Good morning from the Financial Times.
Today is Thursday, February 13th.
This is your FT News Briefing.
Europe is getting the cold shoulder when it comes to Ukraine's peace negotiations, and U .S.
inflation is on the upswing.
Plus, a Chinese chip company is eating South Korea's lunch.
I'm Mark Filippino, and here's the news you need to start your day.
European countries are trying to figure out what U .S.
President Donald Trump wants from a Ukraine peace deal.
They're hoping to get more clarity at the Munich Security Conference that starts tomorrow.
Here to talk about what might be in store for a peace deal is the FT's Brussels Bureau Chief, Henry Foy.
Hi, Henry. Hi, Mark.
All right, Henry. So EU countries don't actually know a ton about what the Trump administration is working on in terms of a peace deal between Russian President Vladimir Putin and Ukraine's President Volodymyr Zelensky.
But what do they know?
They know that whatever is being cooked up and whatever Donald Trump is landing on is probably going to have to be paid for by European capitals.
And when I say paid for, Mark, what I I mean is putting in cash up front to pay for reconstruction, building roads, building housing, and pay for it with physical humans, with troops.
Donald Trump has made very clear that there will not be US troops in Ukraine after the war to keep the peace.
Now, the real concern here is that Europe is going to be asked to pay for and support a deal that they have zero input into striking.
And what they're very worried about is that Trump is going to sort of present it to them as a fait a complete, and then go and negotiate it with Putin and possibly Zelensky, but not necessarily, over the heads of Europe.
Now, Trump said yesterday that he had spoken to Putin on the phone and that the two of them would actually begin negotiations, quote, immediately.
What else did the Trump administration say?
Well, for a while, Trump has been saying that Europe needs to take on more responsibility for its own defense.
That sort of morphed in recent days into Europe needs to take more responsibility for Ukraine going forward.
Also this week, we of course had the release of the US citizen Mark Fogel in Russia.
This was a prison swap deal negotiated by one of Trump's associates in Moscow.
Europeans, of course, very happy to see a Western citizen go free from a Russian jail.
But for them, they read it as, okay, Putin is in a dealmaking mood and Trump is ready to do deals.
And again, this is another deal that the Europeans were not involved in at all.
And how is the EU responding to being left out?
So they're doing their best to sort of reach out to the Trump administration.
They're doing it bilaterally through capitals.
I'm thinking of George Maloney in Rome, or perhaps Viktor Orban in Hungary are reaching out bilaterally to the Trump administration, trying to get as much information as they can, and then sharing that with their European allies.
They're also trying to huddle here in Europe and working out what the contingency plan might be, and really how to make sure they lobby as hard as they can at Munich this week and in any conversations they end up having with Trump officials such as J .D.
Vance, the vice president, trying in any way they can to influence Trump's thinking and try to make sure that he's taking European thoughts into account.
Henry, what kind of impact would a Trump -led peace agreement that doesn't really involve the EU have on European security?
Well, Mark, I think if Trump were to say this is the deal that I've negotiated with Vladimir Putin, and this is the deal you're all going to have to agree to, that would really make a lot of European capitals question just how much they're able to A, rely upon the United States in the future for any
kind of security guarantees to European states.
But also, if on top of that, European troops are being made to move into Ukraine by Donald Trump to protect this peace agreement that he's negotiated, what then happens if Russia were to launch an attack in Ukraine, would America come to their aid?
It really does open up a huge number of questions about how Europe sees its future and how much it can rely on America if it's told, you're not allowed to be part of this deal, but I need you to pay for it, execute it, and make sure it holds.
Henry Foy is the FT's Brussels Bureau Chief.
Thanks, Henry. Cheers, Mark.
U .S. inflation unexpectedly ticked up last month.
It's now at 3%. Economists had predicted it would stay steady at 2 .9%.
Now, the price of eggs was a major factor.
Prices rose 15 % in January and 53 % over the past year, partly because of a surge in bird flu cases.
The increase makes it more likely that the Federal Reserve will move slowly on cutting interest rates.
Last month, the central bank left rates unchanged.
Higher inflation has left investors less than optimistic about rate cuts.
They had priced in two for this year before the data was released.
Now they're thinking there will only be one.
DeepSeek isn't the only Chinese technology company making headlines these days.
the chip maker CXMT could be just as disruptive.
It's been gobbling up global market share, and this time South Korea is paying the price.
Here to explain is Christian Davies.
He's our sole bureau chief.
Hi, Christian. Hello.
So CXMT produces these things called memory chips.
Christian, what do they do, and what does the market for them look like?
So there are basically two main types of semiconductor.
There are the logic chips.
These are processors that do the thinking.
And there are memory chips which store information in the processors.
Memory is heavily commoditized, meaning that you have a much smaller number of players who are competing to produce products on price rather than technological sophistication.
At the moment, the market is dominated by Samsung Electronics and SK Hunics from South Korea.
and Micron from the US.
But CXMT in just the last few years has gone from effectively zero to 5 % and maybe soon 10 % market share.
That doesn't sound like very much, but in a heavily commoditized market, even small shifts in market share make a big difference.
And how exactly is CXMT increasing its market share?
What we are seeing with CXMT is replicating a pattern we've seen in several other industries, which is Chinese newcomers starting at the low end of the market and gradually as they accumulate market share, moving further and further up the value chain to produce more and more sophisticated products.
And this has often come at the expense of Korean companies who themselves had built their position in those sectors by taking over from their Japanese rivals.
And now we're starting to see Chinese companies do the same thing to the Koreans.
OK, so South Korean companies are facing a serious challenger in CXMT.
Is there anything that could slow it down?
So at the moment, you're starting to see a lot of government intervention, specifically the United States intervening to try and prevent Chinese companies from taking over the top end of the market.
They've been imposing export controls, for example, stopping CXMT and other Chinese chip companies from accessing sophisticated chip making equipment.
So at the moment, although CXMT has been rapidly rising at the lower end of the market, there is still a kind of technical ceiling that is certainly decelerating or hampering their efforts to catch up at the high end of the market with the Koreans.
So these export controls are really putting pressure on CXMT.
What does that tell us about the future of chip making, not only in South Korea, but China too?
South Korea's saving grace is that it's not Chinese.
As long as the United States is determined not to depend on Chinese semiconductors, then they're going to need non -Chinese rivals.
And that's where the South Koreans have a clear advantage.
But what normally happens is export controls are imposed.
They tend to have flaws.
They tend to have loopholes.
And only by observing them in practice for two or three years, then the US government can see where the loopholes and the gaps are.
What we can say is that we've seen how adept China is at progressing and really making do with what it can in order to make rapid progress.
Christian Davies covers South Korea for the FT.
Thanks, Christian. Thank you.
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