Monday Tech Briefing: Sensetime, Foxconn, China Railway
BIG TECH COMPANIES
1. Taiwan Bakery Dropped from Mainland Delivery Platforms After Island Leader’s Visit
What: Taiwan’s 85C Bakery Café has been dropped from major Chinese mainland delivery platforms Ele.me and Meituan after the island’s leader visited an 85C store in Los Angeles. Although the company has since vowed to “firmly support the peaceful development of the cross-strait relationship,” this failed to appease enraged internet users. Its official website was hacked and is nonoperational as of publication.
Why it’s important: Taiwan leader Tsai Ing-wen heads a party that has long been associated with the policy of Taiwan formally declaring independence from China. Her visit to 85C has made the company latest target of politically sensitive consumers on the Chinese mainland, which is 85C’s largest market.
Big picture: Last year, South Korea’s Lotte Group had to sell off its supermarkets in the China market after a consumer backlash against its decision to allow the deployment of a U.S. anti-missile system on a golf course it owned, a move Beijing strongly opposed. (Source: Caixin)
2. Foxconn Pursues Chip Ambitions with Plans for China Plant
What: Foxconn Technology Group is about to start a chip and semiconductor equipment design partnership with the government of Zhuhai, Guangdong province, sources told the Wall Street Journal. Foxconn confirmed the local partnership, but denied that it has plans to build a semiconductor plant in Zhuhai “at this time.”
Why it’s important: Foxconn, the world’s biggest contract manufacturer, has been hoping to grow its semiconductor business for some time. Foxconn attempted to acquire Toshiba Corp.’s memory-chip unit last year, but lost the bid to U.S. private-equity firm Bain Capital.
Big picture: China is investing billions of dollars in domestic semiconductor companies in order to reduce its reliance on foreign technology, at a time when the U.S. has blocked multiple Chinese attempts to acquire U.S. chip companies. (Source: Wall Street Journal)
DEALS & FUNDRAISING
3. Tencent-Backed Qutoutiao Files for U.S. IPO
What: Qutoutiao Inc, a Chinese content aggregator backed by Tencent, has filed for an initial public offering of up to $300 million with the U.S. Securities and Exchange Commission. The company said it plans to list on the Nasdaq Stock Market, but did not reveal how many shares it planned to sell or their expected price.
Why it’s important: Qutoutiao is the fourth-most popular news app in Apple’s Chinese App Store, and had 32.1 million monthly average users in the quarter ending June 30. The company’s customers include Chinese search giant Baidu. (Source: Reuters)
4. China Railway Opens First Tender for Wi-Fi Equipment
What: China Railway Corp. (CRC) has begun an open tender for the installation of Wi-Fi equipment sets on select bullet trains, the first time that the state-owned operator has opened such a bid to a third party. The project, with undisclosed financial terms, involves 150 Wi-Fi sets to be used in the newly built Fuxing trains, which is China’s new generation of homegrown bullet trains.
Why it’s important: The bidding is expected to be very competitive as companies vie for a share in CRC’s lucrative Wi-Fi business. The operator plans to introduce wireless data connections to all high-speed trains in the coming years.
Big picture: China now has the world’s largest high-speed train networks. As of the end of last year, the country had 2,935 standard high-speed trains running on 25,000 kilometers of high-speed track, according to official data. (Source: Caixin)
5. China’s Integrated Circuit Sector Faces Talent Shortage
What: China’s integrated circuit sector is facing a talent shortage. The industry will require around 720,000 workers by 2020, but China only had around 400,000 workers qualified for integrated circuit-related jobs last year, according to an industry white paper released recently
Why it’s important: China’s integrated circuit sector has grown rapidly in recent years, far outstripping its universities’ ability to produce graduates with the appropriate skills. Fewer than 30,000 graduates trained in this area will enter the workforce each year, based on current trends. (Source: Reuters, link in Chinese)
6. Alibaba May Replace Human Pornography Censors With Artificial Intelligence
What: E-commerce giant Alibaba plans to replace human censors with artificial intelligence algorithms designed to detect pornography. The algorithms will automatically evaluate the content users post online, scoring it from 0-100. Pictures scored above 99 will be deleted immediately, while those scored between 50-99 will be checked by human censors, Alibaba’s security department said.
Why it’s important: Censorship has become increasingly expensive for Chinese companies like Alibaba, whose online shopping platforms include social media elements. To reduce costs, companies are turning to machine learning to filter inappropriate content. (Source: The Paper, link in Chinese)
7. China AI Unicorn SenseTime Launches Automatic ‘Touch-Up’ Tool for Live-Streamers
What: “SenseTime, the world’s most highly-valued artificial intelligence start-up, is offering a filter for smartphone cameras and live-streaming apps that can automatically touch you up,” according to the South China Morning Post.
Why it’s important: Looking good is crucial for live-streamers trying to succeed in an increasingly competitive market. China’s live-streaming industry has grown rapidly in recent years, and is estimated to be worth $4.4 billion in 2018, according to figures from Deloitte. (Source: South China Morning Post )
Compiled by Hou Qijiang and Qian Tong
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