Daniel Bar
New member
Since I'm a frequent visitor to China for over a decade now this recent article published on Bloomberg-Bussiness picked my eyes with some interesting figures. Its mentioned that Allwinner Technology Co. and Rockchip Electronics Co. jumped from a sales share of 0.3% to 27% of all tablet microprocessors between 2010 to 2013.
I started following the semiconductors industry not too many years ago, my interest was sparked during my materials science undergraduate studies. I kept wondering how come China is not getting a decent manufacturing share, since with such governmental humongous investments in the sector you would expect China to become a semiconductor powerhouse (This was covered by Paul McLellan not too long ago). I suspected that maybe it is because it takes many years to obtain the required depth of knowledge, and a substantial amount of brilliant, skilled and dedicated professionals that are needed to build even the foundations for a production of such complexity. And China is just a little bit short in a few of the aspects mentioned above in my opinion. It seemed that it's only a matter of time till China catches up on those fronts. And by THAT time, it will pose real threat to the Asian semiconductors hubs (Korea, Taiwan, Japan) that drives most non-Intel wafer traffic.
THAT time just come a little earlier then I expected.
Solar Panels tale in China
A relevant comparison can be drawn from the progress seen in PV panels in China. The change happened a lot faster with the solar panels industry. Everyone knows that the Chinese government works closely with manufacturers (Very often companies are state owned companies or subsidiaries of SECs). This resulted in distribution of massive governmental incentives (Massive in China is a whole other level..) to encourage PV panels manufacturers, and subsequently made huge price impacts globally.
I have heard a funny rumor about the real reason for that global price drop. It was a mistake made by one high official who was assigned to monitor global PV panels demand and advice for production guidance accordingly. However, the high official's office made a mistake of an order of magnitude or two in the forecast, due to lack of methodological analysis (Not a big deal if you have 1.35B tax payers money at your disposal right?). This mistake resulted in disproportionate production that led to a global decrease in prices and a sudden need to stock ginormous surplus of PV panels.I don't know how far from reality that story is, but compared to some of the stories Chinese professionals in the investment sector shared with me, it didn't sound unrealistic.
The Chinese semiconductors sector is a rising competitor that has impact potential incomparable to anything we know of. It definitely makes a lot of directors in Asia worried or uncomfortable at the very least.
I started following the semiconductors industry not too many years ago, my interest was sparked during my materials science undergraduate studies. I kept wondering how come China is not getting a decent manufacturing share, since with such governmental humongous investments in the sector you would expect China to become a semiconductor powerhouse (This was covered by Paul McLellan not too long ago). I suspected that maybe it is because it takes many years to obtain the required depth of knowledge, and a substantial amount of brilliant, skilled and dedicated professionals that are needed to build even the foundations for a production of such complexity. And China is just a little bit short in a few of the aspects mentioned above in my opinion. It seemed that it's only a matter of time till China catches up on those fronts. And by THAT time, it will pose real threat to the Asian semiconductors hubs (Korea, Taiwan, Japan) that drives most non-Intel wafer traffic.
THAT time just come a little earlier then I expected.
Solar Panels tale in China
A relevant comparison can be drawn from the progress seen in PV panels in China. The change happened a lot faster with the solar panels industry. Everyone knows that the Chinese government works closely with manufacturers (Very often companies are state owned companies or subsidiaries of SECs). This resulted in distribution of massive governmental incentives (Massive in China is a whole other level..) to encourage PV panels manufacturers, and subsequently made huge price impacts globally.
I have heard a funny rumor about the real reason for that global price drop. It was a mistake made by one high official who was assigned to monitor global PV panels demand and advice for production guidance accordingly. However, the high official's office made a mistake of an order of magnitude or two in the forecast, due to lack of methodological analysis (Not a big deal if you have 1.35B tax payers money at your disposal right?). This mistake resulted in disproportionate production that led to a global decrease in prices and a sudden need to stock ginormous surplus of PV panels.I don't know how far from reality that story is, but compared to some of the stories Chinese professionals in the investment sector shared with me, it didn't sound unrealistic.
The Chinese semiconductors sector is a rising competitor that has impact potential incomparable to anything we know of. It definitely makes a lot of directors in Asia worried or uncomfortable at the very least.