News on China's scientific and technological development.


mderfox

New Member
Registered Member
You think that China will just let its main chip manufacturer just fail?
Its depends on what direction state want to go. As we know, SMIC is public listed, not easy for state to intefere unless it will go bankruptcy.

Its still many variable, what options SMIC taken, if the follow US regulations they lost State support, if the defy US they got state support. In October is supposed to be central planning for 5 year's plan. 11 November US election. After that's we got clear picture what really happened.

It's not like death or alive for state that's need urgently replacement foreign chip. For state its important for military self sufficient the rest lets market decided. Made in China 2025 doesn't mean total replacement foreign chip. Its merely boost domestic chip to certain percentage.

Bear on mind, the largest Fab company in Taiwan. If US or other country push China to the edge, 100% China will attack Taiwan and reunification. Then the whole world will lost to cutting edge Fab company.

AI, Smart City, 5G and IoT will fuel 4th industrial revolution, the need of China for semiconductor, robotics and machinery beyond imagination. It will born hundred or thousand unicorn company. US put handbrake it's not surprised. They also want big cake for 4th industrial revolution in China.

Ultimate goal for US is opening China market for US company as big as possible. Worst case scenarios delay China 4th industrial revolution as much as possible so they can grab world market ahead of time.
 

ansy1968

Junior Member
Registered Member
Its depends on what direction state want to go. As we know, SMIC is public listed, not easy for state to intefere unless it will go bankruptcy.

Its still many variable, what options SMIC taken, if the follow US regulations they lost State support, if the defy US they got state support. In October is supposed to be central planning for 5 year's plan. 11 November US election. After that's we got clear picture what really happened.

It's not like death or alive for state that's need urgently replacement foreign chip. For state its important for military self sufficient the rest lets market decided. Made in China 2025 doesn't mean total replacement foreign chip. Its merely boost domestic chip to certain percentage.

Bear on mind, the largest Fab company in Taiwan. If US or other country push China to the edge, 100% China will attack Taiwan and reunification. Then the whole world will lost to cutting edge Fab company.

AI, Smart City, 5G and IoT will fuel 4th industrial revolution, the need of China for semiconductor, robotics and machinery beyond imagination. It will born hundred or thousand unicorn company. US put handbrake it's not surprised. They also want big cake for 4th industrial revolution in China.

Ultimate goal for US is opening China market for US company as big as possible. Worst case scenarios delay China 4th industrial revolution as much as possible so they can grab world market ahead of time.
Hi mderfox,

From 2021 onward only 3 Asian FAB that can produce 7nm and below, TSMC, SAMSUNG, SMIC (2023) , Intel (2024) maybe if they able to overcome its technical challenges. So hypothetically 2020-2025 being third place is good place to be for SMIC, now from 2025 -2030 you may include Huawei in the mix and here hopefully claiming 2nd place for either Chinese company will be good enough or all Chinese if you include TSMC.

Ultimate goal for US is opening China market for US company as big as possible. Worst case scenarios delay China 4th industrial revolution

The way the US China policy is being directed had produce the opposite result, you dont ban your biggest customer and expect it to trust you again, its blackmail, nobody does business that way. Its a lesson well learned and it had reverberated across China tech industry.
 

emblem21

Junior Member
Registered Member
Hi mderfox,

From 2021 onward only 3 Asian FAB that can produce 7nm and below, TSMC, SAMSUNG, SMIC (2023) , Intel (2024) maybe if they able to overcome its technical challenges. So hypothetically 2020-2025 being third place is good place to be for SMIC, now from 2025 -2030 you may include Huawei in the mix and here hopefully claiming 2nd place for either Chinese company will be good enough or all Chinese if you include TSMC.

Ultimate goal for US is opening China market for US company as big as possible. Worst case scenarios delay China 4th industrial revolution

The way the US China policy is being directed had produce the opposite result, you dont ban your biggest customer and expect it to trust you again, its blackmail, nobody does business that way. Its a lesson well learned and it had reverberated across China tech industry.
This is why the USA is going to crash so bad that they will never recover. And a lot of companies that are suing the Trump administration can see this since if they lose China as a market (given how badly the western world has treated China over the pass year) they will go into bankruptcy and I am sure that Trump isn’t going to want to be know as the president as the man would killed the USA economy in 2020 and no, printing money isn’t going to help to bring these companies back since they will require a decade for an really manufacturing base to be developed.
many idiots that says they should bring back manufacturing to the USA is going to be in for a shock since a lot of manufacturing tools are made only in China. If China does the same thing that the USA is doing in regards to baring all rare earths and machinery with any Chinese parts to the USA, well unlike China that can fund r and d for there super conductor chips, the USA will be too broke and too out of resources and out of Asians to help get manufacturing back to the USA in any capacity. Hence why these corporations and all these scandals are coming out right now to estrous trump and hopefully salvage what is left of the China/USA relations since it is very clear now that without Chinese goods and investment, the USA will be completely screwed as absolutely none of the problems in the past years has been addressed at all and they are still picking fights with their biggest customer. Very soon, they might even try to pull something out of the movie ‘the domestics’ but if they do that, then nothing will stand in China’s way ever again in any way or form
 

Hendrik_2000

Brigadier
They should have done it 5 years ago now they have no choice Like they say if you don't kick it in butt they wont do anything instead take the easy way out
Please, Log in or Register to view URLs content!

Sanctions-hit Huawei ramps up investment in Chinese tech sector
Josh Horwitz
Please, Log in or Register to view URLs content!
September 28, 2020, 9:05 PM

FILE PHOTO: The logo of the Huawei Technologies Co. Ltd. is seen outside its headquarters in Shenzhen, Guangdong province
By Josh Horwitz

SHANGHAI (Reuters) - Huawei Technologies has built up stakes in Chinese semiconductor companies and other tech businesses as the world's largest telecoms equipment maker bolsters its supply chain in the face of pressure from the United States.
Habo Investments, set up by Huawei in April 2019, has closed 17 deals for stakes in Chinese tech companies since August last year, public records show.
The investment arm was established in response to what Huawei's rotating chairman, Guo Ping, last week described as "suppression" by the United States after escalating restrictions that have cut off Huawei's supplies of many overseas chips and effectively barred it from building its own.

"Since Huawei is only one company, we use investment and technology to help our supply chain partners become mature," he said.
The company has emerged as a focal point in deteriorating U.S.-China relations with President Donald Trump's administration alleging that its equipment could be used by Beijing for spying, which the Chinese company has denied repeatedly.
Huawei's investment push also coincides with ramped-up government efforts to boost China's semiconductor sector, which still lags behind leading chip producers including the United States, South Korea and Taiwan.
CHASING CHIPS
While the investments might help Huawei in the future, analysts say they have done little so far to address the supply chain gaps that are undermining its once-booming smartphone business and could eventually threaten its core network equipment operations.

"It will take a long time," said one Chinese chip investor. "But they don't have many good options, so they must turn to investing outside."
Huawei declined to comment on the investment division's operations.
Most of Habo Investment's deals have been in chip-related Chinese start-ups, a few of which have become part of Huawei's supply chain.
Vertilite, which was founded in 2015 and received an investment from Huawei this year, makes VCSEL sensors that support facial-recognition technology in cameras.
The company did not respond immediately to a request for comment, but one Vertilite investor said its sensors are used in a number of Huawei handsets.

However, many of the businesses Huawei has backed are at an early stage in their development.
"Most of these companies are small, niche players who are good at what they do, but they are not necessarily globally competitive," said Ivan Platonov, who tracks China's chip sector at research company EqualOcean.
Shoulder Electronics, for example, makes RF filters that enable wireless communications but has yet to achieve compatibility for advanced 5G phones.
A spokesman for the company, which received investment from Habo in January, could not be reached outside business hours on Monday.
3Peak, which also received investment from Habo this year, makes analogue-to-digital converters (ADC) used in wireless network base stations.

U.S. players dominate that market segment and 3Peak generated only 300 million yuan ($43.99 million) in revenue last year, according to a prospectus it issued before listing on Shanghai's STAR market.
3Peak did not respond immediately to an emailed request for comment.
Habo's portfolio also includes companies outside Huawei's core telecoms operations. Several investments in chips, raw materials and battery technology companies point to ambitions in self-driving cars.
Late last month it also closed an investment in Open Source China, a Shenzhen-based business behind Gitee, a Chinese rival to U.S. coding platform GitHub.

Gitee did not respond immediately to an emailed request for comment.
Habo typically acquires stakes of 5-10%, filings show, though valuations have not been disclosed.

The recent investments mark a change in pace and tactics for Huawei, ramping up the frequency of such deals and refocusing on domestic businesses rather than overseas companies.
In 2013, for example, Huawei acquired Ghent-based photonics company Calopia. The following year it purchased Neul, a British maker of chips for the internet-of-things sector.

"Huawei likes to do its own R&D. So investment or acquisition was done only as a last resort, and that was why it tended to be towards U.S. or European technology companies," said one former Huawei staffer who helped to scout acquisition targets.
(Reporting by Josh Horwitz; Editing by Jonathan Weber and David Goodman)
 

ansy1968

Junior Member
Registered Member
This is why the USA is going to crash so bad that they will never recover. And a lot of companies that are suing the Trump administration can see this since if they lose China as a market (given how badly the western world has treated China over the pass year) they will go into bankruptcy and I am sure that Trump isn’t going to want to be know as the president as the man would killed the USA economy in 2020 and no, printing money isn’t going to help to bring these companies back since they will require a decade for an really manufacturing base to be developed.
many idiots that says they should bring back manufacturing to the USA is going to be in for a shock since a lot of manufacturing tools are made only in China. If China does the same thing that the USA is doing in regards to baring all rare earths and machinery with any Chinese parts to the USA, well unlike China that can fund r and d for there super conductor chips, the USA will be too broke and too out of resources and out of Asians to help get manufacturing back to the USA in any capacity. Hence why these corporations and all these scandals are coming out right now to estrous trump and hopefully salvage what is left of the China/USA relations since it is very clear now that without Chinese goods and investment, the USA will be completely screwed as absolutely none of the problems in the past years has been addressed at all and they are still picking fights with their biggest customer. Very soon, they might even try to pull something out of the movie ‘the domestics’ but if they do that, then nothing will stand in China’s way ever again in any way or form
Hi emblem21,

No doubt there are vulnerabilities in China IC sector, what the sanction had done reinstate the importance of self sufficiency. Huawei going IDM is a way of solving its SUPPLY CHAIN ISSUE. That is the target of the US policy, it may work 5 years ago but with CV19 and its aftermath, the importance of China had been magnified.

Banning rare earth export is also a no brainer, you had a monopoly ,why create a competitor out of thin air by threatening your own customer, as I said its a supply issue, they will look for an alternative.
 

gadgetcool5

Junior Member
Registered Member
That is not accurate.

You assume that Chinese companies will rely on sales revenue to fund R&D into semiconductors.

What the technology war on China has created is a huge market for semiconductors developed and manufactured without any US technology.

So R&D spending for Chinese semiconductors will come from the government and venture capital, not from sales revenue.
This funding will be looking at timeframes over 5 years where operating losses are fully expected.

For example, Amazon made losses for 14 years, but there was no loss of faith because everyone knew they were going to have a huge amount of sales and profits in the future. Amazon are now worth $1570 Billion.

Other examples include Uber, Didi, Alibaba, Tencent, Facebook, Tesla, SpaceX etc

So I am absolutely confident in saying that in 10 years time, China will have a huge domestic market for semiconductor products with zero US technology content.

As I said before, the US technology war is a stupid short-term move.
Amazon made losses for 14 years, but it has huge and growing sales during that time.

It did not rely on government subsidies.

The sales were proof that it was offering a competitive, market-beating product that was surpassing the top retailers of the time. That is why investors piled in. If it was not making sales but only relying on government subsidies to survive, then Amazon would have had no market value either. This is the situation of SMIC. SMIC cannot offer the best product, so it only can rely on direct or indirect government subsidies for revenue.

The reality is that SMIC will likely never be as good as TSMC. Why? Because when SMIC advances one step, TSMC will also advance one step. TSMC is not sitting still either. TSMC, unlike the sanctions-hit SMIC, will have actual sales to the world's leading companies where they can prove their products. SMIC will have, at best, government-subsidized sales going against market rules. It knows it can survive while still building an inferior product, so it will not have the same incentive that TSMC does to make the best product.

That is why SMIC will likely never be as good as TSMC. I hope I'm wrong, but I'm probably not. China had an independent semiconductor industry in the 1980s... and it was inferior. That is likely what China is going back to today. An independent, government subsidized industry and only exists due to protections, but it is inferior in quality and will likely fall further and further behind. In other words the gains of opening & reform will be rolled back.
 

ansy1968

Junior Member
Registered Member
Amazon made losses for 14 years, but it has huge and growing sales during that time.

It did not rely on government subsidies.

The sales were proof that it was offering a competitive, market-beating product that was surpassing the top retailers of the time. That is why investors piled in. If it was not making sales but only relying on government subsidies to survive, then Amazon would have had no market value either. This is the situation of SMIC. SMIC cannot offer the best product, so it only can rely on direct or indirect government subsidies for revenue.

The reality is that SMIC will likely never be as good as TSMC. Why? Because when SMIC advances one step, TSMC will also advance one step. TSMC is not sitting still either. TSMC, unlike the sanctions-hit SMIC, will have actual sales to the world's leading companies where they can prove their products. SMIC will have, at best, government-subsidized sales going against market rules. It knows it can survive while still building an inferior product, so it will not have the same incentive that TSMC does to make the best product.

That is why SMIC will likely never be as good as TSMC. I hope I'm wrong, but I'm probably not. China had an independent semiconductor industry in the 1980s... and it was inferior. That is likely what China is going back to today. An independent, government subsidized industry and only exists due to protections, but it is inferior in quality and will likely fall further and further behind. In other words the gains of opening & reform will be rolled back.
Hi gadgetcool5,

TSMC is a gold standard of chips, the uber of the FAB world, no doubt about it. For christ sake they had just put GF out of business and maybe Intel if they dont improve on their 10nm and 7nm tech and produce it. We have no illusion that SMIC will dethrone it, being third place (TSMC 1ST, SAMSUNG 2ND) in the 2021 2025 time frame is good enough. Its unfortunate that TSMC had been drawn to US-China tech war, their growth will surely be affected Cause Huawei is one of her biggest customer. Its ironic with the ban and Huawei will be going full IDM, they will become one of their fierce competitor/rival in the future.
 
Last edited:

mderfox

New Member
Registered Member
Hi mderfox,

From 2021 onward only 3 Asian FAB that can produce 7nm and below, TSMC, SAMSUNG, SMIC (2023) , Intel (2024) maybe if they able to overcome its technical challenges. So hypothetically 2020-2025 being third place is good place to be for SMIC, now from 2025 -2030 you may include Huawei in the mix and here hopefully claiming 2nd place for either Chinese company will be good enough or all Chinese if you include TSMC.

Ultimate goal for US is opening China market for US company as big as possible. Worst case scenarios delay China 4th industrial revolution

The way the US China policy is being directed had produce the opposite result, you dont ban your biggest customer and expect it to trust you again, its blackmail, nobody does business that way. Its a lesson well learned and it had reverberated across China tech industry.
All business running use blackmailing's and coercion. All financial/big company running using threat if startup doesn't obey, they digging staff or copy business model that company. Using chip for bargaining is usual practice. At the end of the day business entity must know how to maneuver and having card to survive. some member said Huawei give priority to SMIC obtain SMEE equipment. I doubt so, if I'm Huawei think thank, either I'm investing in SMIC or poaching their staff to develop own Fab. At the end of the day Huawei need secure their backyard before attacking global market again.

Huawei have around 2 years for 5G base station chip. and 1 year for mobile phone chip. they have ample time to develop their own fab. according to Harmony OS 2.0 progress on April 2020 128mb-4gb ram and 4gb-unlimited on October 2021. from this point we already know Huawei have ability to build device(IoT and mobile phone) by end of year 2021. I don't think SMIC is on Huawei plan from beginning.
 

ansy1968

Junior Member
Registered Member
All business running use blackmailing's and coercion. All financial/big company running using threat if startup doesn't obey, they digging staff or copy business model that company. Using chip for bargaining is usual practice. At the end of the day business entity must know how to maneuver and having card to survive. some member said Huawei give priority to SMIC obtain SMEE equipment. I doubt so, if I'm Huawei think thank, either I'm investing in SMIC or poaching their staff to develop own Fab. At the end of the day Huawei need secure their backyard before attacking global market again.

Huawei have around 2 years for 5G base station chip. and 1 year for mobile phone chip. they have ample time to develop their own fab. according to Harmony OS 2.0 progress on April 2020 128mb-4gb ram and 4gb-unlimited on October 2021. from this point we already know Huawei have ability to build device(IoT and mobile phone) by end of year 2021. I don't think SMIC is on Huawei plan from beginning.
Hi mderfox,

Im in the business world, we usually deal our perspective client and supplier with utmost respect and try to build a stable business relationship, we may use some simple coercion to lower the price but not blackmail. The situation between Huawei and SMIC is that they complement each other, if the sanction on SMIC is true, then its mana on heaven, SMIC had gain a big customer in Huawei both in 14nm and its future 7nm chip project.
 

mderfox

New Member
Registered Member
Hi mderfox,

Im in the business world, we usually deal our perspective client and supplier with utmost respect and try to build a stable business relationship, we may use some simple coercion to lower the price but not blackmail. The situation between Huawei and SMIC is that they complement each other, if the sanction on SMIC is true, then its mana on heaven, SMIC had gain a big customer in Huawei both in 14nm and its future 7nm chip project.
hi ansy,

Its depend on whether other side is threaten or not to the company. competition in China very high, If want to survive you must build high wall that no other competitor can come in (according to Kai Fu Lee). If new competitor coming in, there is no way to survive if no VC smooth the road. Of course this VC will do everything to acquires much possible share. SMIC is strategic competitor once Huawei decide to build fab.

One thing for sure in business planning need ahead of time. I dont think Huawei put much hope on SMIC. we can see from SMIC reaction to apply license to supply Huawei.
 

Top