US-China chip war intensifies | UK to reign in Big Tech | L'Oréal urged to end hair-straightening products over cancer risks

Welcome to Portfolio Intelligence Daily, where each weekday morning we spotlight under-the-radar investment themes involving supply chain issues, ESG risks, and regulatory and government actions.

Today:?

1. US adds pressure on China in chip war
2. UK prepares to reign in Big Tech
3. L'Oréal urged to withdraw hair-straightening products over cancer risk

Summaries are curated by Auquan’s analyst team using our Portfolio Intelligence Engine to uncover investment insights at scale.

US adds pressure on China in chip war

The US has reportedly requested that South Korean chipmakers, including Samsung Electronics and SK hynix, not fill any market gaps in China if Beijing bans US-based Micron Technology from selling chips in its country.

• The US may be seeking to put direct pressure on China's consumer appliances market as the two countries are engaged in a growing rivalry in the semiconductor industry.
• The US and China are the two biggest markets for chip products for Samsung and SK hynix — with the US accounting for 50% of SK hynix’ total sales and China about 30%.
• The US imposed export controls to cut China from certain semiconductors made with US equipment in October last year, and it granted the South Korean companies, which operate chip manufacturing facilities in China, a one-year exemption.
• China launched a national security probe into Micron, the world's third-biggest memory chip maker, which generated 25 percent of its total revenue from China and Hong Kong last year.
• The US interprets the probe as Beijing's retaliation against the series of trade restrictions that US President Joe Biden imposed to contain Beijing's clout in the chips industry.

“The US appears to be asking Samsung Electronics and SK hynix to join its memory chip sanctions against China, and this may affect the stock prices of the two chipmakers.” — Kim Young-gun, analyst at Mirae Asset Securities (source)

Select timeline

• Apr 24, 2023 | Samsung, SK under renewed pressure to join US chip battle against China (The Korea Herald)
• April 24, 2023 | The US wants to involve South Korea in the US-China chip war (Vn Economy)
• September 5, 2022 | Chinese GPU industry in spotlight as US tightens restrictions (DigiTimes Asia)

Tags: #samsung #skhynix #china #korea #chip #semiconductor #portfoliomanagement #supplychain

UK prepares to reign in Big Tech

The UK government has announced plans to introduce new legislation to address the market power of Big Tech. The legislation is still in the early stages of development, but it is expected to come into effect in the next few years.

• The UK will use a tailored approach to regulate each Big Tech firm, rather than a one-size-fits-all approach used by the EU.

The legislation is intended to:

• Empower the Competition and Markets Authority (CMA) to directly enforce consumer law, rather than having to go through lengthy court processes.
• Increase the penalties for breaches of consumer law, which can scale up to 10% of global turnover once the law is in effect.
• Ban the practice of facilitating fake reviews or advertising consumer reviews without taking reasonable steps to check they are genuine.
• Ensure web users are able to exit subscription contracts in a straightforward, cost-effective, and timely way.

“From abuse of power by tech giants, to fake reviews, scams and rip-offs like being caught in a subscription trap — consumers deserve better. The new laws we’re delivering today will empower the CMA to directly enforce consumer law, strengthen competition in digital markets and ensure that people across the country keep hold of their hard-earned cash.” — Kevin Hollinrake, Business and Trade Minister, UK (source)

Select timeline

• April 25, 2023 | UK to press ahead with long anticipated reform to tackle Big Tech’s market power (TechCrunch)
• April 24, 2023 | Britain to take on Big Tech with new legal powers (Reuters)

Tags: #BigTech #UK

L'Oréal urged to withdraw hair-straightening products over cancer risk

Campaigners are calling on L'Oréal to withdraw its hair-straightening products after research linked it to an increased risk of cancer

• A coalition of politicians, campaigners and professionals concerned about the potential health risks of using chemical hair relaxers, which are often used by Black women, are calling on L'Oréal to withdraw its hair-straightening products and invest in research on the long-term effects of using these products.
• The campaign follows scientific research that claims to show an association between the use of chemical hair straighteners containing lye, also known as sodium hydroxide or caustic soda, and cancer.?
• A 2022 study by the US National Institutes of Health found that women who used such products several times a year were more than twice as likely to develop uterine cancer
• L'Oréal has denied the claims of a link between its products and cancer.
• Nearly 60 lawsuits against L’Oréal and other companies were consolidated in a Chicago federal court in February.?
• The campaigners are also calling on the government to regulate the hair-straightening industry more closely.

“We should all be able to trust that the products we use on our bodies are safe … As one of the biggest brands in the world, we’re calling on L’Oréal to use their resources and power responsibly and listen to Black women.” — Ikamara Larasi, a campaigner at Level Up, the organization that has led the coalition (source)

Select timeline

• April 24, 2023 | L’Oreal Urged To Recall Hair Relaxers Due to Cancer Risks (About Lawsuits)
• April 21, 2023 | L’Oréal urged to withdraw hair relaxers after studies find cancer risk (The Guardian)
• October 17, 2022 | Use of Straighteners and Other Hair Products and Incident Uterine Cancer (Journal of the National Cancer Institute)

Tags: #L’Oréal #esg

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