Western tech firms just can’t resist China’s chip market
US tech titans Tim Cook and Elon Musk are under fire for their business ties to China but they are not the only Western tech executives trying to protect their hard-won Chinese markets in an increasingly hostile political environment at home.
US semiconductor production equipment heavyweights Applied Materials, Lam Research and KLA participated in the 25th China IC Manufacturing Annual Conference and Supply Chain Innovation Forum held in Guangzhou from April 17-19.
Their presence was notable given China’s new focus on tech self-reliance and supply chain security in the face of escalating US sanctions on its tech industry.
China accounted for 26% of semiconductor production equipment sales in 2022, according to data compiled by global industry association SEMI. While Chinese chip equipment makers are not yet competitive in world markets, they have been handed a golden opportunity by US export restrictions.
The event was sponsored and organized by the China Semiconductor Industry Association and other national and regional organizations focused on materials, wafer processing, packaging, testing and finance.
Several domestic and foreign manufacturers, academic and research institutions, and infrastructure providers also participated. In addition to the three big US semiconductor companies, Germany’s Siemens and Zeiss and Japan’s Hitachi and Disco were in attendance.
Topics addressed included integrated circuit (IC) design and electronic design automation (EDA), materials innovation, atomic layer deposition (ALD) and other specialized processing technologies as well as central processing units (CPUs), field programmable gate arrays (FPGAs), systems-on-chip (SOCs), power and compound semiconductors including silicon carbide) automotive ICs and sensors
These are among the areas that Chinese companies need to master in order to build an independent semiconductor industry immune to US sanctions.
Guangdong province is emerging as a new center of semiconductor design and manufacturing with some 40 semiconductor-related projects valued at 500 billion yuan (US$72.6 billion) either underway or in the planning stage. That’s almost 40% more than the $52.7 billion allocated to the US semiconductor industry by the Biden administration’s CHIPS Act.
At the conference, Guangdong Vice Governor Wang Xi noted that the province imports about $145 billion worth of semiconductors each year, representing roughly a third of China’s total chip imports. That potentially massive import substitution opportunity explains why foreign chip-making equipment companies were in attendance.
Wang is a materials scientist and a member of the Chinese Academy of Sciences who previously served as president of the Shanghai Institute of Microsystems and Information Technology, vice chairman of the China Association for Science and Technology and president of the Shanghai Institute of Advanced Research.
He became a member of the Chinese Communist Party (CCP) in 2001 and was appointed vice minister of Science and Technology in 2019. Now, as vice governor and a member of the Standing Committee of the CCP Guangdong Provincial Committee, he is overseeing the creation of a semiconductor industry complex that will complement those in Beijing and Shanghai.
Lam Research, which announced its March quarter results on April 19, wrote in its presentation materials that generally weak demand from memory IC makers was partially offset by “China-related demand across logic and memory.” By region, China accounted for 22% of the company’s sales in the quarter.
On the conference call with analysts, CEO Tim Archer said that the US government had clarified the rules governing exports to China and that this “allows us to ship certain products that we had originally excluded from our expectations.”
Seagate, the world’s largest maker of hard disc drives (HDDs), took the opposite approach and is now paying for it.
On April 19, the Bureau of Industry and Security (BIS) of the US Department of Commerce announced that it had imposed a $300 million penalty on Seagate for shipping about 7.4 million HDDs valued at $1.1 billion to Chinese tech giant Huawei between August 2020 and September 2021 in violation of US export controls. It was the largest single administrative penalty imposed in BIS history; excerpts from the penalty’s announcement follow:
“In August 2020, BIS imposed controls over certain foreign-produced items related to Huawei… Despite this, in September 2020, Seagate announced it would continue to do business with Huawei. Seagate did so despite the fact that its only two competitors had stopped selling HDDs to Huawei, resulting in Seagate becoming Huawei’s sole source provider of HDDs. Subsequently, Seagate entered into a three-year Strategic Cooperation Agreement with Huawei, naming Seagate as ‘Huawei’s strategic supplier’ and granting the company ‘priority basis over other Huawei suppliers.’
“The two other companies capable of making HDDs promptly—and publicly—indicated that they had ceased sales to Huawei. Of the three, only Seagate refused to stop sales and transactions involving Huawei. BIS’s $300 million monetary penalty is more than twice what BIS estimates to be the company’s net profits for the alleged illegal exports to or involving Huawei.”
The other two HDD makers are Western Digital and Toshiba. According to data storage market research company Trendfocus, Seagate had about 45% of the global HDD market in the first quarter of calendar 2023, followed by Western Digital at 36% and Toshiba at 19%.
But the higher the market share, the bigger the problem as global demand for HDDs is collapsing. Unit shipments dropped about 34% year-on-year at Seagate and by approximately 37% at both Western Digital and Toshiba. This was due both to the long-term trend favoring solid-state drives (SSDs) and the current downturn in the PC and enterprise data storage markets.
SSDs use NAND flash memory instead of rotating discs for data storage. South Korea’s Samsung, the world’s largest maker of NAND flash memory, sold its HDD business to Seagate in 2018. Toshiba affiliate Kioxia, in partnership with Western Digital, is the world’s second-largest maker of NAND flash memory.
Unit shipments of HDDs peaked in 2010 and have since dropped by more than 75%. Since 2012, SSD unit shipments have increased by more than 10 times, overtaking HDDs and reaching price parity at higher and higher levels of storage capacity.
Without rotating discs, spindles and motors, SSDs are lighter and more resistant to vibration than HDDs. Indications are that they will continue to displace HDDs in all but top-end applications – and there, too, if HDDs are not available.
Ironically, the BIS has imposed its largest fine ever in a case involving a legacy product that has little or nothing to do with national security and that is steadily declining in tech industry importance. But the point clearly was to set an example: “This settlement is a clarion call about the need for companies to comply rigorously with BIS export rules…”
Specifically, Seagate used ion beam etch and deposition, physical vapor deposition and laser-based surface inspection equipment – all on the BIS’ export restriction list – to manufacture and test the HDDs. Only the final product was shipped to Huawei
For the three months to March (the company’s fiscal third quarter), Seagate reported an operating loss of $315 million and a net loss of $433 million. The $300 million fine, therefore, is equivalent to another bad quarter at the bottom of the tech cycle.
Huawei also learned its lesson, replacing more than 13,000 imported components with alternatives made in China and redesigning more than 4,000 circuit boards in order to evade US sanctions.
with that said;
www.businessinsider.com
India will overtake Germany and Japan in GDP likely in the next 5 yrs....to be #3 in the world
Even Chinese companies are moving supply chains out China to avoid geopolitical risks. Here are the 6 places they're heading for instead.
Western countries were already moving some supply chains out of China — but now even Chinese firms are moving out due to geopolitical risks.
www.businessinsider.com
India will overtake Germany and Japan in GDP likely in the next 5 yrs....to be #3 in the world
BTC is again becoming strongly correlated with high beta it had diverged to a 12 mth low level in June '22. its 90-day correlation coefficient recently hit a high, currently sits approx .88 lol. March's(monthly chart) glorious long green candle strongly suggested continuation for April-it did, but has retraced. April's monthly candle will end most likely as a doji. Indecision. Given the re-strengthened correlation with high beta i'm feeling will need Powell's help for it to break significantly to the upside. Need a Powell pivot. Uppa 25 basis points is likely priced in on the SPY at the next meeting , his words going forward will be huge, hawkish tone? we shall see. CPI Friday :massive day for the metals.
its not IF powell will pivot, its when...he will have to pivot
one more 
USD
WEEKLY chart
www.investing.com
click 1W
This is a classic bottoming process , (AND has divergences flashing) this candle aint done and Friday's CPI will have a huge effect -binary event
USD
WEEKLY chart
US Dollar Index Streaming Chart - Investing.com
In this section you'll find a streaming chart for the US Dollar Index.
click 1W
This is a classic bottoming process , (AND has divergences flashing) this candle aint done and Friday's CPI will have a huge effect -binary event
Meta's value has plunged hundreds of billions.
In financial terms, that's called a "train wreck" - another "w" for the Sheriff.
Keep treating the FAKE fiat news like the gospel and one day you'll wake up to the horror show of watching your retirement nest egg circling the drain.
The "market" is all pretend - a FAKE Fed obsessed with propping up FAKE markets with its FAKE currency.
Your entire FAKE Keynesian economic worldview is about to implode.
Rambling fool.
In financial terms, that's called a "train wreck" - another "w" for the Sheriff.
Keep treating the FAKE fiat news like the gospel and one day you'll wake up to the horror show of watching your retirement nest egg circling the drain.
The "market" is all pretend - a FAKE Fed obsessed with propping up FAKE markets with its FAKE currency.
Your entire FAKE Keynesian economic worldview is about to implode.
Rambling fool.
Hey, remember when Ricboff was here shilling for Big Pharma telling everyone how great the vaxxes were??
That was awesome!
Dr Fauci's Mini-Me --
"science" ?
--------------------------------------------------------------------------------
thewashingtonstandard.com
That was awesome!
Dr Fauci's Mini-Me --
"science" ?--------------------------------------------------------------------------------
Moody’s Downgrades Ratings Of 11 Banks
Banking Crisis Is Not Over Yet: Moody’s Downgrades Ratings Of 11 Banks
The crisis in the United States banking sector is not over yet. Moody’s Investor Services, one of America’s premier credit rating and analysis corporations,
thewashingtonstandard.com
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On tilt again copying and pasting ?
Vax ? Who told u that tech would open many doors? Who told you it may be used for cancer treatment? Clinical trials are out .
Donnie got out of nvax near the top btw
Why do you say Big Tech would go to zero old man ? Did you read it on twitter? Going to post till 3 am again ? No one around ,just the dogs....
Vax ? Who told u that tech would open many doors? Who told you it may be used for cancer treatment? Clinical trials are out .
Donnie got out of nvax near the top btw
Why do you say Big Tech would go to zero old man ? Did you read it on twitter? Going to post till 3 am again ? No one around ,just the dogs....
Cancer? Your toxic jabs CAUSE cancer!On tilt again copying and pasting ?
Vax ? Who told u that tech would open many doors? Who told you it may be used for cancer treatment? Clinical trials are out .
Donnie got out of nvax near the top btw
Why do you say Big Tech would go to zero old man ? Did you read it on twitter? Going to post till 3 am again ? No one around ,just the dogs....
"Safe and effective" ?YOU are the "clinical trial"....with a big fat red nose!
Oops, it causes myocarditis!
Oops, it causes turbo cancer!
Oops, "dying suddenly" is the leading cause of death!
Oops, you need endless boosters because they stop working after 10 days!
You sound like the doctors back in the 50s who were telling people smoking is good for you!
Big Pharma shill.
Ricboff world is clown world. ?
mRNA vaccine for melanoma reduces relapse after therapy, trial finds
A personalized mRNA cancer vaccine combined with immunotherapy cuts the risk of recurrence by nearly half, researchers say.In 2019, Gary Keblish got a diagnosis from his surgeon that left him stunned. The flat, dark-brown mole he’d had on his back for as long as he could remember had turned into a melanoma that was already advanced, putting him at risk of dying.
“I felt numb,” the Brooklyn teacher, 61, said in an interview.
Fortunately, Keblish was able sign on for a small clinical trial testing a preventive vaccine that might possibly keep the disease from coming back.
The trial focused on a personalized vaccine using mRNA technology that used mutations to target mutations unique to a patient’s cancer but not the healthy cells in the body. All participants in the trial would receive the immunotherapy drug Keytruda (pembrolizumab), the standard of care for high-risk melanoma patients like Keblish. Two-thirds of the participants would also receive the vaccine.
Keblish was one of those who received the vaccine — which teaches the body’s immune system to recognize cancer cells as different from normal cells so that, working along with the immunotheraoy drug, it can attack them.
After two years, Keblish's cancer hasn't returned.
Personalized cancer vaccine shows benefit
On Sunday, the results of the phase 2 trial, which showed that the combination of the vaccine and immunotherapy reduced the risk of recurrence by nearly half, were presented at the annual meeting of the American Association for Cancer Research.................
like a said a few yrs back, when it all plays out.... they gotta give Donnie the Noble Peace Prize in Medicine , lol
Hey Ricboff, tell me if this doesn't sound familiar ? ? ?
Circa 1960s: Flu vax found to be ineffective. Whistleblowers censored or fired. Military mandated Adenovirus vax which caused cancer in animal tests and took 3 years for it to be pulled from market.
Between sports activities, camps, schools, growing up I was around THOUSANDS of kids. Do you know I can't recall a single kid with a peanut allergy? Not one! Amazing! I had pb&j sandwiches in my lunch every day!
Now? You can go to jail for being caught with peanuts as they have become a pandemic! Ditto for autism as well other new "normal" children's diseases.
Your greedy corrupt pseudo-science industry has been killing people for decades!
Circa 1960s: Flu vax found to be ineffective. Whistleblowers censored or fired. Military mandated Adenovirus vax which caused cancer in animal tests and took 3 years for it to be pulled from market.
Between sports activities, camps, schools, growing up I was around THOUSANDS of kids. Do you know I can't recall a single kid with a peanut allergy? Not one! Amazing! I had pb&j sandwiches in my lunch every day!
Now? You can go to jail for being caught with peanuts as they have become a pandemic! Ditto for autism as well other new "normal" children's diseases.
Your greedy corrupt pseudo-science industry has been killing people for decades!
