
Indeed
I agree with the author, this capital injection was super predictable.
A consortium led by Chinese government-backed Beijing Jianguang Asset Management Co. Ltd (JAC Capital) has injected $9.4 billion into ailing Chinese chipmaker Tsinghua Unigroup, in a deal that will be appreciated by many big tech industry players. Tsinghua Unigroup is a vast conglomerate that was spun out of Tsinghua …
Sadly for China they lack good homegrown lithography equipment and are still very dependent on suppliers outside of China (ASML, Nikon, Canon mainly afaik), which will be very careful about supplying equipment to Tsinghua Unigroup now and require lots of safeguards to make sure they get paid. Their native equipment is about 10 to 15 years behind the curve. Good enough for some things like memory chips or MCUs but can't keep up with the state of the art.
Dunno which bank but it occurred to me to size the overnight interest:
SHIBOR's showing 1.8480% for O/N money for today. Assume still roughly accurate for last Thursday. US$9.4bn, 1 day, 365 day year = US$471,591.02 income.
Re "killing" i.e. Profit, you'd need to know their funding rate.
A decade or two ago, China was an also ran in the space race. Now they are the leader.
The Middle Kingdom has the money (they are the second largest economy in the world), they have the talent, they have the manufacturing base, and they have a long term outlook, all of which is reflected in this funding.
Whether they can challenge ASML in EUV is questionable - Nikon and Canon have been trying for years without success. But if I were Nikon or Canon I'd be worried.
A decade or two ago, China was an also ran in the space race. Now they are the leader.
They're a strong number 3, behind Russia and ahead of India, but a long ways away from being "the leader."
Can you explain what makes you think they are ahead of Russia (much less the US).
I can say with certainty they won't be able to do EUV for a LONG time to come. I know very up close and personal what is involved in those systems and how close (or far) China is from being able to replicate that (The only part of the ASML NXE system I haven't seen at least part of the insides of is the optics system). I very strongly doubt China will have the technology to make for instance the multi-layer mirrors at the required accuracy need for the EUV optics within the next 20 years.
As for DUV litho, they're still about 10 years behind there too, amongst the challenges they still need to solve is laser control (dosimetry and beam shaping) and optics (They lack domestic manufacture of lenses and optics to the level of for example Zeiss). They might be able to make steps if they really start pushing and putting serious amounts of research into it (China currently isn't really pushing) but I doubt they'd be able to get to the levels of throughput and reliability at smaller nodes achieved by the likes of ASML.