, with100 million registered users at the end of May
· Alibaba’s investment means Red can now partner, rather than compete, with the
e-commerce giant to sell more products on its platform
BIG PICTURE:
· Alibaba is increasingly using investment to
expand its core e-commerce business. Similar recent investments include Lazada Group in Southeast Asia, Tokopedia in
Indonesia and BigBasket in India.
Source: Caixin (Link in Chinese)
PRODUCTS
5. Xiaomi Launches New
Products Ahead of IPO
WHAT:
· Xiaomi, the
world’s fourth largest smartphone supplier, launched a new flagship handset
with a see-through back in its biggest product launch to date, weeks before its
highly-anticipated IPO in Hong Kong
WHY IT’S IMPORTANT:
· The
move further illustrates Xiaomi’s lower pricing strategy as it continues its international
expansion
BIG PICTURE:
· The company is planning to make its $10 billion IPO by early-to-mid July,
presenting the biggest global stock offer this year
Source: South China Morning Post
Compiled by Sun Congying and
Zhang Erchi
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