Tag Archives: Ties
TAIPEI (Reuters) – Washington’s decision to cut off U.S. supplies to a Chinese chip-maker spotlights mounting tensions over China’s drive to be a global player in computer chips and the ways in which Taiwan companies are helping it get there.
FILE PHOTO: Men walk past a signboard of chipmaker United Microelectronics Corp (UMC) in Hsinchu, Taiwan January 10, 2006. REUTERS/Richard Chung/File Photo
Shut out of major global semiconductor deals in recent years, China has been quietly strengthening cooperation with Taiwan chip firms by encouraging the transfer of chip-making expertise into the mainland.
Taiwan chip giant United Microelectronics Corp (UMC) (2303.TW) last week halted research and development activities with its Chinese state-backed partner Fujian Jinhua Integrated Circuit Co Ltd, following the U.S. move.
Taiwan firms such as UMC have helped supply China with a steady pipeline of chip expertise in exchange for access to the fast-growing chip market there.
China has faced a shortage of integrated circuit (IC) chips for years. In 2017, it imported $ 270 billion worth of semiconductors, more than its imports of crude oil.
At least 10 joint ventures or technology partnerships have been set up in the last few years between Chinese and Taiwanese firms, according to industry experts, luring Taiwanese talent with hefty salaries and generous perks.
“Such companies will need to also take care to ensure no patent or IP infringement is involved as the U.S. has export control means to restrict support of critical technology,” said Randy Abrams, an analyst at Credit Suisse in Taipei.
Among the most valuable cross-strait partnerships for China would be ones that strengthen its foundry services and memory chip production. Those two sectors require much-needed help from overseas firms due to the complexity of the manufacturing technologies and intense capital requirements, analysts have said.
But the technology transfer between China and self-ruled Taiwan has raised concerns amid the Sino-U.S. trade war and escalating tensions across the Taiwan Strait.
China has aggressively used “market-distorting subsidies” and “forced technology transfers” to capture traditional and emerging technology industries, Brent Christensen, the director of America’s de facto embassy in Taipei, told a business gathering in late September.
“These actions are harming the United States’ economy, Taiwan’s economy, and other economies.”
Taiwan is one of the largest exporters of IC globally and many worry the island could lose a key economic engine to its political foe.
Taiwan’s government views the island’s chipmakers’ cooperation with China cautiously and has implemented policies to ensure Taiwan’s most advanced technology is not transferred.
“When businesses go to the mainland to invest in wafer production, they must accept controls including one that requires the manufacturing technology to be a generation behind,” the economics ministry’s industrial development bureau said in a statement to Reuters.
INTELLECTUAL PROPERTY CONCERNS
Cooperation between UMC and Fujian Jinhua came under scrutiny last month, when the U.S. government put the Chinese company on a list of entities that cannot buy components, software and technology goods from U.S. firms amid allegations it stole intellectual property from U.S.-based Micron Technology. Fujian Jinhua denied the allegations.
Fujian Jinhua now faces big challenges to reach commercial high volume production as expected in 2020, industry observers say.
Last week, both UMC and Fujian Jinhua, which was only founded in 2016, were charged with conspiring to steal trade secrets from Micron in a U.S. Justice Department indictment.
“Taiwanese tech companies need to carefully re-evaluate their positions and supply chain arrangements as the tension between the two super powers escalates,” Bernstein analyst Mark Li said.
While China will need at least six years before it can catch up in chip manufacturing, according to some estimates, the scale of its chip-making abilities is already seen as a threat in other parts of the chip supply chain.
Barely 2-1/2 years after breaking ground on a 12-inch wafer plant in China, Nexchip, a joint venture between the Chinese city of Hefei and Taiwan DRAM maker Powerchip, started producing 8,000 wafers a month. Wafers are thin pieces of material, usually consisting of silicon, used to make semiconductor chips.
Nexchip’s main goal is to produce liquid crystal display driver ICs for flat-panel makers.
Using Powerchip’s resources and Taiwanese talent, which make up a quarter of its 1,200 employees, Nexchip is helping reduce China’s reliance on foreign chip suppliers.
With an aim to become “the world’s No.1 chipmaker for display drivers,” Nexchip plans to build three more 12-inch wafer plants and ramp up its monthly production to 20,000 wafers by 2019, according to a person with direct knowledge of the matter.
After visiting Nexchip late last year, researchers from Taiwan’s chip hub, Hsinchu Science Park, said progress at the Hefei plant was a “breakthrough”.
“This will likely increase Taiwan firms’ needs to invest in the China market, and it will be a test for the (Taiwan) government’s industrial policy.”
Reporting by Jess Macy Yu and Yimou Lee in Taipei
Elon Musk’s ongoing criticism of the media took a strange turn late Saturday when he praised an analysis of media bias produced by a website linked to NXIVM, a group which federal prosecutors have described as an exploitative pyramid scheme. Keith Raniere, the group’s charismatic leader, was arrested in March on sex-trafficking charges, with charging documents describing a system of sexual blackmail and domination. The article Musk praised looks conventional enough, and there’s no evidence he was aware of its troubling origins—but the incident highlights the double-edged nature of campaigns to discredit the media.
Musk retweeted a link to an article on TheKnifeMedia.com Saturday evening, writing “This analysis is excellent.” The linked article applied numerical scores for factors like “spin” and “logic” to coverage of Musk’s recent critiques of the media, finding that outlets including The Wall Street Journal and the New York Times were “slanted.”
The problem with Musk’s endorsement is that The Knife, previously known as The Knife of Aristotle, has been linked to NXIVM, a marketing company that is allegedly a front for a secret group known as DOS, and which has been described as a cult by experts. NXIVM’s leader, Kieth Ranier, was arrested in March on charges of sex trafficking and abuse, including branding female members of DOS. The FBI’s efforts to rein in the group are ongoing.
Musk has since deleted his endorsement, which was archived by Slate. After being alerted to the article’s problematic origins, though, Musk seemed to double down, writing that the article “had better critical analysis than most non-cult media.”
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Links between NXIVM and The Knife/The Knife of Aristotle were unearthed last year by investigative reporter Brock Wilbur, writing in Paste. Wilbur found that the Knife shared leadership with NXIVM—including Battlestar Galactica actress Nicki Clyne—and speculated that its efforts to hire journalists were a form of recruitment for the broader group. The Knife and NXIVM have since scrubbed evidence linking the two entities.
Musk’s recent criticism of the media started as pushback against coverage of Tesla’s troubles, including Autopilot-linked wrecks, labor battles, and Model 3 production delays. On the Autopilot topic in particular, Musk has a very fair point—the event-driven nature of media coverage means a few wrecks could easily overshadow the life-saving potential of A.I. driver assistance.
But Musk has broadened his critique, painting the media as a whole as “holier-than-thou,” “sanctimonious,” and lacking integrity, and suggesting that he himself could restore that integrity by building a site to rate media outlets’ credibility. His attacks have invited comparisons to President Donald Trump’s remarks against the media, and highlighted Silicon Valley billionaires’ broader distaste for criticism.
Chad Brown the trainer for Cloud Computing celebrates with the Woodlawn Vase after the horse won the 142nd Preakness Stakes horse race at …