Hopefully the British government will grow some balls and do the same as all the countries listed unfortunately its not likely to happen. America protects many industries, so does France, Spain, Italy, China, Korea, Germany, Brazil etc. Find me one industry the UK government does the same with over 54% of all business and 80% of big business is foriegn owned in the UK mainly by America, France & Germany.
Unfortunately, this nationalism/protectionism is not limited to semiconductors, it extends to all aspects of the electronics industry and other industries. All countries are guilty of similar infractions and no country is immune from the impact. In the end, when government intervenes in the market, everyone suffers.
I still stand on what I said Britain does not protect any industry it does give one tax incentive to the creative industries for inward investment. America does defend industries although it talks about free trade, France and China openly look after their own.
I do believe that there is a fine line between nationalism and protectionism. But for an industry like semicondcutors which does require substantial investment in infrastructure (if you are in a foundry business) to start up, traditionally, it hadn't happened withou a government's will and assistance.
Now, how long that government's help should continue is another story, though.
In the UK I think we still have one semiconductor foundry at Plessey Semiconductor in Plymouth. They have converted this for GanLed production and it was totally private money as I said the UK government promote British business but DONT support it financially or by protectionism but the world is far from a level playing field as European companies are finding in China.
Agree, it's time for Govt to get involved to save Semiconductor Conductor Industry in US!! Traditionally Semiconductor Startups are funded by Venture Capatalists but the recent trend in semiconductor industry is little scary as VC's dropping (zeroing) their investments in semiconductor startups.
While other countries taking it as an opportunity and funding their Semiconductor Startups, it's not a healthy situation for US Semiconductor companies as those startups eventually become fierce competitors in the long run ( as we can clearly fore see )
Look at Japan, Taiwan, Korea, Europe, and even the United States. Every place has had its fair share of government assistance before the birth of local semiconductor companies...
Taiwan Semiconductor Manufacturing Co., for example, would have never been born without...Samsung wouldn't be the semiconductor behemoth it is now without...Without help from the ministries in Tokyo, none of Japan's technology godzillas...
@Junko, you are truly an old-school investigative reporter and I dig your work. If only we saw from all our media the same level of curiosity and focus that you have. But isn't your comparison above actually contrast? Those companies were started with a push from their respective governments but the goal, it seems, was that after they get off the ground, they became privately controlled, competitive companies. Either Truly private or publically traded, but not government entities. And its worked out that way.
But these Chinese fabs are going in reverse, no? They were on the market as publically traded companies getting foreign capital and now they're being sucked up by the state.
Your error, or my missunderstanding aside, this trend is concerning. My question would be what did these companies gain from their short time taking foreign capital that will now be property of the Chinese communist government? Is it just money, or IP and infastructure involved too?
@C VanDorne, you are absolutely right. Those Chinese companies are going backwards.
However, one thing remains ambiguous in my mind.
Even though those companies are pulled back from the stock market in the U.S., China's state-owned funds seem mighty interested in making quick RMBs by investing more in them, but quickly selling them off (doing IPOs) on the Chinese stock market. Some China hands explained to me that much of those activities we are seeing now are pure financial plays.
In the past, in China, none of the big state-owned electronics companies truly succeeded. We were beginning to notice the success of Chinese fabless companies only when many of those companies began getting founded by those "sea turtles" (Chinese engineers educated in the US who subsequently went back to China). At that time, the stock market in China wasn't mature enough. They had to come to Nasdaq to get some funding. So, yes, they did get money and also gained some exposure and great visibiliity by coming to the U.S. as private companies.
I actually have great admirations for many of those Chinese fabless companies who managed to get listed in Nasdaq. They learned to do business in a much more transparent environment -- compared to many local Chinese fabless who have never gone through this process.
But again, what remains unclear to me is what those China's state-owned funds will eventually do to those once publicly traded companies.
Just a financial play? If it's only that then it's still intersting in that it seems premature. But what do I know. I am writing you from my place of employment, after all...and not from the corner office either.
Thanks for the link, Junko, and Happy Friday. This storyline has inspired me. I'll call it "The People V.C."? I think it works - the tag anyway. If this new-friendly fascism actually works in practice in China...well, that remains to be seen, and will be fun to watch. Please keep up the good work.
@Junko, of course nationalism matters, I have been watched closely your posts throughout the years, you have paid alot of attention of what China does on its semiconductor industry. Your ethnicity does play a role in terms scrutinzing China strategic industry closely. It's no surprise China is the number 1 spied on target of Japan throughout the years. It had spent tremendous amount of resources in watching every details of China does in aspects especially defense and strategic industries.
Now China ready to up its game and I have seen you become really concerned or even paranoid about it. You can use the excuse of protectionism all you want. And I am not surprise by all these.
Thanks for your comment. I am not sure if I am 'paranoid' as you say, but I sense I am not the only one who wants to understand what's going on in China. I do agree with you: China is ready to up its game.
Tell us more some of the things you've learned about China's strategic industries.
It's fairly simple, China is tired of exporting only shoes, clothes, and toys while importing a overhwemling amount of hightech stuffs from advanced countries.
How about switch role, China will make and export all kinds of advanced stuffs and US and Japan make shoes and clothes for China?? How do you feel about that?
Your comments about Chinese hightech companies retreating back to Chinese state firm is off. Why? because all these years, none of them have risen to western competition due to overhweming lead by western companies. A different way needed to get it done.
It's Not good for China to keep using the latest leading western tech, instead, they should use Tech they can control and have mastered even if they are abit behind.
Anyway, China unlike any countries like Japan, Korea which simply do not have the market size to doing this way.
Already, government already banned window 8 , and will debut its own OS (linux derivative) for desktop and Smart phone. It will promote domestic G4 cellphone chips by Hisilicon, Spreadtrum...etc And asked bank to switch away from IBM server and Cisco routers. You will see Chinese made MIPS based processors ramping up to for desktop, supercomputer and low cost platform for IoT. Soon government will screen for government, state firm pruchased computers and cellphone for ALL-CHina-Made components for those systems, meaning CPU, memories, Chipsets, and harddrives have to made in China. Not more made-in taiwan or made in korea compoents for those government purchases. That's why you seeing Samsung setup a very advance memory fab in Xian for this reason.
You can say whatever China produced in China may not be accepted by western countries. Duh, big deal. just like its COMAC C919 airplane project even not a single one sold to country outside China , it still will do it and sell it to domestic airlines.
Remember, China will become a $20 Trillion economy, even if none of its hightech products sold to western countries, it's still pretty big for all domestic supplier. Third and second tiered countries will for sure buy Chinese hightech stuffs.
ANYWAY, EVEN IF WESTERN TECH ARE SUPERIOR, BUT IF CHINA CANNOT CONTROL IT, IT"S BETTER NOT USE IT. THAT"S BOTTOM LINE. Rather gain the lowered tech and modify it and use it.
Thta's route China is going.
The day of multinational companies dominating China is over.
Not just Qualcomm, but Intel, Broadcom, Lattice, TriQuint, Altera, Linear, TI they better watch out. Right now, Microsoft, McAfee, Cisco, Google the software and system guys got hit big but later component guys will also get hit.
If they are smart, they better team up with Chinese state firm to form a sharing JV in China and then they can at least survive abit or else they will be sweep out of door in near future,.
And many of them using taiwan manufacturing and sell them to China market. That's not going to work. No way... China will crack down on that.
I read about Japanese firms trying to ramp out the G4 stuffs trying to capture China market, well, they have bulleye on their back now China trying to ramp their own stuffs plus the tense political situation between the two countries.
There's isn't a whole lot of difference between current tech and tech of 30 yrs ago.
Fo example, at the height of cold war, US produced the Sea Wolf Class Submarine, B2, F22.
30 yrs later now, US have Virginia subs and F35, heck, there's NO clear advantage between weapons 30 yrs ago versus what's current have. In fact F35 in alot of ways inferior to F22 of 30 yrs ago.
So, if China only sticks to self produced MIPS CPU, and only used self produced DDR2 memory and own chipsets for its desktop, server, laptops, it won't MISS a BEAT.
The country still do FINE.
It doesn't need all those leading edge , exotic stuffs at all. It just a way for western companies to maintain its monopoly.
A good analogy is "an adopted child will never be as good as your own" because he or she doesn't share your bloodline. It doesn't get anymore fundamental than that.
There will be 2 distinct trends in China. On one hand there still be company like Lenovo, Xiaomi that used alot of foreign tech so they can still sell to oversea,.or general public.
On another trend, the government, military, state firms and education areas, self owned technology will emerged. They will exclude lenovo and Xiaomi because they are using too much foreign techs in which China have no way of control.
China has already taken the best shots from US on Protectionism. Obama admin has raised record amount tariffs against Chinese industrial goods such as steel products, tires, auto parts, solar panels and out right banned huawei and ZTE on US markets. yet company like qualcomm making over 60% revenue from China , $12.5 billion from China. It doesn't take a genius to see such huge discrepancy. and Not Wonder makes Chinese government mad.
You don't see China Crying that much publicly about it.
Now China is out to get even. and you see US and EU crying so hard about it.
Like a boxer, you need to able to dish out as well as taking punches.
I mean the stuffs China selling right now in US markets do need WTO helps shoes, jackets , toyes etc. Even without WTO US will not snuff those daily usage stuffs out from China else inflation will run through the roof.
The battle is at hitech and industrial products.
I mean pretty much majority of China industrial products have already been target of Obama admin.
You don't see China crying about it. It took the punches from US quite well.
Now China gets even with US and I see all kinds of crying , raging, howling in US media. ..pathetic.. Sheeshhh Cannot take punches at all.
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