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The U.S., China and the Chip Industry

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coup de grâce
MI6   9/21/2017 10:12:55 AM
 What China is attempting to "take elsewhere" has already been accomplished by America's greedy  CEO's many years ago by driving a fabless company approach to save on manufacturing cost. Most of semiconductor manufacturing IS overseas. What remains in the US is "fabless design" which is easily stolen when reversed engineered in overseas fabs (Samsung /Apple). What we have left in the US for semiconductor manufacturing are some very old fabs that are being run until they fall apart (little to no investment) and very few major players like intel and Micron and dare I say Global foundries. Semiconductor manufacturing left the US long ago and the IP/Designs go with it.   China will just add the coup de grâce in the next few years.

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Re: We have only ourselves to blame for allowing China to..
photonic   9/20/2017 3:18:30 PM
I would put blame on Lattice management in this particular case. Why are they selling? To make a few people rich at the expense of selling out the country and the people of that country that created Lattice's wealth.

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We have only ourselves to blame for allowing China to..
chipmonk0   9/20/2017 1:52:58 PM
carry on asymmetric business practices. The coddling of China, allowing them to get away with daylight robbery of IP started not coincidentally soon after the 1989 violent putdown of pro democracy demonstrators at Tian An Men Sq., Beijing. This assured Wall St. that their investments in China will be safe from popular protests about sweat shop working conditions because the Communist Govt will act as Wall St.s enforcer. Agents of Wall St. armed with spurious business models & growth potential in China fanned out to Middle America. One of the first to fall for their hype was a now vanished Electronics giant that had pioneered Cellular Phones along with many other products that form the backbone of our economy today. To gain a large market share in China ( at a time when very few in China could afford even a basic Cellular Phone ) they agreed to share technology with China, look the other way when their Chinese employees engaged in rampant IP theft to launch a homegrown competitor. Unfortunately this trend has continued for the last quarter century and spread to an even wider circle of industries, not just semiconductor or Electronics. In the first quarter century China wanted to pirate technology to make products more affordable for own citizens, now it is for export to utilize excess capacity, also for Weapons to back up their increasingly aggressive Foreign Policy and Neo Imperialist ambitions. To stop China from extorting such technology tributes as a condition for doing business there, the enablers and apologists for China in the West must first be identified and then shunned. Canyon Bridge partners involved in the blocked Lattice Semi deal was one of those.

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Re: US acquisition of Chinese firms
ritzke   9/20/2017 1:21:59 PM
Great Post ==>  Luddy3 ... 

Yes, if China Business acquistions - One Way only

(suspicions - confirmed - & gee, what a surprise)

it's about time Washington D.C. realized this and

not bury their head in the sand ! ... Fair Trade ?

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US acquisition of Chinese firms
Luddy3   9/20/2017 12:52:33 PM
Nice article.  But in my opinion, the author has omitted an important consideration.  It is essentially impossible for a US company to buy a Chinese firm of any kind that operates in China.  The legal vehicle for wholy foreign-own enties (WFOE, or "woffy" as it is called in China) is restricted from operating in most areas of the economy.  It is, so far as I know, impossible for a US firm to acquire any Chinese company that operates in any area of the Chinese economy that is "sensitive" (and that's everything from technology to media to anything that bids on government work in an economy where 70% of economic activity is state-related), and turn that firm into a WFOE.  It is well to remember the fiaso with Yahoo's stake in Alibaba.  The Europeans and Americans (e.g., AmCham) have been complaining for years about the barriers to foreign investment in the Chinese economy.  That was the reason for the AmCham's great excitement about the Bilateral Investment Treaty that never materialized.  Also the reason for the short-lived excitement about the special import-export areas like that in PuDong, which also never turned into the vehicle for entrance into the Chinese economy that they were ostensibly to be.

In other words, the lack of reciprocity is sufficient grounds for refusing Chinese acquisitions of important US firms.  The security considerations are also considerable, no doubt.  But it makes no sense in my estimation to fling the investment doors wide open to Chinese investors when those doors are shut tight in the case of foreign investment in China.

-Luddy Harrison

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