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America's Chipmakers Go To War vs. China (axios.com)
Chinese raids of U.S. intellectual property have helped China build a solid high-tech economy. But the U.S. semiconductor industry is still far ahead -- and China is desperate to catch up. From a report: Semiconductor manufacturers are fighting to protect IP from the Chinese, fearing that, without coherent action from the Trump administration, Beijing could bulldoze their industries. Three weeks ago, Micron and South Korean chipmakers Samsung and SK Hynix all reported that the Chinese government had launched antitrust probes into their firms, and accused them of setting artificially high prices for memory chips. American companies and the U.S. government have long been suspicious about the link between China's anti-monopoly policies and its industrial goals. "They want access to the intellectual property. They need us to teach them how to do it. Once they have the industry, they want to push us out," an industry source familiar with China's investigation into Micron tells Axios. The price hikes, the source says, are largely due to a boom in demand for memory chips in everything from smartphones to autonomous vehicles. China's investigation is "a clear indication that they're not ready to make [semiconductors] work," says the source. The New York Times has a story which also details the lawsuit of how a Fujian govt-backed chipmaker allegedly stole secrets from Micron. Then Micron got sued for patent infringement in Fujian.
Or as the Times reporter describes it, "This is how you lose a major tech company. First, a Beijing-backed buyout offer. Then friendly Chinese partnership proposals. Then the tech gets stolen. Then when you file a complaint in court, you get hit with investigations in China, your biggest market."
Or as the Times reporter describes it, "This is how you lose a major tech company. First, a Beijing-backed buyout offer. Then friendly Chinese partnership proposals. Then the tech gets stolen. Then when you file a complaint in court, you get hit with investigations in China, your biggest market."
>> Once they have the industry, they want to push us out
This is news? I remember visiting a couple of mid-to-high tech companies doing business in China ten years ago and every company was structured the same way: the one or two foreigners running the plant and the hundreds or thousands of local Chinese doing everything.
If chipmakers don't like the way China works...why not try building elsewhere instead of whining about industry protections aimed at a specific country (that screw up things for lots of other people)?
This is capitalism's Achilles Heel. Businesses are run on short term thinking. Sure your trade secrets are going to get stolen and they are going to use your tech to kick you out of there market in two years, but don't you want to do business in China today? Selling in the Chinese market will increase your stock price next quarter.
Nevertheless, in the long term (multigenerational term), it doesn't matter, they are going to figure it out for themselves one way or the other anyway.
Reminds me of that old saying about "lying down with dogs, waking up with fleas". Just what exactly did they expect to happen? Also we're not much better with companies buying off other companies employees.
The US gov like it that way going back to the 1970's when the USA split China from close deals with the Soviet Union.
For that to work China got a lot of US tech for free. US brands got invited into China. Low tax, low wages. Production lines that could make a profit with every generation of tech.
The only trick was the USA would have to transfer the tech production methods so the new factories in China could make the most profit.
To share everything the US brand had created with a local partner in a Communist nation.
No tech transfer, no production line. The US brands opted to invest in 1970-80's China rather that much more secure and pro US nations with the same wages.
Now China understands the US tech it wants to export everything under its own Communist brands at full price to the world.
Domestic spying is now "Benign Information Gathering"
Been in the industry for a long time and this was always an obvious end result. It's cheaper to have China do your stuff, so you give them access to all your IP and then complain when your IP makes the rounds. Tough shit. Should have paid your workers instead of giving your CEO a 10 million dollar annual salary.
then employ americans and dont outsource and subsidize stem subjects in education
Consumers decide where things are made, not CEOs. A lower manufacturing cost is only relevant if you are getting the sale in the first place and consumers decide who gets the sale. Consumers rewarded those first CEOs that outsourced with sales, so other CEOs got the message and followed. The message: we consumers don't care where things are made we just want lower prices. Its a tragedy of the commons thing. The individual consumer thinks there one decision will have no impact. But millions are thinking the same thing, let this go on for decades, we now see the result.
Things will not change until **consumers** change their behavior and show a preference for US made goods.
This is capitalism's Achilles Heel. Businesses are run on short term thinking.
This is also short term US consumer thinking, a tragedy of the commons thing. Lowering your manufacturing cost is a secondary consideration, the primary consideration is getting the sale in the first place. Consumers drove jobs overseas by rewarding CEOs who outsource with sales. Consumers thought their one little purchase would not make a difference. Multiply by hundreds of millions of consumers, now multiply by many decades.
There is also short term US/State government thinking. For example the San Francisco bay area buying Chinese steel for a recent bridge project.
Yes managing companies for the quarterly report is bad and needs to change. But you have to have a company to manage in the first place and consumes will generally reward your competitors if you manufacture in the US and they manufacture overseas. Consumers need to change their purchasing habits and show companies they have a preference for US made goods, that is the only way that things will change.
1970's? I remember when it was wellknown that all what the Japanese did was copy everything and made bad copies on top of that. Plenty a joke of the Japanese coming to Europe and the US to take pictures of every factory and product but not buy anything.
After that the copies became better and later they where the ones that where being copied. They became the leader in many products, especially electronics.
Don't fight for your country, if your country does not fight for you.
Resulted in its formation of the country. USA has like the worst record when it comes to stealing..
The West invested fully and China simply took the tech for free.
And what did we get in return? Mountains of affordable consumer goods at every big-box store.
Was it worth the trade? That's an undecidable matter of opinion, but let's not pretend the benefits only went in one direction.
I don't care if it's 90,000 hectares. That lake was not my doing.