Weekly News

Contents:

1. Huawei tops worldwide telecom equipment revenue in 2023.?

2. China Unicom Open Annual Server Procurement.

3. CATL is negotiating to license LFP battery tech to GM and to build a joint factory.

4. The Xiaomi car has achieved a sales milestone of 50,000 units.

5. China's BYD slows down plans for EV factories in Vietnam, the industrial park says.

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1. Huawei tops worldwide telecom equipment revenue in 2023.

Despite plans in the UK last year to completely replace Huawei equipment and services from its 5G communication network and recommendations from the German Interior Ministry last year for telecom companies to limit?

the use of equipment manufactured by Huawei and ZTE, Chinese Huawei maintained its lead as the top global telecom equipment company with a 31.3% market share. Samsung Electronics of South Korea suffered a significant?setback in competition, ranking fifth in the market last year with a 6.1% share, down 1.6% from the previous year.

Sweden's Ericsson was listed second with a 24.3% market share, while Finland's Nokia and China's ZTE were third and fourth with market shares of 19.5% and 13.9%, respectively.

Although some EU member states are prepared to legislate to ban companies such as Huawei and ZTE from their national communication networks, only 10 out of the EU's 27 countries comply with the sanctions.

Many are concerned that removing Chinese telecom device firms like Huawei from Europe will result in lower levels of 5G deployment. In January of this year, senior officials from the European Commission warned that low 5G?adoption rates would shock the AI industry, hindering economic growth in the EU.

"In Europe, countries with less influence from the United States continue to use Huawei equipment. Even though there is a prevailing trend in Europe to restrict Huawei, communication providers have no reason not to use the?Chinese brand, which is of good quality and low price," the Director of the Future Strategy Research Department of the ICT Strategy Research Division of the Korean Electronics and Telecommunications Research Institute, stated.

Comment:?

Nokia is leading in the race to seize the European market. And, telecom companies in the region prefer Nokia and Ericsson, while countries in Southeast Asia and South America favor Chinese equipment. Samsung Electronics?communication equipment companies lag behind Nokia and Ericsson in Western markets and behind Huawei and ZTE in China and emerging markets.

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2. China Unicom Open Annual Server Procurement.

It is reported that this project is the centralized procurement of artificial intelligence servers by China Unicom for the year 2024, with a total of 2,503 AI servers and 688 essential networking devices -- RoCE switches.

China Telecom allegedly initiated the purchasing program for AI computing servers (2023-2024), with an estimated scale of 4,175 devices and a budget of 8.4 billion RMB.

In addition, China Mobile started the procurement of AI servers and supporting products for the new intelligent computing center (trial network) from 2023 to 2024, with a size of 1,250 units and a budget of over 2.4 billion RMB.

Furthermore, Ningxia Telecom had previously issued a tender for the centralized procurement of basic service capabilities for AI computing, with a budget of around 700 million RMB.

Comment:

China Unicon did not disclose the specific procurement budget in this announcement. Based on competitors' previous bidding experiences, the budget amount is expected to be considerable.

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3. CATL is negotiating to license LFP battery tech to GM and to build a joint factory.

Reports indicate that Chinese battery giant CATL is currently negotiating with General Motors to license battery technology using an LRS (license royalty service) agreement covering lithium iron phosphate batteries and will build a?joint factory in North America.

Details are still thin on the ground, but the battery plant would have an annual capacity at least the plant currently being built by Ford in collaboration with CATL. The plant will most likely be in either the US or Mexico.

The agreement would likely be similar to the one between Ford and CATL. Under it, CATL would be responsible for building battery production lines, building supply chains, commissioning production line equipment, and managing manufacturing processes, while the capital expenditure of the factory is fully borne by the car company. CATL would not actually own a share of the plant but instead collect patent licensing fees and service fees. The technology licensing?model means that CATL’s capital outlay will be less, but the profit margins will be higher.

Ford’s battery plant is scheduled to open in 2026, so if the GM deal does happen, the resultant factory will likely open around 2027.

Comment:

So far, Japanese and Korean battery producers control 80% of the North American EV battery market, dominated by LG, Samsung SDI, SK, and Panasonic.

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4. The Xiaomi car has achieved a sales milestone of 50,000 units.

Following the conference, Xiaomi cars posed on Weibo, similar to Twitter: 10,000 vehicles sold in 4 minutes, 20,000 units in 7 minutes, and 50,000 units in just 27 minutes. That night, 5000 founding version SU7 cars were already sold?out on the official website.

The official pricing for Xiaomi's first battery SUV - SU7 is as follows: the standard long-range smart driving version is priced at 215,900 RMB; the PRO version at 245,900 RMB; and the MAX version at 299,900 RMB.

In comparison to the MAX version, the SU7 standard comes with a more cost-effective BYD blade battery and only one Nvidia Orin chip. The advanced smart driving vehicle featured dual Nvidia Orin chips, 16 radar devices, and 11 cameras.

Comment:?

The market has numerous electric vehicles priced between 200,000-300,000 RMB, such as Tesla Model 3 and Model Y, Zeekr 007&001, and Luxeed S7. This trend undoubtedly reflects a shift in the market situation driven by reduced manufacturing costs for electric vehicles.

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5. China's BYD slows down plans for EV factories in Vietnam, the industrial park says.

Chinese electric vehicle maker BYD has slowed down its plans to build an EV factory in Vietnam. A manager of the industrial park where the plant would be built told the shareholders of a meeting on Thursday.

"Due to its strategy and the slowdown of the electric vehicle market, BYD slowed down (plans) to start construction," said Luong Thanh Tung, vice chairman of Gelex Group (GEX.HM), the company that runs the industrial park where BYD?would build the new factory.

Speaking at a shareholders conference in Hanoi, Tung said that after lengthy negotiations with BYD, Gelex had reserved 100 hectares (250 acres) of commercial land at the Phu Ha industrial park for an electric vehicle factory.

Andrew Lu, Former Chief Semiconductor Analyst for Barclays/CitiBank, stated that Micron's better-than-expected revenue this quarter was mainly due to a 30% surge in data storage NAND prices and a strong recovery in DRAM demand.

Comment:

Vietnam's government said in May that BYD had decided to build a factory to manufacture and assemble electric cars in the northern Vietnamese province of Phu Tho. The company already has a plant that produces tablets for Apple.

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