Taiwan chipmaker: Chinese rivals will face scrutiny over trade secrets
TAIPEI -- A senior executive at Taiwanese memory chipmaker Nanya Technology said Tuesday that Chinese rivals will face increasing global scrutiny over trade secret violations as Beijing aggressively builds up a domestic semiconductor industry in large part by acquiring foreign companies and poaching talent.
"These emerging Chinese competitors will face stricter reviews on how they obtain memory chip technology and whether they are involved in trade secret theft," said President Lee Pei-Ing of Nanya Tech.
"Not only customers from the West would care about whether the memory chips they purchase have any legal issues, but local Chinese device-makers who want to go global will care a lot about the issue too," Lee said.
Nanya Tech is the world's No. 4 player by market share in the production of dynamic random access memory, or DRAM, chips, trailing market leaders Samsung Electronics, SK Hynix and Micron Technology.
DRAM is an essential memory component used in a wide range of electronic devices including PCs, smartphones and data center servers. For now, China does not control any company that can churn out DRAM in large quantities.
Lee said it was unlikely Chinese companies would be able to make memory chips on their own within the next two to three years without licensing technology from existing global players.
Beijing, too, isn't afraid to wade in to protect its nascent industry.
China's National Development and Reform Commission is looking into whether Samsung, the biggest DRAM maker which controls roughly 46% of the global market, has been involved in price manipulation, according to a December report from China's business publication 21st Century Business Herald.
In a sign that things could get bitter, Micron filed a lawsuit last December in the U.S. against its Chinese competitor Fujian Jin Hua Integrated Circuit and Taiwan's United Microelectronics (UMC). Micron alleged that some of its former employees who went to work for UMC stole trade secrets for the Taiwanese company, which were then passed on to Jin Hua.
Before Micron's U.S. lawsuit, UMC and three of the company's employees were indicted by local prosecutors in Taiwan acting on the complaints made by Micron. Earlier in January, as a counter-action, UMC sued Micron for patent infringement in several Chinese cities.
Jin Hua is set to begin production of lower-end specialty DRAM this year.
Another rising DRAM maker in China is Innotron Memory, previously known as Hefei Chang Xin or Hefei Ruili. With support from China's Anhui province, Innotron is planning to begin production in the first half of 2019. Innotron is teaming up with GigaDevice, a Chinese memory chip provider whose second biggest shareholder is Beijing-backed China In tegrated Circuit Industry Investment Fund.
State-backed Tsinghua Unigroup has also announced plans to develop DRAM technology in the southern Chinese city of Nanjing without revealing the source of technology.
Stable DRAM price
Nanya Tech's Lee said he saw DRAM prices in the first half of this year hovering around the current level and perhaps rising a bit, after the more than 50% hike from the third quarter of 2016.
"We see a balanced demand and supply for the first half of this year, but there will be some uncertainties in the second half of 2018," said Lee.
The most robust demand driving the DRAM industry is from data center servers this year, Lee said. Nanya, unlike many Taiwanese tech companies, does not supply to Apple. It mainly caters to Chinese mid-range smartphone-makers and networking equipment providers such as Huawei Technologies and ZTE, and to a wide range of PC and consumer electronics companies.
For all of 2017, Na nya Tech generated revenue of 54.93 billion New Taiwan dollars ($1.85 billion), 32% more than the previous year. Thanks to tight supply and rising demand for DRAM chips, operating profit more than doubled to NT$18.8 billion from a year ago. Net income was a record NT$40.28 billion, mainly due to the disposal of all of its 5.26% holding in Micron.
Sean Yang, an analyst at Shanghai-based research firm CINNO, who sees an upside of about 5% for the whole of 2018. "However, it could be the calm before a storm. We are worried that DRAM price will collapse in 2019 when Samsung Electronics and SK Hynix both begin to churn out products in their new facilities in Korea and China, respectively," said Yang.Source: Google News Taiwan | Netizen 24 Taiwan
China Says Does Not Need Taiwan's Permission to Open New Air Route
China, US, Taiwan all have own interpretations of 'one China'
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Re âStop pretending that Taiwan isnât a countryâ by Jeff Jacoby (Ideas, Jan. 7): âOne Chinaâ is the decades-old concept guiding US-China-Taiwan relations. My research shows that there are five interpretations of it: China has two, the United States has two, and Taiwan has one.
China maintains the âone Chinaâ principle, which advocates for reunification under the âone country, two systemâ formula as practiced in Hong Kong and Macau. This means Taiwan would become subordinated to China and its Communist system. The United States rejects the âone Chinaâ principle because it contains the right to use force against Taiwan to resolve issues.
The United Statesâ âone Chinaâ policy consists of two different frameworks: the âcommuniquÃ©s frameworkâ and what I call the âsecond framework.â The former favors US-China ties, whereas the latter supports US-Taiwan relations. Trumpâs administration favors the second framework. Both frameworks oppose Chinaâs right to use force against Taiwan.Advertisement
China wants the United States to follow the communiquÃ©s framework only, which marginalizes Taiwan. China actively promotes this framework while actively countering the second framework.Get Truth and Consequences in your inbox: Michael A. Cohen takes on the absurdities and hypocrisies of the current political moment. Thank you for signing up! Sign up for more newsletters here
The Kuomintang on Taiwan has one interpretation, which backs unification with China under the system of democracy. Although the Democratic Progressive Party holds political power on Taiwan now, and wants to abandon âone China,â the principle itself, contra ry to Jacobyâs contention, is far from being dead.
The writer is the project manager of the East Asia Peace and Security Initiative. She worked in China for nearly 10 years and was a former research fellow on Taiwan, sponsored by Taiwanâs Ministry of Foreign Affairs.Source: Google News Taiwan | Netizen 24 Taiwan