i disagree, SMIC and the like are business, no company gonna just buy lower performance equipment JUST to support them. They are doing business not charity work. Its the same reason why manufacture shift to china years ago, US can get cheap good with decent quality products, and Max profit. SMIC didn't think about geopolitical strategy, thats governments jobs, SMIC is an business, hence their priority is how to maximize profit. I doubt huawei/SMIC think Trump can pull a severe sanction like this. That been said, they are now recognize the importance of supply chain disruption due to US. fool me once shame on you, fool me twice shame on me. lesson learned.
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If maximizinf profit was the goal, then the smart thing huawei and SMIC was to invest and support domestic companies and technology years ago As they would absolutely dominate the market if they were immune to sanctions.
spend billions on some other companies for A Maybe on return when clearly there are alternative available. Also dont expect SMIC/Huawei to dominated every corner of chips supply chain, no company can do that, its too big and too many steps. Huawei already had HiSilicon, they are not in the chip making business. SMIC is chip making, but they are not into material/equipment making business. beside why is everybody ranting now AFTER Trump sanction, i didn't see this kind of post 3 years back, no point complain after milk are spoiled.
Maybe you should stop generalizing about “what Chinese people think”
This is magical thinking. If you don’t prioritize your capital efficiency you can’t execute effectively enough to compete. You can’t “dominate” a market that already has powerful incumbents if your business is less efficient and built on unreliable suppliers. Being immune to sanctions is not the same thing as dominating a market. There’s no point hardening yourself against sanctions if you can’t even get marketshare without sanctions. Worrying about sanction proofing first is putting the cart before the horse.
New entrants always need to worry about short term profit first, because they literally start out in a position where even if they have a good product they’re in danger of being completely outspent. Only once they’ve secured their position and built up their asset capacity can they start prioritizing long term.
Hendrik_2000
Lieutenant General
But by then it is too late like what they are in now. Not necessarily true what is lacking is vision being rational is not always the virtue that you try portrait. Samsung founder go against the protestation of his own Samsung board Sometime you have to go against the stream. He funded the then fledging start up to become what is now Samsung semiconductor.
Look where is Samsung now and where is Huawei now! Can you explain that to me?
There were only so many places to go for major technology financing in Korea. The economic climate was worsening, with oil prices continuing to skyrocket and the Japanese pulling back. Samsung had money. Lee Byung-Chull and his son, Lee Kun-Hee, were convinced they had to enter the semiconductor business, not just buy chips. They tried persuading their management teams that advanced chips such as Hankook was building would be the future. Management balked.
Against such sage advice, on December 6, 1974, the Lees funded a stake in Hankook Semiconductor – using money from their own pockets. By the end of 1977, the operation was fully merged, becoming Samsung Semiconductor.
Kang Ki-Dong acquired a Ph.D. at The Ohio State University in 1962, and went to work at Motorola in Phoenix, Arizona in one of the largest discrete transistor plants in the world. As a Korean engineer who also spoke Japanese, he gave many plant tours to visiting engineers, building a network. When the time came to open a Motorola facility in Korea, Kang was sent ahead to perform an initial assessment for land and contacts, including interviewing prospective engineering staff.
After returning to the US and working for another firm, Kang encountered two old friends. The first was Kim Chu-Han, a prominent radio network operator Kang had introduced to ham radio years earlier. The second was a classmate, Harry Cho, an operations manager in semiconductors. Kim had access to financing, Cho could sell, and Kang knew fab technology. Together, the three formulated an idea for a new company: Integrated Circuit International, Incorporated, or ICII.
ICII designed a digital watch chip, and made its first 5 micron CMOS large-scale integration (LSI) parts on a small 3” line in Sunnyvale, California during 1973. Demand was substantial, many times bigger than what ICII could produce, and customers held back volume production orders. Kim’s firm was willing to finance expansion, but would only do so if the capital expenditure remained inside Korea.
Kang decided to pivot. He would continue ICII chip design operations in the US, but send the ICII fabrication line to Puchon and expand it there. The new joint venture was Hankook Semiconductor. However, the global oil crisis in 1974 and a litany of import red tape made the relocation much more expensive than planned. The fab finally came up and produced chips, but operating funds dwindled dangerously low within a few months.
There were only so many places to go for major technology financing in Korea. The economic climate was worsening, with oil prices continuing to skyrocket and the Japanese pulling back. Samsung had money. Lee Byung-Chull and his son, Lee Kun-Hee, were convinced they had to enter the semiconductor business, not just buy chips. They tried persuading their management teams that advanced chips such as Hankook was building would be the future. Management balked.
Against such sage advice, on December 6, 1974, the Lees funded a stake in Hankook Semiconductor – using money from their own pockets. By the end of 1977, the operation was fully merged, becoming Samsung Semiconductor.
Hendrik_2000
Lieutenant General
s002wjh
Chinese government has realized the vulnerability for along time and keep exhorting the Chinese FAB to support independence. but nobody listen They have to do it on their own by forming Tsinghua semiconductor and funding all the research of the Chinese academy But the fact is the semiconductor supply line is very wide ,government alone can do it by themselves unless the private company support it.
The did their best without all those Chinese academy of science effort in Semiconductor research the situation will be even more dire. Now at least they have the science and prototype running if not the production model. But it is matter of time
Unfortunately the Chinese company are blinded by their own short sightedness and a bit of naivety belieiving in all those bs about "win-win" deal with the west because many of their management went to school in the west
They just didn't read their country history
Yeah, but dude ...
Huawei is number #1 in cell phones sales.
Huawei is number #1 in 5G network gear, no one is even close, and that will lead into another industrial revolution.
I do not think anyone will criticize Huawei for not being number #1 in semiconductor fabrication, but they are working on it.
But, you know, they have to finish their Harmony OS first, before that fab, which is reported to go live with a full app store in a few months. Not even two years after the ban from Google as per US government dictates.
To me, Huawei and China look unstoppable.
Huawei has increased market share all this time when the US government has worked against it.
Other people might think otherwise, which is fine. However, there is only right answer here. Reality will win.
Business is about reality. Reality always wins.
I am glad that US firms are leaving. China should kick them out actually. China is no longer in the stage when they can be contract manufacturers of western brands. China must now develop and popularize its own global brands. Whether its phones, laptops, Washing machines, TV China is already taking market share across the globe. Why should China allow western brands to use Chinese labor which is cheap yet skilful to remain competitive? Chinese brands will be much cheaper and better quality as they gain more experience, knowhow and marketshare. They should kick out these brands from producing in China.
What the west has and China lacks are these global brands who sell all over the world. China has the advantage of being a designer and maker due to China's regional development disparity. East coast cities are wealthy and educated enough to be the designers while inland China can be the makers. Most east coast factories are already moving inland. The fact that China has solid waterway as the Yangtze and Pearl river is also another factor. These two rivers allow cheap transport from inland China.
China's next stage of growth will be developing these global brands that will outcompete western brands for everything including consumer products like coca cola to KFC to cars to phones. The design and management of these global companies will allow China to have workers with high salaries, which will lead to high GDP per Capita and thus high total GDP that will be not just bigger than US but double or triple it in the next 30-40 years.
i dont think the company was thinking about win-win, they are thinking the best way to max profit, invest in R&D is time consuming and alot $$$ spend. Huawei did that, but it can't handle entire supply chain. Other company have different business model etc, and may not spend as much revenue as Huawei on R&D. but after Trump sanction ill bet every those company are thinking about supply chain disruption and how to avoid it. In a way Trump is a wake up call for them. I'm curious about what lenovo/xiaomi/ etc going to do, seem like all their supply chain rely on US. Though Trump may not sanction them, he seem to sanction china pioneer company rather than end user assembly type company such as Lenovo.