Posted on 10/28/2019 11:37:51 AM PDT by AdmSmith
At current, SMIC ramps up manufacturing utilizing its 14 nm course of know-how at one of its 300-mm fabs, so preliminary volumes will not be excessive. In the meantime, SMIC’s plans embody build up a brand new 300-mm manufacturing line for 14 nm and thinner course of applied sciences with a month-to-month capability of 35,000 wafer begins per thirty days.
Moreover, the corporate is growing extra superior processes, together with these that may require excessive ultraviolet lithography (EUVL) instruments, that will probably be used subsequent decade. Actually, the corporate has even acquired an EUV step-and-scan system from ASML, however it has not been put in to this point.
The EUV system purchase is on hold. See above.
“There's a lot of concern for chip production being so concentrated, and it's only becoming more important for everything from aerospace and defense to smartphones and the internet of things,” says Sam Azar, senior vice president for corporate development and legal affairs at Globalfoundries, which has called for the U.S. to ban a range of TSMC imports. “A lot of that production comes from one area in Greater China. A lightbulb should go off saying, Wow, that may not be good for the world.”
Globalfoundries’ Azar says he isn't sure when the dust will settle on the trade war or his company’s suits against TSMC. Whatever happens, he says, tech companies and chipmakers need to return to supply chains that aren’t just clustered on one continent. “Having a manufacturing base in America, in Europe - that's a competitive advantage for us,” he says. “Be ready.”
Look what money can buy:
Tsinghua Unigroup, one of China’s leading chipmakers, has hired Japanese semiconductor industry veteran Yukio Sakamoto as a senior vice president and also head of the company’s Japan unit.
Sakamoto, 72, served as chief executive of once-leading Japanese chipmaker Elpida Memory, which was established by combining the memory chip units of NEC and Hitachi.
Besides Sakamoto’s experience, the Chinese government-backed Unigroup likely aims to put his connections in Japan and beyond to work as it expands its reach.
In an interview with Nikkei this year, Sakamoto said it was imperative for China to develop its own chip technology, rather than poaching engineers from South Korea or Taiwan with high salaries.
“It’s better for China to persevere for five years and develop its own technology and build a foundation. China has a large domestic market and it would be better to nurture the ability to create semiconductor products that fit that market,” he said.
https://asia.nikkei.com/Business/Electronics/Japan-chip-industry-heavyweight-joins-China-s-Unigroup
I guess that they are not happy in Japan:
In Japan, 85% say they have an unfavorable opinion of China – the most negative among all countries surveyed. More than half in South Korea (63%), Australia (57%) and the Philippines (54%) share this sentiment. Opinion of China has also fallen across the region over the course of Pew Research Center’s polling and is now hovering at or near historic lows in each of the countries.
More about Rare Earthsand China
https://www.youtube.com/watch?v=8mO6hZFGnA8
Perhaps this can work: S.2093 - RE-Coop 21st Century Manufacturing Act a bill to establish a Thorium-Bearing Rare Earth Refinery Cooperative.
https://www.congress.gov/bill/116th-congress/senate-bill/2093/
China has made no secret of its desire to become self-sufficient in technology. The nation is both the world’s largest importer and consumer of semiconductors. It currently produces just 16% of the semiconductors fuelling its tech boom. But it has plans to produce 40% of all semiconductors it uses by 2020, and 70% by 2025, an ambitious plan spurred by the trade war with the US.
Will Huawei’s chips and operating systems be as competitive as Qualcomm’s and Android? Most likely not. At best, it will take years before they are,” Mr Scaruffi adds. Mr Scaruffi estimates that China could be as many as 10 years behind the leading producers of high-end computer chips. The majority of chips made for high-end electronics are manufactured by specialist foundries like the Taiwanese Semiconductor Manufacturing Company (TSMC). It produces more than 70% of chips designed by third party companies.
Just securing the best machinery needed to make high-end chips is difficult. “To start out with equipment, its very high precision equipment. You need to print very fine features. The equipment that is needed to have this kind of technology is controlled by a few companies in the world,” says Mr Yue.
He believes that Chinese technology is three to four generations behind companies like TSMC. China lacks the industry experience to manufacture high end chips, he says. But he believes that companies like Huawei are already competitive when it comes to designing chips.
“Every Chinese city wants to build its own Silicon Valley. It tends to be more driven from the top. Silicon Valley had a big advantage, that it was very far away from the political power,” says Mr Scaruffi. He believes that China’s technological success lies in the implementation of technology rather than its creation.
https://www.bbc.com/news/business-50287485
This is what Sakamoto planned:
Yukio Sakamoto, the former Elpida CEO, hatched Sino King Technology with plans to gather hundreds of senior chip engineers from Japan, Taiwan and Korea. The startup began its life as part of a $7 billion project conducted by the city of Hefei, capital of Anhui province in eastern China. The project included a wafer fab to produce cutting-edge semiconductors in its city.
Sino King started with 10 Japanese and Taiwanese engineers, with plans to hire experts in design and production technology, aiming to employ around 1,000 engineers.
Sino King, however, no longer appears to be in active operations.
According to Yunogami, Sakamoto in recruiting had promised Japanese semiconductor engineers an annual salary of 100,000,000 yen (roughly $887,000) under the condition that they must move to China and live there for at least three years.
Word on the street in Japan is that Sakamoto actually succeeded in signing up 180 Japanese engineers. Progress stalled at Sino King, not because of lagging recruitment, but because Chinese investors refused to accept Sakamoto’s promise to hire engineers at such an exorbitant salary. Sakamoto reportedly would not back down, refusing to go lower than 100,000,000 yen.
Read more:
https://www.eetimes.com/document.asp?doc_id=1331254# and now Sakamoto is senior vice president of Tsinghua Unigroup.
18NOV2019: The role of China in the global value chains.
Chair: Guntram B. Wolff, Director
Alicia García-Herrero, Senior Fellow
Seamus Grimes, Emeritus professor, Whitaker Institute for Innovation and Societal Change, National University of Ireland
Margit Molnar, Head of the China Desk, OECD Economics Department
1.5 h
https://www.youtube.com/watch?v=nkoI49v0EsI
Federal agencies responded too slowly as Beijing recruited U.S.-based researchers to transfer intellectual property from American laboratories, leaving U.S. taxpayers unwittingly funding the rise of China’s economy and military, U.S. Senate investigators said on Monday.
The Senate’s Permanent Subcommittee on Investigations released the 105-page report saying China started in the late 1990s to exchange salaries, research funding, laboratory space and other incentives for information from U.S. university laboratories and other research institutions, much of it publicly funded. As China spent 20 years recruiting researchers with access to advanced science and technology, U.S. agencies failed to adequately respond. The Federal Bureau of Investigation, for example, did not respond strongly until mid-2018, the report said.
In one example, the Senate investigators said, a post-doctoral researcher who was part of China’s “Thousand Talents Plan” removed more than 30,000 electronic files, including presentations, technical papers, research and charts from a laboratory before returning to China.
Senators Rob Portman, the Republican subcommittee chairman, and Tom Carper, its top Democrat, said they would use the report to write legislation to end “this abuse” of U.S. research, intelligence property and taxpayer money. “These talent plans are a win-win for China. China wins twice. First, the American taxpayer funds China’s research and development. Second, China uses that research to improve its economic and military status,” Portman said in a statement.
This is the second fund this month.
China won’t give up its state-led economic model, top trade negotiator Liu He says
Beijing plans to make its public sector ‘stronger, better and bigger’, vice-premier says in People’s Daily article.
As a tech firm, they've got the usual 10-15% preferential corporate tax rates (its 25% for “normal” firms), but the guy I met claimed they were not getting much else in government subsidies – less than 10% of revenues, he claimed. The big subsidies go to industrial robotics, he said. (And the factories installing equipment often get subsidies too)
That guy from China Robot said what everyone else in PRC tech says these days: we want the technology “in our own hands”. They're all parroting Party Secretary Xi on his “Our Own Rice Bowl” tour in Heilongjiang in September 2018. Xi started talking up the importance of grain self-sufficiency; “The Chinese people's rice bowl has to be held in our own hands at all times”, he declared
Paranoia about the West among the CCP elite is almost official policy. Beijing propaganda can't help itself; its always going back to the Opium War when British cannon made very short-work of Chinese coastal defenses.
Industrial policy is how the CCP builds the economic base upon which National Power can be built. I met a drone firm last year (no, not DJI) which was quietly establishing a subsidiary which would deal exclusively with the PLA. That would allow the main firm to IPO at some point, but keep any foreign contamination away from its military relationships. I'm sure this is not uncommon. Companies here jump over themselves to work with, and sell to, the security apparatus, since that is where the money is. And local governments love the free flow of funds associated with the tech pork barrel too.
China's Disruptive Industrial Strategy. For the uninitiated: Identify a key sector, throw massive, uncoordinated fiscal subsidies and government equity injections at it, seduce a weak foreign firm to share its technology and/or turn a blind eye to IP “borrowing”, sit happily by as loads of firms build a ton of capacity, panic a bit when prices collapse, allow the private firms dumb enough to have jumped in die, but bailout a few of half-decent state-backed firms. Now, wait for a few years as the survivors develop real expertise and a competitive low-end product, and subsidize their losses as they build up a genuine client base. From the low-end, up the value curve they fight. Patient state capital cushions them against failure. It does not guarantee success, but it guarantees a lot of chances to get things right.
http://credibletarget.net/notes/Robots
Unfair competition.
According to a recent statement from the Ministry of Industry and Information Technology, China raised its annual rare-earth mining quota to 132,000 tons, 10 percent more than last year’s level and a new record high.
While the move alleviates concerns that China, the world’s largest supplier of rare-earth minerals, may cut supplies, some critics believe that by raising the quota, China has actually made it more difficult for the US and other countries to develop their own rare-earth industries. The importance and strategic significance of rare earths is self-evident, but it should be made clear that China is not trying to contain the rare-earth industry of any country with its advantageous position. Unlike the US, China never resorts to containment as its strategy to any potential competition.
It is no secret that the excessive reliance of the US on China’s rare-earth supplies is a form of leverage that China has in the trade war with the US. China controls at least 85 percent of the world’s rare-earth processing capacity, according to research firm Adamas Intelligence. Over the years, the US sourced about 80 percent of its rare-earth imports from China. China may not need to play the rare-earth card for the time being, but it is still essential to keep vigilant and to ensure the deterrent effect of this crucial bargaining chip.
http://www.globaltimes.cn/content/1171149.shtml
Since the patent system in China more or less is useless, they have finally started to address the problem:
China’s top decision-making bodies on Sunday set out goals to improve the country’s beleaguered intellectual property (IP) enforcement channels, promising alternatives to overloaded courts so that victims can resolve issues more quickly and cheaply.
Persistent issues such as bad-faith trademark applications and “abnormal” patent filings will face heightened scrutiny.
Some commentators argue that many patents are poor quality and do not deserve even the minimum payout.
An engineering graduate told TechNode on Sunday that he filed eight useless patents for a five-point boost in his application to become a Shanghai resident.
County-level IP offices are supposed to provide quick relief, but critics have said they are ineffectual when faced with highly technical cases and rarely do more than refer victims to court.
I would say almost half the posters on Free Republic are Free Traitors™. The never saw a one sided trade imbalance they didn’t like.
The subsidiary of Panasonic called “Semiconductors Solutions” is being sold to Nuvoton Technology Corporation, Taiwan, a semiconductor company that spun-off from Winbond Electronics Corporation in 2008, where Winbond still owns 61% stake in Nuvoton despite the spinoff. Additionally, Panasonic forecasts a 27% drop in operating profit for this physical year, with the declining semiconductor manufacturing business counted. The reasoning behind this sale is that the company plans to exit all declining businesses that also include LCD manufacturing, as Chinese alternative manufacturers are stiff competition for Panasonic when it comes to pricing and panel output.
https://www.techpowerup.com/261612/panasonic-exits-silicon-manufacturing-business
China-based Advanced Fiber Resources (Zhuhai) Ltd (AFR), a provider of passive optical components (mainly for industrial laser, telecom, data center, fiber sensing, biomedical and academic research fields), has agreed to acquire the assets associated with certain lithium niobate (LiNbO3)-based optical component product lines developed and manufactured in San Donato, Italy by Lumentum Holdings Inc of Milpitas, CA, USA, which makes photonics products for optical networking and lasers for industrial and consumer markets.
http://www.semiconductor-today.com/news_items/2019/dec/lumentum-021219.shtml
Semiconductor manufacturing is both capital- and talent-intensive: Even with the best equipment on the market, a company cannot mass-produce chips without technicians to work on them.
Chinese players are now trying to overcome the barrier by recruiting not only top executives, but entire production teams on the ground,” a Taiwanese industry insider said. “They are paying two to three times as much as Taiwanese companies.”
Taiwanese companies are finding themselves outmatched. “We are improving our compensation, but it is difficult to compete with mainland companies,” Nanya Technology President Lee Pei-ing said.
Taiwan updated its trade secrets act in 2013, imposing prison sentences of up to 10 years for leaking corporate secrets outside the island. But this has not deterred career moves to the mainland in the semiconductor industry.
The effect of these transplants is noticeable. China’s Changxin Memory Technologies and Yangtze Memory Technologies next year are slated to start mass-producing memory chips, one of Taiwan’s strengths. As a market for semiconductor manufacturing equipment, mainland China is expected to surpass Taiwan as the world’s largest next year.
https://asia.nikkei.com/Business/China-tech/Taiwan-loses-3-000-chip-engineers-to-Made-in-China-2025
China Aiming to Overtake South Korea in Semiconductor Industry
According to the Semiconductor Equipment and Materials International (SEMI), South Korea’s and China’s semiconductor equipment investments for this year are estimated at US$9.2 billion and US$11.7 billion, respectively. In addition, those for next year are estimated at US$11.7 billion and US$14.5 billion, respectively.
http://www.businesskorea.co.kr/news/articleView.html?idxno=38711
How should the U.S. respond to China’s attempt to gain semiconductor independence through espionage and immense investments?
Learning the Superior Techniques of the Barbarians
China’s Pursuit of Semiconductor Independence (Jan 2019)
https://csis-prod.s3.amazonaws.com/s3fs-public/publication/190115_Lewis_Semiconductor_v6.pdf
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