Chip, GenAI and greenwashing are this week’s stories

1-TSMC plans more chip factories in Europe

As you know TSMC’s first European plant in Germany is set to begin operations in 2027. In August, TSMC started building a €10 billion semiconductor factory in Dresden, Germany, with the German government covering half the cost through €5 billion, thanks to in state aid under the EU’s Chips Act. (By the way I have a story here about EU’s high tech imports)

I read this story at The Next Web and the factory will be manufacturing semiconductors for automotive and industrial uses, in partnership with Dutch company NXP, and German firms Bosch and Infineon. Let me note that the EU accounts for around 10% of global semiconductor production, specifically in automotive and industrial chips, with established companies like NXP, Infineon, and STMicroelectronics. The new TSMC foundry is expected to reach an annual output of 480,000 silicon wafers by 2029, according to the story.

As a side note, Europe lags behind in manufacturing advanced chips for AI and High-Performance Computing (HPC). Intel’s €30 billion mega foundry in Germany, planned to start in 2028, could have helped bridge this gap, as the story put it.

2-GenAI startups receive 40% of all VC money in cloud amid ChatGPT hype

Generative AI, or GenAI, startups attract 40% of venture capital, or VC, funding cloud companies, according to Accel, a VC, based in US. In its latest Euroscape report on cloud and AI trends, Accel estimates VC funding for cloud startups in the U.S., Europe, and Israel to reach $79.2 billion this year, since AI is the major driver.

The report found that VC funding in the cloud industry grew by 27% in 2023, the first annual increase in three years, with cloud startups in these regions raising $62.5 billion. This represents a 65% increase compared to the $47.9 billion raised four years ago.

I saw this story at Cnbc and as of September 30, Accel’s Euroscape index, which tracks publicly-listed cloud companies in the U.S., Europe, and Israel, was up 19% year-over-year, though it remains 39% below its 2021 peak. No company in the Euroscape index has achieved revenue growth exceeding 40% this year, compared to 23 companies in 2021, according to the story.  IT budgets are shifting towards AI investments, particularly in generative AI, leaving less funding available for other areas, the report said.

The top six generative AI companies in the U.S., Europe, and Israel received about two-thirds of all funding, with OpenAI leading by bagging $18.9 billion in 2023-24, followed by Anthropic and xAI in the U.S., and companies like Wayve, Mistral, and Aleph Alpha in Europe.

The U.S. dominated generative AI funding, attracting almost 80% of the $56 billion invested globally over 2023-24. Leading tech companies such as Amazon, Microsoft, Google, and Meta are each spending between $30 billion and $60 billion annually on AI, the data said.

3-Greenwashing cases went down for first time in 6 years

RepRisk, an ESG risk platform based in Switzerland, published its latest report that identified 1,841 instances of misleading corporate communications, with 56% (1,038 cases) involving environmental claims categorized as greenwashing. Private companies accounted for the majority, representing 70% of greenwashing incidents, while public companies made up 30%.

Philipp Aeby, CEO at RepRisk, noted that while regulatory efforts have progressed, greenwashing risks continue to evolve, potentially harming companies’ reputations and financial performance. Although the overall number of greenwashing cases has declined, their severity has increased. I saw this story at ESG Dive and  the report also found that 30% of companies linked to greenwashing between 2022-23 were repeat offenders in 2024, with 42% of U.S. firms reappearing.

The banking and financial industry, which saw a 70% rise in greenwashing claims in 2023, experienced a 20% decrease in 2024. However, the oil and gas industry remained the most associated with greenwashing claims, comprising 22% of cases (332 incidents) in 2024, as it has been since 2019. The report also highlighted growing scrutiny of sustainability claims in the food and beverage industry, citing legal actions against companies about their environmental efforts.

Greenwashing trends in the U.S. have differed from Europe, with U.S. cases peaking in 2022, falling by 10% in 2023, and then rising by 6% in 2024. High-severity cases in the U.S. surged 114%, while medium- and low-severity cases declined by around 15% and 34%, respectively, reflecting a global pattern.