China’s Push for ‘Made in China 2025’
In the years after 1989, especially after the crackdown of the democracy moment, the West implemented strict export controls on China. Equipment vendors were prohibited from shipping the most advanced tools to China. So by 2015, China launched an initiative, dubbed “Made in China 2025.” The goal is to increase the domestic content of components in 10 areas — IT, robotics, aerospace, shipping, railways, electric vehicles, power equipment, materials, medicine and machinery. In addition, China hopes to become more self-sufficient in ICs (integrated Circuits) and wants to increase its domestic production to 70% by 2025, according to IC Insights.
In due process Beijing rolls out red carpet with triple the pay and benefits for talented employees wherever they could be found.
Below is one such example:
Taiwan loses 3,000 chip engineers to ‘Made in China 2025’
Dec 3, 2019
(Nikkei) – China is ramping up recruitment of Taiwanese talent in semiconductors, attracting top executives and engineers alike to bolster an industry that the US trade war has shown to be a Chinese Achilles’ heel.
The aggressive campaign has sparked concerns about a brain drain within Taiwan’s chip industry, which is struggling to compete with generous offers by cash-rich mainland companies.
A man in his 50s left a longtime job at a leading Taiwanese semiconductor maker a year ago for a position on the mainland.
“It’s only natural to want to launch a big project and increase my value as an engineer,” he told Nikkei during a trip back to Taipei.
The man’s salary more than doubled with the move, and his new employer pays for his child’s private education. The decision was easy, the man said.
More than 3,000 semiconductor engineers have departed Taiwan for positions at mainland companies, the island’s Business Weekly reports. Analysts at the Taiwan Institute of Economic Research say this figure appears to be accurate. That amounts to nearly one-tenth of Taiwan’s roughly 40,000 engineers involved in semiconductor research and development.
The trend is not new. Richard Chang moved to the mainland in 2000 after his Taiwanese business was acquired by Taiwan Semiconductor Manufacturing Co., the world’s leading contract chipmaker. Chang brought several hundred employees and launched Semiconductor Manufacturing International Corp. in Shanghai.
SMIC is now the world’s fifth-largest contract chipmaker and has become a key rival for TSMC with backing from Beijing.
TSMC’s former chief operating officer, Chiang Shang-yi, and research and development executive, Liang Mong-song, have taken high-ranking roles at state-affiliated players in China. Charles Kao, known as the “godfather” of Taiwan’s DRAM industry, also joined Tsinghua Unigroup in 2015. Unigroup competes with Taiwanese players like Nanya Technology in dynamic random access memory.
But such career moves have accelerated under Beijing’s “Made in China 2025” plan to foster self-sufficiency in high-tech industries.
Semiconductor manufacturing is both capital- and talent-intensive: Even with the best equipment on the market, a company cannot mass-produce chips without technicians to work on them.
“Chinese players are now trying to overcome the barrier by recruiting not only top executives, but entire production teams on the ground,” a Taiwanese industry insider said. “They are paying two to three times as much as Taiwanese companies.”
Taiwanese companies are finding themselves outmatched.
“We are improving our compensation, but it is difficult to compete with mainland companies,” Nanya Technology President Lee Pei-ing said.
Taiwan updated its trade secrets act in 2013, imposing prison sentences of up to 10 years for leaking corporate secrets outside the island. But this has not deterred career moves to the mainland in the semiconductor industry.
The effect of these transplants is noticeable. China’s Changxin Memory Technologies and Yangtze Memory Technologies next year are slated to start mass-producing memory chips, one of Taiwan’s strengths.
As a market for semiconductor manufacturing equipment, mainland China is expected to surpass Taiwan as the world’s largest next year.
In addition to bolstering the mainland’s chip industry, Beijing also may be rolling out the red carpet for Taiwanese engineers as a step toward its longtime goal of reunification. Beijing announced 26 measures in November aimed at treating Taiwanese equally to mainland Chinese, advocating for more Taiwanese to work and study on the mainland.
“The goal is to bring Taiwanese talent to the mainland and hollow out Taiwan,” said Meng Chih-cheng, an associate professor at Taiwan’s National Cheng Kung University.
An offer China can’t refuse: ‘Godfather of Taiwan’s DRAM industry’ to lead new Tsinghua Unigroup memory unit
Max Smolaks 1 Jul 2019 // The Register
China-owned semiconductor giant Tsinghua Unigroup, which already manufactures flash memory, is about to try its luck at making DRAM – a much more complicated endeavour.
The Middle Kingdom wants a reliable domestic supply of DRAM, but its latest efforts were thwarted at the end of 2018 when the US indicted state-owned chipmaker Fujian Jinhua Integrated Circuit Company (JHICC) on industrial espionage charges, and banned the company from importing semiconductor equipment and materials from the US. This effectively stopped JHICC from advancing its DRAM programme.
Etching DRAM wafers is a highly complex and expensive task: in recent years, memory suppliers have consolidated into an exclusive club, with Samsung, SK Hynix and Micron providing for around 95 per cent of the world’s DRAM needs.
Tsinghua once attempted to infiltrate this list by buying Micron for $23bn, but is about to enter the highly volatile market on its own, in what is seen as a response to the ongoing trade conflict with the US.
Since 2018, Tsinghua Unigroup HAS BEEN majority-owned by the government of Shenzhen, China’s industrial capital. It acquired Chinese startup RDA Microelectronics for $907m in 2014, and French chip designer Linxens for €2.2bn in 2018. It also owns Spreadtrum Communications, a homegrown mobile chip supplier that hopes to rival MediaTek and Qualcomm, and a chunk of Portland-based Lattice Semiconductor.
Last year, Tsinghua president Zhao Weiguo called for peaceful coexistence with American firms. “I hope multinational chip makers can leave a bite for Chinese companies,” he said.
According to DRAMeXchange, Tsinghua’s new DRAM unit will be led by Charles Kao as CEO, and Diao Shijing, former director of the Electronic Information Department of the Ministry of Industry and Information Technology, as chair.
DRAMeXchange claimed Tsinghua has experience building production facilities as it employs the same teams that worked on fabs for Yangtze Memory. Tsinghua is already building a DRAM plant in Nanjing and is negotiating with the government of Chongqing, where it hopes to open a second facility.
Kao has been called “the godfather” of Taiwan’s DRAM industry. He is the chairman of Inotera Memories, acting chairman of Yangtze River Memory Technology Corporation and former president of Nanya – all three make DRAM products.
Tsinghua said it would enter the DRAM market once before, in 2014, but instead decided to focus on NAND manufacturing.
While the trade war between the US and China has no doubt accelerated these efforts, China’s drive for DRAM independence has been predicted for a while. DRAM manufacturing is part of a larger “Made in China 2025” project that includes the establishment of a domestic semiconductor industry that could supply at least 70 per cent of the country’s needs.
Semiconductor sales by Chinese manufacturers are said to have reached ¥653.2bn in 2018 – that’s about $97.3bn, or around 20 per cent of global semiconductor revenue for the year ($476.7bn).
Joel Huan
The Mystery of Ephraim 