Daily Management Review

China Opens Doors For Foreign Investors To Develop Its Domestic Chip Market


04/26/2018


In an attempt to manage its “core technology”, China moves towards securing independence for its tech industry.



China needs fund support of “billions of dollars” in its ambitious quest of propelling its domestic chips, whereby attempting to reduce on heavy import reliance. As a result, the country has sent invitations to “overseas investors” to join in its endeavour.
 
On Wednesday, 25 April 2018, the Chinese “industry ministry” reported of its invitation to “foreign enterprises”; whereby the latter is welcomed to “invest” in China’s “top state-backed semiconductor fund”, while the tension continues to seethe in the “tech transfers between China and the United States”.
 
The Chinese authorities want to “accelerate” the market development plans of semiconductor, even at the brink of a “fierce trade stand-off” with the U.S., as a part of which a recent ban was implemented on “U.S. sales”. The “National Integrated Circuit Investment Fund” of China is gathering a second fund support, reported an official from the “Ministry of Industry and Information Technology”. The spokesperson, Chen Yin addressed a Beijing press conference by saying:
“We welcome foreign enterprises to participate”.
 
In the fear of Chinese firms challenging the U.S. “chip giants like Qualcomm Corp”, the politicians of the U.S. have targeted the fund support which earlier raised an amount of “$22 billion”, while the U.S. authorities are also well aware that the key market for U.S. chip industry has been China.
 
Moreover, the trade representatives of the United States presented a trade report to the U.S. President with a reference of the Chinese roadmap on its semiconductor market which is backed with “national funding”. The said report has been an attempt to impose taxes of “up to $100 billion in tariffs against the country”
 
While, the Founder of Alibaba, Jack Ma thinks that China needs to manage its “core technology” including chips so as to gain some independency over its exhaustive reliance on the “U.S. imports”. In fact, Alibaba has recently purchased “Hangzhou C-SKY Microsystems”, a Chinese microchip manufacturer, while Ma also added that the said acquisition has nothing to do with the “U.S.-China trade tensions”. In Ma’s words:
“We believe the internet of things is the future ... most things that have electricity will have chips inside. So we need cheaper chips, effective chips, inclusive chips that can be everywhere”.
 
The semiconductor fund of China with its support from the state has been helping “major local projects” which also include the “$24 billion Tsinghua Unigroup memory chip plant” now under construction. As per Reuters:
“Beijing says its supportive investment policies are designed to reduce China’s reliance on foreign semiconductors, which are one of the country’s top imported products by value”.
 
Following the U.S. ban on exports of American components like semiconductors to the Chinese market only outlined the latter’s dependency on the former, as the analysts claim that the ban could prove fatal to “ZTE’s smartphone business”. While, recently a number of times the U.S. regulators also intervened in overseas deals of Chinese firms.
 
References:
reuters.com







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