Why China still can’t create the next Texas Instruments

9/9/2012 11:19 AM EDT

First person to comment that isn't trying to sell sunglasses and handbags! I am actually more positive that this will happen than some of these folks on the panel. That said, I see the growth of the China semiconductor industry as being somewhat different to that of TI. Several companies are aligning to key OEMs in China first, developing a solution there and then rolling that out more broadly across the world. Granted, it is still early, but if those companies are committed to listening to the feedback from those companies (i.e. developing stronger strategic and marketing skills), then they will succeed. If you look at the system level, Huawei went from nothing to being a significant $30B force worldwide (with limited engagement in the US market for well covered reasons). There is no reason why this cannot happen at the semiconductor level too.

9/9/2012 1:55 PM EDT

The development of semi-conductor industry in China has gone a really fast pace. With the concentration of foundry companies, the relevant R&D activity will move in a reasonably fast pace. Who knows when the next TI is born in China. The likelihood is the next semiconductor R&D company born in China is not going to be the same kind as TI is.

9/9/2012 5:06 PM EDT

The Chinese are very good at copying and replicating inexpesive devices, but can anyone name one "China" exclisive device that had not already been designed and developed else where?
Creating a climate of innovation requires a management thought process willing to take losses for unsuccessful new devices. The Chinese punish failure. Until they change, they will never reach the levels of innovation and product process of a TI.
Just my opinion.

9/9/2012 7:10 PM EDT

The same could have been said of Japan in the 1950's; they just copied transistor radios designed in the west. But then came giants like Sony and Toshiba. What may come out of China will look nothing like TI, but I'm sure a giant will come.

9/9/2012 8:29 PM EDT

No. 8: all chinese experts sucks.

I read through all the items , if that's all these experts could imagine, they are idiots.

No. 9. the true reason, chinese so far lacks trust and common value in general.
when you put 3-5 capable chinese VPs together, they .. wont cooperate, they will fight. that's the biggest difference between TI and most of chinese companies. and that 's what's keeping them under.
like SMICs big internal warfare last year, it ended up with a group of taiwan top management take over. The chinese top dog ie simon yang etc are just morally incapable of staying in such kind of position.
TI's real foundation and secret sauce is .. . sourthern baptist church, that's how to keep people trust one another and won't leave the game if they don' t like their PPI...

9/9/2012 10:39 PM EDT

Good Part of it is atleast China is attempting or trying to understand what it takes us to become TI or Qualcomm. Sure, some day they have a chance to get there. As they pointed internal co-operation is the key element rather than in fighting and openness in communication with their stake holders.

9/9/2012 10:46 PM EDT

China can easily create an enterprise comparable in size to TI.
but yet not in creativity at present.
as well as impect.

9/10/2012 1:05 AM EDT

Huawei is not the next TI. It's the next Cisco. Today.

I have been told in both Taiwan and China there is a feeling that everyone wants to be the boss and this gets in the way of the M&A needed to build large companies with broad portfolios that have a deep bench of crack divisional leaders working under on CEO.

9/10/2012 3:56 AM EDT

more inputs:
if you look at chinese IPOs , most of them have 1 founder only, (baidu, huawei, sohu...)

at the same time TI got 4 founders, Intel 3, google 2...

very clear , most chinese don't know /can't find a real partner.

9/10/2012 8:33 AM EDT

The reason is Nature. Most of the why most ? almost all of the technology born in the western countries and all the other especially eastern countries follow this. My personal idea is this is because of the food grown in that part of the earth and the consumption by the people in their respective places plus the cosmic radiation to that part of the earth.May be after a few more centuries the scenario may change.

9/10/2012 11:18 AM EDT

I personally don't like companies of the size of TI. They stifle innovation. I prefer many companies operating in their respective niches.

9/10/2012 11:25 AM EDT

I think they have more fundamental problems such as trust and free communication infrastructure.
My understanding is that design teams are isolated and information does not flow freely, due to a state that is very restrictive.

9/10/2012 11:41 AM EDT

I think the innovation culture has not yet mature in China so it takes some long time for Chinese to catch up the west. The education fundamentally is different. The whole 5000 years of education system is not creating good entrepreneur but officers that obey the king while science is not treasured by the country for very long time so generations by generations Chinese are not cultivated in an open space of creativity and innovation. Without good innovation culture it is very high to go for hi-tech! Well, although the Chinese now are more exposed to the western lifestyle and more Chinese are educated the western way, it still takes some time for the whole culture to change!

9/10/2012 2:43 PM EDT

Often the nature of society dictates this. Although it is now supposedly open and no longer a Communist country, the fundamental nature of mistrust is built into a communist society where suspecting every other person to be an agent is second nature.
For example, when we were selling SLC (Subscriber Loop Carrier) products to several countries, we had a uniquely different problem with China. All other countries would tell us the supply chain, who bought it, where it was deployed and provided contacts. We could dial into that machine and get its health related parameters. The information was used generally to improve the next generation design.

Only in the case of China, it went into a black hole. A Govt agency bought it wholesale - No clue of where and whether it was deployed and no information on how it was doing. No contacts, nor related info. This is was a uniquely perplexing situation (to us from this end, as a product house). I am sure TI if they supplied chips to China, would experience the same. Therefore, to expect China to compete is not practical since there is no "two-way communication".

9/10/2012 4:31 PM EDT

Another reason for the culture of innovation to take hold in China is to respect ideas and not pirate them. Who would want to work in that environment?

9/10/2012 7:03 PM EDT

They just started. China will get there within 20 years when TI will be moved to China

9/10/2012 11:20 PM EDT

Just the other day I was having a conversation with another person while drinking tea, and thinking to myself how good the tea tasted. But what if the tea had tasted bad? Yes you can have good conversation with bad tea, but good tea can certainly add a lot. If I had a choice between having excellent food (three meals a day), and excellent internet service, what would I pick? Well, I limped along on a 56k modem until just a couple years ago, so I might just pick the food! So being the best country at making tea is actually a pretty good feather for one's cap. And I suspect that a country that can produce good quality tea will also be able to, when the time arises, make good semiconductor products. Doing something well lends itself to many enterprises.

What ingredients does it take to make a good semiconductor company? I think freedom is one ingredient. So part of TI's success may trace itself back all the way to the Alamo. And there is also the notion of "quest". Being able to freely follow some strain of thought where it leads. In TI's case, it has lead to a proliferation of semiconductor products. In HP's case, it went from test and measurement in a garage to optoelectronic and semiconductor products and printers and pcs. In surfer jargon, these companies "caught a wave" and rode it.

But making good tea is also a pretty important role to play in our world. Just ask th English!

9/11/2012 1:57 AM EDT

China cannot create the next TI but they can *buy* TI and take it much forward.

9/11/2012 8:54 PM EDT

How is the challenge facing Chinese fabless companies different from what similar companies in the West have already gone through?

The Chinese outfits are starting from scratch in an essentially new market. Each is struggling to differentiate itself, get a track record, and score design wins. Those who do so successfully are likely to find investment available. Those who don't will wither and die or be acquired.

If you were an investor looking to invest in one or more of these outfits, who would you pick, and why? At the moment, the answer would probably be "none of them", because investment is made in anticipation of future profit, and there isn't enough information to handicap the field and and make plausible guesses as to who might actually make money.

TI didn't become what it is overnight. It's the result of decades of diversification and growth. As the Chinese market matures, consolidation wil occur and something like TI might be possible, but it won't and *can't* happen quickly.

9/12/2012 6:25 PM EDT

China could never have a Bell Labs, either. Oh wait, we don't have a Bell Labs anymore either! :-(

9/13/2012 1:29 AM EDT

这个问题值得讨论吗？这是个技术层面的问题吗？是教育层面的问题吗？是吗？

9/16/2012 6:34 PM EDT

An eight reason can be lack of IP protection. Even a reputation for lack of IP protection makes it very difficult for Chinese companies to trust each other and form meaningful partnerships. Western SoC companies nurture a third-party IP vendor (TPIPV) ecosystem based on trust. TPIPVs can dramatically reduce time to market and investment required.