※[Global Morning Briefing] summarizes global news delivered by Seoul Economic Daily.
"Cutting-Edge First in Taiwan": The Hidden Condition of TSMC's US Investment
TSMC has finalized its Arizona investment at 265 billion dollars, moving to strengthen its dominance in the foundry market. According to reports by Bloomberg and CNBC on the 19th, TSMC Chief Financial Officer Wendell Huang said in an interview with local media that AI-driven semiconductor demand is structurally robust, stressing that the company has no intention of ceding the market to competitors.
The expanded investment adds 100 billion dollars to the previous plan, marking the largest foreign direct investment in US history. Once the expansion is complete, the Arizona complex will house 10 wafer fabrication plants, two advanced packaging facilities, and one research and development center. This additional investment will build four new wafer fabs. The first plant is already in operation, and the second is set to begin equipment installation soon.
Huang acknowledged that building semiconductor plants in the US costs four to five times more than in Taiwan, which could lower profitability in the early stages, but explained that it would benefit the overall US semiconductor ecosystem in the long term. North America accounted for 78% of TSMC's revenue in the second quarter of this year, far ahead of other regions such as Asia, China, and Japan, a point cited as a backdrop for the expanded US investment. The move is also interpreted as being influenced by sentiment in US political circles that views Taiwan as a security risk, Intel's expanded investment, and Taiwanese regulatory changes allowing dollar dividends to foreign investors starting next year.
Process migration is also gaining pace. The 4-nanometer process is in operation in the US, while the company-wide 2-nanometer process recorded its first revenue in the second quarter of this year and is expected to establish itself as a new growth pillar from the third quarter. Current revenue shares stand at 33% for 5-nanometer, 30% for 3-nanometer, and about 3% for 2-nanometer.
Investment in Taiwan is proceeding in parallel. According to Taiwanese media, TSMC is reviewing new plant sites at more than 10 locations, including Kaohsiung, Tainan, Chiayi, and Taoyuan, and Huang reaffirmed that next-generation advanced chips will be introduced in Taiwan first.
Not on the Balance Sheet: The Warning of Big Tech's 8-Fold Surge in "Shadow Debt"
With major US technology stocks plunging on concerns over excessive AI investment, this week's Big Tech earnings announcements are expected to be a watershed for a market rebound. According to Bloomberg on the 19th, the Philadelphia Semiconductor Index fell 10% last week on the US stock market, recording its largest weekly drop in one year and three months, since April 2025. The index consists of 30 major semiconductor companies including Nvidia, AMD, and Intel.
Behind the decline in tech stocks lies doubt over massive capital expenditures. As the five major hyperscalers—Alphabet, Microsoft, Amazon, Meta, and Oracle—invest 770 billion dollars in AI this year, concerns are growing over whether such astronomical investments will translate into actual profits.
According to the Nihon Keizai Shimbun, the so-called shadow debt of these five companies, which does not appear on their balance sheets, stood at 1.65 trillion dollars, an eight-fold surge in four years. Shadow debt refers to debt raised through private equity funds or special purpose vehicles to finance data center construction, and this figure exceeds the total balance-sheet debt of 1.35 trillion dollars. Meta's shadow debt, in particular, was tallied at about 420 billion dollars, 2.8 times its on-the-books debt.
Against this backdrop, the Big Tech earnings announcements, starting with Alphabet and Tesla on the 22nd and continuing through the end of the month, have emerged as the market's biggest focus. Alphabet's capital expenditure this year is expected to reach 187 billion dollars, more than double last year's, and news of a delay in the release of its flagship model Gemini 3.5 Pro is heightening investor anxiety. Microsoft and Meta will report on the 29th, followed by Apple and Amazon on the 30th.
Fear of War in the Middle East: Oil Breaks the "90-Dollar Wall" for First Time Since June
With US military deaths expected to reach four just two weeks after the military clash between the US and Iran reignited, fears of all-out war pushed international oil prices above 90 dollars per barrel for the first time since June. On the 19th, US Central Command announced that one US soldier was killed and one wounded in Iraq. Central Command explained that the accident occurred while disposing of unexploded ordnance from an Iranian one-way attack drone that had been shot down the previous day, adding that the wounded soldier was being treated for minor injuries.
Central Command also said it had discovered unidentified remains in Jordan, which was attacked by Iran on the 17th, and was conducting forensic analysis. Two US soldiers were killed and one went missing in that attack, so if the discovered remains are confirmed to be the missing soldier, the death toll would rise to four, bringing the cumulative death toll since the US began its war against Iran to 18.
Iran's Islamic Revolutionary Guard Corps claimed on the 20th that two oil tankers exploded and suspended operations while passing through dangerous waters south of the Strait of Hormuz at the incitement of the US military. The Washington Post reported that the US Department of Defense is increasing the number of military aircraft deployed in the region, and the New York Times reported that F-16 and F-35 fighter jets had moved to the Middle East from Germany and the UK, respectively.
As Yemen's pro-Iran Houthi rebels declared a naval blockade of Saudi Arabia, Brent crude futures for September delivery recorded 91.42 dollars per barrel, up 3.18% from the previous trading day. This is the highest level since June 11, when the military conflict escalated.
Meanwhile, New York Mayor Zohran Mamdani, in an interview with the New York Times, defined Israeli Prime Minister Benjamin Netanyahu as a war criminal indicted by the International Criminal Court, and said he was reviewing legal measures to arrest him should he visit New York to attend the UN General Assembly in September, sparking controversy. However, observers say the likelihood of an actual arrest is low, given that President Donald Trump and the Republican Party have defended Netanyahu.
One Thirty-Second of Anthropic's Valuation: "Cheapest AI Bet" Moonshot Rises
Chinese AI startup Moonshot is preparing for a Hong Kong stock market listing, buoyed by the success of its AI model Kimi K3. According to Bloomberg on the 19th, a source said Moonshot recently formally distributed a resolution to shareholders approving a Hong Kong listing, and Bloomberg interpreted the initiation of such a notification process as typically meaning a listing is possible within six months.
Moonshot has been considering a Hong Kong listing since early this year and has reportedly continued discussions with China International Capital Corporation and Goldman Sachs as listing underwriters. It is understood that the company judged this to be the right time to list as its annualized revenue grew from 200 million dollars last April to 300 million dollars in June this year.
According to Bloomberg, Moonshot is expected to be valued at more than 30 billion dollars in its ongoing funding round. As the valuation of rival Anthropic reaches 965 billion dollars, 32 times that of Moonshot, some assess it as a relatively cheap investment opportunity. Moonshot self-assessed that its new model Kimi K3, unveiled on the 17th, outperforms all rival models in overall performance except for Anthropic's Claude Fable 5 and OpenAI's GPT-5.6. With 2.8 trillion parameters, it was evaluated as an unusual scale for an open-weight model, and after demand surged for 48 hours following its release, Moonshot announced via social media that it was temporarily suspending new subscriptions, saying it would prioritize allocating computing resources to existing members.
On the same day, Alibaba also joined the competition by unveiling a preview version of its latest model, Qwen 3.8 Max. Regarding the model, which has 2.4 trillion parameters, Alibaba touted it as one of the most powerful models available today, claiming it ranked second in performance behind the current top model, Anthropic's Claude Fable 5.
