China establishes $29B fund to wean itself off of US semiconductors

[onetheycallEric]

Why it matters: China's semiconductor industry has largely depended on American technology, but China has long been working on technological self-reliance. In the wake of the US-China trade war, China seems to be heeding calls of urgency to wean itself off of US semiconductors and IP and accelerate its own semiconductor industry -- which some believe could hurt American interests in the long run.

China has established a new state-backed semiconductor fund, with the intent of advancing its domestic semiconductor initiatives and reducing its reliance on US technology. The fund currently sits at 204 billion yuan ($28.9 billion) and is the second of its kind, with the first state-led fund taken place in 2014.

China is the largest consumer of semiconductors in the world, and Bloomberg reports that China imports roughly $200B worth of American semiconductors annually. In recent years, China has made moves to stimulate its own semiconductor industry, but the back and forth US-China tensions have given Beijing a new sense of urgency.

According to Bloomberg, the fund's capital is coming from state organizations and the Chinese government, with China's Ministry of Finance pouring about 22 billion yuan into the fund. The China Development Bank invested another 22 billion yuan, while the fund has also attracted monetary support from other "local governments and state-owned enterprises."

Image credit: Steven McDowell

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https://www.techspot.com/news/82556-china-establishes-29b-fund-wean-itself-off-us.html

 

[wiyosaya]

$200B worth of American semiconductors is a lot of jobs lost because of the trade wars. MAGA!

 

[lmaoboy]

They are going to release their own crypto soon... I hope that after it happens crypto market will rise again and my BMC coins will pump. According to the last Blackmoon digest, they are going to work under the utility of BMC...

 

[psycros]

Cool, now let's start making all the electronic gizmos in places like Mississippi, West Virginia and South Dakota. The blue collar populations are ready to work and the costs of doing business are a lot lower in the "flyover states". Surely there are enough fancy bars in these places to get six-figure management dead weight to live there, too.

 

[grumblguts]

Im willing to never buy china hardware if a alternative is at hand.

 

[Mr Majestyk]

Looks like they have stolen enough IP, although to be fair the West gave them plenty and helped build their factories while dismantling their own, and showed them how to do it and then after a few years they say we don't need you anymore. Reap what you sow.

 

[techarrow]

Nice news for us monopoly on chips.Dram will be cheaper and cpus with the chinese invasion soon I hope

 

[TheWatcher]

If this goes like this then US trade embargo won't mean a thing in the future.

 

[Capaill]

"which some believe could hurt American interests in the long run"
some? could? Haha! America just lost all Asian and African customers. At a minimum.
As with most things Chinese, their new semiconductors will function the same as US ones (as they are based on the same chips/technology) but will cost less. Any international customer not concerned about security will snap them up.

 

[wiyosaya]

If this goes like this then US trade embargo won't mean a thing in the future.

Honestly, I don't think it means a thing now, nor has it ever. The world was far beyond nationalism when it started. Those who failed to review history before starting this inane adventure have simply overlooked the fact that nationalism has never worked for countries that tried it in the past.

Cool, now let's start making all the electronic gizmos in places like Mississippi, West Virginia and South Dakota. The blue collar populations are ready to work and the costs of doing business are a lot lower in the "flyover states". Surely there are enough fancy bars in these places to get six-figure management dead weight to live there, too.

While blue collar populations may be willing to work, who is going to buy all that stuff? The people making it?

What this article indicates is just how big of a market China is for the US.

IMO, the world is going to need a much larger change than the US saying, "TTtthaaat's all folks. We are not part of the world anymore."

China tried isolating itself from the world in what, the 1600's? All that got them was life in the dark ages until about 1970 when Tricky D!ck normalized relations with them.

 

[wiyosaya]

Nice news for us monopoly on chips.Dram will be cheaper and cpus with the chinese invasion soon I hope

And there will be a line item on your purchase slip in the US that reads "30% tariff" just like line items on my recent Digi-Key purchase. So much for China paying the tariffs and Mexico paying for the wall.

 

[wiyosaya]

"which some believe could hurt American interests in the long run"
some? could? Haha! America just lost all Asian and African customers. At a minimum.
As with most things Chinese, their new semiconductors will function the same as US ones (as they are based on the same chips/technology) but will cost less. Any international customer not concerned about security will snap them up.

IMO, there's quite the crowd of people around here that cannot possibly even imagine that this is true. Ah, but what the hey? Why not just give the US clientele to China especially if it makes America great again!

 

[mbrowne5061]

China has been trying to straighten out their semiconductor industry since they fell behind in the 1970s. They keep pumping money in, and only getting stolen IP out - and stolen only keeps them at or just below the competition, it does nothing to get them ahead. This will be no different.

 

[DelJo63]

Interesting; A great many semi-conductor plants are in Asia, not the U.S.

https://www.investopedia.com/articl...tor-companies-tsmintc.asp#8-texas-instruments list the top 10 companies in the industry.

There's an anomaly in finding if a company is offshore or domestic in that the headquarters many be local while the physical plant is offshore.

Here's the list:

• 1) Intel
• 2) Samsung
• 3) Taiwan Semiconductor
• 4) Qualcomm
• 5) Broadcom
• 6) SK Hynix
• 7) Micron Technology
• 8) Texas Instruments
• 9) Toshiba
• 10) NXP

Addtionally, with "globalization" principles driving labor costs to the lower/lowest areas of production, it's got trade negotiations all balled-up so that labor issues impact everyone and every business when the politics kick in.

 

[wiyosaya]

China has been trying to straighten out their semiconductor industry since they fell behind in the 1970s. They keep pumping money in, and only getting stolen IP out - and stolen only keeps them at or just below the competition, it does nothing to get them ahead. This will be no different.

There are cases where Chinese research, that is real Chinese IP authored by real Chinese researchers, has contributed to modern science and technology.
https://www.untvweb.com/news/chinese-scientists-make-breakthrough-in-nano-technology/
http://www.xinhuanet.com/english/2019-01/05/c_137722128.htm
https://www.nationalgeographic.com/magazine/2019/05/data-show-why-china-science-research-is-booming/
https://en.wikipedia.org/wiki/History_of_science_and_technology_in_China
https://www.fic.nih.gov/News/Global...-2015/Pages/china-global-research-impact.aspx

I am not saying that there have not been cases of Chinese stealing IP from elsewhere.

China walked the road of self-isolation for hundreds of years. IMO, it is logical that they discovered the errors of their ways and decided another path was better for the country and its people.

 

[Capaill]

It's only a matter of time before China succeeds through some means. Their nation is unified and driven - with both their government and key industries working together. Other international companies are scared. They love to showcase the failures of China as it is the only way to keep their existing or new customers. It would be foolish to believe that China will never succeed. Once China gets the edge that they have been struggling to get for so long, the other companies are in massive trouble.

 

[quadibloc]

If your goal is to keep China from getting its hands on advanced microchips for use in its military equipment, which is better: to have it try to make such chips itself, or to sell it what it wants? It's true that when the embargo is extended from specialized items like rad-hard chips, China's efforts to make its own chips will be more visible, but I'm not so sure that "counter-productive" really applies here.

 

[toooooot]

$200B worth of American semiconductors is a lot of jobs lost because of the trade wars. MAGA!

But to be fair, China takes lots of our jobs as well. And whats worth, these fake American companies bring the goods back and yet demand that the good shouldn't be taxed. They dont deserve this. This should have been done long ago. And all the taxes gained from taxing them, should go toward making cheaper the goods produced here.