Recently Chinese CPUs made their way to global markets and promised to match the CPU speed of Intel and AMD at fraction of the cost… I bet Wall Mart will be selling Chinese CPUs very soon. If the following news is true then it is a technological POWERHOUSE in the making.
http://www.mercurynews.com/mld/mercurynews/business/8184129.htm
Posted on Sun, Mar. 14, 2004
China, partner to U.S. tech firms, is also a fast-growing threat
By Kristi Heim
Mercury News
Propelled by a decade of stunning economic growth, China is racing to build a world-class technology industry, a prospect that is exciting and, increasingly, unsettling Silicon Valley.
China’s appeal comes from its huge and fast-developing domestic market and its growing importance as a manufacturing partner for the world’s tech companies.
The uneasiness comes from China’s unexpectedly rapid progress toward its goal of becoming a center of both innovation and manufacturing that could challenge the valley and other U.S. tech centers.
I don't know of a CEO in Silicon Valley today who doesn't have a plan for doing business with China,'' said James Morgan, chief executive of Applied Materials, a Santa Clara maker of equipment for the chip industry that has seen its sales in China grow significantly as it fills demand from Chinese chip-makers. And if they don’t, they better get one fast.‘’
Yet China’s emergence in tech stirs anxiety about U.S. competitiveness. ``The great American Dream is moving to Shanghai,‘’ said Brian Halla, chairman of National Semiconductor, which is opening a state-of-the-art testing and assembly plant near Shanghai as part of a $200 million expansion in China.
Increasingly, China is seeking to use its buying power to dictate separate technical standards for products sold within its borders, hoping to give a leg up to its own producers.
That prospect bothers U.S. tech companies like Intel, which believe in a more global standards approach. Last week, Intel, a major investor in China, said it wouldn’t conform to the Chinese government’s requirement that imported wireless-networking products carry its security technology by June 1, potentially ending sales of some of its wireless chips there.
China still faces some huge obstacles, such as a potential banking crisis stemming from bad loans and a growing gap between urban rich and rural poor that could ignite social tension. An unexpected event like the severe acute respiratory syndrome outbreak also could be disruptive.
Still, many Chinese express confidence.
Chinese brands are now the top-selling cell phones in China, and that's one-fourth of the cell phone market in the world,'' said Ping Wu, president of Spreadtrum, a Shanghai start-up that designs chips for wireless communications. We are definitely a future star.‘’
Signs of the tech boom are seen throughout China.
In Beijing, where ambitious students such as Rachel Zhu are learning design skills at Peking University’s new school of software, young Chinese spend hours in virtual worlds battling each other in online video games.
On Shanghai’s ultra-modern light-rail system, commuters chat on mobile phones, work on laptops or watch videos on the train’s flat-screen monitors.
Semiconductor factories are rising on former farmland. High-tech districts brimming with start-ups, as well as universities, are replicating the Silicon Valley model in China’s sprawling cities.
Semiconductor Manufacturing International Corp., China’s leading chip company, attracts employees with stock options and plans to go public in New York and Hong Kong this week.
Legend, China’s largest PC maker, sells mostly inside China, but is using profits to bankroll an expansion overseas, where it plans to promote its own brand name.
Silicon Valley is contributing: Intel, which employs 2,400 workers throughout China, will have invested more than $1 billion there by the end of 2005, producing chips and hiring Chinese engineers for development work.
And there are signs of a Silicon Valley brain drain, as entrepreneurs such as Wayne Dai, head of a Shanghai chip-design start-up, leave California to stake a claim in China’s tech boom.
But some in the U.S. tech industry worry that the flow of investment and the transfer of technology are helping a partner become an emerging rival.
China already has gobbled up a large share of the world’s manufacturing, churning out televisions, computer monitors, personal computers, mobile phones and other electronics. Now it is quickly moving up to make more sophisticated products such as computer chips and network switches.
Its abundant technical brainpower – about 220,000 bachelor’s degrees in engineering were awarded in 2002, compared with 60,000 in the United States – is enabling the country to move into high-tech design and development work.
And the Chinese government is on a mission to make information technology a pillar of the national economy. It has targeted semiconductors and software, introducing incentives like cheap land and tax breaks for new companies.
Silicon Valley workers displaced by offshoring worry that Chinese engineering graduates may take their place as more high-level technical work moves to China.
``The health of the U.S. tech industry is rapidly declining, and U.S. high-technology leadership is not guaranteed,‘’ said George Scalise, president of the Semiconductor Industry Association and member of the President’s Council of Advisors on Science and Technology.
China’s rise as a tech power is being likened to the threat Japan appeared to pose to U.S. economic and technological leadership in the 1980s. Japan, however, never overtook the United States as a leader in high-tech innovation. Some U.S. technologists give China better prospects.
Japan’s smaller population, tradition of management by consensus, and relative lack of entrepreneurship limited its ability to challenge for tech leadership, Scalise said.
``Japan reached a saturation point in terms of its ability to take on more of what was going on in the tech world much, much sooner than China will,‘’ he said.
``There is a true tradition of entrepreneurial energy in China and we are going to see a lot of companies, a lot of new things, going on there because of that.‘’
