CHina has learned the need for its own financial rules, likewise..

essentially, the west especially US is making all kinds rules for the global financial sector. During this finanical crisis CHina has learned to make its own rules such as promoting the Yuan as international currency , battling the western pressure to force the yuan to appreciate, hedging /offloading the forex for natural resources...etc..

Essentailly CHina has learned not to follow blindly and proactively making its own set of rules financially.

Hopefully, China would take the next step and break the west's monopoly on tech, make its own standards and don't follow the west trend because it can never catch up if China just keep on following.

recently I read an article about CHina semiconductor industry is really falling apart for various reasons.



In the China's PC industry 80% of the components are imported. The chinese domestic comapnies are simply not up to par. US, Japan, South Korea, Taiwan simply have too much strangle hold in the area.

US is the kingpin of all this, it has the leading tech to dictate when will a new standard be up and then everybody scramble to meet that.


IF China doesn't break this vicious cycle and define its own standard. it will be forever shackled by the western 's lead in tech. TDSCDMA is a positive example of breaking the normal standard and away from the strangle hold.

Just like in the financial area, China learns to make its own set of rules, same under the tech arena.

The great majority of the chips are coming out from Taiwan and Singapore free play foundries, TSMC, UMC and Chartered. SMIC is fourth, and Texas Instruments is the fifth.

What's slowing the Chinese industry is the delays in export permits for the latest fab equipment, which puts the Chinese chip industry a generation or two behind the latest ones in Taiwan. Another is that there is way too much of a chip glut, especially in DRAMs. You can source chips cheaply, and with no price advantage going with the Chinese fab. Another is simply the Taiwanese model is very efficient.

Chip making is a money losing business. Hence there is really not much fabs anymore except for a dozen of companies and so around the world. Companies like Broadcom and Qualcomm are not in the business of making chips. They just design them and let TSMC or SMIC make them.

The Chinese government isn't very encouraging of it either. Why? Because its extremely capital and automation intensive. Chinese government subsidies are in the business of job creation. Making chips produces less jobs for the amount of money thrown in. Yet, you may need the subsidies for the next generation of fabs. Although quite frankly, SMIC continues to announce and make new fabs even when they're losing money, suggesting they got quite a bit of backing somewhere.

Another is that there is too many small free players in the Chinese industry. There has to be some form of consolidation into one or two giants.

Maybe China should move away from chip manufacturing and more into fabless design houses like Datang and Spreadtrum. In China there are actually hundreds of these firms, quite small, and appears many will close down this year due to the recession or not having enough business. Maybe its time the government act on this due to subsidies, or let them fail or consolidate as part of evolution.



"Nevertheless, IC design sector in China still faces serious challenges. For deficiencies in many aspects, China still relies on import. In 2004, imported IC products in China Mainland accounted for over 80% of the total.

China's deficiencies in IC design are manifested in the following:

Manufacturing techniques in general are lagging behind the U.S., South Korea, Japan and China Taiwan;

SOC design and IP core design capability is far from satisfying the market demand, most products are low-end levels with low profit rate;

The entire market scale of China's IC design sector is relatively small compared to developed regions in the world;

China's IC design sector is in short of qualified personnel, including technical staff, management and marketing personnel;

There are few high-end products, especially the products for high-level system manufacturers;

Most IC design houses are medium- small sized.

However, the Chinese government has always been supporting strongly the IC design industry and released a series of preferential measures to encourage the development of IC design houses, including Document No.18, Document No. 51, tax refund, discount government loan, and setting up specialized industrial base and so on. Overseas venture investment firms and far-sighted investors are also actively participating in China¡¯s IC design development. "


A good example of a fast rising chip design house.

well, the current problem can be alleviated if CHina decides its own set of standard.

For example, instead of of the using DDR2 common speed, like 533Mhz, 666Mhz, 800Mhz for the western market,

China can decide a 700Mhz DDR2 or 500Mhz DDR standard which are different.

Instead of USB 2.0 480Mb/s ,it can define a 300Mb/s USb 2.0

Instead of using Intel Processor, it can use Risc processors for both linux/window.

By changing the standard it will create a whole new set of industries in CHina.
This will create the own set of internal demand unfestered by foreign competitors which aim to cripple chinese 's infant semiconductor industry.

You really don't need the latest cutting edge tools, Let say if China is capable of manufacturing the full set of fab equipment for 8 inches fab from A to Z. (some sort JV with foreign companies) then it can control the cost. Its self sufficient, proficient 8 inches fab will more than enough to create its own set of PC industry with slight different of standard than others.

The main thing is just don't blindly follow the game which dictated by US because it has huge tech lead over the others.

I'm not sure how that helps China at all.

Look at the US. Half went CDMA when the world went GSM and the HSPA frequency is non standard, which is 850 (AT&T), 1700 (T-Mobile) and 1900 in the US, whereas its 900 and 2100 with the rest of the world, mostly 2100. The result remains that much of the phones are still imported, like from Korea or US branded phones like iPhones and Motorola phones with motherboards made by Hon Hai of Taiwan in plants all over China. Qualcomm maybe designing chips, but making them they leave it to Taiwan, Singapore and Chinese companies like TSMC, UMC, Chartered and SMIC.

The end result of the US lack of synchronicity with the rest of the world is a higher cost in the handset, which is absorbed in the bottom line of the carriers and parceled in the contracts to the end user. New handsets come out faster in Europe and Asia, and in the US you sometimes have to wait for months before the newest models come in. If you import the handset from Europe or Asia, only the GSM will work with AT&T and T-Mobile.

Heck standards in the US can be so screwed up that a 3G phone for T-Mobile (1700) won't get the 3G with AT&T (850). If you transfer carrier only the GSM works.

And like I said previous, it didn't help Japan either, which had proprietary 1G networks and is now using the world standard 3G 2100 HSPA air interface.

well the fact is current chinese semiconductor model of hoping a few strong players come through natural selection is not working. Most of them are just bit players.

Take alook at how Huawei came through. It came through by first dominate d the domestic market (maybe strong coonection tie with CCP or PLA). After many years as a domestic player, now it's stepping into the international scene. Now it doesn't have to resort to special privileges/policy when its first started and depended upon.

By having different standard it will help the domestic players gain traction in the domestic market. Otherwise they would be overwhlemed by many foreign firms even at its home turf , which is exactly what's happening now.

Huawei never benefited from close standards. When did it ever? China adopted GSM for the most part, like the rest of the world. Huawei and ZTE zoomed up. Both companies are installing W-CDMA and EV-DO networks around the world even before these networks are allowed in China.

Show me an instance where Huawei ever benefited from a close standard.

BYD became a world leader not by closed standards in battery sizes either. Neither did Suntech benefited from closed standards on solar cells. When did companies like Haier and Greer also benefited from that?

Maybe you can encourage the use of Godson processors into netbooks. But different bus speeds for DRAM? That's stupid. Different speed for USB? That's even stupider. USB is a standard. No need to reinvent it. The people aren't going to buy it.

If China's chip industry needs to take off, they need to make better networking chips, better sound chips, better handset chipsets, better TV and DVD chipsets. That's what Spreadtrum and Datang is doing now.

Different standard my foot. China Mobile is even asking Nokia, LG, Samsung, and Motorola to make TD-SCDMA handsets, because customers prefer to respond via brand name. If anything, China handset makers are getting a bad reputation making direct iPhone copies or "Noklas".

One way of thinking is to push ahead of the anticipated state of the art and make it better and less expensive, so for example if the next gen app is a USB 3.0 with 600 Mb/s for $50, push it up to 700 Mb/s for $45 and make it more durable/last longer.

crobato said:

Huawei never benefited from close standards. When did it ever? China adopted GSM for the most part, like the rest of the world. Huawei and ZTE zoomed up. Both companies are installing W-CDMA and EV-DO networks around the world even before these networks are allowed in China.

Show me an instance where Huawei ever benefited from a close standard.

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Well Huawei definitely had initial inside connection that foreign firms didn't processed. Its storming ground is the Chinese army's communication networks. I would think they use different standard than commercial nominal standard.

crobato said:

Maybe you can encourage the use of Godson processors into netbooks. But different bus speeds for DRAM? That's stupid. Different speed for USB? That's even stupider. USB is a standard. No need to reinvent it. The people aren't going to buy it.

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Well what if you provide the chipsets and CPU that incorporate with different USB and DRAM speed? You provide the whole system rather just making isolated peripherals.

antimatter said:

Well Huawei definitely had initial inside connection that foreign firms didn't processed. Its storming ground is the Chinese army's communication networks. I would think they use different standard than commercial nominal standard.

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NO. True, they might make the networks for the PLA and the CCCP government, but that won't explain why they have 40% over growth year to year and becoming the 5th largest telecom equipment company.

Much of Huawei, and for that matter, ZTE's own recent growth came from outside of China. Why? Because China stopped 3G introduction to wait for TD-SCDMA, and the rate of new contracts in China slowed down. So Huawei and ZTE has to find contracts in other countries doing W-CDMA and EV-DO networks. Only recently is the ban lifted, allowing for TD-SCDMA, W-CDMA and EV-DO in China, can Huawei and ZTE get back into the market again.

Well what if you provide the chipsets and CPU that incorporate with different USB and DRAM speed? You provide the whole system rather just making isolated peripherals.

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No customer or PC vendor would ever buy your stuff.

Don't want to diss on TD-SCDMA, technically its actually superior to EV-DO and W-CDMA by the fact it uses TDD technique (Time Division Duplex) as opposed to FDD (Frequency Divide Duplex). To make it short, TDD is more efficient in the use of bandwidth, which generally makes it better in high density areas. When it comes to 4G networks, TDD-LTE, which is based on TD-SCDMA, would have an advantage of FDD-LTE which everyone else is adopting.

crobato said:

No customer or PC vendor would ever buy your stuff.
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You mean the PC vendors outside of CHina. well as of now, China is not producing much any components either. No significant design/production of CPU, chipsets, memory, harddrive..

So they have nothing to lose by having different standards .

If trhe government stamps out the new standards then the domestic market will have to buy, and a chain reaction of spawning of new industries .

of course they would still produce PC products according to western standard but they are only for export purposes. PC products with different standards are for domestic consumption with complete set/do it all industry to boot.