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China Has Semiconductor Fund Plans Underway To Try And Beat The U.S. In The Future Race For Semiconductor Technology Superiority

ArmchairTechInvestor, May 6, 2018, by Brad Peery

Book Under Development-Simon and Schuster: China vs. U.S. 2018, A Police State vs. A Democracy
Book on Trump’s Political Agenda and Achievements,

In 2013, Chinese government officials invaded the Beijing and Shanghai offices of Qualcomm. After a 15-month investigation, regulators saddled the company with a $975 million fine. In addition to the fine, Qualcomm:
• Was branded a monopoly;
• Was forced to reduce prices;
• Had to move more of its technical manufacturing to China;
• And, help boost the technological abilities of Chinese companies.
By 2018, a growing number of American companies “have complained that China has pressured them into sharing their technology in similar ways”.

The U.S. is finally standing up to an aggressive China by confronting large Chinese companies that are trying to enter the U.S. market, and could threaten U.S. security. Qualcomm, a worldwide leader in semiconductor technology, was threatened by an unfriendly takeover by Broadcom, a Singapore-based company. The U.S. blocked the acquisition on national security grounds. There were several concerns. The acquisition of Qualcomm could have reduced U.S. superiority in semiconductors. It could also have reduced the U.S. lead in next generation 5G broadband networks. Qualcomm has a large business in China, and China has threatened to block Qualcomm has made an offer to acquire NXP Semiconductors, an important part of its growth strategy. The acquisition has been stalled by an antitrust review. In early May, 2018, “Chinese officials said that Qualcomm will have to make more concessions to compensate for the market power it would enjoy after completing the deal, without providing details.”

China has used the national security threat issue as a way to protect Chinese companies. China is still considered to be an emerging country under the World Trade Organization rules, showing how antiquated is the WTO.
*Qualcomm May Be Collateral Damage in a U.S.-China Trade War
New York Times, By Ana Swanson and Alexandra Stevenson, April 18, 2018

**China announced plans to significantly improve the competitiveness of Its state and Chinese semiconductor companies when it launched a $21.8 billion semiconductor development fund in 2014. A U.S. Trade Representative’s report on March 22, 2018 declared the 2014 fund as an effort by government agencies and state-owned companies to meet Chinese national strategic objectives.

China has also announced a new fund that could total about $47.4 billion. Important semiconductor industry sectors it will support are likely to include microprocessors and graphic processors. The objective is to reduce China’s dependence on foreign semiconductor products from companies such as Qualcomm, IBM and Nvidia.
**China Plans Fund to Boost Semiconductors, Wall Street Journal, By Yoko Kubota, May 5, 2015

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