China's Tsinghua Threatens To Disrupt Semiconductor Industry, Building $30 Billion DRAM And NAND Fab

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Urzu1000

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I'm tired and I could be misunderstanding something here. If we're facing NAND shortages, isn't it a good thing that the output increases? It will probably harm the companies' profit margins, but having an overabundance of materials would drive down the price for consumers. It could also open markets for competitors in the storage segment that were unable to get a foot in the door before - thereby spurring competition through innovation.
 

dudmont

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Without full privatisation, this venture will never be as efficient or successful as a private business. May it lower the prices for all of us.
 

erendofe

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the concern is, as a state owned company, the government can prop it financially and use as a pawn to disrupt the industry by later flooding the market. This tactic would be very damaging to competition and if enough competitors were to go under china would have a strangle hold on Dram and Nand. it would be a quiet subtle war fought with commerce instead of guns.
 
You don't know how business works in China - if it is state owned, then there is no tariff, it is impervious to trials and has facilitated access to cash. So its products will be cheaper than the compétition,which will make it desirable for all products manufactured in China - including, say, the iPhone 10...
 

anbello262

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Well, this seems like mainly good news, at least from a consumer point of view.
It is only slightly worrying for the US economy, maybe, so I guess it's mostly good news for non-US consumers.
Of course, I don't have the political/economical background necessary to fully apreciate the possible effects of this.
 

zodiacfml

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I feel sorry for Seagate. If this happens, NAND or SSD will become even cheaper. It will make little sense in the enterprise to stay with HDDs while the consumer/mainstream will get by with low capacity drives
 

bit_user

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It's a matter of who gets it, and at what price. Don't assume they're bound to sell it to everyone, or that all buyers will pay the same.

I don't know that state ownership has the same downsides in China as it might, elsewhere. The State is probably very strategic about where, when, and how it decides to profit off its enterprises.

In the long term, if they can drive enough competition out of business (through short-term state subsidies), then prices for consumers might actually end up higher.

See also: monopoly
 

dudmont

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state ownership is state ownership is state ownership..... in the history of mankind, it's always meant the same thing and had the same results. best example I can give you is state owned oil companies.
 

CKKwan

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Storage technology became a key strategic and security area when the world found out that NAS implant malware / spyware into HDD and SSD firmware, which cannot be removed even after reformat and reinstall your OS.

That was why China would like to have their own, and the US also deny china M&A
 

bit_user

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I think you're confusing the "efficiency" argument with competitiveness.

They can out-compete, in the short run, because they have effectively bottomless pockets. Then, in the long run, it doesn't much matter how efficient they are, because they'd have a monopoly. And the barriers to entry are sufficiently high that if any upstart tries to break into their market, they can resume "dumping" and drive them under.

Worse yet, they can sell to other Chinese SEOs at or below cost, and charge more to foreign competitors. This might make it very difficult for non-Chinese phones and SSDs to compete with Chinese brands.

It's really just a question of which markets China wants to dominate.

Did this happen, or is it just theoretical? Even so, it would be possible to circumvent a known-infected SSD by implementing drive encryption at the BIOS level. Not that people do that, but you could.

I think the economic argument is more persuasive.
 

anbello262

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Why would you instantly assume it's rubbish?
 

CKKwan

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Your hard drives were RIDDLED with NSA SPYWARE for YEARS

http://www.theregister.co.uk/2015/02/17/kaspersky_labs_equation_group/

This is why HDD / SSD had became a security concern, and a strategic investment.
 

Lkaos

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It's funny how there always seem to happen a "shortage" of materials when the product's price is going down...Always...Memory, HDD and now SSD...Isnt it funny!?
 

sam1275tom

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Because I have a Chinese friend and myself also used to live there for years, I know exactly what I'm saying.
 

Greg_80

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It was a failed attempt by OPEC to lower the price of crude to crash the United States oil production. It will be a failed attempt by China to corner the Market on this product. Their currency is going to be worth very little very soon. They do not have the wealth of the people top to bottom to keep their governments overspending afloat.
 

shrapnel_indie

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Well, if you can control the supply, you can always adjust for maximum profit from demand. (i.e. OPEC controls the oil in the middle east... OPEC nations enjoy dirt-chear petrol/gas prices, everyone else.... meh... pay much more for the purchase, plus import/shipping costs, plus governmental taxes.) You can create an artificial "shortage" by ramping down or maintaining current levels of demand in the face of higher demand. It's the down-side (and darker side) of capitalism... which is still better than the "some are more equal than others" that runs rampant in socialism and communism.
 

shrapnel_indie

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They may not have the wealth of the people, but they do have the debts of a few nations... for whatever that is worth.
 

anbello262

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In my own personal opinion, I don't think that just living there is enough to judge the quality and performance of some future still-unannounced product. The quality is something that is usually chosen according to the market at hand, and it seems that this is an attempt to really take over the market.

So I'd rather wait until we have some real products and detailed reviews before assuming it will be worthless.
 

bit_user

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Just because I'm American doesn't mean I know everything about all American products.

Anyway, HTC has a pretty good reputation. I don't own any of their products, but they've made some Google Nexus products, and those have a good reputation. They also make something called the Vive, which seems pretty popular.

I think it's naive and dangerous to assume Chinese products will always be inferior. Japanese products were once thought of in this way, then Taiwanese and Korean. Now, TSMC and Samsung are the leading semiconductor foundries. By some accounts, Samsung has even caught up with Intel.

Also, consider that AMD, Nvidia, (both for like 10 years) and many other major US tech companies have engineering offices in China. So, many of the products you perceive as being from the US or elsewhere probably had some Chinese engineering work on them. This also means their workforce has been getting trained up.

Finally, Chinese academics are getting large numbers of research papers published in international journals, and many top-teir academic conferences have been hosted in China, for years. Going forward, there's less and less basis for thinking the US or Europe has a technical lead over China.
 

bit_user

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First, I think it's a mistake to compare raw materials with semiconductors. The cost structures and ramp-up times are very different.

But, if you want to go there, look at what happened with the so-called "rare earth" minerals? China cornered the market on those, and then used it to exert economic & political leverage.

Also, I don't see what's your point about their currency. If they de-value, that makes their products cheaper. But, the exchange rate probably doesn't have much to do with high-value products, like semiconductors. That's why wealthier countries have done better in high-tech manufacturing, even while all the low-tech stuff moved overseas.

No, that's because the oil producers traditionally made so much that they could afford to subsidize the price of petrol. It's really inefficient, since it incentives over-consumption, which then increases the amount they have to subsidize. In the long run, they'd be better off selling petrol at the market rate and just cutting checks to their citizens (which at least some of them also do).
 
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