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Yageo Promises Technology Protection if Shibaura Acquisition Succeeds

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Taiwanese chip component maker Yageo has pledged strict controls to prevent technology leaks if its bid to acquire Japan’s Shibaura Electronics succeeds, addressing Japanese national security concerns. Yageo’s Chairman Pierre Chen said the company will hold talks with Shibaura in mid-June in Tokyo to discuss cooperation plans.

Yageo, the world’s largest chip resistor producer, launched an unsolicited tender offer in February to gain full control of Shibaura, which specializes in thermistor technology. Yageo’s latest offer stands at 6,200 yen per share, valuing Shibaura at over 65 billion yen ($450 million), in a competitive bidding war against Japanese components supplier Minebea Mitsumi, which Shibaura selected as a “white knight.”

Chen emphasized that Yageo intends to invest heavily in research and development and expand Shibaura’s facilities in Japan. He assured regulators and the public that stringent safeguards would be in place to protect sensitive technology.

The acquisition aligns with Japan’s evolving approach to unsolicited takeovers, with 2023 M&A guidelines reducing resistance to such bids. Chen said discussions with Japan’s Ministry of Economy, Trade and Industry have progressed smoothly.

If successful, the deal would fill a gap in Yageo’s thermistor portfolio, enhancing product offerings for global customers. It would also ease supply chain management for major clients like Apple, Nvidia, and Tesla by providing a broader range of components from a single supplier.

Yageo is also a top global manufacturer of multilayer ceramic capacitors, crucial for devices such as Apple iPhones, Nvidia AI servers, and Tesla electric vehicles.

Broadcom Shares Slip as Revenue Forecast Underwhelms AI-Driven Expectations

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Broadcom shares declined over 3% in early trading on Friday after its third-quarter revenue forecast failed to meet the high expectations of investors who have been heavily bullish on chip stocks amid the ongoing artificial intelligence surge.

The Palo Alto-based semiconductor giant projected third-quarter revenue of approximately $15.80 billion, slightly above the analysts’ consensus estimate of $15.71 billion, according to LSEG data. However, analysts noted that expectations for Broadcom had already been elevated due to its critical role in AI infrastructure.

“High expectations drove a bit of downside,” said Bernstein analyst Stacy Rasgon, reflecting the sentiment that even marginally positive forecasts may not be enough in the current AI-fueled market climate.

Broadcom provides semiconductors to major clients like Apple and Samsung and supplies advanced networking hardware essential for AI data centers, where massive data transfers are required to power generative AI models. In addition to its networking chips, Broadcom also designs custom AI processors for large cloud providers, offering an alternative to Nvidia’s expensive off-the-shelf chips.

Despite its position in the AI supply chain, Broadcom remains exposed to global trade uncertainties, particularly around U.S. export restrictions aimed at limiting China’s access to advanced technology. “AVGO is ramping two additional customers, but they are still small. So the processor business will grow this year, but at a measured rate,” Morgan Stanley commented.

Rival Marvell Technology, meanwhile, offered a more optimistic outlook last week, forecasting stronger-than-expected second-quarter revenue driven by growing demand for custom chips supporting AI workloads in data centers.

Broadcom briefly crossed the $1 trillion market cap threshold in December, reflecting investor optimism about AI-related chip demand. Its shares have climbed roughly 12% year-to-date. However, its current valuation — with a 12-month forward price-to-earnings ratio of 35.36 — remains significantly higher than Marvell’s 20.63, according to LSEG data.

US-UAE AI Data Campus Deal Faces Delays Amid Security Concerns

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A multi-billion dollar agreement to establish one of the world’s largest artificial intelligence data center hubs in the United Arab Emirates (UAE) remains far from finalized, according to sources familiar with the negotiations. Despite its high-profile announcement during President Donald Trump’s recent visit to Abu Dhabi, persistent U.S. security concerns continue to stall progress.

The planned 10-square-mile AI campus is being spearheaded by G42, an Emirati state-linked technology firm central to the UAE’s AI ambitions. Major U.S. technology firms including Nvidia, OpenAI, Cisco, Oracle, and Japan’s SoftBank have signed on to help develop the first phase, called Stargate UAE, which is scheduled to become operational in 2026.

The project’s backers have touted it as a significant step toward steering Gulf nations toward U.S. technology and away from Chinese alternatives. However, five sources involved in the discussions told Reuters that U.S. officials remain deeply concerned about potential technology transfers to China and the UAE’s ability to enforce strict export controls.

Although the UAE pledged during Trump’s visit to align its national security regulations with Washington — including measures to prevent diversion of U.S.-origin technology — American officials remain cautious. These concerns mirror those raised during both the Biden and Trump administrations, particularly over the UAE’s previous deployment of Huawei 5G infrastructure despite U.S. objections.

Sources indicated that the U.S. Commerce Department has yet to determine the security protocols required for exporting advanced Nvidia AI chips critical to the project. The absence of an agreed enforcement mechanism further complicates the deal, leaving it without a definitive timeline for completion.

Among the likely U.S. conditions are prohibitions on Chinese technology at the site and restrictions on employing Chinese nationals, given ongoing fears of AI chip smuggling and intellectual property leaks to adversaries. While the UAE has dismantled some Chinese partnerships—such as G42 removing Chinese hardware and divesting from certain Chinese holdings under Biden administration pressure—Chinese firms like Huawei and Alibaba Cloud still maintain a strong presence in the country.

Adding to U.S. unease is the UAE’s growing role as a hub for companies circumventing Western sanctions on Russia, further complicating Washington’s strategic calculus. Despite these challenges, both Trump administration officials and some in the current administration remain committed to pursuing the deal, though bipartisan skepticism remains strong in Congress.

Once operational, Stargate UAE is expected to house roughly 100,000 advanced Nvidia Grace Blackwell GB300 AI chips within a 1-gigawatt facility — potentially expanding to 5 gigawatts in the future. The Emirati government has so far not commented on the latest delays, and no final agreement has been reached on technology controls or operational oversight.