Chips change smartphone numbers

China’s Xiaomi lost its position as the world’s number two smartphone maker in the third quarter, as Apple benefited from shipping the iPhone 13 in September.

But the semiconductor shortage was also a factor. “We faced fairly big pressure” on chip supplies, Xiaomi president Wang Xiang told reporters, after the company’s earnings report on Wednesday showed slowing growth. “This will continue in the fourth quarter, but will start to ease in 2022.”

Its rivals look to be in a better position in terms of guaranteeing future supplies. Apple is forging a closer partnership with Taiwanese foundry TSMC, according to this Nikkei story that was reported in this week’s #techAsia newsletter.

The iPhone maker is reported to be reducing its reliance on Qualcomm by getting TSMC to make its 5G modems from 2023, while developing its own power management and frequency chips.

Samsung, the number one smartphone maker, overtook Intel to become the world’s largest chip supplier in the second quarter and announced on Wednesday it would build its most advanced semiconductor facility to date in the city of Taylor in Texas. The $17bn factory is intended to help boost production of advanced logic chips used in smartphones, high-performance computing and for artificial intelligence.

Samsung would be taking advantage of subsidies and would avoid future trade barriers, as the US competes with China and Europe over reducing dependence on chip supplies from overseas. Intel and TSMC are also building new chip plants, both in Arizona.

Europe is lagging behind and desperately holding on to what it already has. Today’s Europe Express newsletter says a report recently published on the first year of a regulation screening foreign direct investment revealed the EU helped block the purchase of Italian semiconductor company LPE by China’s Shenzhen Investment Holdings.

The current semiconductor shortage is leading to production lines for fake chips being established, reports Nikkei Asia. Many are created by recovering semiconductors from discarded computers and other electronics. The logos and product numbers are then doctored to make them look new. Used in electronics products, you could find your Christmas present gadget behaving strangely or breaking down altogether.

The Internet of (Five) Things

1. Apple sues Israeli spyware group NSO 
Apple is suing NSO, the Israeli maker of surveillance software, alleging that NSO targeted and spied on iPhone users. Apple is seeking damages as well as an order stopping NSO from using any Apple software, device or services.

2. Orange chief gets suspended fraud sentence
Orange chief executive Stéphane Richard has been given a one-year suspended prison sentence by a French appeals court in a fraud case centred around late businessman Bernard Tapie, leaving his future at the telecoms company hanging in the balance. We also have a report on the latest evidence in the fraud trial of Elizabeth Holmes, founder of blood-testing start-up Theranos.

3. China tightens Tencent restrictions
Chinese regulators say government approval needs to be given to any new apps and app updates from Tencent after a number of its offerings were accused of violating consumer interests. The requirement has been issued shortly after China rolled out new data protection laws restricting how its tech companies can store and handle users’ personal information.

4. Beijing blocks access to vessels’ location data 
China has blocked public access to shipping location data, citing national security concerns, in another sign of its determination to control sources of sensitive information. See the difference for yourself here.

5. BNPL ‘needs more regulation’; fintech funding flowers
The ‘buy now, pay later’ credit industry would benefit from more regulation to help standardise an increasingly crowded market, Max Levchin, chief executive of US consumer lender Affirm has told the FT. UK fintech Freetrade will seek a £650m valuation in a fresh round of crowdfunding, more than double the value the trading app achieved earlier this year. Meanwhile, investors have pumped record amounts into south-east Asian fintechs this year, with 80 deals made worth $3bn.

Tech tools — Kodak REELZ digitiser

Super 8 made a bit of a comeback 10 years ago, when the film format gave its name to a Spielberg/JJ Abrams movie. If you still have any reels left in the attic, or know an aged parent that does, this digitiser may make a good Christmas present. Just released by Kodak brand licensee C+A Global, the REELZ film digitiser will allow you to convert 8mm and Super 8 film to MP4 videos, while watching those golden memories as they’re scanned.