Zhongxing storm is undoubtedly a profound education for Chinas semiconductor industry and even the Internet technology industry. Yesterday, Jingdong CEO Liu Qiangdong publicly said that ZTE has slapped all Chinese Internet companies in the face of a slap, and Alibaba recently announced a wholly funded acquisition of chip company Tianwei and invested six chip companies. For a while, the voice of catching up with the national chip industry has been clamour to catch up with the chip industry in the United States. However, determination is good. We should also fully realize the intensity of competition in the semiconductor industry represented by chips. Recently, a report on the leadership of the American semiconductor, published by the American presidential science and Technology Advisory Committee, was published in January 2017, but its repeated references to China could allow us to see the American cut off and the Chinese semiconductor industry. The logic of the development of the industry. logic Since we need to attack China comprehensively, we must be famous. Thus, the article began with a judgement: Historically, the semiconductor market in the world has never been a completely competitive market. The so-called incomplete competition is organic intervention, and the article writes that it is based on the research of the government and academia, and that some of the technology is in a highly restricted state because of the security of national defense. Based on this, the report made second judgments: if we can innovate quickly, we can mitigate the threat posed by China. But once Americas innovation is hindered, competitors can easily catch up. So the fundamental way to stay ahead is to surpass all competitors. In order to make its approach more reasonable, the report also denounced some practices in China, such as we believe that Chinas competition means distorting the market. They rob the US market share by disrupting innovation and making the United States face the risk of homeland security. From this, the report concludes that the US government should not remain silent or pessimistic in the face of the threat of Chinas rise. In the process of innovation, the US government should try to stop Chinas destruction and influence. How do you do it? - The United States should hold talks with China to understand Chinas true intentions, consolidate internal investment security and export controls by joining the alliance, and limit some of the ways in which China is violating international agreements. The United States also needs to adjust relevant agreements on homeland security to prevent possible security threats in China. Indictment On this basis, everything China has done in this field has become a very threatening action for the United States. For example, they admit that Chinas pursuit of semiconductor technology is far behind that of the United States. Chinas advanced manufacturing technology is much inferior to that of the United States, Taiwan and other advanced semiconductor players. There are many semiconductor Fab in China now, but they are 1 to 1.5 years behind the mainstream technology. But backwardness is acceptable, and you cant accept it if you catch up with it. Therefore, such as Chinas promulgation of the IC promotion program in 2014 to promote the development of Chinas semiconductor industry has become a series of negative behavior. The report points out that Chinas semiconductor strategy relies on its huge financial support. This is an investment involving a total of 150 billion dollars and a period of ten years, including state funds and private equity assets. The main purpose of China is to acquire technology through investment and acquisition of advanced enterprises. The US $23 billion acquisition scale over the past five years has been compared with that of the US. In fact, in the United States, the construction strategy of Chinas whole semiconductor, which is divided into two points: subsidies and zero sum games, is ulterior. First of all, the subsidy. As we all know, in order to support the development of the industry, China often provides various subsidies, and the semiconductor industry is no exception. But it cant be tolerated by the United States, they say: In the short term, Chinas subsidies are good for US companies and consumers, which can help reduce costs and product prices. But in the long run, these subsidies will weaken their ability to innovate. For the United States, because China will expand the scope of its sales, this will increase the risk of Homeland Security in the United States. The surplus of production will affect the direct competitors. These subsidies will directly erode the market share of American enterprises and affect the employment status and innovation of enterprises. Lets look at the so-called zero sum game strategy in the report. Forcing or encouraging local consumers to buy products from Chinas semiconductor suppliers, Chinas performance in this regard is outstanding. This will reduce the momentum of global innovation. For those suppliers who are not Chinese, the market is even smaller. Forcing technology to replace the market can reduce the innovation power of American enterprises. This will also lead to the possibility that advanced technology can be replicated rapidly by all enterprises, so that the market will be concentrated in China. With the high concentration of the Chinese market, China has the ability to push technology transfer, which is a vicious circle. Theft of IP. According to media reports, China often steals IP technology in the dark and examines the safe and controllable technologies in the way of censorship to obtain technical details of the related semiconductor. Look, what serious accusations. And it doesnt matter whether there is a real hammer or not. Just looking at this line, this phrase makes people feel very scary. rategy If there is still a sense of reasoning in front of us, the report, when it comes to the strategy part, is blatantly attacking China. For example, it is clear that in order to win, the best way is to run faster, but what they think about is China: in the process of reducing the speed of chasing China, we will face a lot of temptation. Once the United States stops innovating, Chinas leading role in the semiconductor industry is inevitable. Therefore, the key to maintaining the leadership of the United States is continuous innovation. At this point, the American sense of self can be said to be quite good: the United States advocates global opening to trade and investment, which will benefit both the consumer and the global economy; China is more willing to invest in mature companies and industries and continue to invest to help them grow, and the most overcapacity, resulting in the impact of the economy. China has benefited from global openness, but has rarely undertaken corresponding obligations. In many cases, China hinder the normal marketization movement. Moreover, the report also drew a very strange conclusion: do not reflect against Chinas progress. How should that be against that? The report recommends that the US government need to identify special semiconductor technologies and companies and protect them from mergers and acquisitions to avoid possible security threats. Oh, the island sister finally knows why the acquisition of us chips by purple light has been repeatedly defeated. The more ruthless is still behind. There are many ways in the United States to restrict Chinas action. These include formal and informal regulations on Trade and investment, as well as tools for CFIUS unilateral reviews based on homeland security considerations. At present, the effectiveness of these restrictions is still very significant. The United States should take national defense security as a starting point for the measurement of relevant decisions, and in some areas it should not give China any possibility of negotiation, such as Chinas so-called security control in the field of information technology. The United States should take national defense security as a starting point for the measurement of relevant decisions, and in some areas it should not give China any possibility of negotiation, such as Chinas so-called security control in the field of information technology. If Chinese companies get advanced technology products from the US side through government support and eventually push it to the consequences of overcapacity, it will be necessary for our policymakers to consider whether to agree to the Chinese merger. Speaking of this, it seems that the US decision to contain Chinas semiconductor development will not move. For us, it is a necessary step to recognize the reality and move forward.