Tag: China

Intel buying its way into China

Intel Q4_14_ResultsMegachip maker Intel has decided that the only way to get around the inscrutable Chinese is to invest in shed loads of scrute and buy its way into the market.

Intel is pouring billions of dollars into expanding its influence in China, where fewer than half the country’s roughly 500 million mobile phone users have smartphones and the market is ruled by Qualcomm.

Intel is apparently trying to use its relationship with PC clients in China as a foot in the door to mobile devices. It is chummy with Lenovo, the No. 1 global PC seller, and its hardware powers a handful of Lenovo smartphones. It is also mates with Chinese internet giant Tencent, which includes a joint research centre, helps ensure that the WeChat maker’s software works smoothly with Intel chips.

Intel paid $1.5 billion in September for a 20 percent stake in state-run Tsinghua Unigroup, which controls two domestic mobile chipmakers. It did not need to spend that much, in some observers thought that it was double the outfit’s value. In December, Intel said it would pay $1.6 billion to upgrade its factory in the central Chinese city of Chengdu, which cost $300 million to build a decade ago. The plant, designed for back-end testing, will absorb some of the work previously done in a shuttered Costa Rican facility.

That appears to suggest that Chipzilla is shifting a lot of its tech to China. The idea being that it will intergrate itself into the local supply chain and impress the Chinese officials, who are having a few problems with Qualcomm. Intel may be more favorably treated by Chinese regulators because of its stake in Tsinghua Unigroup—as well as its willingness to build high-end local labs. So far, Intel hasn’t been touched in China’s crackdown on foreign companies.

The next battle is believed to be for wearable tech and if Intel has invested in Chinese start-ups it might have a leg-up and a way to make these as cheap as possible.

Samsung starts trading in Chinese currency

samsung-hqSamsung Electronics has announced that it will start trading the Chinese currency directly with the South Korean won.

The news came as the South Korean government announced that it hoped to sign a final free trade agreement with China within the first half of the year, in a further sign of strengthening relations between the countries.

South Korea is the third country in the world to begin direct trading of the yuan for a local currency in December under the aim of grabbing a larger share of the growing business opportunities involving the yuan outside China.

With a big player like Samsung taking part, the thought is that other big companies will join in.

Samsung said in a statement it was “looking into starting won-yuan direct trading”. It did not elaborate, but traders said such a move would be a big boost for the market, which until now has been in operation led by banks.

“The fact that there’s real demand and supply for commercial purposes carries a big significance even though the amount is small,” said one currency dealer at a local bank.

South Korea has been encouraging companies trading with China to settle transactions with the yuan or the won instead of the US dollar, but actual use of the local currencies in trade deals remains very low.

Samsung uses the currency market to settle direct transactions between its headquarters and its foreign subsidiaries, and it is not clear how much influence it can make on the market on its own.

AMD might get lots of Chinese cash

 Photo of China from satellite - Wikimedia CommonsThe dark satanic rumour mill has manufactured a hell on earth yarn which suggests that AMD might be set to expand thanks to wodges of Chinese cash being thrown at it.

Since Intel paid AMD a billion for its anti-trust doings,  AMD’s bottom line has not been that good.

However it is still in a good position to churn out processors and video cards. This would make it a good deal for a buy out.  Some have suggested Samsung, but others Qualcomm.

But there is also one name which is cropping up on the rumour mill a lot more — a Chinese company called BLX IC Design Corp.

The sticking point to any buy out is that it would require the renegotiation of the licence with Intel over the x86 architecture, however an investment by a third company would work. Trade restrictions by the US government could prevent an outright purchase by an institution run by the Chinese government, but the US loves Chinese cash.

BLX has collaborated with AMD in the past, and does not need to buy the company to get what it wants.

The rumour, looked at  by Tom’s Hardware suggests that BLX IC Design could buy a share of AMD .  It controls the manufacturer of microprocessors Loongson Technology (MIPS architecture, family Godson), may make a strategic investment in technologies and products from AMD with the Chinese Academy of Sciences.

The Chinese chip designer could provide enough money to AMD to increase its capacity for research and development. The budget of AMD in research and development for this quarter will be about $ 200 million, well below the historical spending. As the company’s sales are shrinking, will not increase spending in this area, which could jeopardize its future and the long-term survival.

AMD bosses were in Beijing in late January and early February for meetings related to the possible deal.

Armed with Chinese cash, AMD could damage Intel with projects like Zen and K12 and put the fear of god into Nvidia. Its new partners could help it make inroads into the huge Chinese market and provide the Chinese semiconductor industry with much needed patents and R&D.


TSMC flees Chinese unions

tsmcTSMC is set to invest US$15.8 billion in the Central Taiwan Science Park (CTSP).

The outfit is set to start building its 18-inch wafer foundry in March which will apply the 10 nanometre manufacturing process with a target for mass production in 2017.

However the location of the plant, away from mainland China has raised an eyebrow or two.

Last year the BBC ran a yarn about how China’s labour unions were getting antsy at Apple’s broken promises on work conditions.

Apple’s response to the BBC’s report at the time was that it strongly disagreed: “We are aware of no other company doing as much as Apple to ensure fair and safe working conditions. We work with suppliers to address shortfalls, and we see continuous and significant improvement, but we know our work is never done.”

However, another news site in China is reporting that “in response to the growing criticism of Foxconn’s treatment of its employees, the company has invited its critics to visit its production bases to get a better understanding of its operations”. During the visit, the critics could also talk to the employees to hear their views,” Foxconn said.

But it is starting to look like another row is flaring up between Foxconn via the labour unions – this time  it is about overtime. It seems that there has been a rash of suicides at its plant, and the unions are blaming them on the overtime.

So it does seem that Foxconn is avoiding any conflict with the Chinese unions getting in the way of its relationship with Apple by shifting its new plant to Taiwan.


China internet users number 649 million

chinaflagThere are now 649 million Chinese people with internet access, according to a government report.
And, significantly, a large percentage of those people use smartphones or mobile phones to access the net.
At the end of 2012, there were only 564 million people able to access the web, said the China Internet Network Information Centre.
While the 2014 figures showed a modest growth, there is still room for vendors because internet penetration is only 47.9 percent of the population – with many of those people living in rural areas.
Reuters reports that smartphone sales aren’t doing so well.  It quotes government figures that showed 389 smartphones shipped in China in 2014, a drop from 423 million in 2013.
Some players like Google, Facebook and Twitter have practically no presence in mainland China.
The authorities there routinely censor many web sites and keep a sharp eye for blogs related to politics or to pornography.


Intel carries on wasting money

Intel Q4_14_ResultsChip giant Intel is being stubborn about its mobile strategy and will continue to throw money at the problem.
The firm has attempted to make headway in the tablet and smartphone market but has wasted around $7 billion so far without very much result.
Now, according to Taiwanese wire Digitimes, there’s evidence that Intel is going to carry on wasting money in a segment that has brought it nothing but woe so far.
Digitimes said that it is in cahoots with Chinese firms Spreadtrum and Rockchip and wants to continue to compete with Qualcomm and Mediatek in these markets.
The report claimed that it has licensed its X86 tech to both companies in a bid to ramp up its mobile business.
The report said Spreadtrum will release a number of system on a chip devices in the second half of this year.
Intel apparently wants to be a leader in the much hyped “internet of things”.


AMD rumoured to be up for sale

AMD, SunnyvaleFinancial analysts on Wall Street yesterday gave credence to rumours that Advanced Micro Devices (AMD) is up for sale.
The putative buyer is rumoured to be a Chinese company but there are caveats around such a deal.
For example, AMD’s licence agreement with chip behemoth Intel would fall into desuetude if such a sale was to go ahead.
But the company may be worth something even without that element, given that AMD’s X86 business isn’t that important any more.  Its graphics business continues to do well.
AMD’s share price closed yesterday at $2.70.
On the 20th of January, AMD released its fourth quarter results, showing revenues of $1.24 billion – down 22 percent compared to the same quarter the year before.
Newly sprung CEO Dr Lisa Su said then AMD had made some progress diversifying its business but admitted its PC business faced challenges.
It is facing “channel headwinds” in its computing and graphics segment, she said then.


US rules China, Taiwan dumping solar panels

solarsTrade protection organisation the US International Trade Commission (ITC) has confirmed that Chinese and Taiwanese manufacturers of photo voltaic products are dumping them.
Both anti-dumping and countervailing duties will be levied on imports to the USA from China, while anti-dumping tariffs will be imposed on product from Taiwan.
According to market intelligence firm Trendforce, Chinese PV models will face swingeing minimum tariff of 70 percent.
Taiwanese manufacturers get off much more lightly, with rates in between 12 to 27 percent.
The US ITC acts to prevent home grown manufacturers from being penalised when supplies exceed demand.
Trendforce said that solar cell firms in Taiwan are operating zero margins.
Some Chinese vendors have already relocated their PV manufacturing facilities, and that’s something Taiwanese firms will have to do a similar thing in order to stay afloat.

China steps up internet censorship

chinaflagIn its continuing move to restrict access to internet content the government doesn’t like, China shut down dozens of websites and social media accounts today.
That’s according to Reuters, which said the prohibited content applies to political news, pornography, and other perceived violations.
The “office of the central leading group for cyberspace affairs” said violations not include pornography or writing political material, but material related to gambling.
The cyberspace censors have closed close to 1.8 million accounts on social networking and messaging sites, and the “office” plans to publish a list of those who have violated its strictures.
China already operates a policy to preclude a number of websites and services including YouTube, Google, and any site which dares to mention Falun Gong.
Other countries also restrict access to the internet for political reasons, but it’s widely recognised that China’s so-called “Great Firewall” is the most effective.


China blocks Gmail

Photo of China from satellite - Wikimedia CommonsReports said that the Chinese government blocked access to Gmail accounts on Friday in a bid to further throttle Google.

A freedom of speech group, GreatFire.org, claimed the government was making an attempt to wipe out any Google presence in mainland China, according to a Reuters report.

While practically all of Google’s services have been throttled in mainland China, its email service Gmail was available to people until a block was imposed on Friday.

That block is still in place today. The Chinese government operates a regime which some have dubbed the Great Firewall of China which prevents citizens from seeing internet content that it doesn’t like.

China does not officially admit that it censors some internet services and maintains that it’s all in favour of foreign investment.

Apart from Google.

Qualcomm’s Chinese nightmare to spread

1900-intl-forces-including-us-marines-enter-beijing-to-put-down-boxer-rebellion-which-was-aimed-at-ridding-china-of-foreigners-Making China’s antitrust probe go away is going to cost Qualcom more in the long run.

Word on the street is that other countries are going to have a look at the firm’s highly profitable patent licensing business, and may even call into question its worldwide contracts with smartphone makers such as Apple and Samsung.

China’s National Development and Reform Commission (NDRC) is close to completing a 13-month investigation into the US chipmaker as soon as possible.  It will almost certainly mean that Qualcomm will have to write a cheque for a record fine and change the way it licenses its technology to handset makers in China.

Qualcomm has tried to paint the situation as being part of the sort of problems western companies have working in China but it seems that the mess will not end behind the bamboo curtain. Anti-trust probes in Europe and by the US Federal Trade Commission (FTC) seem to be connected to China’s investigation, Qualcomm has admitted.

Qualcomm is the top patent holder for mobile phone technology, including many that form industry standards like CDMA and LTE. Charging royalties based on the mobile phone selling prices, even those made with competitors’ chips, provided more than half of its $8 billion net income in 2014.

The NDRC, one of China’s anti-trust regulators, has said it suspects Qualcomm of overcharging and abusing its market position in wireless communication standards.

Qualcomm is expected by industry sources to agree to changes in how it charges royalties on mobiles flogged in China, which will hurt its bottom line.

It could affect its contractual relationships not just with local manufacturers such as Huawei, Lenovo, ZTE and Xiaomi, but also with bigger global players that make and sell phones in China, such as Apple Inc. and Samsung Electronics.

China havers over North Korea hack allegations

Kim Jong Un, courtesy of North Korea news agencyNorth Korea’s only ally, mainland China, has condemned the hacks on Sony but said there is no proof it was behind the attacks on the movie company.

A report in Reuters quoted a spokesperson as saying that while China was against any cyberattacks and cyber terrorism, there is no proof that North Korea was the culprit.

North Korea claims that it had no idea which individual or group had hacked Sony Pictures but its press agency said “we can surely say that they are supporters and sympathisers with the DPRK”.

It threatened action against the US which it described as “the cesspool of terrorism”.  US president Obama said his country would take action against the perpetrators of the hack, but did not specify what such action would be.

In a statement, the official North Korea news agency said the USA should “honestly apologise to makind for its evil doing”.

North Korea “highly estimates the righteous action taken by the guardians of peace, though it is not aware of their residence”.

It continued: “The army and people of the DPRK who aspire after justice and truth and value conscience have hundreds of millions of supporters and sympathizers, known or unknown, who have turned out in the sacred war against terrorism and the U.S. imperialists, the chieftain of aggression, to accomplish the just cause.”

USA bodies have, in the past, accused the Chinese government of being behind cyber attacks.

Apple breaks promises on Chinese suppliers

appleApple products continue to be made by workers in shocking conditions, despite promises from Jobs’ Mob to the contrary, according to an undercover BBC Panorama investigation.

Panorama found standards on workers’ hours, ID cards, dormitories, work meetings and juvenile workers were being breached at the Pegatron factories.

Workers were filmed falling asleep on their 12-hour shifts at the Pegatron factories on the outskirts of Shanghai.

One undercover reporter, working in a factory making parts for Apple computers, had to work 18 days in a row despite repeated requests for a day off.

Another reporter, whose longest shift was 16 hours, said: “Every time I got back to the dormitories, I wouldn’t want to move.

“Even if I was hungry I wouldn’t want to get up to eat. I just wanted to lie down and rest. I was unable to sleep at night because of the stress.”

Rather than fessing up, Apple said it strongly disagreed with the programme’s conclusions, although it declined to be interviewed for the programme.

It insisted that no other company wsa doing as much as Apple to ensure fair and safe working conditions.

Apple said it was a very common practice for workers to nap during breaks, but it would investigate any evidence they were falling asleep while working. We guess it will want to make sure that someone comes along to wake them up.

It said it monitored the working hours of more than a million workers and that staff at Pegatron were averaging 55 hours a week.

Apple published a set of standards spelling out how factory workers should be treated. It also moved some of its production work to Pegatron’s factories on the outskirts of Shanghai.

However, Panorama found these standards were routinely breached on the factory floor. Voluntary overtime was not what it said it was and one reporter had to attend unpaid meetings before and after work. Another reporter was housed in a dormitory where 12 workers shared a cramped room.

Apple insists that the dormitory overcrowding has now been resolved and that it requires suppliers to retroactively pay workers if it finds they have not been paid for work meetings.

Intel’s China plans show mobile agenda

1220aIntel’s recently announced plans to invest shedloads into its Chengdu plant might be revealing much about its cunning plan for the future.

The move was a little unusual, as it did not come with the huge tax breaks and other sweeteners that Intel has required from Israeli governments and the US. This indicates that Intel needed a plant in China.

The move followed another similar-sized investment aimed at consolidating China’s wireless chip sector. The smart money suggests the two moves are linked Intel wants China to become a major centre for the company’s belated push into wireless chips.

Intel could be positioning both of these plants to manufacture smartphone chips. Intel failed to recognise the importance of mobile devices earlier, with the result that most of the market is now dominated by companies like sector leader Qualcomm, and mid-sized players like MediaTek, which mostly use chips based on an architecture supplied by European chip giant ARM.

Beijing wants to create a homegrown player to take down Qualcomm but its domestic chip sector consists of mostly small design houses that lack the resources to become major global players.

Unigroup, which is based out at the Tsinghua University, merged two of the biggest domestic players, Spreadtrum and RDA Microelectronics, into a single company. Intel joined that initiative in September, when it purchased 20 per cent of the new company for $1.5 billion. This makes it bigger than China’s largest chipmaker SMIC.

What Intel appears to be doing is getting itself onside with the Chinese and helping their domestic chip making plans with the idea of getting a foot in the door behind the bamboo curtain. Antitrust watchdogs are less likely to snap at its heels, or treat it as a problem, like they do Qualcomm and in the long term, it will have its fingers in the pies of a growing Chinese chip industry.

Free is the about the right price for software

5360989064_19643132d7_b (1)The  CEO of Cheetah Mobile, a Chinese mobile software company that went public earlier this year is telling the world+dog that he thinks free is about the right price for software.

In the west few have heard of Cheetah Mobile, it has several Android utility products that are consistently among the top downloads in the Google Play store. They are unglamorous but useful titles like Clean Master, Battery Doctor and Photo Grid.

Sheng Fu who took four years to build his company for an IPO, and 18 months to expand globally, is being seen as a Chinese Steve Jobs – at least in China.

Despite its products being free, Fu says Cheetah’s business is strong, with sales increasing 150 percent per year for the past two years, with third-quarter sales of more than $77.7 million.

Part of Cheetah’s success  is that the intense competition of the Chinese market leads to products that can compete globally. There are so many recent university graduates working in tech, all with their startups looking to find their place in the market, he said.

Also, Chinese companies saw the impact that piracy played in the PC software era, and China’s mobile companies grew up knowing they would need to make money without getting consumers to open their wallets.

“Chinese companies are so good at making free but high-quality products,” he said.