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."

Comments

Once they have the industry, they want to push us

[xxxJonBoyxxx]

>> 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)?

Re:Once they have the industry, they want to push

[AHuxley]

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.

Re:Short Term Capitalism

[sinij]

Look at this way, if Tech X takes 1Bil to develop and 0.5Bil to set up facilities to produce, Western firm has to recoup 1.5Bil and Chinese firm has to recoup 0.5Bil. Consequently, selling the same Tech X Chinese firms can undercut Western firms by a great deal. This is not because of cheaper labor, but because IP is essentially free to Chinese.

Re:Once they have the industry, they want to push

[houghi]

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.