Tag Archives: COMP08

Wall St stumbles after weak data, hawkish Fed comments

  • Fed’s Bullard, Mester back rate increases
  • U.S. retail sales drop in December
  • Indexes down: Dow 1.28%, S&P 1.07%, Nasdaq 0.78%

Jan 18 (Reuters) – Wall Street’s main indexes fell on Wednesday after weak economic data and hawkish comments from Federal Reserve officials sparked worries that the central bank may not pause interest rate hikes any time soon.

Before the market opened, U.S. economic data showed retail sales and producer prices declined more than expected in December. Also production at U.S. factories fell more than expected in December and output in the prior month was weaker than previously thought.

With Wall Street’s major averages showing gains so far for 2023, Sam Stovall, chief investment strategist at CFRA research, said some investors saw the week data as an opportunity to take profits while others worried about the prospects for a recession.

“The market was overbought. Today’s economic data served as a trigger to initiate a profit taking spell and the groups with most profits to take have been the ones that have done best last year,” said Stovall.

By 2:14PM ET, the Dow Jones Industrial Average (.DJI) fell 434.27 points, or 1.28%, to 33,476.58, the S&P 500 (.SPX) lost 42.57 points, or 1.07%, to 3,948.4 and the Nasdaq Composite (.IXIC) dropped 87.02 points, or 0.78%, to 11,008.10.

The weakest sectors on the day are the defensive consumer staples (.SPLRCD), down more than 2%, and utilities (.SPLRCU), which was last down 1.8%.

The benchmark S&P and the blue-chip Dow were both on track for their second straight day of losses, while the Nasdaq, if it ends lower, would snap a seven-day winning streak.

U.S. stocks had started 2023 on a strong footing, with the S&P having closed up almost 4% year-to-date on Tuesday, on hopes that a moderation in inflationary pressures could give the Fed cover to dial down the size of its interest rate hikes.

Roughly halfway through January, the S&P was up 2.7% for the month so far while the Nasdaq was up more than 5% and the Dow, the best performer of the three for 2022, was up 0.9%.

Earlier, St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester stressed on the need to raise rates beyond 5% to bring inflation to heel.

The Fed commentary also highlighted the disparity between the U.S. central bank’s estimate of its terminal rate and market expectations, which were of the rate peaking at 4.88% by June. Traders are now betting on a 25-basis point rate hike in February.

“This market is very hopeful that we’re going to get a soft landing and every time you have hawkish comments from the Fed, it feels you’re not going to get that,” Dennis Dick, trader at Triple D Trading.

Investors are also focused on the fourth-quarter earnings season as a window into how corporate America is doing against the backdrop of higher interest rates.

Analysts now expect year-over-year earnings from S&P 500 companies to decline 2.6% for the quarter, according to Refinitiv data, compared with a 1.6% decline in the beginning of the year.

IBM Corp (IBM.N) was down 2.6% after Morgan Stanley downgraded the company’s shares to “equal weight” from “overweight”.

Early gainers Microsoft Corp (MSFT.O) and Tesla Inc (TSLA.O) erased gains by late afternoon trading with Microsoft down 1.2% and Tesla off 2.7%.

Moderna Inc (MRNA.O) rose 3.6% after reporting data which demonstrated the effectiveness of its respiratory syncytial virus (RSV) vaccine.

PNC Financial Services Group Inc (PNC.N) was down 5.4% after the company missed estimates for fourth-quarter profit.

Declining issues outnumbered advancing ones on the NYSE by a 1.38-to-1 ratio; on Nasdaq, a 1.66-to-1 ratio favored decliners.

The S&P 500 posted 9 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 71 new highs and 14 new lows.

Reporting by Sinéad Carew in New York, Shreyashi Sanyal and Amruta Khandekar in Bengaluru; Additional reporting by Shubham Batra; Editing by Shounak Dasgupta and David Gregorio

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Dell looks to phase out China-made chips by 2024 – Nikkei

Jan 5 (Reuters) – Dell Technologies Inc (DELL.N) plans to stop using China-made chips by 2024 and has told suppliers to reduce the amount of other made-in-China components in its products amid concerns over U.S.-Beijing tensions, the Nikkei reported on Thursday.

The news comes after the United States added Chinese memory chipmaker YMTC and 21 “major” companies in the country’s artificial intelligence chip sector to a trade blacklist in December.

PC maker HP Inc (HPQ.N), one of Dell’s rivals, has also started surveying its suppliers to gauge the feasibility of moving production and assembly away from China, the report said, citing sources with knowledge of the matter.

Dell has also asked product assemblers and suppliers of other components such as electronic modules and print circuit boards to help prepare capacity in countries beyond China, such as Vietnam, the report said.

“We continuously explore supply-chain diversification across the globe that makes sense for our customers and our business,” Dell said in a statement.

HP did not immediately respond to a Reuters request for comment.

In October last year, the Biden administration published a set of export controls that included a measure to cut China off from certain semiconductor chips made anywhere in the world with U.S. tools.

Reporting by Kanjyik Ghosh in Bengaluru, additional reporting by Tiyashi Datta; Editing by Janane Venkatraman and Devika Syamnath

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Microsoft to buy 4% stake in London Stock Exchange

Dec 12 (Reuters) – Microsoft (MSFT.O) is to take a 4% equity stake in London Stock Exchange Group (LSEG.L) as part of a 10-year commercial deal to migrate the exchange operator’s data platform into the cloud, the British company said on Monday.

It is the latest sign of deepening ties between financial services providers and a handful of big global cloud companies such as Microsoft, Google (GOOGL.O), Amazon (AMZN.O) and IBM (IBM.N), which have prompted regulators to scrutinise the ties more closely.

Microsoft has longstanding links with LSEG, but the exchange group’s Chief Executive David Schwimmer said that about a year ago they began talks on closer ties.

“It’s a long term partnership. In terms of the products we will be building together, I would expect our customers to start to see the benefits of that 18 to 24 months out and we will continue building from there,” Schwimmer told Reuters.

Regulators have expressed concern about the over-reliance of financial firms on too few cloud providers, given the disruption this could cause across the sector if a provider went down.

The European Union has just approved a law introducing safeguards on cloud providers in financial services, with Britain set to follow suit.

“You should assume we do not like to surprise our regulators,” Schwimmer said, when asked if LSEG has ensured that regulators were on board.

LSEG said the link with Microsoft was a partnership to reap the benefits of “consumption-based pricing”, and not a traditional cloud deal.

“We will continue to maintain our multi-cloud strategy and working with other cloud providers,” Schwimmer said.

The deal was not about savings by outsourcing activities to the cloud, but about meaningful incremental revenue growth as new products come on stream over time.

“This feels like a key milestone in LSEG’s journey towards being information solutions-centric, even if ‘meaningful’ revenue growth specifics are lacking,” analysts at Jefferies said.

As part of the deal, LSEG has made a contractual commitment for minimum cloud-related spend with Microsoft of $2.8 billion over the term of the partnership.

Microsoft said the basis of the partnership will be the digital transformation of LSEG’s technology infrastructure and Refinitiv platforms on to the Microsoft Cloud.

“The initial focus will be on delivering interoperability between LSEG Workspace and Microsoft Teams, Excel and PowerPoint with other Microsoft applications and a new version of LSEG’s Workspace,” the U.S. company said.

LSEG shares were up 4% in early trade.

LSEG bought Refinitiv for $27 billion from a Blackstone and Thomson Reuters’ consortium, which turned the exchange into the second largest financial data company after Bloomberg LP.

LSEG has made “good progress” on its programme for the delivery of its cloud-based data platform since the completion of its Refinitiv acquisition in January 2021, it said in a statement.

Microsoft will buy LSEG shares from the Blackstone (BX.N)/Thomson Reuters (TRI.TO), Consortium, the exchange operator said.

Thomson Reuters, which owns Reuters News, has a minority shareholding in LSEG following the Refinitiv deal.

Microsoft’s purchase is expected to complete in the first quarter of 2023.

Reporting by Yadarisa Shabong in Bengaluru; Editing by Nivedita Bhattacharjee, Jane Merriman and Louise Heavens

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Foxconn’s woes to take bigger toll on giant China iPhone plant as more workers leave – source

  • Foxconn Zhengzhou plant’s Nov shipments to fall further – source
  • Worker unhappiness at plant escalated into protests this week
  • Over 20,000 workers, mostly new recruits, have left – source

TAIPEI, Nov 25 (Reuters) – Foxconn’s (2317.TW) flagship iPhone plant in China is set to see its November shipments further reduced by the latest bout of worker unrest this week, a source with direct knowledge of the matter said on Friday, as thousands of employees left the site.

The company could now see more than 30% of the site’s November production affected, up from an internal estimate of up to 30% when the factory’s worker troubles started in late October, the source said.

The site, which is the only factory where Foxconn makes premium iPhone models, including the iPhone 14 Pro, is unlikely to resume full production by the end of this month, the source added.

The world’s largest Apple (AAPL.O) iPhone factory has been grappling with strict COVID-19 restrictions that have fuelled discontent among workers and disrupted production ahead of Christmas and January’s Lunar New Year holiday, as many workers were either put into isolation or fled the plant.

It has fuelled concerns over Apple’s ability to deliver products for the busy holiday period.

On Wednesday workers, most of whom were new recruits hired in recent weeks, clashed with security personnel at the Zhengzhou plant in central China.

Many claimed they were misled over compensation benefits at the factory, and others complained about sharing dormitories with colleagues who had tested positive for COVID.

Foxconn apologised for a pay-related “technical error” when hiring on Thursday, and later offered 10,000 yuan ($1,400) to protesting new recruits who agreed to resign and leave.

The source said more than 20,000 workers, mostly new hires not yet working on production lines, took the money and left. Videos posted on Chinese social media on Friday showed crowds and long lines of luggage-laden workers queuing for buses.

“It’s time to go home,” one person posted.

Foxconn, formally known as Hon Hai Precision Industry Co, declined to comment. Apple, which said on Thursday it had staff at the factory, did not immediately respond to a request for comment on Friday.

The plant, before its woes began, employed more than 200,000 staff. It has dormitories, restaurants, basketball courts and a football pitch across its sprawling roughly 1.4 million-square-metre (15 million-square-foot) facility.

Another Foxconn source familiar with the matter said some new hires had left the campus but did not elaborate on how many. This person said that because the people leaving had not yet been trained or begun to work, their departures would not cause further harm to current production.

“The incident has a big impact on our public image but little on our (current) capacity. Our current capacity is not affected,” the source said.

“There’s only so much corporate can do on pandemic prevention … It’s been a problem for a while. This is a problem faced by everyone,” the person said, pointing to other worker unrest triggered by rigid COVID restrictions, including upheaval at another Apple supplier, Quanta (2382.TW), in May.

Foxconn shares closed down 0.5%, lagging the broader market, (.TWII) which ended flat.

Hundreds of workers joined protests at Foxconn’s major iPhone plant China’s Zhengzhou this week, with some men smashing surveillance cameras and windows, footage uploaded on social media showed.

($1 = 7.1616 Chinese yuan renminbi)

Reporting By Yimou Lee; Additional reporting by Brenda Goh; Editing by Anne Marie Roantree, William Mallard and Gerry Doyle

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France, Germany, Spain agree on moving on with FCAS warplane development – Berlin

BERLIN/PARIS, Nov 18 (Reuters) – France, Germany and Spain have reached agreement on starting the next phase of development of a new fighter jet dubbed FCAS, Europe’s largest defence project at an estimated cost of more than 100 billion euros($103.4 billion), the German government said on Friday.

The Defence Ministry said in a statement that an industrial agreement was achieved after intense negotiations, confirming an earlier Reuters story saying the three countries and their respective industries had struck a deal.

The ministry said it was agreed at the highest government level that a cooperative approach on an equal footing would be pursued in the project, which is under overall French responsibility.

The Spanish Defence Ministry said Madrid would spend 2.5 billion euros ($2.58 billion) on the project, of which 525 million euros ($542 million) would be paid in 2023. The ministry said that the cabinet agreed to this expenditure but did not give other details.

“The political agreement on FCAS is a great step and – especially in these times – an important sign of the excellent Franco-German-Spanish cooperation,” German Defence Minister Christine Lambrecht said.

“It strengthens Europe’s military capabilities and secures important know-how not only for our, but also for the European industry.”

Previously, sources had said that the next development phase for the Future Combat Air System (FCAS) was expected to cost about 3.5 billion euros, to be shared equally by the three countries.

France’s Dassault (AM.PA), Airbus (AIR.PA) and Indra (IDR.MC) – the latter two representing Germany and Spain, respectively – are involved in the scheme to start replacing French Rafale and German and Spanish Eurofighters from 2040.

“Now, a number of formal steps in the respective countries have to be taken in order to allow a speedy contract signature which we will have to adhere to,” Airbus said in e-mailed comments.

French President Emmanuel Macron and then German Chancellor Angela Merkel first announced plans in July 2017 for FCAS, which will include a fighter jet and a range of associated weapons, including drones.

Lately, the project – originally meant to unify Europeans after the migration crisis and Britain’s decision to leave the European Union – has been a source of tension between the two countries.

Last month, Macron cancelled a joint Franco-German ministerial meeting over disagreements with Berlin on a wide range of issues including defence and energy projects.

Both sides had been struggling for more than a year to agree the next stage of FCAS’s development, although the French and German government broadly agreed on the project.

Some sources saw the blame lying with Dassault, as the company had refused to budge in a long-running row over intellectual property rights.

Other sources blamed Airbus for pushing for a bigger workshare of the Dassault-led project, insisting it should be given “equal footing” with the French company.

($1 = 0.9675 euros)

Writing by Sabine Siebold; Editing by Kirsti Knolle, Christoph Steitz, Louise Heavens and Emelia Sithole-Matarise

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Buffett’s Berkshire discloses $4.1 bln TSMC stake

Nov 14 (Reuters) – Berkshire Hathaway Inc (BRKa.N) said it bought more than $4.1 billion of stock in Taiwan Semiconductor Manufacturing (2330.TW), , a rare significant foray into the technology sector by billionaire Warren Buffett’s conglomerate.

The news sent shares in TSMC up more than 6% in Taiwan on Tuesday, as it boosted investor sentiment for the world’s largest contract chipmaker, which saw its shares hit a two-year low last month due to a sharp slowdown in global chip demand.

In a Monday regulatory filing describing its U.S.-listed equity investments as of Sept. 30, Berkshire said it owned about 60.1 million American depositary shares of TSMC.

Berkshire also disclosed new stakes of $297 million in building materials company Louisiana-Pacific Corp (LPX.N) and $13 million in Jefferies Financial Group Inc (JEF.N). It exited an investment in Store Capital Corp (STOR.N), a real estate company that agreed in September to be taken private.

The filing did not specify whether Buffett or his portfolio managers Todd Combs and Ted Weschler made specific purchases and sales. Investors often try to piggy back on what Berkshire buys. Larger investments are normally Buffett’s.

While Berkshire does not normally make big technology bets, it often prefers companies it perceives to have competitive advantages, often through their size.

TSMC, which makes chips for the likes of Apple Inc (AAPL.O), Qulacomm (QCOM.O) and Nvidia Corp (NVDA.O), posted an 80% jump in quarterly profit last month, but struck a more cautious note than usual on upcoming demand.

“I suspect Berkshire has a belief that the world cannot do without the products manufactured by Taiwan Semi,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, which owns Berkshire shares.

“Only a small number of companies that can amass the capital to deliver semiconductors, which are increasingly central to people’s lives,” he added.

Berkshire has had mixed success in technology.

Its more than six-year wager during the last decade in IBM Corp (IBM.N) did not pan out, but Berkshire is sitting on huge unrealized gains on its $126.5 billion stake in Apple, which Buffett views more as a consumer products company.

Apple is by far the largest investment in Berkshire’s $306.2 billion equity portfolio.

Berkshire disclosed the TSMC stake about 2-1/2 months after it began reducing a decade-old, multi-billion dollar stake in BYD Co (002594.SZ), China’s largest electric car company.

In the third quarter, Berkshire added to its stakes in Chevron Corp (CVX.N), Occidental Petroleum Corp (OXY.N), Celanese Corp (CE.N), Paramount Global (PARA.O) and RH (RH.N).

It also sold shares of Activision Blizzard Inc (ATVI.O), Bank of New York Mellon Corp (BK.N), General Motors Co (GM.N), Kroger Co (KR.N) and US Bancorp (USB.N).

Buffett, 92, has run Berkshire since 1965. The Omaha, Nebraska-based company also owns dozens of businesses such as the BNSF railroad, the Geico auto insurer, several energy and industrial companies, Fruit of the Loom and Dairy Queen.

Reporting by Jonathan Stempel in New York; Editing by David Gregorio and Bradley Perrett

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Exclusive: Nvidia offers new advanced chip for China that meets U.S. export controls

OAKLAND, Calif., Nov 7 (Reuters) – U.S. chip maker Nvidia Corp (NVDA.O) is offering a new advanced chip in China that meets recent export control rules aimed at keeping cutting-edge technology out of China’s hands, the company confirmed on Monday.

Nvidia responded to Reuters’ reporting that Chinese computer sellers are advertising products with the new chip.

The chip, called the A800, represents the first reported effort by a U.S. semiconductor company to create advanced processors for China that follow new U.S. trade rules. Nvidia has said the export limitations could cost it hundreds of millions of dollars in revenue.

U.S. regulations set in early October effectively banned export of advanced microchips and equipment to produce advanced chips by Chinese chipmakers, part of an effort to hobble China’s semiconductor industry and in turn the military.

In late August, Nvidia and Advanced Micro Devices Inc AMD.O both said that their advanced chips, including Nvidia’s data center chip A100, were added to the export control list by the U.S. Commerce Department. The Nvidia A800 can be used in place of the A100 and both are GPUs, or graphics processing units.

Such advanced chips can cost thousands of dollars each.

“The Nvidia A800 GPU, which went into production in Q3, is another alternative product to the Nvidia A100 GPU for customers in China. The A800 meets the U.S. Government’s clear test for reduced export control and cannot be programmed to exceed it,” a Nvidia spokesperson said in a statement to Reuters.

The logo of technology company Nvidia is seen at its headquarters in Santa Clara, California February 11, 2015. REUTERS/Robert Galbraith/File Photo

Nvidia declined comment on whether it consulted the Commerce Department about the new chip. A Commerce Department spokesperson declined to comment.

At least two Chinese websites by major server makers offer the A800 chip in their products. One of those products previously used the A100 chip in promotional material.

A distributor website in China detailed the specifications of the A800. A comparison of the chip capabilities with the A100 shows that the chip-to-chip data transfer rate is 400 gigabytes per second on the new chip, down from 600 gigabytes per second on the A100. The new rules restrict rates of 600 gigabytes per second and up.

“The A800 looks to be a repackaged A100 GPU designed to avoid the recent Commerce Department trade restrictions,” said Wayne Lam, an analyst at CCS Insight, basing his comments on the specs shared by Reuters, and noting that eight is a lucky number in China.

“China is a significant market for Nvidia and it makes ample business sense to reconfigure your product to avoid trade restrictions,” said Lam.

Lam said the chip-to-chip communications abilities of the A800 represented a clear performance downgrade for a data center where thousands of chips are used together.

Major Chinese server makers Inspur and H3C which offer servers with the new chips did not respond to requests for comment. Neither did chip distributor OmniSky, which posted the A800 specs online.

Nvidia has said that about $400 million worth of chip sales to China could be impacted in its fiscal third quarter ended in October due to the limits on high-end chips. Having a replacement chip could help lessen the financial blow. The company is to report quarterly results on Nov. 16.

Reporting by Jane Lanhee Lee in Oakland, Calif.
Addditional reporting by Josh Horwitz in Shanghai and Karen Freifeld in New York; Editing by Peter Henderson, Matthew Lewis and Leslie Adler

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Wall Street ends lower as Fed worries outweigh earnings

  • IBM up as it sees higher full-year sales
  • Tesla expects to miss vehicle delivery target this year
  • AT&T raises annual profit forecast
  • Dow down 0.3%, S&P 500 down 0.80%, Nasdaq down 0.61%

NEW YORK, Oct 20 (Reuters) – U.S. stocks closed lower on Thursday as data on the labor market and comments from a U.S. Federal Reserve official reinforced expectations the central bank will be aggressive in hiking interest rates outweighed a flurry of solid corporate earnings.

Stocks initially rose early in the session, boosted by gains in names such as IBM (IBM.N), up 4.73% after the IT services company beat quarterly earnings estimates on Wednesday and said it expects to exceed full-year revenue growth targets. AT&T Inc (T.N) surged 7.72% upon raising its annual profit forecast.

But stocks were unable to hold their gains as strong weekly jobless claims and comments from Federal Reserve Bank of Philadelphia President Patrick Harker bolstered concerns about the Fed hiking rates and potentially tilting the economy into a recession.

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Harker said the Fed is not done raising its short-term rate target as high inflation persists, helping to push the yield on the 10-year U.S. Treasury note to its highest level since June 2008 at 4.239%.

“It’s interest rates that are driving equity volatility, that is the way we have been looking at things all year, that is kind of the precursor of seeing things calm down in the equity space and feeling better about adding risk there is seeing volatility decline in interest rates,” said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina.

“I’m not sure we are going to be able to see that pause that a few Fed members have been pointing to and certainly a few market participants have been kind of latching on to.”

The Dow Jones Industrial Average (.DJI) fell 90.22 points, or 0.3%, to 30,333.59, the S&P 500 (.SPX) lost 29.38 points, or 0.80%, to 3,665.78 and the Nasdaq Composite (.IXIC) dropped 65.66 points, or 0.61%, to 10,614.84.

Better-than-expected results thus far has pushed earnings growth expectations for third-quarter for S&P 500 companies to 3.1% from a 2.8% increase earlier in the week, but still well below the 11.1% increase that was forecast at the start of July.

Tesla Inc (TSLA.O) slumped 6.65% as the electric-vehicle maker flagged persistent logistics challenges, with fourth-quarter deliveries growing by less than the aimed 50%.

Stocks have been under pressure this year as concerns about the impact of the Fed’s aggressive path of interest rate hikes on corporate earnings and the overall economy have mounted as the central bank tries to quell stubbornly high inflation.

Other data showed sales of existing homes fell for an eight straight month, while another reading showed factory activity in the Federal Reserve Bank of Philadelphia’s district contracted again in October.

The U.S. central bank is widely expected to announce a fourth straight 75 basis-point hike at its November meeting, with an outside chance of a full percentage point increase.

Volume on U.S. exchanges was 11.37 billion shares, compared with the 11.62 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 2.12-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favored decliners.

The S&P 500 posted 3 new 52-week highs and 28 new lows; the Nasdaq Composite recorded 53 new highs and 239 new lows.

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Reporting by Chuck Mikolajczak; Editing by Aurora Ellis

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Meta’s new Quest Pro headset, mixing real and virtual worlds, makes debut

Oct 11 (Reuters) – Meta Platforms (META.O) unveiled its Quest Pro virtual and mixed reality headset on Tuesday, marking a milestone for Chief Executive Mark Zuckerberg’s break into the higher-end market for extended reality computing devices.

The headset, introduced at Meta’s annual Connect conference, will hit shelves on Oct. 25 at a price of $1,500, and will offer consumers a way to interact with virtual creations overlaid onto a full-color view of the physical world around them.

The launch is an important step for Zuckerberg, who last year announced plans for the device – then called Project Cambria – at the same time that he changed his company’s name from Facebook to Meta to signal his intention to refocus the social media giant into a company that operates a shared immersive computing experience known as the metaverse.

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Zuckerberg has since poured billions of dollars into that vision. Reality Labs, the Meta unit responsible for bringing the metaverse to life, lost $10.2 billion in 2021 and has lost nearly $6 billion so far this year.

In a speech at the event, Zuckerberg, recorded partially in video and partially as an avatar, said he expects the blending of the physical and digital worlds to give rise to new uses for computing.

“You’re going to see entirely new categories of things getting built,” he said.

The Quest Pro features several upgrades over Meta’s existing Quest 2 headset, which overwhelmingly dominates the consumer virtual reality market.

Most strikingly, it has outward-facing cameras that capture a sort of 3D livestream of the physical environment around a wearer, enabling mixed reality novelties like the ability to hang a virtual painting on a real-world wall or have a virtual ball bounce off a real table.

The Quest 2, by contrast, offers a more rudimentary grayscale version of this technology, called passthrough.

The Quest Pro feels lighter and slimmer than its predecessors, with thin pancake lenses and a relocated battery that sits at the back of the headset, distributing its weight more evenly while reducing overall bulk.

For fully immersive virtual reality, Meta has added tracking sensors to the Quest Pro that can replicate users’ eye movements and facial expressions, creating a sense that avatars are making eye contact.

PITCHING PRODUCTIVITY

Meta is pitching the Quest Pro as a productivity device, aimed at designers, architects and other creative professionals.

In addition to offering its own Horizon social and workspace platforms, the company has also made virtual versions of Microsoft Corp (MSFT.O) work products like Word, Outlook and Teams available, a partnership Microsoft CEO Satya Nadella joined Zuckerberg to announce.

Matthew Ball, a venture capitalist whose writings about the metaverse have drawn Zuckerberg’s praise, said he considered such partnerships significant because they suggested the companies’ commitment to interoperability, or the idea that different systems should connect with each another.

“There is a lot of skepticism in the market as to whether an interoperable and open metaverse is even possible, let alone likely,” he said, noting that Microsoft and Meta compete on several products in the extended reality space.

At a preview of Quest Pro days before its launch, Meta gave reporters a glimpse of the type of user it had in mind for its productivity pitch by showcasing apps like Tribe XR, a virtual training environment for DJs.

Tribe XR is already available in virtual reality, but a demonstration showed how passthrough technology may enable DJs to use the app to play real-world gigs, as it means they can look out past their virtual equipment at actual partygoers.

Meta plans to sell the Quest Pro in consumer channels to start, while adding enterprise-level capabilities like mobile device management, authentication and premium support services next year, executives said at the press event.

They said the device is intended to complement rather than replace the entry-level Quest 2, which sells for $399.99.

For now, that means the Quest Pro stops short of enabling the complex commercial applications Meta has suggested it wants its metaverse technology to support.

The company is still working on a mixed reality experience for its Horizon Workrooms app that would make a person’s avatar appear to be present in a real-world conference room with other users, which it is calling Magic Rooms.

It is also planning to add legs to its avatars, which are currently displayed from the waist up, Zuckerberg said.

Still, the Quest Pro’s price point puts it well under the cost of existing enterprise-focused devices like Microsoft’s Hololens 2, which was released for commercial use in 2019 and is already present in operating rooms and on factory floors.

An entry-level Hololens 2 sells for $3,500.

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Reporting by Katie Paul in Palo Alto, Calif.
Editing by Kenneth Li, Jonathan Oatis and Matthew Lewis

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U.S. adds China’s YMTC and 30 other firms to ‘unverified’ trade list

WASHINGTON, Oct 7 (Reuters) – The United States on Friday added China’s top memory chipmaker YMTC and 30 other Chinese entities to a list of companies that U.S. officials have been unable to inspect, ratcheting up tensions with Beijing and starting a 60 day-clock that could trigger much tougher penalties.

The new listings were the first of a slew of new restrictions announced on Friday on exports of technology to China aimed at blocking military advances. The crackdown included curbs on access to chipmaking tools for Chinese firms including Yantze Memory Technologies Co (YMTC), as reported by Reuters a day earlier. read more

U.S. senators from both parties have been calling for YMTC, China’s fast-growing chip manufacturer, to be placed on a trade blacklist known as the “entity list.” The company, founded in 2016, poses a “direct threat” to U.S. chip companies, according to the Biden administration.

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YMTC and the Chinese embassy in Washington did not respond to requests for comment.

YMTC is under investigation by the Commerce Department over whether it violated U.S. export controls by selling chips to blacklisted Chinese telecommunications company Huawei Technologies Co Ltd. Its chips also are being evaluated by Apple Inc for inclusion in some of its iPhones in China, a major concern for U.S. lawmakers and the Biden administration.

Companies are added to the unverified list because the United States could not complete on-site visits to determine whether they can be trusted to receive sensitive technology exports from the United States. U.S. inspections of Chinese companies require the approval of China’s commerce ministry.

U.S. exporters must conduct additional due diligence before sending goods to entities placed on the “unverified list,” like the 31 added on Friday, and may have to apply for more licenses.

Under the Biden administration’s new policy, if a government prevents U.S. officials from conducting site checks at companies placed the unverified list, Washington will start the process for adding them to the entity list after 60 days.

Entity listing YMTC would further escalate tensions with Beijing and force its U.S. suppliers to seek difficult-to-obtain licenses from the U.S. government before shipping them even the most low-tech items.

Not all the measures announced on Friday were bad news for China. The United States removed a unit of Wuxi Biologics, maker of ingredients for AstraZeneca’s COVID-19 vaccine, from the unverified list. Reuters reported last summer that U.S. officials had been able to conduct an inspection at the Wuxi city site, a stepping stone to removal from the list.

A Wuxi Biologics spokeswoman said the company was pleased the Wuxi site was removed from the list, given the inspection in June. The company looks forward to scheduling an inspection of its Shanghai subsidiary, which also was placed on the unverified list in February, she added.

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Reporting by Karen Freifeld; Editing by Chris Gallagher, Chris Sanders, Chizu Nomiyama, Mark Porter and Richard Chang

Our Standards: The Thomson Reuters Trust Principles.

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