HARDWARE

Semi-Short Notice

We’ve talked about the semiconductor shortage here and there, but there’s no better microcosm for what’s going on than the farms of Taiwan, as detailed by the NYT. 

Close your eyes and let us transport you to a rice farm in Hsinchu. A man with a weathered blue forklift is examining his browning rice fields amid Taiwan’s worst drought in 50+ years. 

• His farm’s neighbors are computer chip factories, including TSMC’s, that manufacture the brains of many of our smartphones, laptops, and vehicles. 

Further complicating things: The Taiwanese government recently decided to cut off irrigation to one-third of the country’s farmland to save water for chipmaking. And, like many major companies, the farmers aren’t sure how all of this will affect business in the coming years. 

Across the (mother)board

Taiwan is the world’s chipmaking epicenter, but zoom out and you’ll see the shortage’s ripple effects far and wide. 

Even Apple isn’t immune to the time-tested laws of supply and demand. The company had to delay, and even pause, production of some MacBooks due to the chip shortage, reports Nikkei Asia. The main snag: Lack of chips to mount on the laptops’ printed circuit boards. 

Also feeling the hit: Home internet. The tech and infrastructure that allow us to WFH are in higher demand than ever. 

• Broadband providers have been quoted ~60-week wait times when ordering internet routers—more than doubling previous waits, per Bloomberg. That bars carriers from adding new customers, translating directly to lost sales. 

Changing the chain

Who’s coming out on top: Toyota. After a 2011 earthquake in Japan that left the company’s main plant paralyzed for months, the automaker took an entirely new approach to supply chain management: creating a database not only of its suppliers, but those suppliers’ suppliers—and then monitoring the network for early signs of shortages. 

• Toyota’s database flagged the need to stockpile chips early on, which helped it mostly steer clear of the current manufacturing slowdown. 

Looking ahead: The semi shortage illustrates just how important the chip has become to all facets of life. Increasing fears that China may attempt to regain control of Taiwan make the industry’s future even less certain. —HF

VOICE

What Are You Up to, Microsoft?

Cortana walked so Nuance could run. 

Today, Microsoft announced that it will acquire Nuance Communications for roughly $19.7 billion, which represents a 23% premium over the company’s Friday closing price. 

Meet Nuance: The Burlington, MA, company specializes in speech recognition. Xerox spin-off ScanSoft acquired Nuance in 2005. After merging, the entities agreed to use the Nuance name. We agree with that call.  

• Also notable: Nuance holds a number of conversational AI-related patents, which it has gone to court to protect. 

Microsoft is reportedly also pursuing a $10+ billion acquisition of Discord and recently completed a $7.5 billion takeover of gaming studio Zenimax Media. 

The Nuance deal, Microsoft’s second-largest acquisition ever, doesn’t necessarily mean the company is plotting a return to the voice assistant market. Microsoft instead seems intent on bringing more conversational AI functionality to its enterprise and healthcare offerings. 

• In a statement confirming the acquisition, Satya Nadella said: “AI is technology’s most important priority, and healthcare is its most urgent application.” —RD

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AV

Houston, We Have Pizza Delivery Robots

As far as pizza chains are concerned, Domino’s is the first mover. 

The pepperoni giant has a new courier in Houston, Texas: R2, Nuro’s driverless last-mile delivery bot. Starting this week, select customers who place a prepaid order at the Domino’s store in the Woodland Heights neighborhood can opt in to R2 delivery. 

• Customers can track the bot via GPS and receive text updates about its journey through the congested streets of Texas’s largest city. 
• Once R2 arrives, customers enter a PIN on its touchscreen and retrieve their pizza. 

We were waiting for this

Every two months or so, we ping Nuro to ask about updates on the R2. The Chipotle-backed startup has US regulatory approval to deploy up to 5,000 of the vehicles, which have a max speed of 25 mph and are designed for neighborhood driving. 

Domino’s has flirted with delivery bots before, but purpose-built, regulator-approved tech may be a better bet. But remember, this delivery service is starting small. Don’t expect commercial robotic delivery to scale for an entire country (or city) overnight. —RD

BITS & BYTES

Stat: China is fining Alibaba a record $2.8 billion, ~4% of the company’s 2019 sales, for monopolistic practices. Alibaba’s shares jumped up 8% on the news, so apparently investors were expecting worse. 

Quote: "Our goal is to be the top maritime startup hub in the world, the Silicon Valley for maritime technology."—Chee Hong Tat, Singapore’s senior minister of state for transport, quoted in the WSJ.

Read: Businessweek looks at how an influx of tech workers could impact Austin’s culture, housing market, and more. TL;DR from Ryan, who lives in Texas’s capital: The cost of living and congestion are climbing. 

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WHAT ELSE IS BREWING

• The Commerce Department placed seven Chinese supercomputing firms on the Entity List, which could bar US companies from doing business with them. 
• The White House is keeping close tabs on the digital yuan, Bloomberg reports. 
• The French military is testing Boston Dynamics’s Spot in combat scenario settings. 
• Google’s “Project Bernanke” was a secret program that used past bidding data to boost its win rate in ad auctions, according to unredacted court docs seen by the WSJ.

THREE THINGS WE'RE WATCHING

Today: The White House holds a virtual summit on addressing the global chip shortage. Execs from Alphabet, AT&T, Intel, Ford, GM, and over a dozen more companies are expected to attend. 

Wednesday: Coinbase direct listing. Wednesday also marks 100 days from the Tokyo Olympics. 

Thursday: TSMC earnings. 

TECH THROWBACK

In 2011, we saw leading tech companies begin a trend: fundraising at $1 billion valuation. (Think: Airbnb, Dropbox, Spotify, Square.) Startups had been pushing IPOs down the line for years, choosing instead to supplement growth with private investors’ $$$. 

Fast-forward nine or ten years, and you’re looking at the year of the SPAC.

ICYMI

Catch up on the top Emerging Tech Brew stories from the past few editions: 

• Polestar’s latest “moonshot goal” for EVs 
• Alternatives to a fiercely debated AI technique 
• A post-password world: Q&A with Okta