Re: Top Two National Projects China Must Concentrate On to advance it to the Next Lev
Maybe I raise couple questions as to guide your thinking.
1)Several global scale Chinese tech companies Huawei, ZTE, Haier, Lenovo, do you agree they are they are biggest Chinese tech companies? Now, Which one is a semiconductor company?
2)Do you know any large scale State enterprise Chinese semiconductor company?
So, if your answers are No to above, then its fairly easy to deduct China has to import over 90% of foreign components for its industrial, consumer usage. That's Why I am saying they need a revolution or some sort to alter that landscape. Therefore it should has a very high priority.
I think it is too early to call that the winner take all in semiconductor are Intel and AMD or Nvdia. They are the pioneer of semiconductor since the day of Fairchild and midwife the birth of microprocessor and PC. But life move on the day of PC is number and China have a good prospect to be the dominant force in the next wave of communication semiconductor revolution. It is smart of China not following the Lemming instinct to go over the cliff
To begin with Fab is very expensive running roughly 5 or 6 billion dollar to built. Many FAb has been built in Asia and most of them loose money A . 2nd the Machinery to make semiconductor are dominated by the like of Applied Material and subjected to Itar. they won't sell the latest gadget . But Chinese semiconductor infrastructure designers are up and coming . The proliferation of design houses in China is indicative of what is in store.
You are right Huawei and ZTE are in position to built their own chips. Using their comparative strength in communication can and should branch in other sector of chip manufacturing. But their first priority is to be dominant in their respective industry first.Once they perfected the city wide wifi that will sound the death knell of Intel
. Don't tell me it is impossible. Mediatek alone is responsible for the demise of Motorola cell phone. They fired every engineer and bought Mediatek chips .Now they are bought by google
Read this excellent article
But TSMC is doing well and cement their dominant in China as pure Fab houses. Rockchip is dominant in tablet and Mediatek in Cell phone. Intel has not been successful in the switch to communication chips. The demand for processor is falling . So don't write of China the best is yet to come. TSMC is nominally a Taiwan company but most of their Fab is in China . If anything those behemoth like Intel are spent force and they will saddled with an old technology and will have hard time avoiding the creative destruction of coming revolution of the fusion between computer and Communication. They are no as nimble as Taiwan companies /
Another thing all this obsession with faster and larger chips is misplaced. The trend now is power thrift design. That is the reason why ARM beat Intel when it come to power efficient chip
A fab success
The smartphone boom has been a boon for a pioneer in semiconductors
Jul 27th 2013 | TAIPEI |From the print edition
Still going strong
WHEN he founded Taiwan Semiconductor Manufacturing Company (TSMC) in 1987, Morris Chang recalls, “Nobody thought we were going anywhere.” Back then the rule was that semiconductor companies both designed and made chips. TSMC was the first pure “foundry”, making chips for designers with no factories, or “fabs”, of their own. The doubts of others suited TSMC nicely. Mr Chang, at 82 still chairman and in his second stint as chief executive, says that meant it suffered no competition in its first eight years.
These days the idea is more popular. Last year foundries made about half of all logic chips (the ones that carry out computations, as opposed to memory chips, a more commoditised market). United Microelectronics Corporation, a slightly older Taiwanese company, turned itself into a pure-play foundry in 1995. GlobalFoundries, with factories in America, Germany and Singapore, was set up in 2009.
In this section
Yet the pioneer still dominates. This year, predicts Samuel Wang of Gartner, a research firm, TSMC’s revenues will exceed those of all other foundries combined. He reckons it has 90% of the world market for advanced 28-nanometre chips, which are essential to smartphones and tablets. TSMC’s sales in the second quarter, reported on July 18th, were NT$156 billion ($5.2 billion), 21% more than a year before. Its net income rose by 24%, to NT$52 billion. That said, growth should slow in the second half of the year, Mr Chang told analysts, because smartphone-makers have been building up their inventories of chips ahead of new-product launches and because sales of PCs and some smartphones have been weaker than expected. Sales could even shrink in the fourth quarter.
TSMC has thrived on a mixture of serendipity and anticipation. “The market moved in the direction in which we were heading,” says Mr Chang. The boom in mobile computing has meant a bonanza for several long-standing customers, which range from Qualcomm, an American firm that dominates the market for smartphones’ application processors, to MediaTek, a Taiwanese neighbour that has burst onto the scene more recently. Sales to Chinese designers such as Allwinner, Rockchip and Spreadtrum, whose chips power inexpensive Android tablets and phones, have doubled in the past year; these all license low-energy chip technology from ARM, a British firm that has been a partner of TSMC’s since 2004.
The “grand alliance” of TSMC and the chip designers, as Mr Chang has called it, has done far better from the shift to mobile devices than Intel, the world’s biggest chipmaker. Intel both designs and makes chips (in industry argot, it is an integrated device manufacturer, or IDM). Its processor chips are the brains of most personal computers, but demand for these has been falling. Although Intel’s newest processors are much less thirsty and the firm is determined to break into the mobile market, it has so far struggled. Its second-quarter revenues fell by 5% and its net income by 29%.
A combination of fabless designers and a pure foundry works well, Mr Chang explains, because the designers “don’t have to worry about the capital-intensive part of the business any more”: the foundry provides the scale. At the same time, fabless companies, of which he reckons there are about 50 with annual revenues of at least $100m, compete with one another and with IDMs. “This diverse group has in total produced more innovation than any single IDM…Just look at the mobile products,” he says.
The battle lines between the alliance and its rivals continue to shift. Intel has entered the foundry business—and recently snaffled a contract with Altera, an American designer that has been a customer of TSMC’s for 20 years. “I really regret that very much,” Mr Chang says. “I had an investigation into why that happened.”
On another front, TSMC is fighting Samsung. The South Korean company makes processors not only for itself but also for Apple, even though the two are deadly rivals in smartphones and tablets. In addition it is the world’s biggest maker of memory chips. Recently the Wall Street Journal reported that TSMC, after years of effort, had won a contract to make chips for iPhones and iPads—a victory that will have stung Samsung. (The Taiwanese company has not commented.) Mr Chang says that he takes neither Intel nor Samsung lightly, but insists: “We have one big advantage: we are a pure foundry. We do not compete with our customers.” No matter how hard Intel and Samsung try, he says, they will not enjoy the same trust.
The big question hanging over TSMC is whether it can find a worthy successor to its octogenarian boss. It has had one false start already: he stood down as chief executive in 2005, but took the helm again in 2009. No handover is planned yet, but last year three men were appointed “co-chief operating officers”. Probably at least two of these, or maybe all three, will end up as joint chief executives. A ménage à trois could prove farcical. But perhaps TSMC’s board thinks its founder is too good an act for one man to follow.
