A Shocking Defeat to Singapore — Left with No Results
Voices Within: ‘Overconfidence Was the Problem’
The Limits of Relying on Advanced Technology Packaging Are Now Plain to See

For South Korea’s leading shipbuilders, what was widely regarded as a breakthrough opportunity to enter the lucrative U.S. defense maintenance market has ended in disappointment. HD Hyundai Heavy Industries and Hanwha Ocean, two giants of the Korean shipbuilding industry, have both failed in their bids for the U.S. Navy’s first Maintenance, Repair, and Overhaul (MRO) contract. Despite their enormous investments, cutting-edge technology, and sophisticated operational systems, both companies were unable to meet the strict procurement standards set by the U.S. military, which prioritizes price competitiveness and delivery performance over technical excellence.

This defeat was more than just a missed contract; it was a harsh reality check that exposed the structural limitations embedded in Korea’s overseas strategies for defense contracting. While both companies had placed substantial hope on cracking the U.S. market, the setback extended beyond America. Hanwha Ocean, simultaneously pursuing a deal with the Royal Thai Navy for its second frigate project, has also faced continued delays and frustrations. Despite emphasizing a well-worn localization strategy coupled with promises of technology transfer, the Thai contract remains unsigned, compounding doubts over whether Korea’s established approaches are still viable in today’s highly competitive global defense landscape.

Falling Short in a USD 7 Billion Market

The U.S. Navy’s MRO market, valued at between USD 6-7.4 billion annually, was seen as a golden gateway for Korean shipbuilders looking to transition from commercial success into the defense maintenance sector. The recent bid, administered by the U.S. Military Sealift Command, was for the maintenance of a logistics support ship assigned to the 7th Fleet. Industry expectations were high, with Korean contenders positioned as serious candidates thanks to their reputation as world-class builders and their recent strategic investments to penetrate the U.S. defense market.

However, the final results were disheartening. A Singaporean company emerged victorious, leaving both HD Hyundai and Hanwha Ocean empty-handed. This outcome was particularly striking given that both companies had been highlighted as key potential partners in the U.S. government’s broader efforts to revitalize domestic shipbuilding capabilities. Over the past several years, they had poured substantial resources into establishing robust U.S.-based supply chains, building maintenance infrastructure, and creating dedicated teams aimed at satisfying the stringent requirements of the U.S. military procurement system.

Yet, the outcome revealed a glaring mismatch between their preparation and the procurement realities of the U.S. Navy. Unlike shipbuilding contracts, which often reward technical sophistication and engineering excellence, MRO contracts are governed by a far more rigid set of priorities, where price competitiveness, strict delivery timelines, and operational efficiency eclipse technological prowess. The bidding process was conducted under an open competition framework, meaning that any eligible company could compete without restrictions, and that the contract would ultimately go to the lowest responsible bidder.

One industry insider succinctly summarized the situation, explaining that the bid imposed no conditions or entry barriers. As a result, the deciding factor was overwhelmingly price, rendering technical advantages irrelevant. The imbalance became so evident during the bidding process that Hanwha Ocean, recognizing that the profit margins were far lower than anticipated, chose to withdraw midway rather than continue investing resources into what had become an unviable prospect.

Adding to the weight of this failure is the fact that this contract was not merely a single opportunity but a crucial entry point into a much larger pipeline of future projects. According to the U.S. Government Accountability Office, the U.S. Navy allocates billions annually toward the maintenance and repair of its fleets, and securing this initial contract would have likely positioned the winner for subsequent multi-year, multi-billion-dollar projects. Both HD Hyundai and Hanwha Ocean had structured their U.S. expansion plans around this vision, ramping up investments and forging relationships within the U.S. defense ecosystem. Despite backing from the Korean government, which championed this effort as part of its “K-Shipbuilding Global Expansion” initiative, both firms now find themselves back at square one.

Misalignment of Strategy and Market Reality

The consequences of this failure extend far beyond a lost contract. It has exposed a profound misalignment between the assumptions driving Korean shipbuilders’ global strategies and the operational realities of international defense markets, particularly in the United States. For decades, Korea’s shipbuilding industry has relied on its undisputed technological edge, engineering precision, and manufacturing excellence to dominate global markets. But the U.S. defense maintenance market operates under fundamentally different dynamics.

In this space, procurement decisions prioritize the most economically efficient, timely, and operationally reliable offers, rather than the most technologically advanced ones. The U.S. Navy, along with most arms of the Department of Defense, evaluates bids based primarily on price, proven delivery performance, operational efficiency, and an applicant’s prior track record within the U.S. procurement framework. Technical sophistication, while valuable, plays only a secondary role in the evaluation process.

This was not merely anecdotal but officially codified. The Government Accountability Office made it explicitly clear in its 2024 report that price competitiveness and past performance are the core determinants in awarding MRO contracts. Korean companies entered the bid under the assumption that their technological superiority and innovative maintenance systems would compensate for their lack of localized operational history, but this assumption proved fatally flawed.

HD Hyundai’s position was particularly precarious, as it entered the bidding process with no prior pilot projects or trial contracts within the U.S. maintenance ecosystem. The absence of verified performance data proved to be a critical weakness. Meanwhile, Hanwha Ocean had managed to secure smaller maintenance deals in the past, including contracts for the USNS Wally Schirra and the USNS Yukon. These allowed it to demonstrate advanced capabilities, such as detecting structural defects early through the use of high-pressure cleaning robots and reverse engineering technologies. However, these achievements were not sufficient to overcome the overwhelming weight placed on price and delivery guarantees.

The harsh truth is that what Korean companies brought to the table — advanced technologies, sophisticated maintenance systems, and a long-term vision — did not align with what the U.S. Navy’s procurement officers were primarily seeking. Their failure highlights a strategic blind spot: the assumption that technical superiority alone could compensate for the lack of a local operational track record and the inability to meet aggressive pricing and delivery expectations.

This is not just a tactical error but a systemic problem that suggests a larger failure to adapt to the evolving nature of global defense procurement. As geopolitical uncertainties rise, defense buyers are increasingly focused on price efficiency, supply chain resilience, and the assurance of local operational support. Korea’s traditional model, heavily reliant on its manufacturing excellence, appears increasingly ill-suited to this new reality.

The Urgent Need for a Strategic Pivot

Despite the setback in the United States, Hanwha Ocean remains committed to expanding its footprint in the global defense sector. Its current focus has shifted toward Southeast Asia, where it is actively competing for the Royal Thai Navy’s second frigate project. The company has doubled down on a localization and technology transfer strategy, offering a comprehensive package that includes a lifecycle maintenance roadmap, a detailed technology transfer plan, and the establishment of local maintenance facilities in Thailand.

This strategy is not new. It is modeled on the approach that proved successful when Hanwha exported its first frigate to the Thai Navy in 2020. At the time, the deal was celebrated as a landmark achievement, reinforcing Korea’s position as an emerging defense exporter in the region. However, the follow-up has proven significantly more complicated. Despite having been viewed as a frontrunner in the early stages of negotiations, Hanwha has yet to secure the contract. The Thai Navy continues to encourage competitive bidding from multiple countries, extending the negotiation process far beyond initial expectations.

Korea’s emphasis on technical superiority and operational stability, while undeniably strong, has yet again failed to deliver a decisive advantage in terms of pricing and delivery commitments, the very same factors that undermined its bid in the United States. The longer the negotiations drag on, the more pressure mounts on Hanwha, not only to secure the contract but also to prove that its approach to international defense sales remains effective.

Experts within Korea are increasingly sounding the alarm. The Korea Institute for Industrial Economics and Trade, in its recent report titled “Comprehensive Competitiveness in the Shipbuilding Value Chain and New Korean Maritime Strategy Directions,” has made it clear that the Korean shipbuilding industry must undergo a fundamental transformation. The report warns that the longstanding reliance on technology-first, vision-driven strategies is no longer adequate for navigating the complexities of today’s defense procurement landscape.

The institute stresses that the future success of Korea’s shipbuilders depends on their ability to align their strategies with the specific procurement standards, operational practices, and evaluation criteria of each target country. It is no longer sufficient to lead with technological excellence alone. What is now required is a far more pragmatic approach, one that balances Korea’s technological strengths with competitive pricing, robust local partnerships, demonstrable delivery reliability, and an operational presence that can meet the expectations of defense customers worldwide.

This latest string of failures serves as a sobering reminder that in the world of international defense contracting, even the most sophisticated technology cannot substitute for the fundamentals of trust-building, cost competitiveness, and operational readiness. Korea’s shipbuilders are now at a critical crossroads, facing an urgent need to evolve their strategies if they hope to secure a meaningful role in the next generation of global defense supply chains.

Plaintiffs Fail to Provide Specific Evidence of Damages
"Unauthorized Data Collection and Training Destroy the Creative Market"
Legal Interpretation of Fair Use Still Pending

A U.S. court has ruled in favor of Meta in a copyright infringement lawsuit over artificial intelligence (AI). The court stated that the plaintiffs failed to provide specific evidence of damages, but clarified that the ruling does not mean Meta’s actions were deemed legal. Given that there are separate precedents stating that data collection for AI training does not qualify as fair use, this case is expected to significantly influence the outcomes of similar lawsuits in the future.

Outcome Hinged on ‘Litigation Strategy Failure,’ Not Legality

On June 26 (local time), Reuters reported that the previous day, the U.S. District Court in San Francisco, California (Judge Vince Chhabria presiding) dismissed the AI copyright infringement lawsuit filed against Meta Platforms and ruled in favor of the defendant. The court stated, “The plaintiffs failed to demonstrate that Meta’s actions encroached on the market for their works” and added, “The plaintiffs pursued the wrong legal approach and did not provide sufficient supporting records.”

The lawsuit, filed in 2023, involved a group of American authors who claimed that Meta’s AI language model “LLaMA” was trained on their books without authorization. The plaintiffs argued that their copyrighted works had been used for LLaMA’s training after being illegally shared online. They also contended that the AI-generated content included sentences similar to their original works or imitated their writing styles, thereby infringing on their economic rights as creators. Given that the AI was used for commercial purposes, they asserted that fair use should not apply.

However, the court found the plaintiffs’ arguments legally insufficient, citing a lack of specific evidence demonstrating actual harm and the mechanisms by which it occurred. The ruling explicitly stated, “This decision does not mean that Meta’s AI training methods are lawful. It merely highlights that the plaintiffs failed to meet their burden of proof.” Legal experts widely view this verdict not as an exemption for AI companies from copyright liability but as a case where the plaintiffs lost due to a flawed litigation strategy and insufficient evidence.

Creative Industry Voices Growing Criticism: “AI Undermines Copyright Revenues”

While Meta has gained temporary relief with this ruling, its legal challenges are far from over. The company remains entangled in multiple AI copyright infringement lawsuits across the United States, and this recent case was merely one of the more high-profile examples. Notably, the plaintiffs in this case have already stated their intent to amend and refile their complaint following the loss. This raises the strong possibility that the same legal issues will surface again in future proceedings.

In response, Meta continues to lean heavily on the “fair use” argument. This principle, enshrined in U.S. copyright law, allows for the use of copyrighted works without permission under certain public-interest conditions. Meta has consistently stated, “We’ve developed innovative open-source AI models for individuals and businesses,” emphasizing that fair use of source material is critical to that process. The company also maintains that the AI-generated text outputs are not direct copies of original works but rather “statistically generated language results,” which it argues should not constitute copyright infringement.

Amid these developments, creators and authors are increasingly calling for systemic reforms beyond mere damage claims. Many are advocating for a formalized “prior consent system” for AI training data and greater “transparency in data sourcing.” They argue that voluntary self-regulation by corporations is insufficient to protect intellectual property rights. Legal experts and advocacy groups are pushing for regulatory updates or even revisions to existing copyright laws at the government level. These debates are expected to impact not only Meta but the broader AI industry, with this Meta-author lawsuit shaping up to become a key milestone in the ongoing legal discourse.

AI Training Not Considered Fair Use, Says Prior Court Ruling

The legal interpretation of whether using copyrighted works for AI model training falls under fair use has already entered a full-fledged judicial review stage in the United States, independent of the Meta case. In February, the U.S. District Court in Delaware ruled that ROSS Intelligence, a former competitor of news agency Thomson Reuters, violated U.S. copyright law by copying existing content to build its AI-based legal platform.

Presiding Judge Stephanos Bibas pointed out that ROSS’s data usage was commercial and non-transformative, stating that it appeared aimed at directly competing with Reuters. The court rejected ROSS’s fair use defense and highlighted the potential market impact of using copyrighted works for AI training. In the ruling, the judge noted, “ROSS’s active, unauthorized use and transformation of the copyrighted material could harm Reuters’ potential AI training data market.”

This ruling is significantly influencing how AI companies worldwide approach the use of copyrighted materials. Until now, generative AI models have typically crawled and used tens of millions of documents, images, and audio files for training, operating in a legal gray area that was often treated as de facto lawful. However, with this court-imposed limitation, the legality of copyright in all AI training datasets is now expected to face increased scrutiny and legal debate going forward.

China's Exports to Europe Rise 8% in May
EU Shows Mixed Stance Between Pro-US and Neutral Policies
Europe's Value Grows Amid Economic and Diplomatic Multipolarization

Amid escalating tensions with the United States, China is shifting the focus of its export strategy toward Europe. While China’s exports to the US plummeted last month, exports to Europe and Southeast Asia showed an upward trend. In particular, high-tech exports to European Union (EU) countries surged sharply, signaling the start of a supply chain realignment. China has taken strategic conciliatory measures, such as fast-tracking rare earth export permits for European companies, but internal EU resistance toward China and Europe’s security dependence on the US remain key variables.

China’s Export-Led Growth Strategy Finds a Detour in the EU

According to the General Administration of Customs of China on the 27th, China’s total exports in May reached USD 316.1 billion, up 4.8% from the same month last year. Imports during the same period fell 3.4% to USD 212.88 billion, resulting in a trade surplus of USD 103.22 billion. By region, exports to the US dropped 21%, while exports to the ten ASEAN countries and the EU rose 21% and 8%, respectively. Although exports to the US plummeted, growth in other regions offset the decline.

Narrowing the focus to the high-tech sector, the presence of these alternative markets becomes even more evident. A massive volume of Chinese high-tech products has flowed into the 27 EU member states, with some countries recording unprecedented import levels. Last month, China’s high-tech exports to Estonia surged 79.4% year-over-year, with increases of 70.5% in Cyprus, 46.7% in Bulgaria, and 42% in Hungary. In larger EU markets, China’s high-tech exports to France rose by 24.2%, to Germany by 21.72%, and to Sweden by 20.4% compared to the previous year.

This trend shows that China has not abandoned its export-led growth strategy. With efforts to boost domestic consumption and strengthen the faltering circular economy, China is turning to Europe as an alternative to maintain its position within the global supply chain. In the face of a blocked trade front with the US, China is reinforcing ties with European countries that maintain strategic neutrality or prioritize economic interests, thereby advancing its strategy to decouple from the US. Signs of deeper integration with Europe in key sectors such as rare earths, electric vehicles, and renewable energy are also emerging.

In fact, China appears to be easing its controls on strategic materials by expediting rare earth export permits for European companies. Rare earths are essential materials for Europe’s critical industries, including semiconductors, electric vehicles, and defense. By simply adjusting the pace of export approvals, China can exert tangible influence over these sectors. This move goes beyond trade, serving as part of a diplomatic strategy aimed at pulling Europe away from US-centered supply chain restructuring. China is effectively sending a message of reciprocity, signaling that easing rare earth restrictions comes with the expectation that Europe will reduce regulatory pressure.

China has also delivered more direct diplomatic messages. On the 26th, Chinese Foreign Minister Wang Yi, speaking at the Polish Embassy in Beijing during a meeting with EU diplomatic envoys, said, “China and the EU have the responsibility and ability to provide much-needed stability and predictability to a world full of turmoil.” He added, “Both sides should strengthen mutual trust, properly manage differences, share strengths, and elevate the comprehensive strategic partnership to a new level.”

China’s Outreach Seen as an Opportunistic Play on EU Divisions

While China is trying to strengthen ties with Europe by positioning it as a new diplomatic and trade partner, structural constraints make it difficult for the EU to readily accept these overtures. First, the EU is not a single nation but a union of 27 member states, each with vastly different foreign policy priorities and interests. Major economies like Germany, France, and Italy pursue a certain level of economic pragmatism in trade with China. However, many Eastern and Northern European countries remain wary of Beijing, citing security risks and human rights concerns. This fundamental divide makes it difficult for the EU to craft a unified China policy.

More importantly, Europe has steadily tightened trade restrictions on China in recent years. In April, the European Commission imposed countervailing duties of up to 66.7% on Chinese-made mobile access equipment (MAE), explicitly framing it as a response to market distortion. Back in January, the EU had already recommended a 15-month risk assessment period for outbound investments in strategic technology sectors like semiconductors, artificial intelligence, and quantum technologies. These moves are widely seen as preemptive controls to keep foreign capital, particularly from China, from gaining excessive access to critical European tech sectors, all under the banner of "technology security."

Geopolitical factors also loom large. Since Russia’s invasion of Ukraine, Europe has focused on strengthening security cooperation with the United States, including NATO expansion and maintaining the US military presence. Given that European countries have limited means to deter Russia independently, the diplomatic consensus is that Europe cannot fundamentally afford to weaken US influence. However, ongoing US pressure over defense cost-sharing and limited carve-outs from the Inflation Reduction Act (IRA) continues to fuel underlying tensions between the two sides.

Europe Seeks to Recalibrate Relations with Both the US and China

Amid these dynamics, Europe is showing signs of recalibrating its strategic distance from the United States and reshaping its diplomatic and security framework. Recently, Europe has intensified cooperation with third countries to counter Russia and expand its diplomatic reach. Last month, 15 European nations formally submitted a letter to the EU, urging the bloc to strengthen diplomacy with third countries as a way to pressure Russia. Discussions are also underway at the EU level to build a more multipolar diplomatic network. This reflects a clear intention to move away from a US-centric foreign policy line.

Japan has emerged as a key partner in this process. In recent months, Japan has expanded defense cooperation with Europe’s four major powers, Germany, France, Italy, and the United Kingdom , achieving concrete progress in areas such as joint military exercises, defense technology transfers, and cybersecurity agreements. These efforts go beyond simple bilateral cooperation, signaling a search for a joint defense structure that spans the Indo-Pacific and the European continent. The prevailing view in the international community is that both Europe and Japan share a strategic objective of checking China’s influence while avoiding over-reliance on the United States.

In this way, Europe is maintaining its security umbrella with the US while also pursuing economic and diplomatic diversification to raise its global stature. This shift signals Europe’s emergence as an independent diplomatic actor, breaking away from its traditional role as a supporting power. As Europe responds to transnational challenges, such as global supply chain restructuring and securing strategic resources, its role on the world stage is becoming increasingly important. Positioned between the US and China, Europe now seeks to act not only as a negotiator but also as a rule-setter in global affairs.

HBM Sales Up 50%, Shipments Made to Four Major Clients
Following SK Hynix, Announces Full Allocation of Next Year’s Supply
Market Share Expected to Jump from 5% to 25%, Confident in Tech Competitiveness.

Micron, which held just a 5% share of the High Bandwidth Memory (HBM) market until last year, is now shaking up the industry landscape. In its latest earnings report, the world’s third-largest memory chipmaker announced that it is supplying large volumes of HBM to four major clients, including AI chip giants Nvidia and AMD. Micron stated with confidence that it aims to raise its HBM market share to around 25%,a level similar to its overall DRAM market share,by the second half of this year. Having trailed behind SK Hynix and Samsung Electronics, Micron is signaling a clear intent to break the two-company dominance and establish itself as a key HBM supplier.

Micron Posts 50% Surge in Q3 HBM Revenue, Delivers Earnings Surprise

On June 25 (local time), Micron highlighted during its fiscal 2025 third-quarter (March to May) earnings call that its HBM competitiveness was a key driver behind its strong performance, maintaining a confident tone throughout. Third-quarter revenue rose 37% year-over-year to USD 9.3 billion, while operating profit jumped 165% to USD 2.49 billion, beating market expectations. HBM revenue surged about 50% from the previous quarter, leading the strong results, and DRAM sales also hit a record high of USD 7.07 billion.

Micron stated during the earnings call, “We expect to achieve an HBM market share close to our overall DRAM market share in the second half of this year,” adding that “the yield and shipment ramp-up of our 12-high HBM3E (fifth-generation HBM) is progressing very smoothly, and we anticipate reaching a shipment inflection point during the fourth quarter.” Micron had previously projected achieving this HBM share by year-end but revised the timeline to the second half during this earnings release. It is now likely that the target could be met as early as this third quarter (July to September).

According to Micron, its entire HBM production for next year is already sold out. CEO Sanjay Mehrotra stated, “HBM supply for this year and next year is already sold out,” predicting, “For fiscal 2024 (September 2023 to August 2024), HBM revenue will reach hundreds of millions of dollars, and for fiscal 2025 (September 2024 to August 2025), it will generate billions of dollars in revenue.” He added, “We are on track to achieve an HBM market share at the level of our DRAM share in 2025.”

He further emphasized, “In this transformative era where artificial intelligence (AI) is driving unprecedented demand for high-performance memory and storage, Micron is uniquely well-positioned to seize the opportunity,” adding, “With the field-proven success of our HBM3E, we’ve gained the trust of major HBM customers and are delivering the industry’s lowest power and highest performance HBM.” Micron expressed confidence that it has moved beyond reliance on specific customers and is now targeting both graphics processing unit (GPU) and application-specific integrated circuit (ASIC) platforms, securing major clients in the AI chip market.

Micron Becomes Sole Supplier of ‘Second HBM’ to Nvidia

Micron has solidified its position as a key supplier to Nvidia, which holds 80% of the AI accelerator market, by proving its technological strength in HBM3E, this year’s flagship product. Following SK Hynix and ahead of Samsung Electronics, Micron became the second in the industry to supply HBM3E to Nvidia. Samsung has yet to supply HBM3E to Nvidia. Brokerage firms estimate Micron’s HBM revenue for Q3, which hit a record high, to be around USD 1.5 billion. This is roughly one-third of SK Hynix’s estimated HBM revenue for Q2 (March to June), which is in the mid-to-high USD 4.6 billion range. Micron stated, “Yields and production volumes for our 12-high HBM3E products are improving very smoothly, and in Q4, shipment volume for the 12-high products will surpass that of the 8-high products.”

Additionally, Nvidia reportedly selected Micron as the first supplier of SOCAMM (System-On-Chip Attached Memory Module), a next-generation memory module. SOCAMM, made by stacking the latest low-power DRAM (LPDDR5X), is drawing attention as a potential “second HBM.” While HBM supports GPUs in AI accelerators, SOCAMM is DRAM attached to CPUs. Though installed on the CPU that controls the entire system, its primary role is to assist AI accelerators in achieving peak performance. SOCAMM will be included in Nvidia’s next-generation AI accelerator “Rubin,” set for release next year.

Unlike HBM, which vertically connects DRAM using through-silicon vias, SOCAMM uses wire bonding to link 16 chips with copper wiring. Copper’s high thermal conductivity helps minimize heat generation from each DRAM chip, making it a key competitive advantage. Micron promoted that its latest low-power DRAM offers 20% better power efficiency than competitors. Nvidia’s next-generation AI servers will feature four SOCAMM modules, totaling 256 LPDDR5X chips. Experts cite Micron’s later adoption of EUV lithography as a reason for its faster delivery. Unlike competitors who boosted DRAM performance through EUV, Micron achieved low-heat technology through architectural innovation.

Industry watchers expect Micron to leverage this low-heat technology to increase its HBM market share. As HBM generations advance, more DRAM layers are stacked, inevitably leading to more heat. The three major memory makers will begin mass production of 12-high HBM4 in the second half of this year and 16-high HBM4 in the first half of next year. An equipment manufacturer CEO said, “Micron entered the HBM market late but can catch up quickly by leveraging its thermal management technology and advantage as a US company.”

Micron’s Surge Poses a Threat to Samsung Electronics

Samsung Electronics is feeling the pressure from Micron’s rapid ascent. According to market research firm TrendForce, Samsung lost its DRAM market leadership for the first time in 33 years to SK Hynix in Q1 of this year. SK Hynix’s market share reached 36.0%, driven by continued HBM shipment growth. Micron, in third place, followed closely with a 24.3% share, narrowing the gap with Samsung (33.7%) to under 10 percentage points. The gap had been about 17 points in Q4 last year when Samsung held 39.3% and Micron 22.4%.

Samsung was also dealt another blow in April when Micron received approval to supply 12-high HBM3E to Nvidia. Previously, SK Hynix was the exclusive supplier of 12-high products, but Micron’s entry broke the monopoly. Nvidia is using this product in its latest AI GPU architecture, “Blackwell Ultra (GB300).”

According to Bloomberg, Samsung began supplying 8-high HBM3E to Nvidia earlier this year. However, the industry’s primary focus now is on the more advanced 12-high product. While Samsung and Nvidia continue discussions about 12-high HBM3E, approval is still pending. A Micron representative stated, “Our HBM production volume is still small, but we lead in specifications,” adding, “Yield rates are improving to the point where by the end of this year, our HBM market share could approach our overall DRAM market share (around the low-to-mid 20% range).”

Micron also announced a massive USD 200 billion investment plan on June 12, the largest in semiconductor industry history. Of this, USD 14 billion is allocated for DRAM facilities including HBM this year. Backed by its advantage as a US-based company, Micron is attracting global investors in this capital-intensive competition, posing a serious threat to Samsung Electronics.

Premier Li Qiang Pledges Stable Growth
Boosting Domestic Consumption as Top Priority
“Progress Toward Long-Term Goals, Not Short-Term Expansion”

Amid mounting concerns over China’s slowing economy, Premier Li Qiang has stepped forward with a confident message designed to calm both domestic and international audiences. Addressing challenges such as deflationary pressure, sluggish global demand, and turbulent trade conditions, Li reaffirmed China’s commitment to stable growth. But more than just a reassurance, Li’s message signals a fundamental economic shift: China aims to transform itself from a manufacturing-led, export-driven economy into a consumption-powered domestic market giant.

This is not just rhetoric. Behind Li’s words lies a sweeping government strategy focused on boosting internal demand to offset external volatility. From massive bond issuances and liquidity injections to consumption subsidies and emotional appeals to national pride, China is unleashing one of its most aggressive economic stimulus campaigns in recent memory. Yet, as the bold policies unfold, cracks in the foundation are already emerging, particularly over whether these measures are financially sustainable in the long run.

Beijing's Bold Push: Bonds, Liquidity, and Domestic Demand

Speaking at the World Economic Forum (WEF) in Tianjin, dubbed the "Summer Davos," Premier Li Qiang declared that China has both the confidence and the capability to sustain relatively rapid growth, even amid global uncertainties. He emphasized that China’s growth is not aimed at short-term expansion but is part of a longer-term strategic pivot toward a more sustainable and resilient economic model.

At the core of this transformation is a decisive shift away from heavy dependence on exports. Instead, Li outlined a blueprint where domestic consumption becomes a key growth driver. “China is not only striving to be a manufacturing powerhouse,” Li said, “but also aims to become a major consumer powerhouse.” This statement underscores Beijing’s intention to build a more self-reliant economy, less vulnerable to external shocks.

To back these ambitions with concrete action, the Chinese government has been pumping liquidity into the market since late 2023. The Ministry of Finance issued roughly USD 56 billion in special and ultra-long-term government bonds in April alone. Simultaneously, the People’s Bank of China (PBOC) supplied approximately USD 117 billion to the market through its one-year Medium-term Lending Facility (MLF). After accounting for USD 13.9 billion in maturing MLF loans, April’s net injection stood at approximately USD 98 billion, the most significant single-month liquidity infusion since December 2023.

This is only the initial wave. The government plans to issue an additional USD 255 billion in ultra-long-term special bonds, with maturities spanning 20, 30, and 50 years. The funds are earmarked specifically to support domestic demand. As Ming Ming, chief economist at CITIC Securities, explained, recapitalizing state-owned banks enhances their capacity to support the real economy. With an estimated eightfold leverage effect, a USD 69.8 billion capital injection could fuel as much as USD 558 billion in new lending to businesses and households.

A ‘Chinese New Deal’: Subsidies, Housing Relief, and Patriotic Spending

In addition to bond-driven stimulus, Beijing is pursuing what many are calling a “Chinese New Deal.” Much like Franklin D. Roosevelt’s programs during the Great Depression, the strategy focuses on bolstering consumer purchasing power and stimulating demand through direct financial incentives.

To stabilize the struggling housing market, the central government has loosened borrowing constraints for local governments and encouraged them to ramp up public investment. This has been accompanied by cuts in both the benchmark lending rate and mortgage rates, moves designed to lower borrowing costs for consumers and businesses alike.

One of the most prominent pillars of this consumer stimulus effort is the Yi Jiu Huan Xin (以旧换新) program, which offers generous subsidies for trading in old products for new ones. Covering a wide array of consumer goods, including household appliances, smartphones, digital devices, and automobiles, the program aims to revitalize consumption and accelerate economic turnover. Backed by a budget of about USD 57 billion, the initiative is being jointly managed by the National Development and Reform Commission (NDRC) and the Ministry of Finance.

This program isn’t simply an economic tool; it’s also an emotional appeal. Alongside financial incentives, Beijing is placing a strong emphasis on patriotic messaging. “Patriotic consumption” campaigns are being rolled out nationwide, encouraging citizens to favor domestic brands over foreign products. State media and social platforms are amplifying messages that frame buying Chinese-made goods not just as a personal choice, but as a civic duty. The broader goal is clear: to reduce dependence on global brands, strengthen the domestic manufacturing ecosystem, and anchor economic growth in the power of its own people’s wallets.

Cracks Beneath the Surface: Can the Strategy Hold?

Despite the bold design of China’s stimulus package, signs of strain are already emerging. The Yi Jiu Huan Xin subsidy program, initially intended to run nationwide through the end of the year, is rapidly depleting its funds. By the end of May, more than half of about USD 28 billion had already been depleted. The situation quickly worsened with the onset of the annual “618” online shopping festival, which alone burned through another USD 9.5 billion. Current estimates indicate that by the end of June, nearly 70% of the total subsidy budget will have been exhausted.

Compounding the issue are growing administrative hurdles. Several provinces, including Guangdong, have rushed to implement stricter rules to prevent fraud and abuse. Consumers are now required to register product serial numbers and provide proof of the return or recycling of old items to qualify for subsidies. In Jiangsu, authorities have instituted a "daily quota system," limiting the total amount of subsidies to USD 935,000 per day. Some regions have even transitioned part of the application process from online to offline to better control the influx of claims.

These moves are not without cause. Reports of subsidy abuse have become widespread. Fraudsters have been caught helping ineligible applicants, such as non-students, falsely obtain student-specific subsidies in exchange for kickbacks. Other schemes involve individuals purchasing heavily subsidized smartphones and reselling them at market rates for quick profits, pocketing tens to hundreds of US dollars per transaction.

All these developments raise a difficult question: Can China’s current strategy of stimulus-driven consumption growth truly hold? The country’s bold pivot to domestic demand is being tested not only by economic pressures but also by practical limitations in managing large-scale financial aid programs. While Premier Li Qiang’s confident rhetoric continues to project resilience, the rapid depletion of subsidy funds and the mounting need for tighter controls point to an underlying fragility in the model.

In the end, the success of China’s transformation into a major consumer powerhouse may depend on more than just liquidity injections and subsidy checks. It will require long-term structural reforms, renewed consumer confidence, and a sustainable fiscal strategy, none of which are guaranteed to be achieved. Whether Beijing can deliver on this grand economic reset remains one of the most critical questions for the global economy today.

Polls at Just 1% Early This Year — From Unknown to Frontrunner
Free Childcare and Rent Freeze Spark Grassroots Surge
Some Companies Now Considering Leaving New York

Wall Street, the undisputed center of global finance, has been thrown into a state of panic by a political earthquake few saw coming. The shock reverberated far beyond the city’s financial district as Zohran Mamdani, a young and fiercely progressive member of the New York State Assembly, stunned the political establishment by clinching first place in the Democratic primary for the New York City mayoral race. His meteoric rise has not only defied every conventional political prediction but also sparked widespread fears that the city, long regarded as a symbol of capitalist dynamism, could veer toward economic decline reminiscent of America’s Rust Belt.

The anxiety gripping Wall Street is rooted in the sheer audacity of Mamdani’s platform. His bold agenda champions sweeping rent controls, massive tax hikes on the wealthy, and a range of free public services designed to reshape the city’s socioeconomic landscape radically. For the financial elite, the prospect of a self-proclaimed socialist steering the world’s financial capital is more than just unsettling; it is existentially threatening. With the general election looming in November, major financial players are scrambling to assess the damage a Mamdani victory could inflict on their interests and the broader economic stability of the city.

The Stunning Rise of Zohran Mamdani

When Mamdani declared his candidacy in October, his prospects seemed slim at best. Few believed that a relative political unknown could pose any serious challenge to Andrew Cuomo, a three-term governor of New York and a towering figure within Democratic Party circles. Mamdani, lacking the pedigree of previous mayors like Rudy Giuliani, a former federal prosecutor, or Michael Bloomberg, a billionaire media mogul, was dismissed by many as a fringe candidate whose ambitions far exceeded his political capital.

Yet Mamdani’s rise was anything but accidental. His deep-rooted commitment to progressive politics traces back to his college years, when he founded a student group advocating for Palestinian rights. His activism took a dramatic turn during the 2023 war between Israel and Hamas, when he staged a five-day hunger strike in a show of solidarity with Palestine. That moment crystallized his broader worldview, a relentless fight against perceived injustice, whether at home or abroad, and an unapologetic alignment with causes often shunned by mainstream politicians.

Mamdani’s campaign was a reflection of this ethos. It was fueled by an uncompromising slate of promises that resonated powerfully with disillusioned voters, particularly the younger generation. His vision of a New York where bus fares are completely free, rent hikes are frozen indefinitely, and the ultra-wealthy are taxed to fund expansive social programs struck a chord with voters weary of inequality and entrenched political power. His platform captured the attention and enthusiastic endorsement of icons of the American progressive movement, including Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez, both of whom lent their voices and political machinery to amplify Mamdani’s message.

A crucial element of Mamdani’s success lay in his mastery of digital campaigning. Unlike his opponents, whose campaigns leaned heavily on traditional media and elite donor networks, Mamdani embraced social media as his battleground. His TikTok and Instagram feeds were filled with relatable, charming videos of him exploring local eateries and interacting with ordinary New Yorkers, creating an image of a candidate who was both approachable and authentically grounded in the community. His appearances on popular podcasts further cemented his status as a fresh, dynamic figure unafraid to challenge the status quo. The result was a groundswell of organic support that translated into a formidable campaign army of more than 27,000 volunteers, alongside an impressive USD 8 million in grassroots fundraising, a remarkable achievement for a candidate whose name was virtually unknown in political circles just months earlier.

Cuomo’s campaign, sensing the rising threat, pivoted aggressively to attack. His team sought to portray Mamdani as an inexperienced radical, seizing on his pro-Palestinian activism to brand him as anti-Israel in an attempt to alienate moderate voters and key donor bases. Mamdani, however, proved deft at navigating the political minefield, issuing a swift rebuttal that there was no place for anti-Israel sentiment in his movement, effectively neutralizing the charge before it could gain traction. The campaign escalated further when, during a televised debate, Cuomo sought to undermine Mamdani’s credibility by claiming he lacked the executive experience necessary to manage a complex metropolis like New York or to stand firm against figures like Donald Trump. Mamdani’s response was a rhetorical dagger, coolly reminding Cuomo and the audience that, unlike the former governor, he had never resigned in disgrace, a brutal reference to Cuomo’s fall from power in 2021 amid multiple sexual harassment allegations.

Despite Cuomo’s formidable backing from Wall Street billionaires like Bill Ackman, Dan Loeb, and Michael Bloomberg, and even an 11th-hour appeal from former President Bill Clinton, the political machine built to stop Mamdani ultimately collapsed. What made the upset even more dramatic was the overwhelming consensus among pollsters that Cuomo was a lock for victory, with forecasts just weeks before the primary placing his chances at well over 90 percent. Yet, against all odds, the 34-year-old Mamdani flipped the script, transforming what had begun as a long-shot campaign into one of the most consequential political upheavals in recent New York history.

Wall Street Scrambles as Fears of a Fiscal Meltdown Grow

As the reality of Mamdani’s ascent sinks in, panic has begun to take hold among New York’s financial elites. The prospect of an administration committed to policies that would freeze rents, raise the minimum wage to USD 30 an hour, and eliminate bus fares, all while extracting higher taxes from corporations, has triggered alarm not just on Wall Street but across the broader business community. These proposals, while wildly popular among the progressive base, are being viewed by investors and financial executives as nothing short of economically catastrophic.

Even media outlets traditionally sympathetic to progressive causes have not minced words. The New York Times, in a sharply critical editorial, warned that while Mamdani may be captivating to elite progressives, the actual implementation of his policies could spell disaster for the city’s economic health. Their critique echoed growing concerns that the financial strain from such expansive welfare programs would hollow out the city’s tax base and drive away both investment and jobs.

Indeed, these fears are no longer theoretical. Increasing chatter among major financial firms suggests that some are actively preparing contingency plans to relocate their headquarters out of New York altogether. States like Florida and Texas, long favored for their business-friendly tax regimes, have emerged as the most attractive alternatives. Reports from The Wall Street Journal confirm that a significant number of top executives are considering moving their firms, citing the dual threat of looming tax hikes under a Mamdani administration and what they perceive as an uncomfortable shift toward anti-Israel sentiment in the city’s political discourse.

A Warning Sign for Blue States Nationwide

The tremors rattling Wall Street are not confined to New York City. They are the latest chapter in a larger, long-brewing saga of demographic and economic shifts reshaping the American political landscape. For years, a quiet but steady exodus has been underway as individuals and businesses flee Democrat-controlled states in search of more favorable economic climates. What was once dismissed as anecdotal has now become an undeniable trend, supported by decades of data from the Internal Revenue Service.

Between 1990 and 2021, over 13 million people left blue states like California, Illinois, New Jersey, Massachusetts, and New York. During that same period, Republican-led states such as Florida, Texas, Arizona, North Carolina, Tennessee, Nevada, and South Carolina welcomed nearly an identical number of incoming residents. This migration is not merely about preference for warmer weather or lower property costs, it is an economic referendum on governance models. The driving forces behind this exodus are a tangled web of mounting public pension liabilities, inefficient and bloated housing subsidies, declining public education systems, and chronic underperformance in crime control.

As homelessness surges and tax burdens swell, many residents have come to the conclusion that progressive governance, for all its intentions, is failing to deliver a sustainable quality of life. The wave of departures is compounded by rising frustration over limitations on school choice and a perception that state governments are increasingly hostile to businesses and high-income earners.

The stark warning from economists and policy analysts is that without a dramatic policy reversal, blue states risk locking themselves into a death spiral of declining populations, eroding economic vitality, growing welfare dependency, and deepening poverty. Recommendations to stem this tide are nothing short of revolutionary for traditionally progressive regions. They include measures long associated with conservative orthodoxy, deep tax cuts, aggressive crime reduction, regulatory rollbacks, pension system reforms, school choice expansions, and the scrapping of rent control laws.

The story unfolding in New York is not just a local political drama; it is a national issue. It is a cautionary tale for every city and state grappling with the tension between progressive ideals and fiscal realities. Whether Mamdani’s rise represents a brave new future or the beginning of New York’s economic unraveling is a question that now hangs heavily over the city, and indeed, the entire nation.