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krisi
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$10B
krisi   3/25/2014 10:51:25 AM
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You got to be impressed with China long term thinking...

junko.yoshida
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Re: $10B
junko.yoshida   3/25/2014 10:54:52 AM
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I know, Kris. The bigger issue, though, is if they can pull that off effectively with transparency. That won't be easy.

krisi
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CEO
Re: $10B
krisi   3/25/2014 11:00:15 AM
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Why is transparency an issue Junko?

junko.yoshida
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Re: $10B
junko.yoshida   3/25/2014 11:09:52 AM
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Well, Kris, as I noted in the story, whenever local governments and bureaucrats are involved, there are often corruption issues.

This is how it was explained to me -- in terms of how corruptions could occur.

 

You [local government officials or whoever in the position to distribute the money] do a favor to someone you know by enabling investment. In return, you feel you are entitled to pocket some money from the deal, because you enabled it! And if there more deals to be made, there will be more opportunities for you to profit from it.

Hopefully, this idea of "set up a fund and let professional investors place bets" would work. 

 

krisi
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CEO
Re: $10B
krisi   3/25/2014 11:15:23 AM
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Corruption exists everywhere, including USA or Canada where I live...it just looks different on both sides of the Pacific ocean...Kris

junko.yoshida
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Re: $10B
junko.yoshida   3/25/2014 11:29:17 AM
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Very true, Kris. But $10B per year? That's a lot of money to play with.

krisi
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CEO
Re: $10B
krisi   3/25/2014 11:35:38 AM
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Not really...Canada's oil industry or US military contracts are much larger than that...even Macao's casino gambling business is 3x that ;-)...I am sure major part of that $10B will end up in silicon

wilber_xbox
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Re: $10B
wilber_xbox   3/25/2014 12:06:00 PM
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Kris, even our Abu Dhabi based oil barron are not spending that much money in semiconductor after starting with a bang. 

krisi
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CEO
Re: $10B
krisi   3/25/2014 1:01:34 PM
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Good point @wilber_xbox although China's GDP (which is roughly 50% of the US 16 trillion) is about 40x larger than Abu Dhabi's (roughly 50% of the UAE $400B) so they can clearly afford it

If you want to be serious about semiconductors $10B is minimum in my mind...$5B is the cost of one fab that can do 28nm or better...and you need some ecosystem around it...say another $5B for that

wilber_xbox
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Re: $10B
wilber_xbox   3/25/2014 12:04:00 PM
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Junko, i am also not convinced that China will be spending $10B per year for 5-10 years. Its just too much given the spending of others in Semiconductor, but if China is serious about spending whatever money to develop ecosystem for Semiconductor then its good for overall industry as you have rightly mentioned a quote in the article that semiconductor is base for all the electronic development.

junko.yoshida
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Re: $10B
junko.yoshida   3/25/2014 12:16:59 PM
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@wilber_xbox, China's $10B per year investment, if true, will blow everyone out of the water. It is really off the chart.

But at a time when chip vendors struggle to get VCs' attention in Silicon Valley and the general public seems to be taking the advancements of chips for granted, China's interest in semiconductors is a blessing to this industry, I must say. 

Anand.Yaligar
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Rookie
Re: Good idea
Anand.Yaligar   3/30/2014 11:52:28 AM
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From investor's point of view, I think the idea of not letting the government to dictate which IC industry sector should get the investment money is a brilliant one. This will make it effective because it will reduce cases of corruption leading to embezzlement of this investment money. It will also lead to a quality and successful project. The idea of letting professional investors to place bets on which entities, foundries and research institute deserve the funding is also a good one.

Anand.Yaligar
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Rookie
Re: $10 B
Anand.Yaligar   3/30/2014 12:02:39 PM
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@Krisi, it is true that corruption could shrink the 10 billion figure to a smaller amount but considering that China is a communist state the risk of loss of fund through corruption is not as serious as it would be if the project were to be implemented in some other parts of the world. Naturally the communist states are less corrupt, especially at the lower levels of government, compared to democracies and pseudo-democracies.

Anand.Yaligar
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Rookie
Re: Private sector involvement
Anand.Yaligar   3/30/2014 12:10:01 PM
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The involvement of the private sector in the disbursement of these funds is an essential approach in two main ways; first of all, there is greater efficiency since the private investors are more concerned about the bottom line than the government and can evaluate the companies looking for funding more objectively. Secondly it increases accountability since most companies are usually not very concerned about conserving whatever they receive directly from the government because they believe they are entitle to the same as they pay taxes to the government.

junko.yoshida
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Re: Private sector involvement
junko.yoshida   3/31/2014 7:59:39 PM
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True, Anand. The third reason that this may work, in my mind, though, is that private investors most likely know this industry and what key players in the industry need -- far better than the government's bureaucrats. 

Anand.Yaligar
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Rookie
Re: Interesting figures
Anand.Yaligar   3/30/2014 12:11:04 PM
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Since there does not seem to be any clear consensus as to the specific amount of money that the Chinese administration is planning to commit to the development of its home chip industry, being an optimist I can't help but wonder what it would be like if they actually pumped those figures into the industry. Say, for example, they actually pump $200 billion stretched over 5 years into the chip industry. Such investment would literally make competitors tremble, if nothing else.

junko.yoshida
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Blogger
Re: Interesting figures
junko.yoshida   3/31/2014 7:56:44 PM
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yes, if it happens, it will indeed make every competing nation's effort look very pale.

Anand.Yaligar
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Rookie
Re: IoT devices
Anand.Yaligar   3/30/2014 12:12:13 PM
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These are some pretty interesting insights into how the portable technology and wearable technology markets are going to drive battery revenue in the coming years but I do not see any mention of the contribution of Internet of Things devices to this growth. Even though they are hard to completely define, a good proportion of them rely on batteries for this power and considering just how fast the IoT world has been growing it would be interesting to see how they will contribute to the sustainability and growth of battery revenue.



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