Qualcomm acknowledged that, as part of the NDRC probe, it hired the Global Economics Group in Chicago to produce an economic analysis for submission to the regulator. The consultancy employed Zhang Xinzhu, one of China's leading antitrust experts, to co-author the report. A Qualcomm spokeswoman told Reuters that her company paid for the consultancy's services but had no financial dealings with Zhang directly.
Clearly, China is using every possible tool to pressure foreign companies. It appears a little too convenient for Chinese regulators to scrutinize foreign chip companies for antitrust allegations while its local chip firms, by going "state-owned," are poised to become far less transparent.
US-Japan chip trade agreement
But then, who am I to blame China? "Antitrust" allegations might seem a little too creative, but Japan spent decades closing off its market, refusing to buy chips from abroad. Eventually, such practices resulted in a US-Japan semiconductor agreement, first signed in 1986 and renewed in 1991, in which Japan agreed to source 20% of its market for microelectronic chips from American and other foreign companies.
China has consistently stated its desire to reduce dependence on foreign companies. It has lamented that only a small portion of semiconductors consumed in China are actually produced there.
In a June blog post on EE Times, Jin Zhang, senior director of marketing and general manager for Asia Pacific at Oski Technology, cited China's IC consumption and production gap, including an alarmingly wide gap projected for 2015 and beyond. "Most of the ICs consumed in China are provided by semiconductor giants such as Intel, Samsung, TI, Freescale, and Qualcomm," she wrote.
In the eyes of many Chinese industry sources and government officials, that's the crux of an issue that needs to be corrected.
The flipside, of course, is that the very existence of multinationals in China -- which are there because they're needed -- stifles the growth of Chinese chip companies.
Back in 2011, when EE Times started covering China's fabless landscape in earnest, we held high hopes for fabless companies there. They looked (at least to me) far more global than Japanese chip companies did in the mid and late 1980s. I thought they were more likely to cross borders, go public, and become actively engaged in mutually beneficial strategic partnerships with fellow chip vendors overseas.
That view was based on what I thought we had learned over the years through the US-Japan agreement, which settled one of the hardest fought trade disputes in the electronics industry.
In 1995, when Japan's electronics industry was calling for the termination of a nearly 10-year-old semiconductor trade agreement between the United States and Japan, Norio Ohga, then chairman of Sony and the Japanese industry association, argued that many Japanese and American semiconductor companies were working together, relieving trade tensions. He told The New York Times at the time: "Given the borderless nature of many fundamental business operations in this industry, the era in which it made sense to distinguish the 'nationality' of a semiconductor product is long since past."
That was almost 20 years ago.
But today, judging by China vs. the rest of the world in the electronics industry, the nationality of a semiconductor product still matters. I recommend that we all fasten our seat belts. We've begun a long, wild Asian rollercoaster ride all over again -- this time in China.
— Junko Yoshida, Chief International Correspondent, EE Times