China is Planning to Purge Foreign Technology and Replace With Homegrown Suppliers

[cirr]

TSMC Plans 300mm Fab Amid China's Policy to Foster Own Chip Sector

2014/12/26

Silicon foundry giant Taiwan Semiconductor Manufacturing Co. (TSMC) plans to open its first 300mm wafer fab in China, responding to the nation's recent announcement to budget massively to foster its homegrown semiconductor industry.

China, a major semiconductor market that depended on imports to meet US$232.2 billion in semiconductor demand in 2013, plans to cultivate its semiconductor industry by investing RMB120 billion (US$19.6 billion) initially.

TSMC Chairman Morris Chang recently said the company's decision to open a 300mm wafer fab in China hinges on its national industry policy, conceding that TSMC has little choice if China will only use chips made locally.

Chang added that TSMC is but a catalyst in China's semiconductor industry growth and plans to set up 28nm process capacity that accounts for sub-10% of its total capacity there.

TSMC's spokespeople said the investment plan is still on the drawing board without having budgeted for such capital expenditure for 2015.

Industry executives say although TSMC is running a 200mm wafer fab in China, 28nm process is a manufacturing technology used in 300mm wafer fab.

Capital equipment suppliers predict TSMC to open such a facility in China by 2016 for the Taiwan government only permits the island's chipmakers to invest in wafer fabs in China that is two generations behind their latest technologies in Taiwan. TSMC will ramp up volume production using 16nm process in 2016 after beginning volume production in H2, 2015.

Industry executives say TSMC may still choose Shanghai as the location for its 300mm wafer fab because its 200mm fab is in the same city, where semiconductor industrial clusters have developed.

They also reiterated Chairman Chang's statement above, emphasizing that for TSMC to overlook such opportunity would result in losing the huge market to Samsung and Intel.

Taiwan supplied 31% of China's imports of IC chips in 2013, which were mostly built by TSMC. .

Samsung opened a 300mm wafer fab in Xian in China to put out memory chips before the policy announcement, and can put aside the facility for production of logic chips, the major products that TSMC is contracted to make in line with China's policy.

China's homegrown Semiconductor Manufacturing International Corp. (SMIC) also competes against TSMC with vigorous effort to migrate to 28nm process.

China's semiconductor market has grown rapidly over the last few years, mostly driven by government subsidies for IC design houses striving to develop chips for trendy applications such as Internet of Things (IoT) and wearable gear, to create demand for sufficient, advanced foundry capacity from contract chipmakers.

Industry executives say TSMC can comfortably meet such demand with its high-yield 28nm process since it has migrated to 16nm process technology for high-end customers like Broadcom, Qualcomm and Apple.

Global Unichip Corp. can also help TSMC's to lure contracts from China's design houses, providing intellectual property to application specialty IC (ASIC) designers developing system-on-chips.

The major hurdle to TSMC's investment plan in China is the Taiwan government, which stipulates the island's chipmakers can set up production capacity in China only through taking over plants or acquiring stocks, not building new factory.

United Microelectronics Corp. (UMC), another major foundry supplier in Taiwan to invest in 300mm fab in China, plans to acquire stocks in a chip-making venture co-founded by the Xiamen City Government and Fujian Electronics and Information (Group) Co., Ltd. (KL)


Prominent 300mm Wafer Fabs in China
Company
Location
Product
Monthly Capacity
UMC
Xiamen
Contract logic ICs
56,000 wafers
SIMC
Beijing, Wuhan
Contract logic ICs at Beijing and contract NOR flash ICs at Wuhan
50,000 wafers at Beijing and 60,000 wafers at Wuhan
Intel
Dalian
CPUs
52,000 wafers
Samsung
Xian
Storage flash memory chips
100,000 wafers
SK Hynix
Wuxi
DRAM
130,000 wafers Source: The companies
(by Ken Liu)

 

[bolo]

When I was shopping in Wal-mart weeks ago, I had a chat with an American salesman (he talked to me actually), he is interested in Alibaba stocks and considering buying some, he also said Jack Ma looks very weird but he is great.

jack ma looks like the Yin Yang School kung fu master from Qin's Moon

 

[TaiShang]

Tencent and Baidu-backed Wanda buys stake in Alipay competitor

11:51 am on Dec 26, 2014

Wanda Group, the brick-and-mortar business conglomerate that formed a US$814 million joint venture with Baidu and Tencent, announced today it bought a stake in99Bill, an online payment company, according to QQ Tech.

The terms of the deal were not disclosed, but some sources familiar with the deal reported a sum of RMB 2 billion (US$322 million) to Chinese media. It’s not clear if Wanda took a minority or majority stake.

99Bill, also known as Kuaiqian, will continue to operate as an independent entity. It’s essentially an alternative to Alibaba’s popular Alipay online payment system. The company makes several electronic payment-related products, including a mobile wallet, mobile point-of-sales device, microcredit loans, cloud-based business accounting software, and payment processing for cash, bank cards, recharge cards, Paypal, and more. 99Bill can only be used by businesses registered in China.

99Bill is ranked fourth by online payment market share in China after Alipay, Tenpay, and UnionPay with 6.9 percent of the market, according to iResearch.

Rumors surfaced in November that Baidu would acquire 99Bill for RMB 2 billion, but the deal was not confirmed. But through Baidu’s close relationship with Wanda, the search giant will still have a hand in what the company does next. Until now, Baidu was behind the curve compared to Tencent and Alibaba in online finance, with its Baidu Wallet app gaining relatively little traction.

Wanda owns chains of commercial properties like hotels, movie theatres, and malls throughout China. In August, it set up a joint venture with Tencent and Baidu to cooperate on mobile payments on Wanda properties. Customers at over 100 such locations can use Tencent’s payment tools – WeChat Payments and TenPay – to make purchases in-store. The number of locations will continue to increase, and it looks like 99Bill will be added to the payment options. These four heavyweights – Baidu, Tencent, Wanda, and 99Bill – are teaming up to take on Alipay in the battle for epayments at brick-and-mortar stores.

Alipay and Alipay Wallet are still miles ahead of their competitors. iResearch estimates that gross merchandise volume through the wallet app hit RMB 905.75 billion (about US$147 billion) for the year 2013. Tencent’s WeChat payments and Tenpay, meanwhile, saw just RMB 50 billion (over US$8.1 billion). Alipay still accounts for almost half of all third-party online payments in China.

 

[cirr]

UMC’s China fab investment approved

CHIPMAKING:UMC’s investment in 40nm and 55nm process technologies in China will still be one generation behind its most advanced tech in Taiwan, an official said

By Lauly Li / Staff reporter

01/01/2015

The Investment Commission yesterday approved United Microelectronics Corp’s (UMC, 聯電) application to invest in a 12-inch wafer fabrication plant in China.

The nation’s No. 2 contract chipmaker plans to invest a total of US$1.35 billion in a three-way joint venture with the Xiamen City Government and Fujian Electronics & Information Group (福建電子信息集團) to manufacture advanced chips in China.

Commission spokesperson Chu Ping (朱萍) said the regulatory body approved UMC’s application to wire US$710.64 million — which includes US$260.64 million from HeJian Technology (Suzhou) Co (蘇州和艦科技) — to fund the investment over the next three years.

UMC gained an 86 percent majority share of HeJian in 2012.

Chu said the company would file another application to transfer the remainder of the US$1.35 billion.

Acting commission executive secretary Emile Chang (張銘斌) said it is the largest investment the regulator has approved in the past two years.

“Although UMC’s five-year investment in the 12-inch wafer fab conforms to the government’s regulations on China-bound investments, the commission still requested that the company meet several conditions,” Chang said.

The commission asked that UMC carry out research and development for 14-nanometer (nm) technology in the Southern Taiwan Science Park (南部科學工業園區) within the next three years, Chang said, adding that the chipmaker must also recruit 3,000 employees in Taiwan over that period.

It must also invest US$1.3 billion annually for capital expenditure in Taiwan, which is higher than its proposed investment in China, he said.

Chang added that the company should report on the progress of its China investment to the commission and the Ministry of Economic Affairs on a quarterly basis.

He said UMC had agreed to the terms proposed by the commission.

The Industrial Development Bureau said that China developing its semiconductor industry is positive for Taiwanese companies as it can help them expand their presence and secure their positions in the world’s largest semiconductor market.

The bureau said that UMC’s strategic investment would help it secure more orders from China and expand its production capacity.

Bureau Deputy Director-General Lien Ching-chang (連錦漳) said UMC’s proposed investment in 40nm and 55nm process technologies in China will be one generation less advanced than the company’s most advanced 28nm technology.

“There will be no risk of leaking technologies to China,” Lien said.

UMC shares gained 1.72 percent to close at NT$14.75 yesterday in Taipei trading. They rose 19.43 percent over the year, compared with the broader market’s 8.08 percent increase over the same period, Taiwan Stock Exchange data showed.

 

[AgentOrange]

Expecting to see all major countries adopting similar policies with regard to Chinese products.

All communist countries are control-freaks, they might open up for some time, then the basic tendency gets back.

Maybe India should start replacing its made in China products with stuff made in India. If you can.

 

[dray]

Maybe India should start replacing its made in China products with stuff made in India. If you can.

View attachment 180362

Two pieces of information for you:

1. India's has a current account deficit because of the import bills of oil and gold, they are the biggest contributors.

2. In 2004 India had reported a current account surplus of about US$ 22 billion in the immediately preceding three years. Mind you, that was despite the doubling of average oil prices then. Now the party that left the office in 2004 is back in power. The trade deficit happened in last 10 years because of the stupid government policies of the previous government, and it will be corrected now.

 

[AgentOrange]

Two pieces of information for you:

1. India's has a current account deficit because of the import bills of oil and gold, they are the biggest contributors.

2. In 2004 India had reported a current account surplus of about US$ 22 billion in the immediately preceding three years. Mind you, that was despite the doubling of average oil prices then. Now the party that left the office in 2004 is back in power. The trade deficit happened in last 10 years because of the stupid government policies of the previous government, and it will be corrected now.

Doubtful.

 

[dray]

Doubtful.

Which part?

 

[Keel]

Doubtful.

Can you please tell me what is wrong with the following charts?
Or are we seeing another load of BS from the indian troll?

 

[AgentOrange]

Can you please tell me what is wrong with the following charts?
Or are we seeing another load of BS from the indian troll?

Exactly. India doesn't make anything. And it will never be able to replace China or even approach China's level of manufacturing output. Not a matter of "when." It will simply never happen. Even certain manufacturers on the lower end of the value chain that are leaving China due to rising wages are NOT going to India. India's a bad bet in terms of logistics, infrastructure, and red tape. As a result, their trade balance will continue to be negative, Modi or no Modi.

I've bolded some interesting parts in the following article.

Modi faces uphill battle in mission to see India rival China - FT.com

Modi faces uphill battle in mission to see India rival China

James Crabtree

PM’s goal to turn India into a global manufacturing hub will be difficult to achieve

Indian Prime Minister Narendra Modi addresses the media during the opening of the winter session of Parliament in New Delhi on November 24, 2014. The Narendra Modi government, which has promised big reforms in its first budget, is looking to push the Insurance Bill as well as the Goods and Service Tax Bill in the month-long winter session that begins today.

As prime minister Narendra Modi ponders his New Year’s resolutions, one stands out: redoubling India’s efforts to rival China by turning into a global manufacturing hub. Few goals are as important to his country’s future. But few are likely to be as difficult to achieve.

India’s manufacturing frailty is well documented. At just 15 per cent of gross domestic product, the sector is less than half the size of China’s. No poor Asian country has risen to middle-income status with such feeble figures — hence the urgency behind Mr Modi’s “Make in India” drive, launched amid much hoopla in September.

India excels at some high-tech manufacturing. The likes of Ford and Hyundai run world-class local factories, packed with whirring robots. Many global carmakers see India as a crucial export base. But lower skilled, labour-intensive industries such as clothes manufacturing and electronics do less well, causing alarm in a nation that must create 12m new jobs a year until 2030 to meet a looming demographic bulge.

Few companies exemplify these woes as well as Nokia. Until last year, the Finnish technology group ran a large, ultra-modern factory in Chennai, employing about 8,000 workers and exporting products globally. A local supply chain built up around the plant, attracting the likes of Chinese smartphone maker Foxconn. But this was before India’s revenue authorities took an interest. Two disputed tax claims scuppered plans to transfer the factory to Microsoft as part of a global deal. Now it is set to be sold or closed, imperilling workers and suppliers alike.

Worse, other phonemakers seem unlikely to follow where Nokia failed. Despite rocketing domestic demand, local players such as Micromax rely almost exclusively on Chinese suppliers. China’s Xiaomi plans a research lab in Bangalore as it attempts to grow in India, but no local production until at least 2016. As India seeks manufacturing success, labour-intensive products such as mobile phones should be an ideal fit. Instead, industry groups warn phone exports may drop to zero next year.

Reversing such trends will be difficult, making the limited progress by Mr Modi’s otherwise laudable “Make in India” drive all the more depressing. The phrase is often repeated by fawning industrialists, but has prompted scant policy changes. “When all is said and done, more is said than done,” Arun Shourie, a former minister in Mr Modi’s party, lamented last month.

Economist Arvind Panagariya admits this lack of detail is disappointing but says export-led manufacturing remains India’s best economic hope. Make in India should be understood as a way to explain the need for far-reaching reforms, such as scrapping outmoded labour and land acquisition laws, he argues. This is perfectly reasonable but also sobering. It suggests that heroic and improbable changes are needed across India’s economy before its manufacturing aspirations can be realised.

Worse, the nature of Asian manufacturing is changing in ways that make India’s task trickier. Cheap labour is still an advantage. But factors such as logistics and energy costs are increasingly important in persuading global companies to relocate — both areas where India struggles. Even manufacturers facing rising wage bills in China show few signs of moving to India en masse.


12m new jobs a year must be created until 2030 to meet a looming demographic bulge

Then there is the simple problem of demand. “The world as a whole is unlikely to be able to accommodate another export-led China,” Raghuram Rajan, governor of the Reserve Bank of India, explained this month in a speech warning against sneaking in tariffs for favoured sectors under the cloak of pro-manufacturing rhetoric.

This does not mean progress is impossible. India ranks second only to Indonesia in a recent analysis of manufacturing costs across 25 large exporters by consultants BCG. Perversely, the country’s myriad manufacturing barriers should make it possible to remove at least some of those expenses, including the overzealous tax regime that damaged Nokia.

Still, the odds that India can transform itself into a Chinese-style exporting powerhouse are slim. But getting just part of the way down that road would provide a critical boost to the country’s progress. As Mr Modi considers his priorities for 2015, he might reflect that a resolution partially achieved is generally better than one not attempted at all.

 

[Norwegian]

China should start by exporting its state of the art native technology to other countries, if it really is better than the West and stop making such absurd claims. Chinese technology is nationalistic if it cannot be applied elsewhere. Sounds like Islamic or Hindu "science" to me

 

[AgentOrange]

China should start by exporting its state of the art native technology to other countries, if it really is better than the West and stop making such absurd claims. Chinese technology is nationalistic if it cannot be applied elsewhere. Sounds like Islamic or Hindu "science" to me

Did you not read the article? China is replacing critical technologies with Chinese made equivalents partly due to security reasons. And China has exported its technology - sometimes successful, sometimes not, in part due to political reasons from other nations. Ever heard of Huawei?

Sounds like "Islamic science"? Pakistanis don't think so. Huawei is quite successful there.

"Huawei Technologies Co. Ltd. /ˈwɑːˌweɪ/ is a Chinese multinational networking and telecommunications equipment and services company headquartered in Shenzhen, Guangdong.[4] It is the largest telecommunications equipment maker in the world, having overtaken Ericsson in 2012"

Huawei - Wikipedia, the free encyclopedia

In 2010 Fast Company ranked Huawei the fifth most innovative company in the world.[98] The same year, Huawei received three honors at the Global Telecom Business Innovation Awards including "Green base station innovation", "Wholesale network innovation" and "Consumer voting innovation" awards with Vodafone, BT and TalkTalk, respectively.[99] In 2010 Frost & Sullivan recognized Huawei as the 2010 SDM Equipment Vendor of the Year[100] and in the contact center application market with the 2010 Asia Pacific Growth Strategy Leadership Award.[101] On 29 July 2010, Huawei was recognized by British Telecom with Best in Class 21CN Solution Maturity, Value, Service and Innovation award, for its innovation and contribution in 21CN and Next Generation Access project.[102] Also in 2010 The Economist recognized Huawei with its Corporate Use of Innovation Award.[103] In May 2011 Huawei won two awards at the LTE World Summit 2011 for "Significant Progress for a Commercial Launch of LTE by a Vendor" and "Best LTE Network Elements." As of May 2011, Huawei has deployed over 100 SingleRAN commercial networks, which are capable of evolving into LTE, and of those that have deployed SingleRAN networks, more than 40 operators have announced the launch or the imminent launch of distinct LTE services.

 

[Norwegian]

Sounds like "Islamic science"? Pakistanis don't think so. Huawei is quite successful there.

Yes, Huawei is sometimes considered as a spy company of Chinese government

Ever heard of Huawei?

Of course. Its everywhere.

Did you not read the article? China is replacing critical technologies with Chinese made equivalents partly due to security reasons.

So just because they are spying everywhere with their Huawei, they think everyone else is also doing the same? Self-delusion?

 

[Developereo]

Did you not read the article?

Don't waste time with this guy.
He constantly criticizes Pakistan and anyone who supports Pakistan.

If you had written India great, Israel great, USA great, he would be clapping for you.

 

[AgentOrange]

Don't waste time with this guy.
He constantly criticizes Pakistan and anyone who supports Pakistan.

If you had written India great, Israel great, USA great, he would be clapping for you.

Yeah, I'm coming to the realization that he isn't here to discuss so much as to troll.