Andy Xie
China must draw the right lessons from Japan’s trade war with the US, and develop its technology
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- The Plaza Accord, which pushed up the yen, didn’t break the Japanese economy, which was in a good place to begin with. But China, which has a lower average income, can’t afford to make the same policy mistakes as Japan
The United States’ trade war with China reminds people of a similar episode between the
in the 1980s. Ironically, Japan’s ruling elite have been telling the Chinese in private for many years that the US would
to China one day. The current situation seems to vindicate the Japanese pessimism, which makes the lessons from Japan highly important to China’s strategic thinking. Unfortunately, the wrong lessons could be drawn.
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Japan’s big failure was not expanding its competitive scope. When the asset crash crippled the balance sheets of its banks and big companies, Japan went into defensive mode, hanging onto what it had. Consequently, it continues to lead in automobiles,
, precision parts and machinery, but it has largely missed the internet technology boom.
How China Could Replace all US Technology
- Thread starter AndrewS
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It's supposed to apply to both hardware and software.
So let's say China mirrors the same national security requirement - that US hardware and software can't be used inside China, what happens?
From a commercial perspective, it's worth Nokia and Ericsson removing all US technology to serve the Chinese 5G market.
And to develop future products which don't use any US technology.
It means Ericsson, Nokia and Huawei are all operating at the same level (inside China) without any US technology.
We can see Huawei is removing all US content from its 5G products. And once this is complete, what are the chances of the Chinese government banning US technology from 5G in China?
So I imagine Nokia and Ericsson are already have programmes to strip out US technology from their products.
But they probably need to move faster, given the headstart that Huawei has.
And they should also be relocating R&D from the USA to Europe, which the European Union Governments will be happy with.
In the end, the US would end up an isolated and technologically backward 5G island with spotty coverage, with only 3% of the global 5G infrastructure and user base.
And the rest of the world will move on and develop better alternatives to US technology.
So let's say China mirrors the same national security requirement - that US hardware and software can't be used inside China, what happens?
- The US is stuck with high-frequency 5G because the US military won't release the low-band and medium-band frequencies that everyone else in the world uses.
- China currently has 10x as many 4G cell sites as the USA. Then add in Europe which is also using the same standard as China.
- China is set to have more 5G users as everyone else in the world in the next few years.
- Nokia and Ericsson are based in Europe, and along with Huawei dominate the 5G equipment industry, so they set the standards that are deployed
From a commercial perspective, it's worth Nokia and Ericsson removing all US technology to serve the Chinese 5G market.
And to develop future products which don't use any US technology.
It means Ericsson, Nokia and Huawei are all operating at the same level (inside China) without any US technology.
We can see Huawei is removing all US content from its 5G products. And once this is complete, what are the chances of the Chinese government banning US technology from 5G in China?
So I imagine Nokia and Ericsson are already have programmes to strip out US technology from their products.
But they probably need to move faster, given the headstart that Huawei has.
And they should also be relocating R&D from the USA to Europe, which the European Union Governments will be happy with.
In the end, the US would end up an isolated and technologically backward 5G island with spotty coverage, with only 3% of the global 5G infrastructure and user base.
And the rest of the world will move on and develop better alternatives to US technology.
Current weakness of China Semiconductor industry is its lacking of analog chip supplier. It's harder to design analog chips because it takes much more experiences.
However, here's the good part of analog chips
1) much easier to reverse engineer, unlike digital chip, it's transistor gate count is much smaller. The structure of analog chip can be studied and copy through using of electron scanning microscope. Analog chip structure is much easier to be copied.
2)analog chips usually use older tech process, not need for state of the art, fastest process.
Due to above two factors , China will become a dominant analog chip powerhouse.
Take away business from Texas instrument , analog device, Maxine, and others.
I check hisilicon portfolio, almost all of them are digital chip. Missing alot of analog chips.
Huawei can get those missing analog chip through reverse engineering.
However, here's the good part of analog chips
1) much easier to reverse engineer, unlike digital chip, it's transistor gate count is much smaller. The structure of analog chip can be studied and copy through using of electron scanning microscope. Analog chip structure is much easier to be copied.
2)analog chips usually use older tech process, not need for state of the art, fastest process.
Due to above two factors , China will become a dominant analog chip powerhouse.
Take away business from Texas instrument , analog device, Maxine, and others.
I check hisilicon portfolio, almost all of them are digital chip. Missing alot of analog chips.
Huawei can get those missing analog chip through reverse engineering.
I am not an expert of analogue circuits, but by memory the digital easy of copy, but the analogue hard to copy, because the characteristic of the elements has definitive influence to the output, but in the case of digital the differences doesn't matter (up to a certain degree)
No, how can copy a structure that has millions of transistor count of a digital circuit? Impossible.
Analog circuit has far less gate count. You can characterize the analog circuit by counting it's gate count, size/shape/layout location of transistor, of capacitor,inductor of analog circuit.
If world economy going into full recession, then few people would buy new electronic gadget, innovation will slow down, companies will be out of business.
The recession will help China catch up. Alot of new projects just going into pipeline.
Huawei can catch its breath.
Huawei is now asking for royalties for its patents from Verizon. It looks like Ericsson and Nokia will need to redesign their 5G products for just the US market. If it takes too much costs for reinvestment, they just night give up on the US market. There may not be any major vendors selling in the US market.
supercat
Major
You mean Nokia and Ericsson are using Huawei 5G technologies? I'm not surprised.
supercat
Major
I guess it depends on the time frame. China has been under U.S. and Western arms embargo since 1989. Yet they developed pretty much everything for themselves, from 5th gen. fighter to satellite navigational system to quantum communication system, and much more. Give China 5-10 years, the situation will be different.
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