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GM proposing $2.8 billion investment in South Korea

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General Motors vehicles go through assembly after GM celebrated the official launch of the Chevrolet Volt hybrid electric vehicle at GM's Detroit-Hamtramck Assembly November 30, 2010 in Detroit, Michigan.

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General Motors vehicles go through assembly after GM celebrated the official launch of the Chevrolet Volt hybrid electric vehicle at GM’s Detroit-Hamtramck Assembly November 30, 2010 in Detroit, Michigan.

General Motors (GM) has proposed a $2.8 billion fresh investment in South Korea over the next 10 years as part of its plan to restructure its embattled Korean unit, according to a South Korean senior government official.

The official with direct knowledge of the matter added that the U.S. car maker had requested South Korea to inject funds into GM Korea, in which the country’s state bank also holds a stake.

The offer comes as the Detroit carmaker and the South Korean government discuss restructuring options at loss-making GM Korea, one of GM’s largest offshore operations.

However, the official added that a close look into GM’s proposal was necessary to determine whether the investment plan was sufficient to rescue the unit, which directly employs some
16,000 workers.

“We need to have a closer look through the audit,” the official said.

South Korea’s trade minister Paik Un-gyu had said on Wednesday that the government has asked for an audit into General Motors “opaque” management in the country in the wake of
the car maker’s decision to shut down a factory in a city southwest of Seoul.

“By opaque we mean the high rate of profits to raw material costs, interest payments regarding loans and unfair financial support made to GM’s headquarters,” Paik told lawmakers in parliament.

Paik added that taxpayers’ money would not be wasted in government efforts linked to the GM issue.

GM, which is based in Detroit, has said that its factory in Gunsan will be closed by May, and it is mulling the fate of its three remaining plants in South Korea.

– CNBC contributed to this report.

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Jeremy Grantham says market is in a bubble amid ‘investor euphoria’

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Millions of new investors piled into Chinese stock markets in 2020

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Qualcomm chip market share plunges in China after U.S. sanctions on Huawei

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Qualcomm’s Snapdragon 888 chip will be used in premium Android devices that could cost over $1000.

Qualcomm

Qualcomm’s market share of China’s smartphone chip market plunged in 2020 due to U.S. sanctions on Huawei, according to a new report.

As a result, the country’s domestic mobile players turned to alternatives such as Taiwan’s MediaTek, according to CINNO Research.

Last year, 307 million smartphone so-called system on chips (SOC) were shipped in China, down 20.8% year-on-year, the report said.

SOC is a type of semiconductor that contains many components required for a device to work on a single chip, such as a processor. They are a critical component for smartphones.

Qualcomm’s shipments in China shrank 48.1% year-on-year, CINNO Research said without releasing details on the number of Qualcomm chips shipped. The U.S. giant’s market share in China fell to 25.4% in 2020 versus 37.9% in 2019.

MediaTek No. 1

Taiwan’s MediaTek benefited from all that pent-up demand. The chip designer took advantage of Huawei and Qualcomm’s woes, and also got major Chinese smartphone makers to use its chips.

“As far as we know, (for) OPPO, Vivo and Xiaomi and Huawei, the MediaTek share has increased a lot,” CINNO Research told CNBC in a statement from its analysts.

Huawei is China’s largest smartphone maker by market share, followed by Vivo, Oppo and Xiaomi.

Many of these players make phones priced at the mid-range but with high specs. This is where MediaTek has performed well in gaining share.

The U.S. sanctions on Huawei have also forced other Chinese players to look for alternatives should they find themselves cut off from the likes of Qualcomm.

“This (is) not only because (of) the excellent performance of MediaTek’s mid-end platform, but also, it is undeniable that the U.S. has imposed a series of sanctions on Huawei & Hisilicon, forcing major manufacturers to seek more diversified, stable and reliable sources of supply,” CINNO Research said in a press release.

Xiaomi was recently added to a U.S. blacklist of alleged Chinese military companies, though its unclear if this will affect their ability to procure certain components.

5G market up for grabs

China is the world’s largest market for 5G smartphones. 5G refers to next-generation mobile internet, and chipmakers are battling it out for a slice of the pie.

“After the first year of 5G, let’s take a view of the changes in China’s smartphone SOC market. It shows that the market pattern has changed from a single dominant Qualcomm company in the 4G era, to a three-party pattern of Hisilicon, Qualcomm and MediaTek in 2020,” CINNO Research said.

Last year, Qualcomm launched a new series of 5G smartphones chips known as the 6 series and 4 series, which could eat into MediaTek’s market share in China.

“Qualcomm launching 6 and 4 series 5G chipset will help to take share away from MediaTek in the fast growing 5G smartphone segment in China,” said Neil Shah, a partner at Counterpoint Research.

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