Posted on 10/28/2019 11:37:51 AM PDT by AdmSmith
Wuhan lockdown strikes at heart of ‘Made in China 2025’
Government goes all out to keep semiconductor and steel production rolling
One semiconductor industry insider summarized the situation in Wuhan under lockdown: “Workers on Spring Festival holiday cannot return, and on top of that, quality control managers from client companies are unable to come to inspect the product, so full-scale production cannot move forward.”
An executive of a Japanese automaker also said: “China’s overall production could be adversely affected. We have begun reviewing our supply network to see if we can procure parts from outside China.”
Check the table with major companies in Hubei province.
The outbreak of the coronavirus in Wuhan, a major manufacturing hub in Central China’s Hubei Province, could inflict a slew of effects on various high-tech and heavy industries where Wuhan plays a pivotal role, such as semiconductor, panel and auto sectors, industry insiders said.
https://www.globaltimes.cn/content/1178381.shtml
SEMI announced Tuesday the postponement of SEMICON/FPD China 2020 and related events originally scheduled for March 18-20, 2020. SEMI China is actively working on a contingency plan for rescheduling of the event and will keep you informed as soon as a confirmed plan is in place.
BARB JORGENSON: I’m hearing that it could go as long as April, easily. And what I’m really saying is that things may get back up normal by April. But let’s just also remember that it takes 18 weeks to manufacture a semiconductor. It’s about that amount of time to manufacture passives. Again, a lot of US brands are manufacturing out of Wuhan. I’ve heard estimates as long as six months just to get back to normal. There are also expectations that, if this is a significant delay of several months, shortages of components and materials might start to revise. I read today that a German car manufacturer has been unable to restart its production line because materials out of Wuhan are being limited. They depend on steel quite a lot, and apparently Wuhan is the number one region for the output of steel.
BRIAN SANTO: Well since you mentioned that, we’re talking about steel, we’re talking about semiconductors, can you give us a quick overview of the types of industry that Wuhan is leading in? Are there any particular types of components or any particular types of ICs and other materials that go into the high tech supply chain?
BARB JORGENSON: Yes. What I’ve heard is, industries that we see are optical electronics, semiconductors, chemicals, life sciences, biotech and food. In the high tech arena, we’re specifically talking about 3D nand and flash. We are talking about applications such as smartphones and computers.
https://www.eetimes.com/podcasts/the-outbreak-in-wuhan-semiconductors-and-sulfuric-acid/
China debt fears grow amid wave of corporate defaults
Not so long ago a Chinese bond default was barely heard of. Yet in the past two months, talk in the country’s financial circles has been of little else.
A swath of failures to repay principal or interest on outstanding bonds has sent this year’s default total to a record $25 billion and raised concerns of a looming debt crisis that could derail China’s post-pandemic recovery. It follows a period in which Chinese companies have gorged on cheap borrowing, giving the world’s second-largest economy one of the world’s most debt-dependent corporate sectors.
Nonfinancial corporate debt climbed to 159.1% of GDP in the first quarter from 152.2% a year earlier, according to the Institute of International Finance, which counts 400 banks and financial institutions across the globe as members. The ratio is the world’s second highest, behind only Hong Kong. In comparison, the proportion in the U.S. stood at 78.1%, in the euro area at 109.8%, 106.4% in Japan and 96.1% on average across emerging markets.
Now the focus is on what 2021 might bring. In the offshore market, where Chinese companies borrow in foreign currencies, about $104 billion worth of bonds will mature in 2021, 40% more than this year. Some 7.1 trillion yuan of bonds are due to mature in the domestic market, with Fitch Ratings warning that 1.15 trillion yuan of that relates to companies with excessive borrowings or weak balance sheets.
24DEC2020 With Money, and Waste, China Fights for Chip Independence
But as Beijing broadens its ambitions in semiconductors, it is also setting itself up for larger potential failures — and dialing up the amount of money it might lose in the process. Several chip projects have run aground recently because of frozen funding and mismanagement. A state-backed chip conglomerate, Tsinghua Unigroup, warned this month that it was in danger of defaulting on nearly $2.5 billion in international bonds.
Morgan Stanley analysts estimate that Chinese brands bought $103 billion in semiconductors last year, of which 17 percent was from local vendors. They predict the share will rise to 40 percent in 2025, far short of the government’s target of 70 percent.
China this year has rolled out new tax breaks for chips, including a 10-year exemption from corporate tax and duty-free imports of materials. State-backed funds have invested in both start-ups and publicly traded companies, including when SMIC listed shares in Shanghai in July.
At a top-level meeting on the economy last week, the Communist Party’s leaders enshrined technological self-reliance as one of the country’s “Five Fundamentals” for economic development.
When the state broadcaster China Central Television visited one stalled project in the eastern city of Huai’an recently, it found dozens of giant machines idling on the factory floor, many of them still sheathed in plastic.
https://www.nytimes.com/2020/12/24/technology/china-semiconductors.html
Treasury FAQs prohibit ETFs and index funds from financing Communist Chinese military companies and subsidiaries.
https://twitter.com/State_E/status/1343700383785512962
latest list https://www.treasury.gov/ofac/downloads/ccmc/ns-ccmc_list.pdf
Jan. 1, 2021—The Semiconductor Industry Association (SIA) today applauded Congress for enacting the National Defense Authorization Act (NDAA), legislation that includes Title XCIX, “Creating Helpful Incentives to Produce Semiconductors for America,” which authorizes federal incentives to promote semiconductor manufacturing and federal investments in semiconductor research. SIA represents 98 percent of the U.S. semiconductor industry by revenue and nearly two-thirds of non-U.S. chip firms.
“Enactment of the NDAA will help propel U.S. economic growth and cement America’s position at the forefront of semiconductor innovation, which is critical to the game-changing technologies of today and the future,” said Bob Bruggeworth, President, CEO, and Director of Qorvo and SIA Chair. “The next step is for leaders in Washington to fully fund the NDAA’s domestic chip manufacturing incentives and research initiatives. Doing so will make America one of the world’s most attractive places to produce this foundational technology.”
SIA Webinar - Examining China's Semiconductor Self Sufficiency: Present and Future Prospects
17 Nov, 1h
https://www.youtube.com/watch?v=TsBxU0ADotY
The Weak Links in China’s Drive for Semiconductors
“Our dependence on core technology is the biggest hidden trouble for us”, said Xi Jinping in 2016. Semiconductors are crucial to China’s global leadership ambitions - but China’s trouble is no longer hidden, despite massive policy support to a booming sector.
Semiconductors are key to attain Xi Jinping’s goal to turn the People’s Liberation Army into a world-class military by 2050, outlined at the 19th National Congress of the Chinese Communist Party in 2017. Semiconductors are an essential technology for the arms industry, an issue that is now central in US-China relations.
https://www.institutmontaigne.org/en/publications/weak-links-chinas-drive-semiconductors
72 pages report
If this is correct 22JAN21:
China’s state chip fund, aka “The Big Fund”, announced plans to cut its shareholding in three Chinese semiconductor companies. The move will cash out >$4bln for the central govt and an array of investors who are mostly state-owned enterprises.
https://twitter.com/GaoYuan86/status/1352641073386938370
The money might be used for this: 08DEC2020
SMIC announced that it has signed a joint venture agreement with the second phase of China Integrated Circuit Industry Investment Fund and Beijing E-Town International Investment & Development to jointly establish a joint venture SMIC Beijing Integrated Circuit Manufacturing (Beijing) Co., Ltd., with a total investment of $7.6B.
The “CHIPS for America Act” introduced to Congress last year aims to encourage more plants to be established in the U.S. Michael McCaul, a Texas Republican, plans to reintroduce the bipartisan bill this year with a view to securing $25 billion in federal funds and tax incentives. McCaul said in a statement he’s working with colleagues in the House and Senate “to prioritize getting the remaining provisions of CHIPS signed into law as quickly as possible.
TSMC to establish a $12 billion chip fabrication plant in Arizona. South Korea’s Samsung Electronics Co. is set to follow, with a $10 billion facility in Austin, Texas.
The European Union aims to bolster the bloc’s “technological sovereignty” through an alliance armed initially with as much as 30 billion euros ($36 billion) of public-private investment to raise Europe’s share of the global chip market to 20% (without a target date) from less than 10% now.
GlobalWafers Co., based in TSMC’s hometown of Hsinchu, just boosted its offer for Germany’s Siltronic AG to value the company at 4.4 billion euros, an acquisition that would create the world’s largest silicon wafer maker by revenue.
China, in its five-year plan presented in October, is channeling help to the chip industry and other key technologies to the tune of $1.4 trillion through 2025. Yet even that kind of money doesn’t negate the need for Taiwan. Indeed, China has long tapped the island for chip-making talent; two key executives at China’s top chipmaker, Semiconductor Manufacturing International Corp., used to work at TSMC: co-Chief Executive Officer Liang Mong Song and Vice Chairman Chiang Shang-yi.
Fellow analyst Linda Kuo said the Taiwanese government was alarmed by a ransomware attack on TSMC in 2018 and had announced plans for some $500 million to help the industry become more aware of cyber security issues.
The greater worry is that TSMC’s chip factories could become collateral damage if China were to make good on threats to invade Taiwan if it moves toward independence.
A group of Ninety Chinese companies has submitted the application to form the National Integrated Circuit Standardization Technical Committee. According to the Ministry of Industry and Information Technology in China, the secretariat is planned to be established in the China Electronics Standardization Institute.
The major names among the 90 companies are Huawei, Shenzhen HiSilicon, Xiaomi, ZTE Microelectronics, SMIC, Datang, Unichip Microelectronics, Zhanrui Communications, China Mobile, China Unicom, China Telecom, and Tencent.
Chinese businesses bought almost $32 billion of equipment used to produce computer chips from Japan, South Korea, Taiwan and elsewhere, a 20% jump from 2019, a Bloomberg analysis of official trade data shows.
And with companies like Huawei Technologies Co. stockpiling supplies ahead of U.S. sanctions, imports of computer chips climbed to almost $380 billion — making up about 18% of all of China’s imports for the year.
One good thing here—— Looks like no traitorous US or European investors in this Chinese chip manufacturing fund. Looks like all investment was Chinese.
During Trump era some Chinese Companies were raising investment funds on Wall Street. This curtailed under Trump and thanks to Trump. I expect this to make a come back under China Sellout Joe Biden.
Under TRUMP >>>China was our main rival and enemy. Russia is an afterthought.
Under BIDEN-HARRIS>>>> Russia/Putin is our enemy and all purpose boogeyman...While China is our friend.
Yes, more or less, this thread is about Chinese activities to improve their semiconductor industry and become independent. (When they are independent, it is a big threat to all of us) They are using all methods in the book from legal purchase to industrial espionage. If you read any appropriate news article please post it here.
07FEB2021 Taiwan should join semiconductor alliance against China: analyst
Wang also warned that Taiwan should beware of China’s efforts to poach talent, given the latter’s goal of becoming 70 percent self-sufficient in chip production by 2025. “Judging from the past experience, China’s poaching efforts will only increase,” he said.
According to a report in the Nikkei Asian Review in August 2020, China succeeded in luring more than 100 TSMC engineers in the span of just one year, offering them double the amount they were earning in Taiwan. China has redoubled its efforts to develop its semiconductor industry, since U.S. sanctions have restricted its ability to acquire semiconductor chips, Wang said.
Meanwhile, the American semiconductor industry has been urging the new administration of U.S. President Joe Biden to form a semiconductor alliance with like-minded countries to prevent tech espionage by China, he said. The Taiwan government should guide the country’s tech companies to join such an alliance, in order to protect Taiwan’s technological advantage and national strategic security, Wang said.
https://focustaiwan.tw/business/202102070010
China’s largest and most global players in the automotive chips sector came to be Chinese through acquisition. Some of these acquisitions may have struggled to go through in today’s climate, but the fact they were done earlier shows some foresight on these Chinese companies’ part. At the same time, in fields like autonomous driving, homegrown companies are rising.
The acquired companies are in a good position to take advantage of the growing EV and AV industries, but the home grown companies may struggle to compete with the size and scale of their foreign counterparts.
Nexperia, ISSI, and Omnivision have all kept their HQs in their respective home countries, but are concurrently operating strong R&D or manufacturing facilities in China—and in my experience Chinese owners are rarely hands off. ISSI and Omnivision have design teams in China, whereas Nexperia operates packaging R&D on the mainland.
There is nothing nefarious about this, it is quite normal and makes sense. But technical know-how is transferred naturally as part of the work process, so even if these companies switch owners in the future I expect some skills and knowledge will have been transferred to Chinese employees.
https://pathofex.com/where-china-is-gearing-up-in-automotive-semiconductors-%c2%b7-technode/
For years, U.S. investigators found tampering in products made by Super Micro Computer Inc. The company says it was never told. Neither was the public.
Former U.S. officials and corporate security executives say Chinese operatives tampered with Super Micro Computer's products by placing added chips loaded with malicious code on an unknown number of motherboards.
Once installed in servers and shipped to Supermicro customers, the added chips sent beacons back to China and created an opening for malware to be installed undetected.
16FEB21 Semiconductors and the U.S.-China Innovation Race
Geopolitics of the supply chain and the central role of Taiwan
https://foreignpolicy.com/2021/02/16/semiconductors-us-china-taiwan-technology-innovation-competition/
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