Chips remain contentious despite easing US-China tensions

This week’s On the Rise looks at the US-China trade war and the new rumors surrounding Binance. [Read from your browser]( On the Rise 🚀 Welcome to On the Rise! Delivered every Tuesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in emerging tech. If you’re not a subscriber, get access by [registering here](. --------------------------------------------------------------- IN FOCUS In today's newsletter, we look at: - The [potential changes]( in US policy on Chinese exports - The fraud allegations against Binance and other legal problems it’s facing - Changing [SaaS landscape]( in Indonesia Hello {NAME} After my school exams, I was all geared up for the National Defence Academy (NDA). Yep, for a hot minute during my college days, I had this big dream of becoming an army officer. A big chunk of the NDA entrance test focused on current events. That meant I had to flip through newspapers every day. (Maybe that's where my interest in journalism took root?) That's when I stumbled upon how then-US president Donald Trump started the trade war with China. He slapped sanctions left and right, hitting everything from aircraft parts to soybeans. When Joe Biden was elected US president, you might have expected things to be different. But surprisingly, Biden doubled down instead by signing an executive order targeting China's tech economy. The move, he claimed, is aimed at limiting China’s military's technological prowess. Through the executive order, the US has imposed sweeping restrictions on exporting advanced computer chips to China, sparking a high-stakes battle for computational supremacy. The US even pumped subsidies into its own chip production with the CHIPS and Science Act. But senior US officials have been trying to play nice with China over the past month, and that’s raised questions about possible changes in tech export restrictions. The US will reportedly focus on just specific high-end technologies instead of going for an all-out ban. My colleague Scott dove deep into the issue in this week's first Big Story, and guess what's causing all the buzz? The semiconductor industry is right in the thick of it. But hold on, China isn't taking this lying down. It’s working on a clever work-around called chiplets - nifty packaging for small semiconductors. And get this: Huawei, the Chinese company that’s been the focal point of US sanctions, is back in the game, filing chiplet patents like there's no tomorrow. In our second Big Story, Shadine maps out the key players in Indonesia's SaaS industry, examines investment trends, and provides data on funding rounds in the sector. And for the Token Issue, I discuss the rumor about US authorities hitting Binance with fraud charges. -- Lokesh  --------------------------------------------------------------- THE BIG STORIES 1️⃣ [US-China tensions may be cooling, but chips remain a hot issue]( High-profile visits to China by some top US diplomats might signal a shift in the trade war between the two countries. Instead of a much-feared decoupling, the Biden administration will narrow its sanctions to state-of-the-art computer chips, experts say. 2️⃣ [Charting the SaaS landscape in Indonesia (Updated)]( Indonesia’s SaaS industry had a tough time raising funds in 2022. Venture funding dropped by 58% and Indonesian startup investments fell 67.4% to $11.4 billion.  --------------------------------------------------------------- TOKEN ISSUE Fraud allegations hit Binance hard, crypto prices take a dive If you’ve been following the crypto industry’s relationship with the US government over the past year, then you probably know what’s coming. There are rumors flying that the US Department of Justice (DOJ) might finally hit Binance - including its CEO Changpeng Zhao - with criminal fraud charges. If this turns out to be true, then it will be the battle of the century. Forget Manchester vs. Manchester United: This is CZ vs. the US attorney general. The news immediately caused panic on crypto exchanges. Bitcoin prices went down by 2% while Binance’s BNB token fell by 4.8%. Bitcoin was actually on the rebound after that massive drop in 2022, but now it might stay chilling below US$30,000. But you know what? In a battle this size, there might not be any winners, and the US government knows this. There are legitimate concerns that an indictment could send shockwaves throughout the crypto industry, triggering a run on the exchange. When FTX collapsed in November 2022, the damage was in the billions. With Binance, it could be in the [trillions.]( This isn’t [FUD]( given that the industry is still on shaky ground following the crypto winter. It wouldn’t take much to set off a chain reaction of chaos. With that in mind, a journalist at [Semafor]( thinks the DOJ is considering other options, like slapping hefty fines or maybe some deferred or non-prosecution agreements. Anything to avoid another cryptocurrency implosion. It is likely that any lawsuit - or maybe even the threat of one - could bring CZ and Binance to the negotiating table. The company is already in enough legal trouble, particularly with the US Securities and Exchange Commission. The agency has sued Binance for 13 civil offenses, including charges that it was operating an unregistered securities exchange and not bothering to keep US customers off its platform. Binance is also facing a lawsuit from the Commodity Futures Trading Commission for allegedly trying to dodge US laws. And let's not forget about Binance’s compliance program and what a total belly flop it is. The company was supposed to verify customers' identities to prevent terrorist financing and money laundering. Instead, Binance has been accused of encouraging its employees to help customers find ways to avoid compliance. So yes, being in legal hot water and the prospect of jail time might compel Binance to negotiate with the US government. It certainly has happened before - the SEC used similar tactics with Coinbase. Working out a settlement that results in a compliant Binance would probably be preferable to the effort and cost involved in breaking up the company. -- Lokesh  --------------------------------------------------------------- NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the emerging tech scene [here](. 1️⃣ [Endowus grows revenue 2.5x in 2022, but losses rise to $20m]( The Singapore-based wealthtech firm reported a significant increase in revenue for the financial year ending December 31, 2022. Its revenue reached US$6.1 million, more than double the previous year's US$2.4 million. 2️⃣ [GrabRentals drives home $90m in revenue as earnings grow 73% in FYE 2022]( The private-hire car rental arm of Singapore-based Grab achieved a record revenue of US$89.8 million for the financial year 2022, marking a 17% increase from the year before. 3️⃣ [HashKey becomes first licensed Hong Kong exchange to serve retail users]( It has become the first licensed exchange to offer both retail and professional services in the market after obtaining Type 1 and Type 7 licenses from Hong Kong’s Securities and Futures Commission. 4️⃣ [TikTok poses serious threat to Shopee, Lazada in ASEAN: Morgan Stanley]( Since March 2021, TikTok has surpassed Shopee in terms of monthly active users across Southeast Asian markets, averaging 227 million MAUs in the region. In the first half of this year, Shopee's app downloads in ASEAN countries declined 3% year on year. Meanwhile, Lazada's app downloads remained flat and TikTok's increased 5%. 5️⃣ [Chinese users log $90b in transactions on Binance under domestic ban: report]( Chinese users reportedly traded around US$90 billion in assets on Binance in a single month, accounting for 20% of the exchange's global volume. Binance is also cooperating with Chinese law enforcement to monitor criminal activity among its 900,000 active users in the country.  --------------------------------------------------------------- FYI [Ion Mobility now builds e-bikes from scratch after aborted design strategy]( The Singapore-based firm, formerly known as Mobius, plans to launch its electric motorbikes in Q4 2023. It has adopted an OEM approach, unlike other electric motorcycle companies in the city-state. Ion, which counts TVS Motor Company as a strategic investor, has raised over US$25 million to date.  ---------------------------------------------------------------  That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preference center. See you soon! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2023 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894