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China To Spend $47 Billion In Bid To Become 3rd-Largest Global Chip Manufacturer (reuters.com)

An anonymous reader writes: In an interview with Reuters, the head of China's Tsinghua Unigroup has revealed they will invest 300 billion yuan ($47bn) over the next five years with the ambition of becoming the world's third largest chip-maker. The state-backed company, also the technological investment arm of Tsinghua University, is in talks with an unnamed U.S. company (most likely Micron) though Zhao discounts the possibility of buying a controlling share as politically insensitive.

53 comments

  1. Until the world is rid of ISIL... by EzInKy · · Score: 0

    ...nothing else matters. Fry them already.

    --
    Time is what keeps everything from happening all at once.
    1. Re:Until the world is rid of ISIL... by TWX · · Score: 0

      Daesh's real impact on the world is limited to about 500 million people currently. There are around 400 million people in the middle east, not all impacted by them, and there are localized impacts outside of the middle east like the recent events in Paris. The world's population is over seven billion people. Daesh impacts about 7% of the population of the world.

      They need to be dealt with, but there are a whole lot of other people that have their own wants and needs completely irrespective of Daesh. The world does not stop because of relatively local events.

      --
      Do not look into laser with remaining eye.
    2. Re:Until the world is rid of ISIL... by someone1234 · · Score: 1

      Tell that to the civilians in Paris. Do you want to wait till the crazies reach your town?

      --
      Patents Drive Free Software as Hurricanes Drive Construction Industry
    3. Re:Until the world is rid of ISIL... by Anonymous Coward · · Score: 0

      There have been thousands of them settled in my (very red) state. They don't speak English, have no job skills, and live off welfare benefits. I have no doubt that some of them will become radicalized and commit terrorist acts at some point in the near future. Settling middle-Eastern refugees in the US is insane. No other Muslim countries are taking them.

  2. Political insensitive? by Anonymous Coward · · Score: 0

    I've been up nearly 23 hours I think. Did they mean incentive, or am I interpretting that incorrectly?

    1. Re:Political insensitive? by Adriax · · Score: 1

      Politically insensitive.
      Apparently their PR is trying to garner sympathy from SJWs by standing up to the bully regulators who might stop the buyout.

      --
      I don't suffer from insanity, I enjoy every minute of it!
    2. Re:Political insensitive? by shaitand · · Score: 1

      Your post didn't make much more sense than the concept of a buyout being politically insensitive. What is an SJW? In what way is a possible buyout political? Why would people be sensitive about it? Whose feelings would it hurt?

  3. Wuda Figered CN was #1 by Anonymous Coward · · Score: 0

    so who be #1?

    #2

    1. Re:Wuda Figered CN was #1 by The+Eight-Bit+Link · · Score: 1

      If I recall correctly, TSMC is number one, and either Samsung or Global Foundries is number two. Pretty sure it's Samsung, sing Global FOundries has been having issues getting 14nm working.

    2. Re:Wuda Figered CN was #1 by Anonymous Coward · · Score: 0

      There really is no money to be made in this. The margins are slim, it's probably more about the supply chain and not relying on other countries for portions of it. Since the US lost this market a long time ago, I tend to think this is probably a good thing.

    3. Re:Wuda Figered CN was #1 by Dave+Whiteside · · Score: 2

      from the article
      "Currently, Qualcomm Inc (QCOM.O) holds the No.3 position in the global chip rankings, behind Samsung Electronics Co Ltd (005930.KS) and market leader Intel Corp (INTC.O), which has a market capitalization of $151.5 billion."

      --
      who where what when now?
    4. Re:Wuda Figered CN was #1 by serviscope_minor · · Score: 4, Insightful

      Qualcomm doesn't manufacture chips though: they design them. They're a fabless semiconductor company.

      --
      SJW n. One who posts facts.
    5. Re:Wuda Figered CN was #1 by DarkTempes · · Score: 2

      If you read the article or look at wikipedia you'll see that Intel is easily #1 (by revenue.)
      Consider that they design and manufacture most processors in laptops and desktops and that those chips are a lot more expensive than generic ICs.

      Then it's Samsung, Qualcomm (who doesn't actually fab their own stuff), and Micron. I don't think they're including foundries but even if you included those TSMC would probably only be #3 (or a very close #4.)

      No other foundry even comes close to top 10 semiconductor company revenue.

      China's current top foundry is probably SMIC and they don't even have a semiconductor company in the top 20 revenue list. You'll see lots of USA, Japan, South Korea, and Taiwan (more so in foundries), and a few European companies instead.

    6. Re:Wuda Figered CN was #1 by Anonymous Coward · · Score: 0

      Yeah, but it's also a state advantage in economic warfare-- the China is becoming very competitive in tech advancement. Cameras, drones, and cellphones comes to mind.

      Now that they have Lenovo--computers are next and the last thing that the US/EU/JP has over them is robotics--which I'm sure all this is a strategy to be leader and tech independent when the robotic economy hits.

    7. Re:Wuda Figered CN was #1 by Anonymous Coward · · Score: 1

      Qualcomm licenses/patents their wares. The don't manufacture them.

      That model would never wrk in China--they would clone it and screww Qualcomm over the license fees. They don't respect IP laws, mind that standards trade secrets and such. It's when they could lose the entire market they would comply. Otherwise the gov't promotes piracy & disrespect for IP. If anything thse practices will give way if they want the entire market....

    8. Re:Wuda Figered CN was #1 by Anonymous Coward · · Score: 0

      Yep, which is why you can expect china to soon equalize and overtake other economies in terms of research and development. The same thing happened with Japan. They were behind, stole ideas, got in front and then got stupid enough to care about IP laws. And thus it gives room for the next economy that doesn't care about them to take over.

      IP law will always take money away from something else, most likely R&D. When there are IP laws, you need to spend more on your legal budget. So your entire budget gets divided under more things. And when you have IP law, R&D doesn't pay off as much once you made one item, since nobody is allowed to take it over, you have no incentive to keep innovating.

      If you want an example, look at one of the first things to ever have been protected under patent laws. The steam engine. Watt did not make it, he made a pretty big improvement to it and then patented it with a business partner. Over the next years it was patented, the steam engine did not get improvements. The reality is that beforehand, companies also wanted a better steam engine, so they paid other developers to make it better and these improvements were freely stolen or sometimes even shared between different steam engine using companies.

    9. Re:Wuda Figered CN was #1 by shaitand · · Score: 1

      And the world is a better place because of it. If only they'd disrespect, pirate, and open up the modeling and simulation tools for ASIC design.

      More and more the world moves to standardized building blocks, open design specifications, clone off those designs manufacturing along with more and more accessible and affordable at home design and prototype fabrication. In 10-15 years chip features will no longer be shrinking, the technology and design tools will embrace an open commodity standard and I'll be able to design a custom chip as easily as I do a custom pcb today. In 20-25 years I'll be able to hit the print button on my 3D printer/assembler and it will combine conductive, magnetic, and insulating materials to build a fully integrated electronic that substitutes for all the functionality of a pcb+components today. Who knows, maybe I'll just print it as an integrated part of the enclosure and just add any consumables needed and plug it in. Then I'll upload my cool lavalamp design to thing-a-verse and anyone else who wants one can have one as well. Building new physical things and electronics will be no more difficult than 3d modeling and/or programming today.

  4. Where will they get the technology by Anonymous Coward · · Score: 0

    Is it being developed inside, or is it coming from somewhere else?

    1. Re:Where will they get the technology by Anonymous Coward · · Score: 0

      Probably from India at this point.

    2. Re:Where will they get the technology by TWX · · Score: 1

      Probably from Chandler, Arizona...

      --
      Do not look into laser with remaining eye.
    3. Re:Where will they get the technology by Anonymous Coward · · Score: 1

      All those Chinese nationals working for current western semiconductor companies... you don't think that's a coincidence, do you?

      I have it from reliable sources that they are always expected to "bring something home" when they return even for visiting family. Some don't because of their own ethics but there is a push to do it.

    4. Re:Where will they get the technology by Anonymous Coward · · Score: 0

      What are you talking about? The Chinese have been making microchips for decades, and they are a power-house of manufacturing. They don't need any technology to do what they already do, they're just looking to scale up production and enter new markets.

    5. Re:Where will they get the technology by kheldan · · Score: 1

      What are you talking about? The Chinese have been making knock-offs of microchips for decades, and they are a power-house of child labor-powered, sub living-wage, sub human rights manufacturing. They don't need any technology of their own to do what they already do, they're just looking to scale up production and pirate new markets.

      There, fixed that for you.

      --
      Are YOU using the TOOL, or is the TOOL using YOU? Think about it!
    6. Re:Where will they get the technology by HiThere · · Score: 1

      Both. Just like everyone else.

      --

      I think we've pushed this "anyone can grow up to be president" thing too far.
    7. Re:Where will they get the technology by Anonymous Coward · · Score: 0

      Nobody owns any technology "of their own". Everything invented and made today is a collaboration of people from all corners of the world, and it builds on previous research and invention again involving people from all corners of the world. You seem like the typical ignorant American who believes their country invented everything.

    8. Re:Where will they get the technology by Anonymous Coward · · Score: 0

      SHUT UP, CHINA SHILL, you don't know a single fucking thing. The goddamned Chinese have been making shit-tier counterfeit integrated circuits for decades now, and watering down the overall quality of the whole supply chain because of it. At one point it was a major problem because the knockoffs would not quite meet specs for the real parts, so devices would SEEM to work until you stressed or aged them.

  5. 47 Billion of our money by Anonymous Coward · · Score: 0

    That we gave them since the 70's because we in the West are too lazy to get up off our arses and make stuff.

    We are cashing in on every Westerner's hard work since the Industrial revolution so we can spend 50 odd years doing lazy office jobs

    1. Re:47 Billion of our money by EzInKy · · Score: 1

      It costs money to make stuff. China got where it is today because it could make stuff cheaper.c

      --
      Time is what keeps everything from happening all at once.
    2. Re:47 Billion of our money by Anonymous Coward · · Score: 0

      Greed at the top is the problem, not laziness at the bottom.

    3. Re:47 Billion of our money by TWX · · Score: 4, Insightful

      I think it's getting to be time for public companies to have an upper limit on the nature of compensation bonuses for top management. Stop it with the golden parachutes and define the rules where their stock options given as bonuses cannot be exercised until so many years have passed and then must be cashed-out when they have matured, such that management has incentive to do what it takes to leave the company healthy even as they exit it.

      --
      Do not look into laser with remaining eye.
    4. Re:47 Billion of our money by Anonymous Coward · · Score: 0

      Cheaper though illegal labor laws (child labor), illegal cloning (circumventing IP), no fair trade practices, and lack of environmental concerns.

      yes, no different from the 1400 Spain, 1500's UK, 1800's US, but hasn't the world advance a little in the last 150yrs?

    5. Re:47 Billion of our money by Anonymous Coward · · Score: 0

      No. What China has done is pretty remarkable in such a short period of time. It's also what is necessary to grow. Old documentaries about Taiwan's economy stated it would be a polluted wasteland by this time.

      India and China pretty much started at the same point in terms of social/economic factors in the 1950s, with India have the slight upper hand in terms of economics. Now the difference between them is night in day. In 3 years time, China growing at 5%, that growth would equal the same as India's current GDP.

    6. Re:47 Billion of our money by shaitand · · Score: 1

      And look at the economic benefits reaped by those countries. You just mentioned a four hundred year time span as each nation got it's chance and/or caught up, just add china to your list as they are just now getting around to it. In every case the nation mentioned became the global economic leader as a consequence.

      What we in the US need to do and spread the wealth around to our population with a minimum income that we grow as much as possible and invest it in India and china so that chinese industry borrows wealth from us and pays us interest while we continue developing automations to do the actual work and eventually progress to the point where we are all independently wealthy.

    7. Re:47 Billion of our money by WindBourne · · Score: 2

      Actually, we need to roll back the regs that reagan removed.
      After the great stock market crash, a reg was put in place that required that all executives not own any stock in the industry that they were working in. As such, they made correct choices for the company and not for themselves. Since reagan rolled that back, the executives have shifted from being paid wages (with normal taxation), along with a bonus for profit performance, to paying themselves with massive stock options in which they pay little to nothing in taxes. Worse, they put their own interests above the the company's long-term interest.

      --
      I prefer the "u" in honour as it seems to be missing these days.
    8. Re:47 Billion of our money by khallow · · Score: 1

      yes, no different from the 1400 Spain, 1500's UK, 1800's US, but hasn't the world advance a little in the last 150yrs?

      That question works against your argument too. Why would China stew in such an ancient state of affairs when via the "cheaper" methods you complain about, they are building a modern economy?

    9. Re:47 Billion of our money by TWX · · Score: 1

      The only thing on that which gives me pause is when company founders and owners that work for the company and own the company when it's private transition it to public, rigid rules might require them to sell their portions. I don't think it's necessary to compel executives to not own the companies for which they work, but I do believe that there needs to be a catch to prevent a pump-and-dump.

      --
      Do not look into laser with remaining eye.
    10. Re:47 Billion of our money by Anonymous Coward · · Score: 0

      China needs a minincome (basic income?) to compete against the West. The sooner this occurs, the sooner they will win

    11. Re:47 Billion of our money by WindBourne · · Score: 1

      ah.
      No, during a start-up, that is different. Basically, these are the owners that have stock options PRIOR to it going public. However, once you go public, then you would no longer get stock or options in the publicly traded stock.
      the one issue that I see is that now that so many LBO groups exists out there, what will it mean when they take a company private? I assume that it is like having it back to start-up phase. As such, any executives in that time, can get all of the options that they want. However, upon IPO, that is over.

      --
      I prefer the "u" in honour as it seems to be missing these days.
  6. Good news by Anonymous Coward · · Score: 0

    They will be able to supply a wide variety of chips of the highest technical quality, to a low price. In the future it could hopefully mean a hammer to the unfortunate monopoly on Intel-compatible CPUs and graphics chips that the American manufacturers have.

    1. Re:Good news by shaitand · · Score: 1

      "of the highest technical quality"

      That doesn't sound like the Chinese.

      "to a low price"

      That part does.

      There are Chinese manufacturers aplenty making PCBs but if you actually want quality boards that consistently work and if populated are populated with the components you specified you order us or european boards and pay the couple dollars more.

      At some point a lower price is actually more expensive due to the quality sacrifice to get there.

    2. Re:Good news by Z80a · · Score: 1

      To compete against intel, you must make a x86 compatible CPU, and due the ridiculously huge warchest of patents intel and AMD, only those two can do it without getting sued to hell and back.

  7. they have root in major US company networks by raymorris · · Score: 4, Insightful

    China has infiltrated the networks of most major US companies, so in all likelihood all of the schematics and blueprints from Intel are available to them, and will continue to be for the foreseeable future. China is far and away the world leader in computer espionage, certainly in terms of the relentless volume of constant attacks and probably also in the sophistication of their best attacks. Some companies block all of China's IP space from accessing their networks because the daily attacks are relentless.

    We can assume that any technology US or European companies have is in the hands of the Chinese government, or soon will be. Keep in mind too this electronics company is part of the Chinese government - the same organization that employs armies of hackers. So if not a question of if the government will provide this IP to the company- the government -is- the company and company is the government.

    1. Re:they have root in major US company networks by Anonymous Coward · · Score: 0

      Don't be a doofus. China doesn't need to spy on anyone to build micro electronics. They have all the technology and manufacturing know-how they need, this is all about markets and expansion.

    2. Re:they have root in major US company networks by Anonymous Coward · · Score: 0

      The Chinese company said themselves that China lacks the technology to mass produce high density NAND Flash, and that obtaining the related patent and manufacturing tech will be critical the their project...

      Tsinghua Unigroup probably is going to buy the tech and hire the talents from top companies in US, and then ramp up production when everybody else is busy reducing production to drive out competition. If it didn't work well they could always ask PRC government to add a tax or ban import of NAND Flash all together. Either way this will be a serious threat to US/KR/TW chip makers. $47bn is more than Intel and Micron combined. Plus they already bought Sandisk and OmniVision.

  8. The real issue is by fred911 · · Score: 1

    Regardless of the investment stated the problem with this countries "state owned" businesses are that profit isn't needed as quickly as other markets.

      Even if 76 billion is the initial commitment, they can sell at a loss for years until there's no competition.

      Then what?

    --
    09 F9 11 02 9D 74 E3 5B - D8 41 56 C5 63 56 88 C0 45 5F E1 04 22 CA 29 C4 93 3F 95 05 2B 79 2A B2
    1. Re:The real issue is by Douglas+Goodall · · Score: 1

      I like your signature line. You know there is a song on youtube about that

  9. knock offs by p51d007 · · Score: 2

    of existing chips of course.

    1. Re:knock offs by luis_a_espinal · · Score: 1

      of existing chips of course.

      Here in 'Murika people used to dismissively say the same about Japanese electronics in the 60's. See how well that hubris worked for us.

  10. Baked-in malware and counterfeit silicon by Anonymous Coward · · Score: 1

    Do I need to say more? Am I going to start getting approached by Chinese nationals with offers of five- or six-digit paydays for smuggling next-gen silicon to them from the major microprocessor/SoC manufacturer I work for, so they can make knock-offs with malware/spyware/botnet baked right into them?

    INB4 modding me down for China-bashing by the China shills.

  11. Tsinghua University is controlling interest. by fhage · · Score: 2
    I found it very interesting that Tsinghua University controls the investment group. Does that make a difference?

    Their Wikipedia page says nothing about their EE department. I took a quick look at their EE dept. faculty page and, while large, don't seem to be doing much in chip design or fabrication.

    Can someone with more knowledge of the University provide some insight on its relationship to the Chinese military and national government? Has anybody here worked with current Tsinghua University faculty?

    1. Re:Tsinghua University is controlling interest. by Anonymous Coward · · Score: 0

      I suspect this funding is to be for memory chip manufacture as the Chinese already have the very good Loongson MIPS chip http://blog.imgtec.com/mips-processors/loongson-mips64-processors-performance-barrier

  12. Micron is an odd choice by Guspaz · · Score: 1

    A good chunk of Micron's chip manufacturing capacity is via IMFT, which is a joint venture with Intel (hence the Intel Micron Flash Technologies Inc.) and I really doubt the US government would let them buy Micron...

    On the other hand, there are a bunch of chip manufactures in Taiwan (like TSMC or UMC) that they could buy, or even a bunch of Chinese manufacturers like SMIC that they could buy and expand.