FirstFT: Global chip makers flock to Japan

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Some of the world’s largest chipmakers have agreed invest billions of dollars in Japan while developed economies try to reduce their dependence on Taiwan’s semiconductor industry amid rising tensions between the West and China.

Japanese Prime Minister Fumio Kishida met with the heads of major Western chipmakers, including Taiwan Semiconductor Manufacturing, South Korea’s Samsung Electronics and the US’s Intel and Micron, in Tokyo ahead of the G7 summit starting tomorrow in Hiroshima .

Semiconductors, which are an integral part of modern technology, have emerged as an area of ​​intense concern for the United States and its allies since the Russian invasion of Ukraine. Taiwan is at the heart of the world’s chip-making industry but is at risk of a possible invasion by China, which sees it as part of its territory.

According to experts, Taiwan produces 65% of the world’s semiconductors and nearly 90% of the most advanced chips.

Here’s what else I’ll be watching over the next few days:

• G7 Summit: The gathering of world leaders will open today in Hiroshima.

• Inflation Japan: April CPI inflation rate data is available today.

• FT USA Weekend Festival: It’s not too late to register to attend Saturday’s US FT Weekend Festival online or in person. Register to hear key FT journalists in conversation with Hillary Rodham Clinton, Jamie Lee Curtis, Salman Rushdie and more.

Who will win the US-China tech war? Join leading FT journalists and a colleague from Nikkei Asia for a Webinar only for subscribers on May 25th at 12:30 BST and ask your questions to the panel: James Kynge, Eleanor Olcott, Ed Luce, Cheng Ting-Fang, moderated by Geoff Dyer.

Five more top stories

1. Carl Icahn admitted he was wrong in betting that the market would crash after the ill-fated trade cost his company nearly $9 billion over about six years. The activist investor lost about $1.8 billion in 2017 on hedging positions that would pay off if asset prices tumbled before losing another $7 billion between 2018 and the first quarter of this year, according to an analysis by the Financial Times. Read the full story here.

2. The G7 countries are preparing new sanctions against Russia, which covers ships, planes, individuals and diamonds, officials say, as they try to increase economic pressure on the Kremlin. The plan to reduce diamond imports from Russia targets one of Moscow’s few remaining export industries still relatively unscathed by Western sanctions.

3. TikTok is facing its first ban from a US state over national security concerns after the governor of Montana signed a bill banning the download of the Chinese-owned social media app. The bill, signed yesterday by state Governor Greg Gianforte, takes effect in January.

• Artificial intelligence: Turing Award winner Yoshua Bengio warns of a “danger to political systems, to democracy, to the very nature of truth” from advanced AI systems like OpenAI’s GPT. Read more from his FT interview.

4. Alibaba is planning a massive shakeup of its tech empire as it prepares to list its food and logistics businesses within the next 18 months and spin off its cloud division. Read more from Alibaba’s first financial results since the tech giant announced plans to split into six businesses.

5. Indian tycoon Gautam Adani has invited bankers on a three-day trip next month to visit his conglomerate’s valuable assets and restore confidence after a short seller accused his group of accounting fraud and stock price manipulation. Here’s what’s on the agenda.

How well did you manage to keep up with the news this week? Take our quiz.

Great read

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We are also reading. . .

• Populist vs general: Imran Khan’s challenge to Asim Munir, a man few Pakistanis have dared openly criticize, risks sparking the most serious fight between civilian and military politicians since 2008.

• Gaga for Gold: A couple of decades ago, investing in gold seemed strangely retro. But this month the price of gold has been trading near all-time high.

• ‘Fatal Cycle’: Amidst San Francisco’s homelessness crisis, drug abuse and sensationalized crime, there is a growing sense that the city’s progressive political class it has failed its citizens.

Chart of the day

The FT’s Chris Giles examines why central bank economists around the world have done this underestimated the extent and persistence of inflation.

Take a break from the news

FT writers nominate their favorite hotels as a home away from homefrom a former lakeside camp for the Rockefellers to a 19th century ryokans in Japan.

Additional contributions by Gordon Smith and Gary Jones