Chip clampdowns and Sony-Honda's upcoming EV

Hello, this is Kenji in Hong Kong. For the last couple of weeks, I have been commuting to the West Kowloon court to follow the first testimony by Jimmy Lai Chee-ying, a self-made media tycoon charged under the national security law with colluding with foreign forces and conspiring to publish seditious materials.

The long-running case, which reached its 100th day on Monday, is perhaps the most closely followed trial in the former British colony, which has gone through substantial socio-political change since the law was imposed by Beijing in June 2020.

Lai, who founded the now-shuttered pro-democracy news outlet Apple Daily, is accused of "masterminding" the mass anti-government protests in 2019 triggered by legislation allowing criminal suspects to be sent to mainland China for trial.

What gives this case -- and especially the ongoing testimony by Lai -- extra significance is the connection to U.S. President-elect Donald Trump. The period that the media mogul's trial concerns largely overlaps with Trump's first presidency, and testimony relating to him and his former associates and officials has popped up frequently. It was under his administration that Washington started imposing tariffs, sanctions and other punitive measures on China and Hong Kong, an approach continued under Joe Biden.

Trump, who returns to office next month, has publicly said he will get Lai out of jail "100%" and that doing so will be "easy." It's not clear how or even if he will be able to achieve this, but his promises to get tougher on China are already making an impact on governments and businesses around the world.

Finally, on a very personal note, I wish to express my deep thanks to our family's pet dog Sora, who passed away as I was writing this newsletter on Wednesday evening, after being with us for almost 17 years.

A final swing

Donald Trump has not yet returned to the White House, but the U.S. is already clamping down on China, unveiling tighter export restrictions to curb the expansion of the country's tech industry. Nikkei Asia's Pak Yiu in New York and Cheng Ting-Fang and Lauly Li in Taipei report that 140 companies -- including a broad range of Chinese suppliers of chip production equipment, electronic design automation software and specialty gases -- were added to the Entity List, the U.S. Commerce Department blacklist.

Chinese private equity firms that financially support the country's tech industry, such as Wise Road Capital and JAC Capital, were also placed on the blacklist.

According to Commerce Secretary Gina Raimondo, the latest move is "the culmination of the Biden-Harris administration's targeted approach, in concert with our allies and partners, to impair [China]'s ability to indigenize the production of advanced technologies that pose a risk to our national security."

The action, which follows similar controls rolled out in October 2022 and October 2023, is seen as the administration's most sweeping clampdown on China's tech ambitions. "It's a very long and detailed list covering almost all the major chip equipment makers," an executive from an American semiconductor production toolmaker said of the blacklisting. "If you are not on the list, it could mean your technologies are not qualified enough or you have good channels and have given in on something to the U.S. government."

Branching out

China's leading venture capital firm HongShan, which has been behind some of the most successful bets on the country's tech giants, including Meituan, PDD Holdings and ByteDance, is taking an increasingly adventurous investment approach, write the Financial Times' Eleanor Olcott and George Hammond.

HongShan raised nearly $9 billion across four funds in 2022, but the intervening two years have been brutal for China's startup landscape, with a wave of bankruptcies and down-rounds.

So far, the firm has only deployed between 10% and 20% of its two later-stage funds, both sized at $3.6 billion, leading some limited partners to grumble at its sluggish pace of investment.

It is scouring the global market for deals to plow its money into and has recently invested in the Kylie Jenner-backed vodka seltzer company Sprinter, as well as French women's fashion brand Destree, co-founded by Geraldine Guyot, the wife of LVMH founder's son Alexandre Arnault.

It also has plans to open a Tokyo office after it recently established a presence in London. The international push could pitch it in more direct competition with former partner Sequoia Capital, which it split from last year as geopolitical tensions between China and the U.S. worsened.

A matter of timing

The 50-50 joint venture between two of the leading Japanese corporate powerhouses -- Sony Group and Honda Motor -- plans to showcase its very first electric vehicle, the Afeela, at the CES annual consumer electronics show in Las Vegas next month.

But the debut Sony Honda Mobility's maiden model, two and a half years after the venture's inception, may not be coming at the most opportune time, according to Nikkei Asia's Sayumi Take.

SHM intends to assemble the cars at Honda's factory in the U.S. and kick off sales there in 2026. But President-elect Trump has vowed to cut subsidies for EVs, a move that some estimate could lead to about a 30% drop in electric car sales.

Takaki Nakanishi, a veteran Tokyo-based auto analyst, describes Afeela's entrance into the American EV market as coming at "the worst timing," not only due to the Trump presidency, but also the intense competition, led by Tesla.

But Izumi Kawanishi, SHM's president and chief operating officer, told Nikkei Asia: "All businesses have ups and downs. ... EVs will spread, and sooner or later, that's the way the world will go."

The final verdict will be down to American drivers.

Academic accident

As academic research becomes increasingly sensitive, Nikkei's Shoji Yano reports that some Japanese researchers have unwittingly co-authored papers with North Korean peers in a potential violation of United Nations sanctions.

A Nikkei examination of roughly 97 million documents on Scopus, a database for academic publications, found eight such papers involving nine individuals from seven institutions. The topics ranged from robot controls to how pigment in tomatoes interacts with ultraviolet rays. The North Korean co-authors were from leading institutions, such as Kim Il Sung University in Pyongyang.

Exceptions for scientific cooperation with North Koreans under U.N. Security Council resolutions are limited to medical exchanges or in cases specifically approved by a government. All of the researchers in Japan involved in these eight papers told Nikkei that they were not aware of the existence of North Korean co-authors.

Why Samsung is struggling to ride the AI wave

Welcome to the Tech Latest podcast. Hosted by our tech coverage veterans, Katey Creel and Akito Tanaka, every Tuesday we will deliver the hottest trends and news from the sector.

In this episode, Katey speaks with Seoul correspondent Kim Jaewon about clouds hanging over South Korea's Samsung, from a major executive reshuffle to legal headaches, AI competition and potential risks from the incoming Trump administration.