The inside story on the Asia tech trends that matter, from Nikkei Asia and the Financial Times
Hello, this is Kenji, presenting this edition of #techAsia from Tokyo after our short Golden Week holiday break.
Corporate earnings season is hitting its peak this week, as most companies in Japan close their financial years at the end of March, and the Tokyo Stock Exchange demands that listed enterprises disclose their results within 45 days. This means thousands of them will be announcing their earnings up to the deadline on Friday.
SoftBank Group surprised a lot of us -- including myself, who used to cover the company over a decade ago -- on Wednesday when it reported a full-year net profit of 5 trillion yen ($31.6 billion), quadrupling from a year earlier. The surge is mainly on paper, driven by gains from its tech-focused Vision Funds, which booked an annual investment profit of 6.99 trillion yen, 16 times higher than the year before. But this result reflects the higher valuations of tech companies in general, including ChatGPT developer OpenAI, on which SoftBank is betting heavily.
Investors are now waiting for memory chip maker Kioxia to release its annual results after the market closes on Friday. The latest analyst consensus is that the former Toshiba Memory will book 787 billion yen in operating profit for the year ended in March, jumping by more than 70%. The momentum is expected to accelerate during this financial year to potentially reach 4 trillion yen.
If so, that would surpass the country's most profitable manufacturer, Toyota Motor, which said last Friday that its operating profit for this financial year is anticipated to drop 20% to 3 trillion yen, citing renewed uncertainties over the crisis in the Middle East.
A change in the ranking of Japan's top money-making manufacturers would underscore how the country's industrial landscape is shifting away from the automotive sector as artificial intelligence takes center stage and demand for data centers continues unabated.
Kioxia's share price has jumped almost five times since the beginning of the year, and its market capitalization is now 27.57 trillion yen, the fourth largest in the Tokyo market and exceeding that of Tokyo Electron. The gap was closing with top-runner Toyota's 46.42 trillion yen and SoftBank Group's 34.33 trillion yen as of Wednesday.
Meanwhile, the market is also closely watching how the summit between U.S. President Donald Trump and his Chinese counterpart President Xi Jinping turns out. The two leaders are expected to discuss thorny issues including rare earths, tech rivalry, tariffs and Taiwan. At the time this newsletter was sent out on Thursday afternoon, Trump was in Beijing awaiting his state banquet with Xi.
While the equity market seems to be biased toward optimism when it comes to tech, anything could happen at any time, as we are witnessing in Iran.
While he meets with his Chinese counterpart Xi Jinping in Beijing, the war on Iran that President Donald Trump initiated with Israeli Prime Minister Benjamin Netanyahu continues -- and the impact is being felt increasingly heavily across regions and sectors. Nikkei Asia's Taipei-based tech correspondents Cheng Ting-Fang and Lauly Li report on the latest pain points emerging for the tech supply chain: shortages of helium tanks and industrial solvents.
The blockade of the Strait of Hormuz has not only stranded oil tankers but also disrupted the transport of highly specialized "ISO tanks" used to carry helium, an indispensable element in advanced chipmaking. These tanks are made by only a few companies, and many are now stuck in the Middle East. Helium production itself has already been disrupted in Qatar, which accounts for about 33% of global supplies, while Russia, which holds about a 9% share, has imposed export controls to stabilize domestic supply.
Many other key metals and petrochemical materials used for tech manufacturing have been affected as well.
"The very upstream petrochemicals are the foundation to all industries. Ordinary people may not feel the impact immediately, but over time the chain reaction will manifest across the supply chain and reach everyone's daily life," Henry Ho, chairman of Taiwan's Tung Ho Steel Enterprise, told Nikkei Asia. "And such an impact won't be solved overnight."
China's biggest state-backed semiconductor investment vehicle is in talks to lead the financing of DeepSeek's first fundraising that could value the AI group at about $45 billion, write the Financial Times' Zijing Wu, Cheng Leng and Eleanor Olcott.
The China Integrated Circuit Industry Investment Fund, typically referred to as the "Big Fund," is seeking to lead the investment into DeepSeek, according to four people with knowledge of the discussions.
Other investors still in talks for a stake include Chinese tech giant Tencent, although the final line-up has not yet been finalized.
DeepSeek shot to prominence in January 2025 following the release of R1, a powerful open-source large language model, which it said was trained on a fraction of the computing power of models developed by American rivals such as OpenAI.
The valuation of DeepSeek has increased significantly from $20 billion when it started the fundraising talks only weeks ago, as investors strive to bet on the lab's potential despite its lack of focus on commercialization.
Liang Wenfeng, the billionaire founder of the Hangzhou-based startup, could also invest personally in this round, two of the people said. He controls 89.5% of DeepSeek through personal holdings and affiliated groups, according to company filings.
