5/7(Tue) ‘China First’: China’s semiconductor expansion (Host: Winston)

[李昰翰]

‘China First’: China’s semiconductor expansion



Reference article:
https://english.cw.com.tw/article/artic ... on?id=3671


SESSION ONE:
Excerpt1. In January 2024, the United States Department of Commerce initiated a new survey on the U.S. semiconductor supply chain and the national security risks posed by China. At about the same time, the European Union revealed that it was planning to pursue a similar information-gathering process to see if blocking China’s advantages in these mature processes was warranted.

Q1. What was it that prompted the U.S. and Europe to initiate these surveys?
Can you offer your observation and viewpoints from political, economic, and commercial spheres respectively?


Excerpt2. We found that based on China’s existing and planned factories in the sector, it intends to double its current capacity within the next few years, resulting in potential output five-times that of Taiwan-based foundry United Microelectronics Corporation, which offers a broad line of mature semiconductor technologies. Though such projections have yet to materialize, they are already causing the U.S. and Europe to break out in a cold sweat.

Q2. Who will be injured the most by the over-capacity on matured processes of semiconductor manufacturing from China? The matured processes of semiconductor which was supposedly regarded less sensitive on high end technology before, and why does it still arouse U.S. and Europe’s concerns on China’s ambition?


Ecerpt3. There have been several dimensions to China’s strategy.
Dimension No. 1: SMIC Looking to Double Capacity
Dimension No. 2: Low Prices Hurting Taiwanese Vendors
Dimension No. 3: ‘State-owned Asset Losses’?
Dimension No. 4: ‘Planning’ vs. ‘Reality’

Q3. What are your comments on China’s strategy? Do you think China will fulfill her ambitious plan on self-reliance for its demand on semiconductors? What are China’s strength and weakness? For China’s semiconductor plan, is it purely for economic and commercial intention?


Exerp4. If SMIC’s factory expansion goes to plan, it will eventually be able to produce 1.097 million 12-inch wafers a month, tripling its capacity in 2023, according to TrendForce data. One Taiwanese industry expert described that as “over the top.” In the past three years, SMIC has opened at least four new 12-inch wafer fabs, almost all of which were backed by local governments, which contributed nearly half of the capital. (Source: AFP)

Q4. One Taiwanese industry expert described SMIC’s (中芯國際) capacity as “over the top”; what’s wrong with SMIC’s capacity expansion? And what’s your comment on SMIC’s wafer fabs expansion nealy half of the capital backed by China’s local government? Do you think the subsidies by China government will distort the market competition?



SESSION TWO:
Excerpt 5. The added capacity bought by this substantial windfall has led to steep price cuts by Chinese vendors over the past year to fill their capacity, giving some Taiwanese companies headaches.
Taiwan's second-tier foundries have felt the price wars of China's mature process manufacturers, and capacity utilization has been greatly impacted. (Source: Getty Images)

Q5. Do you think Taiwanese vendors can survive from China’s price war by her mature process manufacturers? How should Taiwanese vendors react to China’s self-sufficiency policy on semiconductor?
“China first” will bring what sorts of implications to Taiwan?


Q6. Do you think China’s “low price” strategy will win the semiconductor market, just like what they duplicate on LCD panels, solar panels, emerging expansion on electric car market, steels.,etc backed by China government’s support on huge grants. What are Taiwanese vendor’s strategies for survival on this trend? What will be the implication to Taiwan from “China first” trend?


Q7. Why does China so aggressively expand their semiconductor industry? What are the responses from other countries for China’s semiconductor expansion? Why are there so many countries concerned about semiconductor industries? What trend is an on-going formula forming? Will it gradually erode Taiwan’s semiconductor strength? What are the challenges and opportunities for Taiwan’s semiconductor industry future?

==============================================================================================
Agenda

6:45 ~ 7:00pm Greetings & Free Talk / Ordering Beverage or Meal / Getting Newcomer’s Information
7:00 ~ 7:10pm Opening Remarks / Newcomer’s Self-introduction / Grouping
(Session I)
7:10 ~ 7:45pm Discussion Session (35 mins)
7:45 ~ 8:00pm Summarization (15 mins)
8:00 ~ 8:05pm Regrouping / Instruction Giving / Taking a 5 Minutes Break (Intermission)
(Session II)
8:05 ~ 8:40pm Discussion Session (35 mins)
8:40 ~ 8:55pm Summarization (15 mins)
8:55 ~ 9:00pm Concluding Remarks / Announcements

Meeting Date: As shown on the Subject Line
Meeting Time: 7:00pm – 9:00pm
Meeting Venue: 丹堤咖啡 Dante Coffee (Minimum Order $100)
Address: 台北市濟南路三段25號[MAP]-捷運忠孝新生站3號出口步行3分鐘

Important Notes:
1. We advise participants to print out the discussion questions and bring them to the meeting for reference. As for the supporting articles, feel free to print them out, as well, according to your preference.
2. We suggest that participants read the articles and think about the questions in advance.
3. Newcomers should prepare a two-to-three minute self-introduction in English to deliver when called upon by the host before the start of the discussion. The host may also ask you to give brief feedback about the meeting at the conclusion of the meeting.
4. We conduct the entire meeting in English. All participants should have at least moderate English-conversation skills and be able to articulate your ideas for each discussion question.
5. We welcome newcomers and other guests to attend the meetings and join the discussion freely for two times. After that, we hope you will consider becoming a YoYo English Club member. We charge a NT$1500 lifetime membership fee, or NT$1000 for students.

[李昰翰]

Bring to top

[Luis Ko]

Q4. One Taiwanese industry expert described SMIC’s (中芯國際) capacity as “over the top”; what’s wrong with SMIC’s capacity expansion? And what’s your comment on SMIC’s wafer fabs expansion nealy half of the capital backed by China’s local government? Do you think the subsidies by China government will distort the market competition?



It's quite interesting that those from so called democracy countries are always concerned about Chinese companies have the government got their backs that would distort the market competition, but they have never cared about the US government's intervention in the market. Instead of concerns, they follow suit. They take the order of all the embargos laid by the US towards Chinese companies! I wonder if that's because "democracy" is always justifiable!?

By the way, I don't think there's any problem if private companies got support from governments. since businesses is about money competition, it doesn't matter if it's from government or private sector, there will always be someone richer than the others. You won't say it's unfair for a company to have someone very rich or other very rich companies to fund them, will you!?