“Deglobalization” has entered the narrative zeitgeist. But what’s happening on the ground? This weekly series seeks to answer that question with a round-up of deglobalization developments from the week that’s done.
1. Changes are afoot in Apple’s supply chain. While China remains a major production hub for the iPhone maker, six of its top 10 suppliers now have factories in Vietnam or India, according to a Bloomberg analysis. Over the past decade, Vietnam has seen a fourfold increase in companies assembling Apple products, and India now manufactures about 7% of all iPhones.
2. But there are wrinkles ahead in the campaign to shift more electronics manufacturing to South and Southeast Asia. To whit: Vietnam faces an engineer shortage. The country only has 6,000 trained hardware engineers for the chip sector against a demand of 20,000 in five years and 50,000 in a decade, according to industry estimates reported by Reuters.
3. Nvidia and AMD face new US export restrictions of advanced chips to some countries in the Middle East, the two semiconductor makers said in regulatory filings. According to Nvidia, the new export licensing requirements affect its A100 and H100 GPUs. The US government had last year told Nvidia that the new rule is meant to address risk of products being “used in, or diverted to, a ‘military end use’ or ‘military end user’ in China.”
4. Global logistics groups are expanding their Asia footprint as they gear up for their customers’ diversification of supply chains beyond China. German container carrier Hapag-Lloyd in April acquired a 40% stake in Indian port operator JM Baxi, and had been eyeing an acquisition of South Korean flagship carrier HMM before being excluded from shortlisted bidders.
5. Great Wall Motors, China’s largest SUV maker, is benefiting from foreign automakers’ exit from Russia. The company’s Russian subsidiary reported an operating profit of 1.36 billion yuan (189 million USD), larger than the operating profit of 170 million USD for the entire company. Sales in Russia appear to be surging: revenue for the subsidiary in the first half of the year totaled 6.76 billion yuan, versus 7.92 billion yuan for all of 2022.
6. The FT’s Alan Beatie explains in a column this week why the yuan won’t dethrone the dollar: there’s little trust in the issuer’s openness and credibility—a fundamental ingredient for confidence in a standard global currency.
(Photo by Pexabay/Pexels)
