China re-shapes its silicon industry to boost production China has unveiled a slate of new and more focused initiatives aimed at helping local chipmakers boost production and accelerate product development. The new policy, unveiled by the State Council on Tuesday and charmingly named "Several Policies to Promote the High-quality Development of the Integrated Circuit Industry and …
Silicone is the stuff you use to waterproof around your bath or shower or make bigger boobies with, silicon on the other hand is the element used in electronics.
Thinking about it though, the highly synthetic nature of silicone means you were probably right.
Cue tantrums of 'unfair competition from Chinese State subsidised companies', from the usual quarters.
Backing China into a corner and forcing/encouraging it to become more self sufficient will make it more difficult to compete with them and will make recources like rare earths more more expensive and harder to obtain simply because they are being used in China.
I think Globalfoundries got $1bn from New York State, plus tax breaks, to set up there. Bezos ran a competition to see how much cities would pay him to put Amazon's HQ in it. The US has a long tradition of paying big companies to set up in various locations. Tax breaks for strategically important industries (aerospace, defence, semicondutors) are also common.
The U.S. might give tax breaks, or even provide federal funds, in a similar way, but that doesn't mean that this won't be spun as "unfair advantages" for Chinese companies.
Slip in a couple of references to "commies" and "socialists" and Trump has all the justification he needs for a trade war...
"All we want is a level playing field", etc.
If you've been following the whole Airbus / Boeing / tariffs on European imports thing you'll notice that allegations of unfair government subsidies is used by the US to impose tariffs, tariffs that stay in place even after the cause of the original complaint has been dealt with.
Its all really just noise and talking points. Governments are going to do what they think is appropriate for their best interests. The US tends to be the champion of free trade only it its winning (by 'winning' I mean 'the usual suspects are making a lot of money from it, even if we're running huge current account deficits').
Rare earths - not so much - they tried to corner the market a few years ago, and got egg on their faces - see previous El Reg seminars and articles. Mostly by not properly understanding how international rare earth extraction works.
This subsidization has nothing to do with the West leaning on China - its not a reactions, its part of a plan. This was in play long before that fracas started - they have been importing high tech fabrication systems for years - and stealing know how when they can. This is part of a play for the worldwide semiconductor industry - and the govt subsidies are part of that long-play.
International companies would be crazy to invest in training, manufacturing and R&D there - except they will continue to do it for the short term massive markets (much easier and often only possible to sell tech in China if a thing is made in China). That is also part of the China strategy. These guys are playing a long, long game - these subsidies last for 10 years and represent a massive and long term subsidization of Chinese manufacturing.
They won on steel, now they are moving on. last year, they manufactured 10 times more steel their next rival (india), and more than the next 20 countries combined.
They won on steel, now they are moving on. last year, they manufactured 10 times more steel their next rival (india), and more than the next 20 countries combined.
Why shouldn't they? They also use the most steel worldwide - they produce ~1000m tons of steel and export around 60m tons of steel.
I didn't say they shouldn't do it. I was saying that the strategy is for world domination of certain sectors.
China produced 120m tons in 1999 - now its 1000m tons. to do that it employs around 2 million people - excluding transport and logistics. that employment is down a million in the last 20 years... but its employment lost (mostly in US and EU)...
Even exporting 60M tons - that's larger than most countries entire production- enough to kill off all significant European production - and equals the entirety of US production (number 4). Employment in that sector has dropped everywhere except India.
The strategy is a 20 year one. IC production (later it will be design) are the next target. They are not targetting the coarse 28nm stuff like Z80A or cips for a tamagochi - tax breaks are for targeting high engineering.
I don't think it is an issue. If you examine the following link, there are many foundries not in China :
https://en.wikipedia.org/wiki/List_of_semiconductor_fabrication_plants
The only issue i could foresee is if China annexes Taiwan, or their production capability is extensively subsidised to cause other foundries to close (which assumes that they obtain the licence to produce the IC's in the first place).
If China does play games, then there is sufficient other foundries to absorb the new manufacturing. The other aspect i can foresee is fake parts - not sure how this will progress if it occurs.
10 year tax breaks to indigenous companies will give you the advantage. 20 years ago, every industrial country produced its own steel - even in the 1950's, the 'common market' treaty was about coal and steel (Its old name was the European Economic Coal and Steel Community) - steel was a national strategic resource.
Today, one could argue that Silicon is the new strategic resource. It would be awkward if an AMRAAM would turn away from a Xian H-20.
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