Despite 20-odd years of trying to grow a domestic IC industry,
In 2000, the deficit was under $10 billion. In 2010 it was over $100 billion, according to
That's a stupendous figure when you take into account that the entire world market for ICs is only $310 billion.
iSuppli reckons that half the world's production of ICs go to
So that means
And
So the deficit was nearer $130 billion.
The Ministry says that the lack of innovation is a threat to national security and the industry's sustained development.
Consequently the Ministry will invest more money in the IC industry.
Of course the stock Western response to this is that money won't deliver innovation.
Innovation comes from free-thinking people with disruptive ideas, is the stock Western view.
And freethinking disruptive ideas men are not the sort of people encouraged by a Communist dictatorship which - whatever its capitalistic business practices -
Now
And the Taiwanese have developed a free-thinking society.
So maybe there's something in the Western belief that innovation requires a free people.
Or maybe the "freethinking disruptive ideas men" (and in China's case definitely women as well) understand that whilst ICs are an essential brick in the value triangle there are higher profits to be had in the upper levels actually using those ICs to make products.
There are actually many innovative Chinese designed and made products now appearing on their internal market. I came across an interesting case the other day where rip-off copies of a Chinese company's product were appearing on the market. Perhaps that will get China to tighten its IP enforcement laws. Nothing quite like executing a few pirates to solve the problem.
I think that this power of free thinking is the only thing that will save the west from economic collapse.
Interesting article!
There is a typo between million and billion.
Thank you Sadasivam, I have corrected it
Yes indeed, Pete, and IMHO that power derives from the superiority of western universities. It is difficult to see how China will improve its universities to the best western standards without allowing freedom of thought and expression and without opening up higher education to a much wider proportion of their population than they now do. I understand the student entrance system is more likely to be based on your connections with The Party than on your brains. That will slow things up too. Japan also needs to change it's attitude that free-thinkers and contrarian-thinkers are anti-social.