A reappraisal of China's semiconductor strategy

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gelgoog

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I predict US will be severely declined technologically.
Without the Chinese market, half of US Semiconductor companies will out of business in few years.
Plus US restricting Chinese students to get into the Semiconductor field, there will shortage of talents.
More than of US Semiconductor firms out of business and shortage of talents will hasten US decline.
I foresee Huawei will becomes the leading Chinese Semiconductor firm, selling the chips they designed to local china firms. It will become less of phone company globally

To a degree China can have its own internal market. But without having success outside China, like in the Indian market, Southeast Asia, and maybe Europe, it will probably lose out in the long term. China already had a failure with TD-SCDMA in the past. The US also tried to do its own standard with CDMA2000 and failed. Europe and Japan combined had a larger market.

In the long term the Indian market will be larger than the Chinese market. But thus far they are very price sensitive which makes US companies not very successful in there.
 

dratsabknihcllik

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China indicates it may use rare earths as weapon in trade war
By GT staff Source:Global Times Published: 2019/5/28 23:31:57
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(NDRC), China's state planner, when asked about whether rare earths will be used as a countering weapon in the China-US trade war.

Industry insiders said that the comment, in a rare case, sends an implicit signal that China does not hesitate using rare earths as a weapon against the US amid the escalating trade war and US containment of Huawei.

The comments were made after Chinese President Xi Jinping visited on May 20JL MAG Rare-Earth Co, a Ganzhou-based high-tech company specializing in research and development (R&D) into permanent rare-earth magnetic materials, to learn about the company's operations and the development of the rare earth industry, the Xinhua News Agency reported.

China is the world's largest rare-earth producer, and many developed countries are big consumers of the material. Strengthening the development and utilization of rare earths benefits China and the world, said the NDRC official.

China dominates global supply chains. The country accounted for at least 71 percent of mined output last year and a higher ratio of processed rare earth compounds, and the US sourced 80 percent of its rare earth imports from China from 2014 to 2017, according to the Reuters report.

Scaling down rare-earth exports to the US is "a smart hit" against the US crackdown on Huawei and the US-China trade war, Wu Chenhui, an independent rare-earth analyst, told the Global Times on Tuesday. The latest move is also seen as China's retaliation for the US export control of its high technologies to China, and as a strategic material, the export of China's rare earths has to be adjusted now, analysts said.

"It could inflict substantial damage on the US military and tech industry, as rare earths are a key material in manufacturing chips, radar, fiber optics, night vision goggles, missile guiding systems, and tank armor," he said. "Just name a few big name US companies like Apple, Qualcomm and Raytheon… they could suffer a lot from the countermeasures."

Ganzhou has incomparable and irreplaceable rare earth resources, with its heavy rare earths accounting for 80 percent of the country's total storage. In recent years, by integrating market resources and increasing R&D investment, Ganzhou has achieved a leading level of separation and smelting technology in the country. Its industrial scale accounts for one-third of the national total and has become an important production base and new material industry for rare-earth smelting products in China, said the NDRC official.

In 2018, the above-designated scale enterprises in Ganzhou in the rare earth industry achieved a revenue of 26 billion yuan ($3.6 billion) from their main businesses, said the official.

"As the world's largest supplier of rare-earth materials, China has always adhered to the principle of openness, synergy and sharing to promote the development of the rare-earth industry. On the one hand, we adhere to the principle that rare-earth resources give priority to domestic needs; on the other hand, we are also willing to meet the legitimate needs of countries around the world for rare-earth resources," the NDRC official noted.

"We are pleased to see that China's rare-earth resources and products can be widely used in manufacturing various advanced products to better meet the needs of people around the world for a better life," the NDRC official said.



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I think this is the first ever mention by any official that China may restrict/deny rare earth export to certain countries. Even though it's not an official declaration, (please correct me if I am wrong)an article on globaltimes is itself an authority.
 

BoggedDown

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I think China should make efforts to move those communication standards under the purview of the ITU. It is headquartered in Switzerland so it shouldn't have those issues. Particularly the Wi-Fi and Bluetooth standards.

If all communication standardization bodies can be put under UN/ITU it would be an ideal situation but US will not let go the control over technology. It did not even allow to let go internet management to UN/ITU.
 

Tam

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They always like to bring up that Japan found a large deposit at the bottom of the ocean. Good luck mining those out, refining it from the mud and the salt, and the overall bill the venture it would cost, which will reflect on how much the final product would cost.

Its not whether you can find rare earths, its how much it would cost to refine them, and how much the eventual product would cost per ounce without China SOE subsidies and overproduction to drive down the costs and such.
 

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China indicates it may use rare earths as weapon in trade war
By GT staff Source:Global Times Published: 2019/5/28 23:31:57
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(NDRC), China's state planner, when asked about whether rare earths will be used as a countering weapon in the China-US trade war.

Industry insiders said that the comment, in a rare case, sends an implicit signal that China does not hesitate using rare earths as a weapon against the US amid the escalating trade war and US containment of Huawei.

The comments were made after Chinese President Xi Jinping visited on May 20JL MAG Rare-Earth Co, a Ganzhou-based high-tech company specializing in research and development (R&D) into permanent rare-earth magnetic materials, to learn about the company's operations and the development of the rare earth industry, the Xinhua News Agency reported.

China is the world's largest rare-earth producer, and many developed countries are big consumers of the material. Strengthening the development and utilization of rare earths benefits China and the world, said the NDRC official.

China dominates global supply chains. The country accounted for at least 71 percent of mined output last year and a higher ratio of processed rare earth compounds, and the US sourced 80 percent of its rare earth imports from China from 2014 to 2017, according to the Reuters report.

Scaling down rare-earth exports to the US is "a smart hit" against the US crackdown on Huawei and the US-China trade war, Wu Chenhui, an independent rare-earth analyst, told the Global Times on Tuesday. The latest move is also seen as China's retaliation for the US export control of its high technologies to China, and as a strategic material, the export of China's rare earths has to be adjusted now, analysts said.

"It could inflict substantial damage on the US military and tech industry, as rare earths are a key material in manufacturing chips, radar, fiber optics, night vision goggles, missile guiding systems, and tank armor," he said. "Just name a few big name US companies like Apple, Qualcomm and Raytheon… they could suffer a lot from the countermeasures."

Ganzhou has incomparable and irreplaceable rare earth resources, with its heavy rare earths accounting for 80 percent of the country's total storage. In recent years, by integrating market resources and increasing R&D investment, Ganzhou has achieved a leading level of separation and smelting technology in the country. Its industrial scale accounts for one-third of the national total and has become an important production base and new material industry for rare-earth smelting products in China, said the NDRC official.

In 2018, the above-designated scale enterprises in Ganzhou in the rare earth industry achieved a revenue of 26 billion yuan ($3.6 billion) from their main businesses, said the official.

"As the world's largest supplier of rare-earth materials, China has always adhered to the principle of openness, synergy and sharing to promote the development of the rare-earth industry. On the one hand, we adhere to the principle that rare-earth resources give priority to domestic needs; on the other hand, we are also willing to meet the legitimate needs of countries around the world for rare-earth resources," the NDRC official noted.

"We are pleased to see that China's rare-earth resources and products can be widely used in manufacturing various advanced products to better meet the needs of people around the world for a better life," the NDRC official said.



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____________________________________

I think this is the first ever mention by any official that China may restrict/deny rare earth export to certain countries. Even though it's not an official declaration, (please correct me if I am wrong)an article on globaltimes is itself an authority.

Global Times is just a tabloid with a pro-government slant. People’s Daily is a much better gauge for official sentiments.
 

nugroho

Junior Member
They always like to bring up that Japan found a large deposit at the bottom of the ocean. Good luck mining those out, refining it from the mud and the salt, and the overall bill the venture it would cost, which will reflect on how much the final product would cost.

Its not whether you can find rare earths, its how much it would cost to refine them, and how much the eventual product would cost per ounce without China SOE subsidies and overproduction to drive down the costs and such.
and also , to make an offshore rare earth mining to production needs more than 2 years, I estimate
 

Brumby

Major
Building China’s own chip industry will be a costly 10-year marathon, former Intel China MD says

China’s semiconductor industry needs more than a decade to catch up with global peers due to a weaker industrial base, and the US-China trade war only adds extra pressure, according to a Chinese semiconductor expert.
“This is an extremely challenging and brutal industry, heavily reliant on long term industrial accumulation,” said Jay Huang Jie, founding partner of Jadestone Capital and former Intel Managing Director in China, speaking at a public event on Monday hosted by local think tank Our Hong Kong Foundation.
“China should be prepared for a marathon of at least a decade, which will also be loss-making [along the way],” said Huang, who left Intel in 2015 to establish his own investment firm focused on the semiconductor industry.
A possible exodus of high-end manufacturing from China, triggered by the US-China trade war, could put further pressure on the country as it tries to catch up. “It would be concerning if the high-end supply chain moves away from China after tariffs are raised. It won’t happen overnight, but there’s the possibility,” Huang said.
While China is on a par with global peers in chip design there is a 10-year gap in terms of the foundry business, meaning the manufacture of integrated circuits, Huang said. When it comes to equipment used in a foundry, the gap is even bigger as foreign firms, including Applied Materials from the US and ASML from the Netherlands, have a stranglehold in supply, Huang added.
Beijing’s call to to boost self-sufficiency in strategic technology, including chip making, comes as the US moves to cut Chinese firms off from American scientific know-how amid an intensifying trade war between the US and China. Talks to resolve a lingering trade war between the world’s two-biggest economies ended without agreement this month, sparking a wave of targeted actions by the Trump administration against China, including Chinese President Xi Jinping has stressed the need for self-reliance and innovation in order to fend off various long-term challenges from the US. “Only if we own our own intellectual property and core technologies, can we then make products with core competitiveness and [we] won’t be beaten in intensifying competition,” Xi said last week.
Huawei Technologies, the world’s biggest network gear maker, was this month added to the US Commerce Department’s Entity List, after the Trump administration concluded that the Shenzhen-based company was engaged in activities “contrary to US national security or foreign policy interests”, preventing it from buying American technology, including chips and software.
In the past few years Huawei’s chip arm HiSilicon has been developing its own chipsets as a backup plan for use in its smartphone and networking products, which are considered Intel and Qualcomm alternatives, according to the company.
HiSilicon’s chip design for smartphone base-band is on a par with Qualcomm, and in terms of domestic research and production, Huawei is doing much better than its crosstown rival ZTE, which was brought to the brink of collapse following a similar ban by the US last year, Huang said. Yet, how the backup plan will play out depends on the availability of China-made alternatives needed in the chip making process, according to Huang. “It won’t make a difference in the short term whether [chip] localisation is at 99 per cent or only 10 per cent, said Huang. “If you cannot find the domestic alternative for only one part, there’s no way around it.”
 
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