Cut the Chip

Hey ZipLawyer! Here's how this week’s news impact law firms.

🇳🇱 Netherlands blocks chip
📱 Telegram drama continues
❤️ UK & EU back together?
🌳 EU’s Deforestation Regulation

What you need to know this week

💻 Nvidia’s Mixed Signals: Nvidia's quarterly revenue soared by 122% to $30bn, but it wasn’t enough to please investors, who saw a drop in growth from the previous quarter. Despite a 168% rise in net profit, shares dipped as markets closely monitor AI-driven performance.

🚗 BYD Speeds Ahead: Despite a price war in China, BYD's revenue grew by 16% and net profit by 24% in the first half of 2024. The electric vehicle maker saw a 21% increase in fully electric vehicle deliveries in the second quarter.

🇨🇦 Tariff Tensions: Canada slapped 100% tariffs on Chinese-made electric vehicles and a 25% duty on Chinese steel and aluminium, following the U.S. and EU's steps. China warned these measures would harm bilateral trade and cooperation.

🚀 Boeing's Setback: NASA decided to use SpaceX's Dragon to bring back two ISS astronauts instead of Boeing's Starliner, which faced technical issues. The astronauts, originally on an eight-day mission, will return after eight months in space.

🎥 Paramount's Sale: Paramount Global’s acquisition by Skydance Media is moving forward, set to complete in early 2025. A competing bid led by Edgar Bronfman was quickly withdrawn, clearing the path for Skydance.

Cut the Chip

What’s going on?

The Netherlands is likely to stop ASML from servicing its advanced semiconductor equipment in China, dealing a significant blow to Beijing’s efforts to build a cutting-edge chip industry. The government will likely not renew certain ASML licenses to service and provide spare parts in China when they expire at the end of this year.

In focus: For ASML, this is a double-edged sword. The move could jeopardize a crucial revenue stream—China accounts for nearly half of its sales—while also aligning the company with Western geopolitical goals. For China, it’s a serious setback. The inability to maintain or repair these machines could stall its semiconductor advancements, impacting tech giants like Huawei. The Dutch government, newly cautious under Prime Minister Dick Schoof, gains security assurances but risks straining economic ties with China.

Big picture: This decision highlights the tightening noose around China’s tech sector, with Western nations increasingly coordinated in curbing Beijing’s rise. The move could escalate global tensions, influencing trade relations and tech collaborations worldwide. As the U.S. pressures allies to take tougher stances on China, we may see a more fractured global tech landscape, with nations choosing sides between Western and Chinese technology ecosystems.

How does this impact Law Firms?