robert maire president semiconductor advisors...
TRANSCRIPT
RobertMairePresidentSemiconductorAdvisorsLLC
SemiconductorAdvisorsLLC
¡ ChinaInvestments&AspirationsintheSemiconductorIndustry¡ Regulatoryissues-CFIUS¡ Currentadministrationpolicy&direction¡ Taiwan–TSMCandthesemiconductorindustry¡ Tradesecrets,espionage,IPprotection¡ The“DoubleEdgeSword”
SemiconductorAdvisorsLLC
¡ BroadcomacquisitionofQualcomm-Blocked¡ ChinesehandsetmakerZTEbannedfrombuyingUSsemiconductors
¡ LatticeacquisitionbyCanyonBridge–Blocked¡ XcerraacquisitionbyHubeiXinyan–Blocked¡ Aixtron(AGermancompany)acquisitionbyGrandChip–Blocked¡ FoxconntriedtobuyToshiba’sChipbusiness¡ Barrons–“ChipsLoomasaTargetifChinaTradeDisputeExpands”¡ Semiwatch–USSemiequipmentsalestoChinablocked(Aprilfoolsornot)
SemiconductorAdvisorsLLC
¡ Chinaconsumesmorethan60%ofchipsyetproduceslessthan15%
¡ Onefundof$21B–Totalfundsofover$100B§ NationalIntegratedCircuitryInvestmentFund
¡ Goal-TosupplythemajorityofChipsconsumedbyChineseElectronics
¡ TobecomeindependentoftheUSandothercountries§ ConcernsaboutUSleverageoverChinaChipshasskyrocketed§ PresidentXihasdirectlyaddressedtheissue
¡ TobetheleaderinAI,VR&5Getc;Semiconductorsarecrucialingredient
¡ Toincrease&dominateintelligence&defensetechnology§ Largestvideosurveillancesystemintheworld
SemiconductorAdvisorsLLC
SemiconductorAdvisorsLLC
SemiconductorAdvisorsLLC
SemiconductorAdvisorsLLC
¡ Tradehasemergedasthenumberoneinternationalissue(Afterthewall….)
¡ Chinaisatthetopofthelistoftradecomplaints¡ Sanctionsandtariffshavebeenfastandfurious¡ TitforTatincreaseshavebeengoingon-escalatingtensions¡ Chinacan’trespond100%totariffsduetomassivetradeimbalance
§ ChinadidrespondbyblockingQualcommacquisitionofNXP§ ThistriestoreduceUSdominancein5Gtechnology
¡ Thecurrenttradeissuere-doublesChina’sefforttobecomechipindependent
¡ China’sconcernsaboutsemiconductorsareequalpartsstrategic&economic
SemiconductorAdvisorsLLC
¡ Taiwanisviewedasa“Run–Away”provinceofChina§ Seerecentairlinelabelingissue
¡ Re-unificationisviewedasinevitable–PRCsaysbyforceifneeded¡ In1996,whenChinawasshootingmissilesoverTaiwan,wewroteanarticleabouttheimportanceofTaiwantothePCindustry(atthattimethecoreofalltech)asitproduced100%ofallmotherboards
¡ GetTaiwanandyougetTSMC¡ GetTSMCandyoubecomenumberoneinfoundry¡ GetTSMC&youhaveleverageoverApple,Qualcomm&UScompanies
SemiconductorAdvisorsLLC
¡ SMIC,China’slargestfoundryandmostadvancedwasprohibitedfrombuyingthelatestgenerationofUSsemiconductorequipmenttoolsastheUSdefensedepartmentwasconcernedaboutSMICasadualusefacility(commercial&military).ThispermanentlykeptSMICatthetrailingedge.
¡ TheUSdepartmentofdefensehadtheabilitytodo”inspections”onsiteinChina,atSMICtoinsurecompliance
¡ HowwouldpeopleintheUSfeeliftheChinesecould“inspect”Intel’sfabs?
¡ Theconcernoverselfsufficiencyinsemiconductorsislikelyjustified
SemiconductorAdvisorsLLC
SemiconductorAdvisorsLLC
¡ TherehasbeenlongstandingconcernsaboutKoreancopiesofUStools
¡ SamsunghasfosteredlocalcompetitorstoUScompanieswithsimilartools
¡ IssueswillbemanytimesworseinChinaasittriestorapidlygrow¡ Veeco&AMECisthetextbookexampleofwhatwillhappeninChina
§ VeecosoldMOCVDtoolsprimarilytoChinesecustomers§ AMECcopiedsomeaspectsofthetool&Veecosued,haltingsales§ AMECcountersued,stoppedVeeco&ChinesecourtssupportedAMEC§ Veecoisina“nowin”situation&willloseitsbiggestmarket
¡ TheUSslowingtechnologysalestoChinawillresultintheaccelerationofIPtheft,muchworsethanexperiencedinanyothermarket
SemiconductorAdvisorsLLC
¡ SamuelSlater,“thefatheroftheAmericanindustrialrevolution”copiedBritishcottonmillsandstartedtheUSindustrialrevolutiononcopiedBritishtechnology
¡ Wascalled“SlatertheTraitor”
SemiconductorAdvisorsLLC
¡ HeadedbytheUSTreasurysecretary¡ Representativesfrom16agencies–Defense,Commerce,State,Homeland
¡ EstablishedbyPresidentFordin1975¡ Reviewfor30daysormore-Canaskfor“resolutions”toissues¡ SendsrecommendationtoPresidentforfinalyeaornay
SemiconductorAdvisorsLLC
¡ WascreatedduringtheCarteradministrationtodealwiththeIranianhostagesituation
¡ TheIEEPAauthorizesthepresidenttodeclaretheexistenceofan"unusualandextraordinarythreat...tothenationalsecurity,foreignpolicy,oreconomyoftheUnitedStates"thatoriginates"inwholeorsubstantialpartoutsidetheUnitedStates."Itfurtherauthorizesthepresident,aftersuchadeclaration,toblocktransactionsandfreezeassetstodealwiththethreat.IntheeventofanactualattackontheUnitedStates,thepresidentcanalsoconfiscatepropertyconnectedwithacountry,group,orpersonthataidedintheattack
¡ TheIEEPAcanbeusedtoblockthesaleoftechnology
¡ ZTEcomponentsaleswereblockedbythecommercedepartmentafterZTEviolatedtradesanctionsonIranandNorthKoreaaswellasallegationsoftrojanhorsesoftware
SemiconductorAdvisorsLLC
¡ AftermakingZTEtheposterchildasa“badactor”Chinesecompany,theadministrationhasdonea180,“tosaveChinesejobs”andwillapparentlynullifytheblockadeofchipsales
¡ UScompaniesprovideapproximately60%bydollarvolumeofsemiconductorcontentintheirlatestphones
¡ MostUScompaniesandagenciesstillwillnotselloruseZTEphones
SemiconductorAdvisorsLLC
¡ Googlehasbeenfrustrated¡ Uberhasbeenshutoutandgaveupandsoldout¡ AppleisbeingforcedtogiveupIPandcontrol¡ IntelbuiltafabinChinaasa“QuidproQuo”¡ UScompaniescan’towna51%stakeinoperationsinChina¡ Chinahassomeofthestrongestprotectionistpoliciesandlegislation
¡ Report:“MadeinChina2025”byUSChamberofCommerce
SemiconductorAdvisorsLLC
¡ SemiconductorandsemiconductorequipmentmakerscanillaffordtoignoreorstayoutoftheChinamarket
¡ OneoutofthreeIphonessoldareinChina¡ LastyearChinawas20%ofApplerevenueat$45B¡ 65%ofQualcommsbusinesswasChina¡ Chinawas23%ofIntelsbusiness¡ MostoftheupsideinthesemiconductorequipmentindustryisthebuildupofdomesticfabcapacityinChina
SemiconductorAdvisorsLLC
SemiconductorAdvisorsLLC
SemiconductorAdvisorsLLC
¡ BoththeLEDandsolarpanelindustriesweredestroyedbyChina’sentranceintotherespectivemarkets.
¡ Thesemiconductormarketissignificantlydifferentasmostlogicsemiconductordevicesarenot“commodities”likeLED&solarpanels
¡ ThebiggerriskistothememorymarketofbothNANDandDRAM,whicharecommoditiesmuchlikeLED&solar
¡ ItismoredifficultforChinatorun“ataloss”inmemorygiventheveryhighcapitalcostsascomparedtolowcapitalcostsforsolarandLED§ $50Mversus$7B
SemiconductorAdvisorsLLC
¡ MuchlikeJapan,Taiwan&Koreabeforethem,Chinaenteringthesemiconductorindustryisanormalprogressionofmodernization
¡ TheUSwillalsoneedalternativesupplierslikeMicron&GloFo¡ TheUScanparticipateandprofitinChina–Ahuuuugemarket¡ Everyonemustparticipatewitheyeswideopentorisks¡ TheUSgovernmentcanhelpleveltheplayingfieldoftrade&IPconcerns
¡ ChinawilllikelybefasterthanJapan,KoreaorTaiwaninbuildup¡ USmustpromote&protect&investinnewtech–AI,VR,IOTetc;¡ Chinaremainsaverysharpdoubleedgeswordthatcutsbothways
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¡ Q&A
SemiconductorAdvisorsLLC