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Four reasons why its 'game over' for foreign chip firms in China

Ground truth
6/6/2012 00:36 AM EDT
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rick merritt
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re: Four reasons why its 'game over' for foreign chip firms in China
rick merritt   6/6/2012 6:06:32 AM
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Long term I don't think China can build a sustainable chip industry on its ability accept lower margins and work harder. Similarly, I don't think Western chip makers can sustain their higher margins and easier paces. IMHO the two will have to meet in the middle in a future global industry.

yalanand
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re: Four reasons why its 'game over' for foreign chip firms in China
yalanand   6/6/2012 10:55:58 AM
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@rick.merritt, what exactly you mean by the two will have to meet in the middle? Do you think the two will eventually tie-up to face the market challenges ?

rick merritt
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re: Four reasons why its 'game over' for foreign chip firms in China
rick merritt   6/11/2012 5:58:20 AM
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I mean it's a global market and technology and talent know no geographic boundaries. Long term success comes from embracing globalization IMHO, not excluding any particular area out of fear or aversion.

KB3001
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re: Four reasons why its 'game over' for foreign chip firms in China
KB3001   6/6/2012 6:34:58 PM
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It would not happen voluntarily, it at all, but through market dynamics. Chinese firms will become bigger and Western firms would shrink and at some stage the two might reach a common equilibrium. That would only happen if the process is smooth, and I doubt it is.

TyR78
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re: Four reasons why its 'game over' for foreign chip firms in China
TyR78   6/6/2012 9:58:49 PM
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And why not? The have practically unlimited slave labor. Who can compete, especially when they won't allow any non-Chinese companies compete with these Chinese companies.

Turkman
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re: Four reasons why its 'game over' for foreign chip firms in China
Turkman   6/7/2012 1:43:22 AM
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According to Tai, China is not accepting lower margins. Net margin (the one that counts) is the same.

phlei
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re: Four reasons why its 'game over' for foreign chip firms in China
phlei   6/14/2012 7:35:17 PM
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I doubt the accuracy of that statement.. China makes nickle and dime on their products and only spends very little on the R&Ds.. US fabless design houses will spend around 15% of the revenues in the R&Ds because the net gross margin over 30%. The Taiwanese fabless design houses can only spend 5-7% of the revenues on the R&Ds. But China counter parts can only spend less than 3% of the total revenues on the R&Ds or even lower because the low net margins.. I know it the first hand because our fabless design house in Taiwan is competing with the China ones.

cdhmanning
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re: Four reasons why its 'game over' for foreign chip firms in China
cdhmanning   6/7/2012 2:34:53 AM
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Taking the cheap low margin end is always the easy entry into any business. From there it is a lot easier to work towards the higher margin end than it is for high-margin cultures (Intel etc) to move into low margin business. That's how the Japanese got into manufacturing. Anyone remembering Japanese products in the 1960s will think of toys that broke within a few days of purchase. From there Japan has worked towards being the quality and innovation leaders in many industries. There is absolutely nothing preventing China doing the same in any industry they choose to play in. Anybody that thinks the West has some special capability that China etc don't have is just being arrogant.

Etmax
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re: Four reasons why its 'game over' for foreign chip firms in China
Etmax   6/7/2012 2:40:37 PM
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You are absolutely right, and China has the advantage that they don't really support free trade by foreign companies in China and they have a large number of slaves to call on. Any arguments and the tanks roll out. In a true level playing field the Chines would struggle due to cultural differences that stifle independent thought, the west's only real strength. Over time however they would be able to follow Japan's example and equal the west.

Chao.Shen
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re: Four reasons why its 'game over' for foreign chip firms in China
Chao.Shen   6/11/2012 3:35:16 PM
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I would not agree you called "slave". Actually, china is producing far more higher educated young people than any other country each year. Even they are not been used efficiently in current industrial structure chain. But it will beat west a lot of in many ways.

chrisnfolsom
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re: Four reasons why its 'game over' for foreign chip firms in China
chrisnfolsom   6/13/2012 7:12:16 PM
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This is my main concern as the "world" economy used to have diverse supply and manufacturing channels which would eventually balance supply over different sources - in today's economy they seem to push manufacturing into fewer places which reduces competition - and the ability to generate competition. Having China with it's protectionist government pulling the strings of a VERY large portion of the world production and supply channels will make it hard for competitors (ie solyndra) to compete as "The Goverment" can push money around to reduce global competitors in a way that not other company/government can. Either other Governments need to compete in like with China or we have to change the game in some other way to even allow for some level of competition.

phlei
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re: Four reasons why its 'game over' for foreign chip firms in China
phlei   6/14/2012 7:38:43 PM
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The issue is how did the Japan Inc transform into high quality? It is because the government policy to force them to follow. Which I don't see the Chinese government is taking that action? It took Japan ten years after the government launched the "quality program" in 1965. Another thing is Japan spent tons of money to do the deep researches and China mainly relies on the foreign technology transfers... That is the key differences, once the foreign companies are gone, so are the quality...

t.alex
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re: Four reasons why its 'game over' for foreign chip firms in China
t.alex   6/7/2012 3:28:08 PM
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I think China is already having sustainable consumer product industry. Chip industry just needs a bit of time.

PoseTech
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re: Four reasons why its 'game over' for foreign chip firms in China
PoseTech   6/6/2012 6:26:03 AM
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Of course they can pump out a new phone every 3 months with 5 to 10 people but the question is do you want to use it knowing that it is going to breakdown when you most want to use it? They don't care if the product is buggy or unstable becaues it is going to be replaced in three months. In addition, a lot of the design work are cut and copy which will of course cut down on the design cycle.

Steven-x
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re: Four reasons why its 'game over' for foreign chip firms in China
Steven-x   6/7/2012 2:45:46 AM
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Are they really "new" phones or are they just moving around the buttons?

Rodneyluo8
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Rodneyluo8   6/7/2012 6:13:56 AM
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fuck u man , WE have the smart p

TonyDeCastro
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re: Four reasons why its 'game over' for foreign chip firms in China
TonyDeCastro   6/7/2012 1:19:38 PM
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Wow, such harsh words to use on a business related site. Let's face the facts, America grew to greatness as the educated and low cost labor leader. This has changed, like or nor not, as China has the larger workforce that is becoming highly educated. Add the labor costs far below that of Western Hemisphere nations (Mexico / Costa Rica / Brasil) and you can see that they will be dominating the work place if we don't change things here.

Hughston
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re: Four reasons why its 'game over' for foreign chip firms in China
Hughston   6/7/2012 4:00:36 PM
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The designs are done in Taiwan. China just puts it in plastic. Some chinese phone vendors exist for only a few months then disappear before the tax man comes to collect.

WaveMan0
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re: Four reasons why its 'game over' for foreign chip firms in China
WaveMan0   6/7/2012 11:46:51 PM
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Chill out honey! No doubt China is on the rise and will mimic the likes of other Asian tigers, such as Japan and Korea. Problem is that China thinks they can dominate every market by sheer volume and size. The quality of electronics from China varies all over the map, just like apparel, heavy machinery, etc...I should know, I've worked with Chinese suppliers for years. Often here today, gone tomorrow. China often lacks the finesse and attention to details. They'll get there, but it takes time. It's apparent that China doesn't want to climb that ladder that can take decades, just like Japan did and later Korea.

CarmenMesta
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re: Four reasons why its 'game over' for foreign chip firms in China
CarmenMesta   6/8/2012 11:43:22 AM
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If you're so smart, why do you allow your government to continue the way it is?? The gov't of China is even worse than the U.S. gov't.....they make our current Congress look like honorable people of integrity by comparison. And our current Congress is HORRIBLE!!! But they're angels compared to the people in the Chinese government. I believe Mexico has less corruption than China!

Nikto
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re: Four reasons why its 'game over' for foreign chip firms in China
Nikto   6/11/2012 12:41:32 PM
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Whoo-hoo. Strong words! Now, try to sell ANY of those "smart p" in the western marked, not in the "internal" one. You will have so many IP court cases and quality claims that your grandchildren will have to deal with them. One thing this article shows is what they truly cherish in their hearts and minds and that is to defeat the West and beat it into dust.

t.alex
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re: Four reasons why its 'game over' for foreign chip firms in China
t.alex   6/16/2012 2:54:22 AM
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Wow, use kinder words pls.

CarmenMesta
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re: Four reasons why its 'game over' for foreign chip firms in China
CarmenMesta   6/8/2012 11:39:53 AM
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I don't trust any Chinese products. They pump out fake chips that have malware security holes built in, they steal user data, and they can be remotely deactivated. Similarly, some of the food products they ship here are poisoned. China is the #1 producer of gov't sponsored pirated products, too. I will gladly pay more for a product produced elsewhere. I will never buy anything made in China.

Etmax
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re: Four reasons why its 'game over' for foreign chip firms in China
Etmax   6/8/2012 12:07:51 PM
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I wish it were that simple. In electronics it's almost buy Chinese or nothing. :-(

silly2012
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re: Four reasons why its 'game over' for foreign chip firms in China
silly2012   6/11/2012 9:44:55 AM
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Agree! It's very China!

sunny565
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sunny565   6/6/2012 7:14:55 AM
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This interview clearly shows how they care about the quality of their products. I'm just not sure if that's how you should build a successful company anywhere!!!

yalanand
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re: Four reasons why its 'game over' for foreign chip firms in China
yalanand   6/6/2012 10:46:44 AM
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People don't prefer buying chinese goods because they aren't sure about the quality of those goods. China creates low-cost product but by compromising quality.

junko.yoshida
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re: Four reasons why its 'game over' for foreign chip firms in China
junko.yoshida   6/6/2012 2:15:47 PM
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Judging from the comments posted here, I realize that a lot of people are still stuck in the last decade -- when we all believed that China's products equal poor quality. That may have been the case in the past, but I think it's time to rethink that. Not all products made in China are buggy. There were times when anything made in Japan was synonymous to cheap products in poor quality.

KB3001
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re: Four reasons why its 'game over' for foreign chip firms in China
KB3001   6/6/2012 6:15:58 PM
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I second that. Many people do not realise this fact. Japanese goods were derided for being low quality and unreliable in the west in the 1960's. 20 years afterwards the perception changed completely.

TonyDeCastro
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re: Four reasons why its 'game over' for foreign chip firms in China
TonyDeCastro   6/7/2012 1:26:16 PM
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Well stated KB3001. If you are going to compete or build a business, you must look at the following: Profitability, Cash Flow and Survival in the Long and Short Term. They know they are building for the future and started with Cheap poor quality and have grow. They have a stellar example in Japan to go by.

jaybus0
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re: Four reasons why its 'game over' for foreign chip firms in China
jaybus0   6/7/2012 8:08:53 PM
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Yes, but you know what else changed in Japan over those 20 years? The wages skyrocketed right along with the quality. The same will happen in China, because they are both the result of an educated and more skilled workforce. In 20 years from now, Chinese workers will be complaining about Chinese companies moving manufacturing jobs to Africa or wherever the next cheap labor happens to be.

WaveMan0
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re: Four reasons why its 'game over' for foreign chip firms in China
WaveMan0   6/7/2012 11:40:15 PM
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Incorrect, by the 1960's Japanese products were already world-class. In the 60's, Japanese Hi-Fi's were some of the first to incorporate MOSFET transistors, they often produced higher quality and more compact PCBs as well. By the early 1970's, the game was in large part over for when it came to consumer electronics. Just look at the Sony Trinitron t.v. from circa 1973 - leap frogged ahead of U.S. manufacturers. You maybe have to go back at least a decade earlier to the 1950's, but even then the Japanese were producing transistor radios. In the 50's they would even house the transistor radios inside old food tins.

Paul Sanchez
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Paul Sanchez   6/6/2012 8:35:27 PM
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Absolutely untrue! More and more products from China that were somewhat acceptable are worsening in quality. This is not being stuck in the past decade, this is today’s reality. We have so many computer components that never failed before that are now regularly replaced and this goes for too many products that are foisted on consumers.

TyR78
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re: Four reasons why its 'game over' for foreign chip firms in China
TyR78   6/6/2012 10:05:47 PM
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That is dependant on the companies selling their products. If the manufacturer's name it is sold under demands quality it is available. If not, then they look at productivity, cheap prices and quantities they can pump out the door to meet demand, disregarding quality, as the seller is not demanding it.

CarmenMesta
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re: Four reasons why its 'game over' for foreign chip firms in China
CarmenMesta   6/8/2012 11:50:39 AM
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Companies that previously had a GOOD name, like HP for example, now sell stuff made in China that is horrible. Our company has a "NO HP" policy now because of the outrageous high rate of failures. And the support from HP has similarly degraded. Their "front line" of support is useless, and they charge a fortune even for products in warranty, always finding something that is not covered; adding high "shipping and handling" fees, etc.

Simon7382
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re: Four reasons why its 'game over' for foreign chip firms in China
Simon7382   6/8/2012 10:35:53 PM
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Same here. I stopped approving any purchase requests for HP products. Their quality is Chinese and their customer support is non-existent.

TyR78
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re: Four reasons why its 'game over' for foreign chip firms in China
TyR78   6/6/2012 10:01:54 PM
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I agree. I work for a large company that still does most of the R&D in house, but we still manufacture many products in China. I have many opportunities to see the quality of products make in China as well as W. Europe, Mexico, India etc., and China is taking much more pride in producing quality products than in the past.

Steven-x
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re: Four reasons why its 'game over' for foreign chip firms in China
Steven-x   6/7/2012 2:51:01 AM
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China can make good quality products, just look at Apple/Foxcom. Apple has even admitted at that quality level the cost difference between China and the US was nominal. The japan example is good. In the 60's a lot of US companies outsourced TV manufacturing to Japan. They later offer to design. By the 70's japan realized they could also market, and the US companies became redundant. No wonder US CEO's are "mining" their companies for everything they can.

mmmmh
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re: Four reasons why its 'game over' for foreign chip firms in China
mmmmh   6/7/2012 9:17:19 AM
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Partially agree whilst the China case is different with Japan. Japanese 'Kawasaki' culture leads to Taguchi and numerous innovators. In modern China, it is hard to find an open-minded leader who is willing to get the long-term margin. In contrast most leaders’ families have immigrated overseas since they foresee the avalanche of that community. Please find the detail in http://en.wikipedia.org/wiki/Bo_Xilai

gasdfnq
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re: Four reasons why its 'game over' for foreign chip firms in China
gasdfnq   6/12/2012 9:13:47 PM
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you don't know china at all.

TonyDeCastro
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re: Four reasons why its 'game over' for foreign chip firms in China
TonyDeCastro   6/7/2012 1:21:48 PM
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Junko, Well said. China has increased and have continued to increast their QC / QA processes to insure market domenance. If they continue on this path, I see China being the leader in 10 yrs or less.

gasdfnq
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re: Four reasons why its 'game over' for foreign chip firms in China
gasdfnq   6/12/2012 9:13:04 PM
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agree, add one more comment, China is very different from Japan, China have a huge internal market, there are many famous chinese company make good products but only sell in China, coz low profit in oversea market.

Etmax
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re: Four reasons why its 'game over' for foreign chip firms in China
Etmax   6/8/2012 12:11:43 PM
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Actually I remember a time when Chinese products were well made, it was before the massive out sourcing to China. There was the odd thing and it was of good quality. Now the dodgy operators are in it to make a quick buck. China to a significant degree has been taught that price is more important than quality, Also they sanction back door sales of front door rejects. That is something the Japanese government stomped on. No doubt the Chinese will eventually too.

chrisnfolsom
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re: Four reasons why its 'game over' for foreign chip firms in China
chrisnfolsom   6/13/2012 7:28:34 PM
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Again, many good posts - my only issue with comparison is that China has a 1.3 billion people and a socialist government (in name) with plenty of corruption and absolute control. If there is one rule of business it is that you only pay employees what you have to.... America, Japan, they both ran out of skilled employees and had to compete against each other for them - thus wages increased. I don't believe this will happen as well for the Chinese people for many reasons - they will have modest improvements (they started so low), but not to what we would call a world standard. And the middle class laborer - forget it as we can't even provide that in America and it exists in Europe only with heavy government subsidies. Not sure of the answer, but direct comparisons don't work.

Mushroom in the dark
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re: Four reasons why its 'game over' for foreign chip firms in China
Mushroom in the dark   6/6/2012 2:33:06 PM
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Can't understand it. As the title says "'game over' for foreign chip firms in China". I was expecting a reaction of how it was wrong that almost all the western semi con companies had put all their eggs in the same basket. Does the term "monopoly" ring a bell? Honestly, are we not concerned that technology will someday be beholden to one country that can dictate its release depending on their interest and own internal policies?

Duane Benson
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re: Four reasons why its 'game over' for foreign chip firms in China
Duane Benson   6/6/2012 4:34:24 PM
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This "monopoly" aspect is, in my opinion, the most frightening aspect. Taking the rare earth metals as an example, China has already flooded the market with inexpensive product, diving competitors out of business and then cutting supply when there are no other options. That is the danger of a monopoly. Right now, we talk of China doing that, but it's not just a Chinese thing. A hundred or so years ago, here in the U.S., our government busted up monopolies and put in regulations to keep them down for just this reason. Monopolies will do that because it's in human nature. With so many of our eggs in one basket, we are really putting our economic viability at risk.

george.leopold
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re: Four reasons why its 'game over' for foreign chip firms in China
george.leopold   6/6/2012 5:40:36 PM
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Plenty of U.S. tech companies, most notably Intel in microprocessors, exercise monopoly control over a market. Microsoft used to. Much of what Junko Yoshida is reporting on the ground in China is a reaction to that and the growing resentment over royalty payments. It's as if the Chinese consider IP rights to be usury.

TyR78
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TyR78   6/6/2012 10:08:03 PM
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It concerns me, and the US govt., and I hope our govt. will start paying even more attention and start up a plant to manufacture the ICs we need for critical systems, military, govt. records, anything that could impact our security and our military and make it all in house, at a trusted or even govt. controlled facility.

SR656601
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re: Four reasons why its 'game over' for foreign chip firms in China
SR656601   6/6/2012 2:48:04 PM
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Tai is right on the money and Junko is right. I've worked during the past 5 odd years in China, competing with the likes of RDA and I can tell you first hand I couldn't have picked more major reasons as Vincent articulated here. Let me share a few personal perspectives. Whenever I returned from my long stay in China to my bay area office it was like a day and night and I was entering into a strangely out-of-touch world here in bay area. Not generalizing, but I've seen this attitude of "China phone quality is bad, they can't sustain," from so many people in semi companies here in the bay area, that I confess feeling if I am siding with the losing team. Look, it's a hard lesson to hear when you are out here in the valley but hear me on this. We crow about the cheap quality of Chinese-made phones, but how many of us really think that it is really bad? How many actually used them? Have you used them in China Mobile network? The U.S. mobile service companies and phone companies have trained all of us into paying them exorbitant amounts of money for products and services and for that what do we get? Crappy service with dropped calls, and try switching phones from one network to another. In China, it is very common for the consumer to switch phones as often as they wish and China Mobile service is the best cell service ever I've experienced in all the world. How about that for better consumer experience? I guarantee you, you take one of these high quality iPhone/Android phones with a reasonable, 300Yuan phone from China and compare the consumer experience in AT&T network, you would be hard pressed to find many differences. Bells and whistles yes but basic functionality? No difference. So when we talk about China phone quality, we need to take into account the entire consumer experience and then evaluate. As a logical consequence, when we talk about China competitiveness, we need to look at how they service the markets and why they win. SR

Rodneyluo8
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re: Four reasons why its 'game over' for foreign chip firms in China
Rodneyluo8   6/7/2012 6:18:36 AM
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right agreeable

phlei
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re: Four reasons why its 'game over' for foreign chip firms in China
phlei   6/12/2012 6:19:51 PM
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I can give my first hand opinion about the quality concept in China. We sell ACDC HV offline LED driver, which is fabbed in Taiwan, no HV fab in China has enough reliability yet. There are numerous parts competing in the market from China but their reliability is not up to the western standard. The quality concept is basically none, that is why so little Chinese brands outside of China. Who is responsible for the Taiwanese Foxconn factories in China, Apple is testing the reliability. China can't by herself to have that quality and most of the IC parts are imported from abroad.. The quality concept is a government policy execution and we can all the food and drug poisoning, we know it isn't there yet. Japan went through the same fate as the low quality country before the seventies but the government started a quality plan in 1965 to eradicate the bad reputation within ten years and it worked. Japan has their own brands with quality but China has none.

gasdfnq
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re: Four reasons why its 'game over' for foreign chip firms in China
gasdfnq   6/12/2012 9:30:28 PM
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China brands are focusing china market, that's why we don't see many out of china. give you a example, the world largest home air conditioner maker is a chinese company probably you never heard, 90% of their products are selled in china with their own brand.

linyj
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re: Four reasons why its 'game over' for foreign chip firms in China
linyj   6/6/2012 2:56:50 PM
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The key question to answer is why RDA can enjoy 20% OPBT with 35%gross margin? If it's partly from "to be local" with supply chain, then I'd say there is some true competition margin.

loptide
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loptide   6/6/2012 4:03:56 PM
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You know there's great general quality control such as when large volumes of milk is spiked with melamine (2008 and on-going). Oh, I forgot, but I don't make phone calls with milk. Never mind.

Simon7382
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re: Four reasons why its 'game over' for foreign chip firms in China
Simon7382   6/8/2012 10:42:55 PM
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Exactly. I never buy any food products that had Chinese ingredients. There is no control or regulation worth anything over there. Not that the FDA is not very corrupt and incompetent but at least we have some minimal level of protection here. I am sure the Chinese will catch up and understand that poisoning people to increase profit is not really acceptable, but it will take time, maybe decades.

chipmonk0
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re: Four reasons why its 'game over' for foreign chip firms in China
chipmonk0   6/6/2012 4:55:34 PM
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Getting lured by the cheap labor and huge population of China has been the downfall of naive technology Co.s like Motorola and western economies in general. Many US companies have also actively induced US Universities ( with foundations, grants etc. specifically targeted to benefit the Chinese ) to train Chinese grad students ( as a soft 'Bribe" to China ) for almost free. These grads do a better job of technology theft through various subterfuges and then make impertinent statements about profit margin of US developers being too high ( Vincent Tai, RDA per this report ). The case of Chinese employees of Motorola walking out with Base Station designs to Huawei is only a tip of the iceberg. We've been had. But the suckers still won't face the facts. Only an embargo of all technology going back 2 to 3 generations will stop the bleeding and bold Piracy by the Chinese. The same goes for giving them free education in US universities. There are far better & sustainable alternatives.

KB3001
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re: Four reasons why its 'game over' for foreign chip firms in China
KB3001   6/6/2012 6:31:06 PM
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It won't work chipmonk - you put a great nation like China on an embargo and they will develop alternatives which you would know nothing about! That and they will also take US technology "for free" using illegal means. In any case, it's way too late. So instead of swimming against the tide, the US and the West in general should accept that wealth is now in the East, and do their best to get a slice of that wealth. The West has had it good for 200-300 years now. As a result, people work less hard, and take many things for granted. The value-system in particular is reversed. You look at the other side, and you see people valuing education, knowledge, and hard work. It's only normal, and dare I say fair, that they become wealthier. PS. I do not buy this "stealing our technology" propaganda. The West also got rich, in part, because of unscrupulous policies e.g. colonialism.

Simon7382
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re: Four reasons why its 'game over' for foreign chip firms in China
Simon7382   6/8/2012 10:47:11 PM
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Whether you buy it or not it is a fact. A LOT of Chinese technology, especially military technology, has been stolen from the US. Throwing your hands up and saying that this is life, nothing can be done about it, is utterly irresponsible.

gasdfnq
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re: Four reasons why its 'game over' for foreign chip firms in China
gasdfnq   6/12/2012 9:35:32 PM
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i think you are brainwashed by western media and politicians, you really should take a chance to visit china, and even stay and work there for a while.

chrisnfolsom
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re: Four reasons why its 'game over' for foreign chip firms in China
chrisnfolsom   6/13/2012 8:08:47 PM
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I am not sure what to make of your position - to cede power/money and such to a country that "could" develop personal liberty? They are a great country - there are many great countries - Germany is one of my favorites, but look what happened in the 30's and 40's (unfair perhaps, but illlustritive). It is up to the "world" to decide where to put their business and their power. We have to get away from this "great" nation business - yes, the west must share as should the east in how it treats it's people (including the muslim countries). It was VERY short sighted of the west to give so much economic power to China specifically just to make a dollar - very predictable as the west is now more concerned with quick money, and not sustained growth and manufacturing - something that governments and business groups need to support more. As you state it is "way" too late, but don't pull any of the "the west had it good" - so what they should abdicate? To live with the Chinese government making more world decisions? The west is NOT perfect - and perhaps not the better. I am sorry, but I can't trust any monocultural country with too much power, especially with a centralized all powerful government and a propensity to dismiss, cover up, or try to obliterate any problems rather then embracing the opportunity to make better decisions and a future for it's poeople (The West does try...) - is the EETimes, or the Huffington Post ;)

jj1234
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re: Four reasons why its 'game over' for foreign chip firms in China
jj1234   6/6/2012 8:26:55 PM
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Isolation never worked. NASA rejected China in the ISS program, but that didn’t stop China to develop its own space program, and actually it encourages China’s own space program. There are piracy issues but that might be deal with. Things won’t change over-night but things will get better. The 3D movie Avatar managed to generate 182 million US dollars revenue from mainland China, which beats UK, France or Germany’s box office. It is not like Chinese only watch pirate versions. Sometimes if they think it is worth it, they are willing to pay. Apple also did very well and about 1/6 of Apple’s revenue come from China.

Mushroom in the dark
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re: Four reasons why its 'game over' for foreign chip firms in China
Mushroom in the dark   6/6/2012 11:20:53 PM
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I have to agree with both KB3001 and jj1234. The technology momentum is now there. No amount of embargo or isolationism will stop it. They already have all the ingredients of ANY tech industry, integration to what is required is just a matter of internally sharing their knowledge. Please note that China's drive is to be No. 1 and that will be attained by whatever means.

Chao.Shen
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re: Four reasons why its 'game over' for foreign chip firms in China
Chao.Shen   6/11/2012 5:40:34 PM
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Well said. If you can't stop it, stand up and compete with it.

phlei
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re: Four reasons why its 'game over' for foreign chip firms in China
phlei   6/12/2012 6:11:06 PM
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Definitely not true.. The joke is Arnold Schwarzenegger went to Shanghai to visit, everyone there knew him but no one paid a dime for his movies... Chinese government has half eyes open for the pirate DVDs and even drugs..

sreenivas.vaddi
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re: Four reasons why its 'game over' for foreign chip firms in China
sreenivas.vaddi   6/6/2012 6:35:22 PM
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I think the article hit on some ground realities. 1. If there is a product based on standards( wifi, bluetooth, DVD-s etc) China/Taiwan have an edge. With desin, fabs, assembly houses, test houses all in the same place, it is quite easy to see why there is more collaboration. Show me how many fabs,assembly houses,test houses operate in usa. None that matter, except for IDMs. With education being globalized, there is no unique advantage for USA. One can get a MIT/Stanford/Harvard quality education to any corner of the globe. 2. companies in USA due to their cost structure need 50% gross profit margin to be sucessful and reinvest in next generation products. While companies in China/Taiwan can do the same investment with 35% gross margin. So they can sell a product cheap with approximately the same quality. I can give numerous examples from the past where a lot of new companies sprung up in Taiwan/china and drove big US companies out of business. 3. The growing market is not in USA but in Far east asia. Naturally, there is a significant shift to use local products to aid in the growth. Companies in US will probably introduce a product first to enable the market, but for sure, a Taiwan/china company will reap all the rewards when volumes pick up. This is not a reversible process. this is going to go the way how all our clothes, safety pins, every day tools are made in china. Add semi conductors too. This will happen for sure.. just a matter of time. .. my 0.02c

tb1
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re: Four reasons why its 'game over' for foreign chip firms in China
tb1   6/6/2012 7:22:35 PM
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"Show me how many fabs,assembly houses,test houses operate in usa. " IBM, Intel, AMD, and others have answers for you that you might not except. "companies in USA due to their cost structure need 50% gross profit margin to be sucessful and reinvest in next generation products. While companies in China/Taiwan can do the same investment with 35% gross margin." There are quite a few US companies making even less than 35% gross margin on their chips. There are a lot of inaccurate generalizations being thrown around here on all sides.

sreenivas.vaddi
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re: Four reasons why its 'game over' for foreign chip firms in China
sreenivas.vaddi   6/8/2012 2:06:58 PM
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exactly my point.. did you not read "except IDMs" IDMs stand for Integrated Device manufacturers" those companies that have fabs/assembly/test only for their own products.. and those companies that work with 35% or less gross profit margins will not be rewarded by stock market and cannot reinvest on R&D unless they only have token presence in usa and have pretty much all the workforce elsewhere..

tb1
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re: Four reasons why its 'game over' for foreign chip firms in China
tb1   6/6/2012 7:24:07 PM
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(except should be expect)

slackbytes
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re: Four reasons why its 'game over' for foreign chip firms in China
slackbytes   6/6/2012 7:58:53 PM
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I'm having a hard time recalling any Chinese brand names...

Rodneyluo8
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re: Four reasons why its 'game over' for foreign chip firms in China
Rodneyluo8   6/7/2012 6:19:22 AM
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man are u in china!

Actaeon2
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re: Four reasons why its 'game over' for foreign chip firms in China
Actaeon2   6/8/2012 8:01:11 PM
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although Taiwanese, "MeanWell" is my favorite for the manufacturer of power supplies. Goofy name or what?

DrFPGA
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re: Four reasons why its 'game over' for foreign chip firms in China
DrFPGA   6/6/2012 7:59:57 PM
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At least the US companies will still have the military market- just like at the beginning of the semi industry...

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/8/2012 3:17:47 PM
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Don't be so sure. I see a lot of Chinese immigrants working in Defense firms. Do you know that they have an open invitation to start companies in China with a $2M grant from the Chinese govt ? Basically encouraging IP theft.

Simon7382
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re: Four reasons why its 'game over' for foreign chip firms in China
Simon7382   6/8/2012 10:53:44 PM
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Due to idiotic new purchasing rules in the military "to save on components" a lot of the IC-s etc., that are going into weapons today, are made in China (either legally or via fake products labeled as US designs, sold by criminal or clueless distributors). It is crazy and whoever made these purchasing rules know very little about the electronics industry and China, but this is how it is.

moloned
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re: Four reasons why its 'game over' for foreign chip firms in China
moloned   6/11/2012 4:19:29 PM
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Ehhh, no! You have to generate tax revenue to pay for a huge defence budget. The worldwide axis is tilting east and tax revenue, defence budgets, financial services etc. will follow. This trend will continue until made in China becomes too expensive, and/or demographics dictate otherwise. Probably around 2030 when India takes over from China as the most populous nation. At that point the Asians will start outsourcing back to us.

yshida
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re: Four reasons why its 'game over' for foreign chip firms in China
yshida   6/6/2012 8:09:34 PM
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This is all similar to what they said about the Japanese chip manufacturers a decade or two ago. If this were all true, there would be no US chip manufacturers left now. There will definitely be powerhouse Chinese chip companies in the future, but in the same vein, there will also be US / European / Japanese ones as well. Innovation will always trump lower cost manufacturing in the long run.

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/8/2012 3:21:07 PM
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The Japanese force the american companies out of the DRAM market in the 80s. The difference is that we control Japan thru 'defense' pacts so if there were any supply chain problems the State department or DoD could intervene. We do not control China. If they want to hold the world hostage for rare earths or ICs then there's nothing we can do. GAME OVER.

gasdfnq
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re: Four reasons why its 'game over' for foreign chip firms in China
gasdfnq   6/12/2012 9:42:11 PM
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you are smart :)!

Bob @ JVD Inc.
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re: Four reasons why its 'game over' for foreign chip firms in China
Bob @ JVD Inc.   6/6/2012 8:14:46 PM
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I disagree with Junko and KB3001. 15 months ago we secured a huge Analog ASIC from a China Automotive company. One of their main reasons for choosing us, they told us, is the importance of “USA Inside”. They flat out said that Chinese chip companies take short cuts and offer no innovation. For us, the game is still on!

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/8/2012 3:22:16 PM
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Until they copy your design. Then "so long sucker!"

gatorfan
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re: Four reasons why its 'game over' for foreign chip firms in China
gatorfan   6/6/2012 8:24:16 PM
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Surprised no one commented on the night/day difference in Regulatory environment. And I'm not referring to the banking/financial regulation but the FCC and U/L style of Western nations. Compliance is a HUGE cost here in the West that East companies do not face. I believe the answer needs to be a localization model for the Western firms to compete. But in doing so they must set up a "firewall" between the product compliance levels of a part targeted for China vs a Western country.

BobsView
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re: Four reasons why its 'game over' for foreign chip firms in China
BobsView   6/6/2012 8:38:40 PM
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Why is this a surprise? I agree with Junko, the quality of Chinese products is excellent in many cases. I bought a USB WiFi adapter for $12 that was designed and manufactured in China and it works better than anything else I have that cost 3x the amount. It's the natural progression of technology. Western companies cannot expect to have 50% margins forever. They should have anticipated a time when local companies would be able to compete in price, quality, and performance, and the time has arrived.

PJames
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re: Four reasons why its 'game over' for foreign chip firms in China
PJames   6/6/2012 9:44:09 PM
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Which vendor's wifi chip is in it?

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/8/2012 3:23:47 PM
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So they copied a design perfectly. There's not much R&D involved in copying.

Simon7382
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re: Four reasons why its 'game over' for foreign chip firms in China
Simon7382   6/8/2012 11:01:09 PM
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Bob, what you say is correct, BUT you learn a LOT by copying. That is how the Japanese started and as the Taiwanese started after them. The Chinese have learned a LOT during the past decade (partly legally and partly illegally) and will climb the value chain as Japan and Taiwan did before them.

Simon7382
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re: Four reasons why its 'game over' for foreign chip firms in China
Simon7382   6/8/2012 10:57:42 PM
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You were lucky. I bough a couple of dozen LED bulbs from China. Some of them are working well, but about 15% were either dead on arrival or died within 2-3 months of use (instead of the advertized 20 years). The main problem about Chinese quality is that it is VERY dependent on the manufacturer and it is totally unpredictable and uneven.

gasdfnq
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re: Four reasons why its 'game over' for foreign chip firms in China
gasdfnq   6/12/2012 9:47:20 PM
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there are huge amount of LED makers in china who supply the various markets. if you want to buy good quality products, you should buy expensive one. if you are cost orientation, paid less, then the quality is poor.

jj1234
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re: Four reasons why its 'game over' for foreign chip firms in China
jj1234   6/6/2012 8:49:17 PM
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It’s not a complete view to consider oversea Chinese students only benefit China. First of all, it is not free education. Undergraduate level scholarship is rare. For graduate levels, the reason the US universities can offer scholarship and financial aid is because professors need students to help their research and they can’t find enough resources domestically. US didn’t pay previous education for the international students, but at graduate level, this is the first time students’ brain can be useful instead of only absorbing knowledge. To some extent, this is more like the developed world exploiting cheap “brain” from developing countries by directly harvesting the brains and skipping paying all the early years’ education. Things will continue to be like this because smart American students still consider business, medical and law schools as their first choice and fewer students are willing to commit their career in engineering. For those graduated international students, some founded or co-founded a lot of well-known companies in Silicon Valley … there are many angles to this topic ...

Steven-x
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re: Four reasons why its 'game over' for foreign chip firms in China
Steven-x   6/7/2012 2:43:37 AM
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"American students still consider business, medical and law schools as their first choice" Medical & law schools are another 3 years. Pretty much limited to CEO kids unless you want $200k student debt. Business majors are for dumb kids who can't do math, or want to party in college. Sometime I wish we would stop putting down STEM graduates. Our business have been suffering because of Harvard Business School graduates that started the outsourcing craze.

chipmonk0
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re: Four reasons why its 'game over' for foreign chip firms in China
chipmonk0   6/7/2012 4:07:35 PM
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Ditto. The US economy will recover in no time at all if the top 10 Law and Biz schools are shut down and the Faculty sent to re-education camp( for life !) for advocating outsourcing to China etc. Start with the major offenders, Ivy League schools like Harvard, Yale and U Penn.

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/8/2012 3:31:25 PM
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Look. US students are not dumb. They see us engineers struggling to make a living -- always on the brink of being unemployed -- and they want to make more money and have some security. If you want to save this country, prevent massive layoffs and outsourcing jobs. It's that simple. You can't force people to become coal miners and you can't force them to be engineers.

jaybus0
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re: Four reasons why its 'game over' for foreign chip firms in China
jaybus0   6/10/2012 11:56:00 AM
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Well, companies can outsource their hardware to China and their software to India. What they need are lawyers with training in eng/sci who can litigate patent dispute cases. My nephew just got a BS in Comp Sci and is starting law school next semester. I encouraged him to do so, as I encourage my daughter's engineering student friends. How could I not? After all, the kids inheritied the World we made for them.

moloned
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re: Four reasons why its 'game over' for foreign chip firms in China
moloned   6/11/2012 4:23:03 PM
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Wrong. There need to be incentives for people to study engineering and science and start their own businesses. Until the playing field is tilted away from service jobs such as medicine and law there will be no change.

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/8/2012 3:28:26 PM
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BS, many professors prefer immigrant grad students as they can make them work harder and complain less (and steal credit for their work -- the dirty little secret of university 'research'). This is training for their future H1 jobs. No wonder many foreign students want to go back to their home countries after gaining experience (and IP) -- they're tired of being second class citizens.

garydpdx
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re: Four reasons why its 'game over' for foreign chip firms in China
garydpdx   6/12/2012 4:03:58 PM
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The same professors can get an American citizen or green card holder for free, no hit on their own grants, with so many STEM fellowships going begging. If anything, we should be concerned about reverse brain drain (as the Silicon Valley Business Council has been banging the drum, the last couple of years). I know a few returnees who are now in Director-level positions across the Pacific, versus enduring a decade for a green card in the same entry level job (and these days, praying that the job continues).

Mike1234567
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re: Four reasons why its 'game over' for foreign chip firms in China
Mike1234567   6/6/2012 9:04:55 PM
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Here are a few of my thoughts and feeling about this. In my opinion we should stop funding foreign students with state and federal grants. There should be a preference for US nationals in US schools. There is value in have diversity in Universities but I've seen US engineering students take a back set in grad schools. Take a read of this article. "American Universities Infected by Foreign Spies Detected by FBI", Bloomberg, April 8, 2012: http://www.bloomberg.com/news/print/2012-04-08/american-universities-infected-by-foreign-spies-detected-by-fbi.html Second, our corporations have become bloated and top heavy with outrageous executive perks and salaries. see http://www.forbes.com/lists/2011/12/ceo-compensation-11_land.html The ratio of Execs to blue/white collar workers are out of touch with reality. Third, I have been involved in small business electronics manufacturing. I know of many, many products that have been cloned and just outright stolen and then resold in the US. It is far easier to clone and make fine-scale improvements on existing products. Fourth, there are more sinister activities going on with Chinese manufacturing. http://www.enterprisenetworkingplanet.com/netsecur/is-china-putting-backdoors-into-networking-gear.html

jj1234
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re: Four reasons why its 'game over' for foreign chip firms in China
jj1234   6/6/2012 9:55:34 PM
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This is not really open mind mentality, and I don’t think it will even work. Most research results, if not all, will eventually appear in peer-reviewed journals, accessible to everybody. Knowledge has no boundaries and benefits all human kind. Protection is required when there is business interest or the information is extremely sensitive for national defense. These cases normally don’t apply to university level research. You can close the door and stop looking for the smart brains overall the world, but I don’t think that will benefit America, or even slow down countries like China. What Stanford and MIT are doing is completely the opposite. They are publishing their video lectures, creating open course concept through Internet, trying to make their undergraduate level education accessible to the whole world. So basically, you don’t even need to go to their campus to study and you can simply get the education from Internet, for free.

jj1234
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re: Four reasons why its 'game over' for foreign chip firms in China
jj1234   6/6/2012 9:57:43 PM
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I don’t think it will even work. Most research results, if not all, will eventually appear in peer-reviewed journals, accessible to everybody. Knowledge has no boundaries and benefits all human kind. Protection is required when there is business interest or the information is extremely sensitive for national defense. These cases normally don’t apply to university level research. You can close the door and stop looking for the smart brains overall the world, but I don’t think that will benefit America, or even slow down countries like China. What Stanford and MIT are doing is completely the opposite. They are publishing their video lectures, creating open course concept through Internet, trying to make their undergraduate level education accessible to the whole world. So basically, you don’t even need to go to their campus to study and you can simply get the education from Internet, for free.

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/8/2012 3:37:21 PM
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Here, Here. Great comment Mike1234567. There is a definitely a plan behind this Chinese invasion of US universities. Some have labeled it "million grains of sand" approach to spying. Get a lot of spies to get little pieces of information and piece it together later.

resistion
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re: Four reasons why its 'game over' for foreign chip firms in China
resistion   6/12/2012 3:22:06 PM
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Nothing requiring clearance at universities. Defense firms on the other hand...

Adele.Hars
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re: Four reasons why its 'game over' for foreign chip firms in China
Adele.Hars   6/6/2012 9:50:31 PM
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And yet IBM is fabbing chips (in the US, one assumes) for RDA - see http://www.advancedsubstratenews.com/2011/09/rda-microelectronics-of-shanghai-developed-the-rdasw91/. Worth remembering that China represents a quarter of the world's population. It's much less of a monolith that we might think in the West. If you're interested in learning more about modern China, I highly recommend "What China Thinks" by Mark Leonard.

george.leopold
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re: Four reasons why its 'game over' for foreign chip firms in China
george.leopold   6/7/2012 12:24:23 AM
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Thanks for the recommendation. I have another recommendation related to Chinese tech innovation: "The Run of the Red Queen" by Breznitz and Murphrees: http://www.amazon.com/Run-Red-Queen-Government-Globalization/dp/030015271X

chipmonk0
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re: Four reasons why its 'game over' for foreign chip firms in China
chipmonk0   6/7/2012 7:17:50 PM
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non-technical vultures who feed off US technology ( those worthless English majors / Engr. drop-outs turned into MBAs who try to cadge a living by smuggling & dealing dope e,g. outsourcing, tech sell out ) seem to be the most persistent cheer leaders for China

Chee Choy
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re: Four reasons why its 'game over' for foreign chip firms in China
Chee Choy   6/6/2012 11:48:58 PM
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If you really read and understand the Communist China society, you will know the threat from China is a paper Tiger. The way of their thinking is just western known well communist policy, their people of doing things are half past the six, the only thing the full the Western people is their product features and trendy outlook, away from that their products are craps, the most unreliable do not work more than 3 months some failed after 1 weeks. These products are only meet their own people requirements. I sincerely hope the western people should be patient doing the way western mind and concept, it is the only way keep evolving and bring innovative products and benefit the whole world. You look at what they claim the world high speed train is a piece of copy cat and crash missing out the simple feature of crash avoidance sensor. What a laughing story !!!

johnsolomon
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re: Four reasons why its 'game over' for foreign chip firms in China
johnsolomon   6/7/2012 12:50:53 PM
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We live in a connected world. Evolution is the only thing that will matter. If man evolves and dinosaurs get extinct in this process. It is just a trivia. Isolation through protectionism will lead to creation of Darwinian creatures/systems/process which will forever have to remain on an island. China /India / Brazil question is irrelevant just like mammals and the dinosaurs. What has to seen is will the ecosystem evolve to a better state of things than the present? Which i feel it definitely will.The Ecosystem is driven by consumer demand , consumer values. If the consumer values are low performance , low quality, then the ecosystem will move towards the survival of entities specializing with such traits. If the consumers drives high performance, reliability and quality and innovation the ecosystem will move towards the survival of entities specializing in them. Whether the mutations occur once in a week or once in 3 months or once in 6 months or once in decade is irrelevant. What is important is quality of these mutations. Which can create tangible, clear cut diffentiation on which product lines {family lines} can be built. The question of will the ecosystem evolve in the favour of the dinosaurs or the mammals is irrelevant. Dinosaurs evolve to begin to fly and dominate the skies and mammals evolve to dominate the land. So live in the connected world of evolution.

sranje
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re: Four reasons why its 'game over' for foreign chip firms in China
sranje   6/7/2012 2:38:06 PM
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Thank you very much for interesting interview. AS of our priorities they seem to be clear - after the big Change and Hope fraud and incompetence. 1. We will very likely build at least ten more aircraft carriers - our presidential candidates must compete on who is more "patriotic" and supports our "defense" industry. 2. Creating even higher percentage of our population who believes in soon coming "Rapture" and in the cretenism "science" (pardon creationism) is very high priority in order to keep unemployed docile and brainwashed in the "low taxes" for rich 3. Mass transportation and high-speed trains and similar ideas will be cancelled and suppresed - this is "pure communism" apparently - we don't need any inrastructure investments

ibm221
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re: Four reasons why its 'game over' for foreign chip firms in China
ibm221   6/8/2012 1:43:40 AM
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communism would have some risk though. If your luck sucks you might end up like N Korea.

Daniel Cooley
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re: Four reasons why its 'game over' for foreign chip firms in China
Daniel Cooley   6/7/2012 2:38:08 PM
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I lived and worked in China for 4 years, and I can echo many comments here. The IC design capabilities within China have jumped tremendously over the past decade. Companies like RDA are leading the way, but others will follow. There are countless startups and medium-sized companies fighting tooth-and-nail to get a foothold into many consumer markets. While most will ultimately fail (just like in the US or EU), it only takes a few to cause significant disruption in the industry.

jeremybirch
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re: Four reasons why its 'game over' for foreign chip firms in China
jeremybirch   6/7/2012 3:18:55 PM
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I think this boils down to: 1) Does the US have a monopoly on smarts? NO 2) Does China have a cost advantage? YES (see how many goods designed by EU and US companies are manufactured there) - some of it is unfair (artificial exchange rate, poor working conditions) 3) In a non-saturated and buoyant market, does handset lifetime matter? NO - the expectation is you change to a new one rapidly 4) Is this sustainable? In a business sense - yes it will go on for sometime. In an environmental sense NO - all that churn on handsets is massively wasteful and polluting 5) Does it hurt when your nation is no longer certain that it is top dog? YES - the UK went through this process around 1920 and more so after 1950. Get over it - and don't resort to military means to try to reverse it 6) How do those outside China make some many out of this? By changing their assumptions to better fit the Chinese model, whilst trying not to descend into a lowest-common-denominator fight on pollution and human rights

Hyperdude
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re: Four reasons why its 'game over' for foreign chip firms in China
Hyperdude   6/13/2012 6:16:29 PM
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This is mostly correct, but I don't believe quality engineers are cheap in China any longer. Can someone comments on how much does a hardware/software engineer with 10 years experience get in China these days? These are the types of engineers you need to make the "quality" "innovative" products.

DAH2136
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re: Four reasons why its 'game over' for foreign chip firms in China
DAH2136   6/7/2012 3:34:32 PM
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China takes Taiwan. Game over for US. Who makes your ICs?

old account Frank Eory
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re: Four reasons why its 'game over' for foreign chip firms in China
old account Frank Eory   6/7/2012 11:54:57 PM
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Why would that be game over? You think Beijing would want to give up all that business? Look at Hong Kong. Beijing did not foolishly kill the golden goose.

gasdfnq
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re: Four reasons why its 'game over' for foreign chip firms in China
gasdfnq   6/12/2012 10:02:01 PM
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smart view

GREAT-Terry
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re: Four reasons why its 'game over' for foreign chip firms in China
GREAT-Terry   6/7/2012 5:04:53 PM
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Wow, this topic has attracted so many comments, and some are even more analytic than the article itself. I agree in some degree that some Chinese companies are doing better and better. However, if the gross margin is low while net margin being similar to foreign companies, does it mean the company indeed is taking away the gain of the workers? It is not a very healthy situation if all workers (including R&D) are just underpaid for long time. BTW, it is a good sight to see more and more Chinese high-tech company are moving up the supply chain and gain more and more. I hope one day they won't need to squeeze the expense but still make good profit margin.

gasdfnq
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re: Four reasons why its 'game over' for foreign chip firms in China
gasdfnq   6/12/2012 10:04:44 PM
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it is very reasonable that small companies to reduce margine for gaining market share, that is how eletroinics become cheaper and cheaper

chipmonk0
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re: Four reasons why its 'game over' for foreign chip firms in China
chipmonk0   6/7/2012 5:24:36 PM
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Since my original post from yesterday seems to have triggered so much response, I feel that I need to clarify some of the basics about China and how to deal with it instead of blindly drinking the kool - aid prescribed by the 'free-marketers' over here. Ever since Deng launched his 4 Modernization plan in 1979, China has worked very hard and its economy has grown at 10 % per year and is now 10x of what is was just after the Tian An Men massacre in 1989. But the Chinese used to work very hard during the Mao era too when it stagnated. The difference is the catalyst of the West, modern education, business and industry that China got for almost free in exchange of providing cheap regimented labor to the outsourcers and their masters in Wall St.. It is almost certain that left to themselves China would not have been able to manage this phenomenal growth on their own. History shows that left on their own they are unable to innovate - be it during Ming in the 16 th century or Mao in the 20 th. China's stagnation for nearly 2 decades since the Sino - Soviet split of 1963 was not entirely due to the Cultural Revolution. Cutting off contact with the Soviet Union plunged China into scientific stagnation. I myself have encountered in the US ( in the early 1980s ) Chinese Visiting Scholars from Beijing who were still parroting antiquated Russian semiconductor physics from the 1950s ! They had not yet woken up to MOS. (cont'd )

tideblue
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re: Four reasons why its 'game over' for foreign chip firms in China
tideblue   6/12/2012 11:20:58 AM
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Looks like you really know china history.But you are very wrong. Even during the cultural revolution, chinese GDP doubled in that 10 years. (please do some googling). Many of your so called facts are wrong.I do want to comments on all of them. So please, if you try to understand china, do it like a real engineer. Do not use those second-hand biased facts.Be careful with the media, since most of them are trying to brainwash you guys.

chipmonk0
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re: Four reasons why its 'game over' for foreign chip firms in China
chipmonk0   6/7/2012 5:27:04 PM
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( Part II cont'd from above ) Immediately after the Communist takeover of China in 1949, the Soviet Union was China's chief benefactor and for 10 years the USSR had opened its door ( much like the US now ) to Chinese students, scientists and transferred both defense and civilian technologies & industries to China. Then China got too big for its britches and started demanding even Nuclear weapons which the Russians to their credit refused to part with. This led to their split in 1963 and eventually the US ( Nixon, 1971 ) was able to tempt China with goodies to betray their erstwhile benefactor the Soviet Union. Being cornered on two fronts by the US as well as China was one of the reasons behind the demise of the USSR. Now China is playing the same game against the US by siding with Russia in the UN. China is simply too big, armed with Nukes and pumped up with its own contrived ideas of greatness and grudge against the West ( Opium, concessions, .. ) to be pliable like post WW II Japan. The US automotive industry was sacrificed so Japan could raise its standard of living. China has 9x the population of Japan and 1/3 the std of living. How many more US industries will have to be sacrificed so the 1.2 billion Chinese can raise its std. of living to that of the US benefit from 'free - market' proponents & China lovers here ? Its a zero sum game that only the handful of 'free-market' profiteers and their brain-washed zombies would favor.

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/8/2012 3:53:51 PM
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Great comment. Let me add one more thing. To really understand the Chinese govt, you must read Sun Tzu' 'Art of War'. It's very relevant to modern day events and how China is encircling the globe to master it's enemies. The Chinese govt officials still have a middle age mindset and a false impression that China was a once great nation that if it wasn't for the West (Opium wars) and Japan, would still be great. They are still suffering from PTSD from WWII when a tiny country like Japan conquered the Great China. (Not that the WWII Japanese weren't monsters themselves). To ensure this never happens again they are on a program to build up their military AND economy (lesson learned from USSR), energy supplies (friend to Iran and Venezuela), and raw materials (South America and Africa). Outsourced manufacturing is just a strategy in the bigger game.

vlsi_guy
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re: Four reasons why its 'game over' for foreign chip firms in China
vlsi_guy   6/7/2012 8:03:25 PM
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People, people, people, don't you realize that our salvation lies in becoming a service sector based economy. Oh, yea, and if you really want to stay in engineering here in the US then become a manager of engineering teams that are offshore.

moloned
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re: Four reasons why its 'game over' for foreign chip firms in China
moloned   6/11/2012 4:30:11 PM
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Wrong. Services will eventually follow the money back to China. Governments should be working on levelling the playing field by legislation and taxation , something they have signally failed to do. Look at the raspberry pi debacle where even though the AP was designed by Broadcom in the UK, tax rules meant that the raspi boards were cheaper to build in China. Stoopid is as stoopid does!

KB3001
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re: Four reasons why its 'game over' for foreign chip firms in China
KB3001   6/7/2012 8:32:42 PM
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@chipmonk, it is clear to me that you have a particular (prejudiced) view of China and you are trying your hardest to bend over historical facts to fit your own prejudice. Below are just few samples: "...left to themselves China would not have been able to manage this phenomenal growth on their own." This is a laughable statement! Left to themselves, Western Europeans would not have never known the Renaissance. Do you know where did the forefathers of European Renaissance study? Who influenced the thoughts of Thomas Aquinas, Leonardo Da Vinci, Fibonacci etc.? Where and how did the industrial revolution get its fuel, natural raw materials, and dare I say even human resources?? Each civilisation learns from its predecessor, this is the natural cycle of human history. The Chinese are in the process of learning. Sooner or later they will move into the leading creative role. You might think it's a zero-sum game, it ought not to be. If we all work together to improve human condition on a global level, we might get there, but if we keep setting each part of this world against the other, we will end up destroying ourselves. We nearly did it on a couple of occasions in the last century, and we escaped it narrowly during the cold war, but we won't be lucky forever! "....Now China is playing the same game against the US by siding with Russia in the UN. " What an oversimplificated view of the world! As far as I know, China has not invaded any country, and its position in the UN has always been in support of international law, not the law of the jungle and double-standards. Anyway, I am uncomfortable with your vilification of China, and the above shows you that the same could be easily done to the US/West. There are two sides to any argument....

WaveMan0
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re: Four reasons why its 'game over' for foreign chip firms in China
WaveMan0   6/7/2012 11:51:59 PM
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"As far as I know, China has not invaded any country..." How about Tibet in 1959?! Ever heard of that country? Yes, it's very popular these days to look at the U.S. as the biggest and baddest aggressor nation. China has had a long history of sparring with it's neighbors in Asia. Just ask a Korean, Vietnamese, Taiwanese...

liverdonor
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re: Four reasons why its 'game over' for foreign chip firms in China
liverdonor   6/8/2012 12:34:55 AM
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China has had an active role in Tibetan government since at least the 1300s and possibly before. It's more like, if South Carolina decided to declare itself independent - what would the rest of the US do? Probably shut them down. Korea? Please. Korean people recognize their mutual "Han-ness" with China. Political and cultural differences, yes - but there's always been some ties there. Taiwan? The Japanese invaded Taiwan first, then the Chinese came later, after WWII ended. Essentially, the Kuomintang government that calls itself "Republic" of China is an invading government - just ask the native Taiwanese. Actually, the only real "invasion" in this list is Vietnam - in the 1500s China attempted to conquer Vietnam and had _exactly_ the same experience that the French and later the Americans would have. Guerilla war went on forever and they eventually withdrew when it became obvious that it was a losing proposition. Just to set the record straight. BTW - The only reason the Chinese PRC govt. declared martial law in Tibet in 1959 was in response to US CIA-backed coup that failed.

chipmonk0
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re: Four reasons why its 'game over' for foreign chip firms in China
chipmonk0   6/8/2012 4:46:38 AM
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The Dalai Lama and the Tibetans may have something against your interpretation of Chinese claims over Tibet. In 1950 during the Korean War the Chinese PLA invaded and occupied Tibet simply because of its strategic location and used some typically Chinese BIG LIES and trumped up historical claims to justify it. First they vandalized the Buddhist monasteries of Tibet and then stripped all the accumulated gold and jeweleries. Then they brought in 3 million Han Chinese settlers to overwhelm the native Tibetans. And now they won't let go of Tibet after discovering all the gold, uranium and rare earth metals ( Li,.. ) in the high altitude dry lake beds of Tibet. The Chinese DEVOUR anything that moves and the whole world is at risk of being EATEN ALIVE by the Chinese hordes. For the world to maintain its sanity the Chinese MONSTERs must be put back into their bottle and corked / quarantined.

KB3001
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re: Four reasons why its 'game over' for foreign chip firms in China
KB3001   6/8/2012 8:08:30 AM
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"The Chinese DEVOUR anything that moves and the whole world is at risk of being EATEN ALIVE by the Chinese hordes. For the world to maintain its sanity the Chinese MONSTERs must be put back into their bottle and corked / quarantined." This is clear Xenophobia, Chipmonk, not to say something else. It's a dangerous rhetoric, which can lead to catastrophies if adopted at the wider scale.

WaveMan0
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re: Four reasons why its 'game over' for foreign chip firms in China
WaveMan0   6/9/2012 1:50:38 PM
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My wife, who is originally from Seoul, Korea, would take issue with your statement about "mutual hanness." A ridiculous statement that is mostly incorrect. While some Koreans due share common blood with ethnic Han Chinese, the Koreans are generally ethnically distinct, probably more closely related to Manchurians and Mongolians. Even the Korean language is a Ural-Altaic language, completely distinct from let's say Mandarin Chinese spoke by the Han. I gather from your name BiBimNaenygMyun" that you are Korean? So, what's your point about "active role" since the 1300s? England has also had an active and colonizing role in Ireland for over six centuries, but many can make the good argument that it is still an occupying force, there only to protect ethnic English and Scots in the north of the country. Put down the CIA-behind-every-coup conspiracy books and take with a grain of salt the often radical so-called "alternative media" online.

gasdfnq
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re: Four reasons why its 'game over' for foreign chip firms in China
gasdfnq   6/12/2012 10:27:29 PM
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i have to say your wife was brainwashed by Korean goverment, Korean use Chinese language as writing language for thousands years until maybe 1800's(i'm not sure), even now Korean's names are actually come from CHinese but just spelled in their way.

gasdfnq
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re: Four reasons why its 'game over' for foreign chip firms in China
gasdfnq   6/12/2012 10:21:28 PM
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no, Vietnam was part of china in 1500's, then they pursued independancy which made Chinese king to send army to beat them, but chinese army lost the war.

WaveMan0
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re: Four reasons why its 'game over' for foreign chip firms in China
WaveMan0   6/13/2012 5:22:21 PM
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You need a history lesson, dude. While correct that China has played a very important role in Korean history (some good, some bad), there are distinct ethnic and cultural differences. No doubt the Koreans were at times in their history in awe of China, especially early in the Choson Dynasty. Still, there are many distinct cultural differences between Korea and China - language, ethnicity...

KB3001
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re: Four reasons why its 'game over' for foreign chip firms in China
KB3001   6/8/2012 8:19:43 AM
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Even if we accept what you say about Tibet WaveMan (which I do not by the way) at least China has had problems with its immediate "neighbours" not countries halfway around the globe. Look at how China is behaving in Africa for instance and you will see that they are going about it in a different way. Soft power is way more productive in the long term.

WaveMan0
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re: Four reasons why its 'game over' for foreign chip firms in China
WaveMan0   6/9/2012 2:09:36 PM
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While not defending Western foreign policy in Africa, which at times did indeed support and prop-up brutal regimes (often to counter Soviet expansionism), let's please not delude ourselves into thinking China is in Africa out of altruism. They are there for the natural resources, plain and simple. When some of the mines no longer cede their natural wealth, the Chinese will be on the next place/country/region...

KB3001
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re: Four reasons why its 'game over' for foreign chip firms in China
KB3001   6/9/2012 5:23:05 PM
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I fully agree with you on this WaveMan. The Chinese are pursuing their self-interest in the same way as America, Britain etc. To vilify them because of this is wrong and I showed Chipmonk that the same tactic could be easily applied to the US/West. My point throughout was to say that there is no 100% Good and 100% Evil, that life ought not to be a zero-sum game, that there are always two sides to any argument. The way Chipmonk in particular described China and the Chinese in this thread is nothing short of Xenophobia and my conscience could not allow me to be silent.

WaveMan0
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re: Four reasons why its 'game over' for foreign chip firms in China
WaveMan0   6/10/2012 5:31:36 PM
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@KB3001 I was not vilifying China, and I never used that term or similar term. Just pointing out Chinese is not in Africa to help the nations or people, but instead for the natural resources. Not too different from the West when it comes to middle eastern oil.

Etmax
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re: Four reasons why its 'game over' for foreign chip firms in China
Etmax   6/9/2012 2:37:11 PM
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Interestingly Fiji is having issues with Chinese merchants along the lines of what India experienced in the days of English colonialism. We have to realise that any country will do what they think is best for them, it's simply human nature. The Chinese are not really any better or worse, than any other "colonial" ruler (for want of a better phrase) the difference is that now we are on the receiving end and have welcomed the situation with open arms. I'm not really a protectionism advocate, but free trade without consideration of national interests is asking for trouble (ie. the status quo) Merchants are worse than governments on this issue, because they are more greed driven and influence government.

gasdfnq
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re: Four reasons why its 'game over' for foreign chip firms in China
gasdfnq   6/12/2012 10:18:27 PM
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you should study history , you don't know chinese history at all.

chipmonk0
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re: Four reasons why its 'game over' for foreign chip firms in China
chipmonk0   6/8/2012 4:25:02 AM
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you sound like one of those Third worlders ( Middle East ? ) with a chip on his shoulder about the West who would gladly become a Trojan Horse to let China get in through the back door.

KB3001
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re: Four reasons why its 'game over' for foreign chip firms in China
KB3001   6/8/2012 8:00:37 AM
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It was to show you that there are two sides to this argument, Chipmonk, and that it's not a straight Good vs. Evil issue. I hate these oversimplifications. China's rise is a challenge to the West, it goes without saying, but to portray it as Good vs. Evil, advocate a technological embargo including visiting students!, and link this whole issue to world politics e.g. recent UN deliberations, is way over the top and quite dangerous in my opinion. I do not see life as a zero-sum game unlike you, and I am certainly not taking sides. I would happily criticise the Chinese Government (or even people) on other occasions, but not on this one, because it's not right.

chipmonk0
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re: Four reasons why its 'game over' for foreign chip firms in China
chipmonk0   6/8/2012 3:53:51 PM
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Do you have any first hand experience in dealing with the Chinese in China ? I would suggest that till you get some business experience with them just stick to opining on EE design. It would also help your non - technical arguments here if you were to first get an unbiased education in history. FYI, it was not as simple as Renaissance started because Italians learned a lot from the Arabs as you have implied in your earlier post. The Arabs themelves learned a lot from the Greek and Byzantine civilizations - starting with how to build a Dome that forms the basis of all Mosques. In Mecca itself they did not know how to build a Dome, the evidence is the Cube shaped Kaabah. The Rennaissance in Italy was triggered mostly by the Christian refugees from Constantinople after the Moslem Turks captured it. The reason the Arabs and the Middle East in general have fallen behind is because they believe in their OWN LIES and still chop off the heads of those who question it. The Chinese are not much different - no matter how much they ape Western technology.

KB3001
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re: Four reasons why its 'game over' for foreign chip firms in China
KB3001   6/8/2012 4:16:43 PM
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I actually do have business experience in China, Chipmonk. I have no complaints: reasonable pricing and good quality. As for the rest, you comfirm what I said above at the beginning of your post, every civilisation learns from previous civilisations. The rest is the usual Xenophobia I came to expect from you by now :-)

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/8/2012 4:00:25 PM
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Chinese killed Americans in Korea in the 1950s, invaded Tibet in the 50s, invaded India in 1962, supplied Pakistan and North Korea with Nukes, had a border war with Vietnam in the 70s (which they lost badly), supplies the Burmese Junta, supplies every major terrorist group with cheap weapons. KB3001, you need to get your head out of your ...

tideblue
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re: Four reasons why its 'game over' for foreign chip firms in China
tideblue   6/12/2012 11:31:42 AM
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OK ok,let's say all you said is true. Then I am begging our great world-peace-keeper uncle Sam to deliver great democracy to this evil country. Then what?why do not they take China like Iraq. It is 100 times more evil

gasdfnq
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re: Four reasons why its 'game over' for foreign chip firms in China
gasdfnq   6/12/2012 10:31:10 PM
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in my view, American soldiers are killing ww people overseas every year since ww2, they started wars in other countries or attack others every 5 years

ruserious
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re: Four reasons why its 'game over' for foreign chip firms in China
ruserious   6/7/2012 9:05:36 PM
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Tai said multinational companies retain a model that requires 100 engineers to develop a new system every six months. “We are seeing Chinese system guys pump out a new product every three months with just five to 10 people.” Tai said, “That’s very disruptive.” Wow, Chinese engineers work twice as fast with ten to twenty times fewer people! That's amazing! Some would even say it's unbelievable.

Peter Clarke
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re: Four reasons why its 'game over' for foreign chip firms in China
Peter Clarke   6/8/2012 10:50:37 AM
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I dont think it is that the engineers work 20 times harder....they simply want their suppliers to do more of the work..... So they tell their SOC provider to supply the complete platform including Bill of Materials, motherboad layout, recommendations for all chips....and firmware..while they focus on getting Angry Birds running

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/8/2012 4:02:43 PM
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LOL, Peter. Here's another joke - "Chinese R&D".

zzacreek
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re: Four reasons why its 'game over' for foreign chip firms in China
zzacreek   6/8/2012 3:35:13 PM
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China has to open up the market more to more outside companies in order to become a leader in chip development or any development. Japan opened it's markets up to the outside world and Japan companies that made it ended up being some of the best in the world. China currently does not allow low cost electronics from countries like India. And china backs up a lot of its companies with government money. These two things will have to change as china labor cost more and more.

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/8/2012 4:07:17 PM
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BTW, nothing against the Chinese people. They are hard working mostly decent people, but the govt is evil. Brutalizing it's citizens, killing Tibetans and other minorities, poisoning the environment (their own and neighboring countries). Supporting terrorists in Pakistan to destabilize India. The list goes on and on. This is not the work of some benevolent free market sponsor. I wish the Chinese people one thing -- freedom and democracy. Only then can they live up to their full potential.

gasdfnq
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re: Four reasons why its 'game over' for foreign chip firms in China
gasdfnq   6/12/2012 10:34:30 PM
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you can not seperate chinese people and chinese goverment, becuase chinese goverment is made of chinese people, their policy is based on their culture and tradition, if u think about how rapidly china rised, u can not deny chinse goverment is the smartest goverment in the world.

Actaeon2
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re: Four reasons why its 'game over' for foreign chip firms in China
Actaeon2   6/8/2012 8:09:10 PM
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This could be the most interesting and active thread ever. I'll pick back up on this when I get home. Thanks for an interesting topic and discussion.

AliNS
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re: Four reasons why its 'game over' for foreign chip firms in China
AliNS   6/8/2012 8:50:58 PM
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Strange, but I heard the same arguments 20 or so years ago about the Japanese chip companies, not only was it game over for the rest of us but Japan was going to take over the rest of the world. Granted, the Chinese doemstic market is potentially the largest and they can hold on a little while longer, but we shall see...

microe
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re: Four reasons why its 'game over' for foreign chip firms in China
microe   6/8/2012 9:48:14 PM
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Interesting discussion. People promoting hatred should be sent back to the two world war days to feel the pain. Enemy is sometimes created by your own due to ignorance and the lack of respect. The world is still enough for the human population. We should learn how to turn zero-sum to win-win.

dong2
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re: Four reasons why its 'game over' for foreign chip firms in China
dong2   6/8/2012 11:25:44 PM
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Unfortunately so many comments are not really reflecting the major idea in this article: 1. The success of Chinese semiconductor companies, especially this one, comes from fast adaption to market demand, agile product support. It's basics to any business but they can well execute them. 2. American companies' advantage lied in basic science research, technical innovation and combination of art and engineering. Maybe American companies still hold some technical advantages. As long as our could-be R&D investments are still wasted on world-wide wars, conflicts, or domestic political deadlocks, prison systems, we'll see more and more Chinese companies make the rules. 3. As a member of semiconductor company battling at Chinese market, I can tell you what this CEO said is totally true.

dong2
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re: Four reasons why its 'game over' for foreign chip firms in China
dong2   6/8/2012 11:32:27 PM
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add one more after reviewing some more non-technical comments: 4. If we still blame China this and blame China that but not effectively take right actions upon ourselves, don't we look more like a loser already?

KB3001
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re: Four reasons why its 'game over' for foreign chip firms in China
KB3001   6/9/2012 12:15:27 PM
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The short-term shareholder-driven value is also to blame dong2. In China, the Government is taking a long term view, and companies also often take some short term losses or diminished profits for long term prosperity. In many Western countries/companies, it's the here and now that counts. CEOs are prepared to do anything to increase their personal return in their short tenure and the hell with the rest afterwards.

resistion
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re: Four reasons why its 'game over' for foreign chip firms in China
resistion   6/12/2012 3:34:23 PM
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Basic science research would be done at universities. Anyone can access on the internet. If a company does too much R&D, of course it will have trouble with time to market.

ChipBuilder
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re: Four reasons why its 'game over' for foreign chip firms in China
ChipBuilder   6/8/2012 11:28:32 PM
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I read a book written by a US general who suprisingly said, it is a mistake to think that your people are better than any other people, people all have equal capacity. It is training, discipline and equipment that allows you to win. I know the families forced to kill their second girl fetus in China are comforted by their contribution to the greater good. Their govt has capacity for some serious evil, so allow me to be a little skeptical about their intent. @gaia: its good to see that China has idiots too.

resistion
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re: Four reasons why its 'game over' for foreign chip firms in China
resistion   6/12/2012 3:30:42 PM
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..felt a little pro-life there.

ChipBuilder
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re: Four reasons why its 'game over' for foreign chip firms in China
ChipBuilder   6/13/2012 6:23:55 AM
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its actually a pro-choice statement, because they are not given a choice; made by a pro-life engineer. isn't freedom of speech great

resistion
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re: Four reasons why its 'game over' for foreign chip firms in China
resistion   6/14/2012 3:02:56 AM
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I had no problems with your perspective. In fact, I am sure the Chinese government now regrets the ultrahigh M/F ratio.

I_B_GREEN
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re: Four reasons why its 'game over' for foreign chip firms in China
I_B_GREEN   6/9/2012 12:49:42 AM
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perhaps but your labor cost are going up at 30% year. how long will you have a clear advantage when slave wages are not the norm?

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/11/2012 3:46:52 AM
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As long as the US attracts the best and brightest in the world -- we will always have an advantage over closed societies with homogenous communities.

resistion
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re: Four reasons why its 'game over' for foreign chip firms in China
resistion   6/12/2012 3:27:08 PM
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The US may attract but not necessarily retain.

garydpdx
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re: Four reasons why its 'game over' for foreign chip firms in China
garydpdx   6/13/2012 1:31:46 AM
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Do a search with the string "reverse brain drain" to see why the Silicon Valley Business Council is sounding alarms ...

resistion
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re: Four reasons why its 'game over' for foreign chip firms in China
resistion   6/13/2012 2:56:56 AM
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Yes it's scary. Here is one find: http://www.insidehighered.com/news/2011/10/06/house_panel_considers_loosening_immigration_laws_for_foreign_students_with_stem_degrees “Our system is out of green cards for the next 10 to 70 years,” she said. “You will have to wait a long time if you want to make a life here. The result has been a reverse brain drain. And we have reason to fear it.”

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/15/2012 12:15:28 AM
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Many of the departed are trying to return to the US. Corruption and politics at ever level of society is a very real problem. You can't live a normal life in India/China with every Tom, Dick and Hari asking for a bribe or treating you for one. Sorry, whatever our faults here, bribery and corruption is hidden and doesn't affect us on a personal level.

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/15/2012 12:20:56 AM
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typo: treating = threatening

jagmohanN
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re: Four reasons why its 'game over' for foreign chip firms in China
jagmohanN   6/11/2012 8:14:08 AM
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My suggestion - Step away and take a look at the article and number of responses. Right/Wrong, Correct/Incorrect, True/Untrue - the article has made many to read it and respond to it. Think about it - why did it make you respond if you were not concerned or bothered or alarmed or if it did not matter to you. Business lives in real time and will. What Tai says - is reality for him and may be for whole China. Rather than going to history - think about how are you going to use it for your business.

private1234567890
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re: Four reasons why its 'game over' for foreign chip firms in China
private1234567890   6/11/2012 6:44:25 PM
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Two basket cases... http://tinyurl.com/23-things-they-dont-tell-you Both these countries below are up to their necks in heavy protectionism, discrimination against foreign investors, weak protection of property rights, monopolies, lack of democracy, corruption, lack of meritocracy, and so on. You would think that they are both headed for developmental disasters. But think again. Country A --------- Until a decade ago, the country was highly protectionist, with an average industrial tariff rate well above 30%. Despite the recent tariff reduction, important visible and invisible trade restrictions remain. The country has heavy restrictions on cross-border flows of capital, a state-owned and highly regulated banking sector, and numerous restrictions on foreign ownership of financial assets. Foreign firms producing in the country complain that they are discriminated against through differential taxes and regulations by local governments. The country has no elections and is riddled with corruption. It has opaque and complicated property rights. In particular, its protection of intellectual property rights is weak, making it the pirate capital of the world. The country has a large number of state-owned enterprises, many of which make large losses but are propped up by subsidies and government-granted monopoly rights.

private1234567890
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re: Four reasons why its 'game over' for foreign chip firms in China
private1234567890   6/11/2012 6:44:30 PM
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Country B --------- The country's trade policy has literally been the most protectionist in the world for the last few decades, with an average industrial tariff rate at 40-55%. The majority of the population cannot vote, and vote-buying and electoral fraud are widespread. Corruption is rampant, with the political parties selling government jobs to their financial bankers. The country has never recruited a single civil servant through an open,competitive process. Its public finances are precarious, with records of government loan defaults that worry foreign investors. Especially in the banking sector, foreigners are prohibited from becoming directos while foreign shareholders cannot even exercise their voting rights unless they are resident in the country. It does not have a competition law, permitting cartels and other forms of monopoly to grow unchecked. Its protection of intellectual property rights is patchy, particularly marred by its refusal to protect foreigner's copyrights. Country A is China today. Country B is the USA, around 1880, when it was somewhat poorer than today's China. http://tinyurl.com/23-things-they-dont-tell-you

Paul911
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re: Four reasons why its 'game over' for foreign chip firms in China
Paul911   6/12/2012 12:48:55 AM
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good point from private1234567890...

resistion
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re: Four reasons why its 'game over' for foreign chip firms in China
resistion   6/12/2012 4:15:33 AM
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Key concern seems to be do markets outside China matter? Hopefully they do, otherwise the frustration sensed here can only rise..

Navelpluis
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re: Four reasons why its 'game over' for foreign chip firms in China
Navelpluis   6/13/2012 7:24:16 PM
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I think protectionism would not help us. But we should give not away our knowledge just to make university professors happy to have enough people in class ( happens here in The Netherlands! ). China indeed copies (and steals) a lot of our designs. This has been proven in very many ways. But I think it is a mind setting problem: Reverse engineering brings you back to the past: I do not believe in it. The only thing that we -as engineers- can do is progressive engineering and innovation. Create useful high quality new things. This can only be done inside small companies. No bothering managers, legal, and lots of other annoying the engineer. And as stated before: Regulations are too tight. We see here that the industry regulate themselves to keep others out of their business (= protectionism) I think this is a bad thing. Things are changing in our society: Nobody here wants to study for 10-12 years to get an underpaid engineering job in comparison with lawyers, management, and others. For electronics engineering university we have a result of approx. 250 people finishing their study each year out of 16 million folks in our little country.... And I can tell you that not even 1/4 goes into engineering... And this 250 means for all diversities in our profession. (part1)

Navelpluis
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re: Four reasons why its 'game over' for foreign chip firms in China
Navelpluis   6/13/2012 7:24:39 PM
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(part2) I think it is just a matter of time that the same will happen in China, the same as it happens in Japan: Our youth don't want this anymore. Their youth will profit from the results of their parents in -say- 25 years. So we are going ahead into rough economic times. I don't know what it will bring for our profession, I really have no clue if we are capable to do proper engineering here in Europe. But fortunately we are very creative. So I think that with our creativity and with good innovative engineering we probably will hold on for these 25 years, let us just hope. The baddest thing to do is to be arrogant (in person and also as a company). Watch out for people 'knowing it all well' who are not directly involved in our industry. They certainly will lead us in destruction - while they fill their pockets. I have my own very small company. I am always very careful for my customers and serve them the best I can. That's my 2 cents and all I can do...

tideblue
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re: Four reasons why its 'game over' for foreign chip firms in China
tideblue   6/14/2012 10:58:09 AM
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Some good points navelpluis. My 4 years working experience in Holland shows there are many Dutch guys who are really arrogant.They are great engineers but they know nothing of what happening outside Holland and has no vision for future.What happens at NXP is a good example.

ChipBuilder
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re: Four reasons why its 'game over' for foreign chip firms in China
ChipBuilder   6/14/2012 4:59:18 AM
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I donate my 3 cents to the green energy fund, if you not part of the solution, your part of the problem.

Mxv
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re: Four reasons why its 'game over' for foreign chip firms in China
Mxv   6/15/2012 12:17:19 AM
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Interesting reading: http://brontecapital.blogspot.com/2012/06/macroeconomics-of-chinese-kleptocracy.html

resistion
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re: Four reasons why its 'game over' for foreign chip firms in China
resistion   6/15/2012 1:12:50 AM
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The points look reasonable, probably because if we applied the analysis in the US or other developed country, we'd expect similar results. Although the author, in order to criticize the one-child policy, appeared to favor many-child policy - that obviously doesn't work for other reasons.

seaEE
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re: Four reasons why its 'game over' for foreign chip firms in China
seaEE   6/16/2012 3:24:40 AM
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The only constant is change (well that and 3.14159 and 2.71828). Ten years from now Brazil might be the new manufacturing hub.

fabsurplus.com
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re: Four reasons why its 'game over' for foreign chip firms in China
fabsurplus.com   6/19/2012 8:02:46 AM
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All I know about China is we sold an HF based wet etch system there to a government fab in 2005. The contract engineer rang us up to complain during the install that the fab had no PPE (Personal Protection Equipment) whatsoever for the engineers working on this HF chemistry based tool. I'm looking forwards to NOT working in any factory like that at any time in the next 20 years... Stephen Howe www.fabsurplus.com Contact us now to buy and sell used equipment and enjoy the benefits of cost-saving.

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