20/05/2020
- US chip giant GlobalFoundries confirms it has ceased operations at its only Chinese facility, with industry experts saying the poorly-planned project was doomed to fail
- Closure deals blow to China’s plans to move up semiconductor value chain, amid increasingly hostile tech rivalry with the United States
Beijing boasted that the final total investment in the GlobalFoundries plant could be US$10 billion. The plant was intended to produce 300mm wafers, a key material in making chips, but production never started at the 65,000 square metre facility, which was completed mid-2018. Photo: Weibo
US chip giant GlobalFoundries has halted operations at a joint venture factory in China, the company has confirmed, dealing a potential blow to China’s bid to own a bigger slice of the global semiconductor market.
The closure of the firm’s only China facility comes just three years after it announced plans to make chips in the mainland, and comes amid an escalating tech war with the United States.
The winding down, however, has little to do with the fierce superpower rivalry. It comes after two years of speculation as to what was actually happening at the US$100 million facility, which was hailed as “a miracle” by local media when announced to fanfare in 2017, but which never got off the ground.
Nonetheless, the symbolism is rich.
China is struggling in its efforts to boost its domestic chip research and production in a bid to counter US efforts to block it from American technology.
Last week, the US Department of Commerce upped the ante by
banning the sale
of Huawei-designed chips produced outside America if they are made using the US software and technology, adding further pressure to the Chinese telecom giant’s global supply chain.
The GlobalFoundries factory, in a hi-tech park in the southwestern city of Chengdu, was one of China’s major foreign-invested semiconductor projects, for which the local government rolled out the red carpet three years ago.
At the time, Chengdu boasted that the final total investment in the plant could be US$10 billion. The plant was intended to produce 300mm wafers, a key material in making chips, but production never started at the 65,000 square metre facility, which was completed mid-2018.
A spokesperson for California-based GlobalFoundries confirmed that the Chengdu plant had stopped operations and that it had offered staff an “employee optimisation plan”, a commonly-used euphemism for lay-offs.
“The plan is being carried out on the basis of open and transparent communications with the employees and they have been offered various options to choose from based on their personal situations,” a company statement read.
A 2018 annual report from the joint venture, in which GlobalFoundries had a stake of 51 per cent with the rest controlled by an investment vehicle of the Chengdu government, showed that the plant had 320 employees.
A company notice sent to employees dated May 14 and seen by the Post said that after mid-June, the company would only pay 70 per cent of Chengdu’s minimum monthly wage, about 1,246 yuan (US$175.38), while negotiating severance packages with staff.
For some industry analysts who have followed the Chengdu project from its inception, its demise has less to do with the trade war, more to do with poor planning.
There was little detailed research and planning before the project was launched. As far as the Chengdu government is concerned, it lacks a sufficient understanding of GlobalFoundriesGu Wenjun, analyst
“There was little detailed research and planning before the project was launched. As far as the Chengdu government is concerned, it lacks a sufficient understanding of GlobalFoundries, its decision-making mechanism and economic strengths, and it did not get strong support from the central government,” said Gu Wenjun, chief analyst at Shanghai-based semiconductor research firm ICwise.
The idea of establishing a joint venture was first pitched to
Chongqing municipality, a neighbouring city of Chengdu, in 2016. Chongqing signed a memorandum of understanding with GlobalFoundries to set up a plant to manufacture 300mm silicon wafers – components for making integrated circuits – using technology from GlobalFoundries’ Singapore factory.
After the deal to open a Chongqing plant fell through for unclear reasons, Chengdu moved in to cut a deal with GlobalFoundries in late-2016. A 2017 blueprint stated that 3,500 employees could be working at the site, according to Wallace Pai, then GlobalFoundries’ general manager for China.
But production never started. Initially the project was supposed to have two phases: using mainstream technologies to manufacture 300mm wafers from 2018, then transferring to more advanced technologies in late-2019.
However, in October 2018, the two partners decided to “bypass” the phase one manufacturing stage, partly because of China’s increasing demand for more advanced products and GlobalFoundries’ own financial stress. The project has since stalled.
Comparing official announcements from the Chengdu government and GlobalFroundries back in 2017, Gu from ICwise said the two had different focuses, which might explain the plant’s derailment. The government clearly wanted to bring in mainstream, lower-risk technologies to boost the city’s brand, while the company aimed for Chinese capital and government support to invest in more advanced technology, Gu said.
The joint venture will continue after the factory’s demise, with GlobalFoundries still expecting to expand sales in the Chinese market, the company said in its statement. It now has five factories, three in the US and one each in Singapore and Germany.
When The Post contacted the office of the joint venture partner within the Chengdu government, the person answering the phone said they did not know anything about the closure nor future plans, before hanging up without giving their name.
“Our focus in China is on developing and growing our partner ecosystem including creating local technology infrastructure and bringing more intellectual property vendors and electronic design automation partners to better serve the local market,” the company said.
According to the China Semiconductor Industry Association, China’s integrated circuits sales rose 15.8 per cent in 2019 from a year earlier to 756.2 billion yuan (US$106.44 billion), while sales in the global semiconductor market dropped by 12 per cent to US$412 billion.
Last week, Dutch company ASML Holding, a key supplier of chip-making equipment, set up a plant in Wuxi, in Jiangsu province, in a boost to China’s efforts to attract foreign semiconductor investment.
Source: SCMP
Posted in advanced technologies, American, ASML Holding, ‘a miracle’, Beijing’s, blow, Chengdu, China, China Semiconductor Industry Association, chip, Chongqing Municipality, Dutch, euphemism, Factory, foreign, Germany, global, GlobalFoundries, hailed, hostile, Huawei-designed chips, Investment, jiangsu province, lay-offs, mainstream, manufacture, plans, production, semiconductor, semiconductor giant, semiconductor market, shuts, Singapore, symbolism, tech rivalry, technologies, Technology, transferring, Uncategorized, United States, US chip giant, US Department of Commerce, value chain,, Wuxi |
Leave a Comment »
27/04/2020
BEIJING/SHANGHAI (Reuters) – China’s Inceptio Technology, a startup developing self-driving trucks, has raised $100 million in its latest funding round from logistics firm GLP, its key strategic investor G7 and other investors, two sources familiar with the matter told Reuters.
The proceeds from its series A funding round will be used to further develop its technologies and to start commercial trials, said the sources, who declined to be named as they were not authorised to speak to media.
The company, which aims to operate a freight network with autonomous driving trucks in China from 2022, has partnerships with Dongfeng Automobile Co Ltd (600006.SS), Sinotruk Hong Kong Ltd (3808.HK) and Foton (600166.SS).
The two-year-old firm is developing autonomous driving software and an in-car computing system while the truckmakers are responsible for the vehicles’ platforms.
Inceptio declined to comment. G7 and Singapore-based GLP did not immediately respond to requests for comment.
Inceptio focuses on level 3 and 4 technologies. A level 3 vehicle will enable drivers to turn their attention away from driving but they still need to take over if the car encounters a problem, while with level 4 technologies, there is no human intervention in most circumstances.
The trucking industry is expected to an earlier adopter of autonomous driving technology compared to passenger vehicle makers as driving on highways is more predictable than on busy city streets.
German automaker Daimler (DAIGn.DE) and U.S. postal giant United Parcel Service Inc (UPS.N) have invested in self-driving trucks.
Source: Reuters
Posted in $100 million, 2022, aims, attention, authorised, autonomous driving, autonomous driving technology, away from, busy, car, China, Chinese, circumstances, city streets, comment, commercial, Company, compared, computing system, DAIMLER (DAIGn.DE), declined, developing, Dongfeng Automobile Co Ltd, drivers, driving, earlier adopter, encounters, expected, firm, focuses, Foton, freight network, funding, funding round, further develop, G7, German automaker, GLP, Highways, human intervention, immediately, in-car, Inceptio Technology, investors, key strategic investor, latest, level 3 and 4, level 3 vehicle, level 4 technologies, logistics firm, Makers, media, most, named, partnerships, passenger vehicle, predictable, problem, proceeds, raised, respond, responsible, round, self-driving truck, self-driving trucks, series A, Sinotruk Hong Kong Ltd, software, sources, speak, start, startup, take over, technologies, to operate, to requests, trials, trucking industry, truckmakers, trucks, turn, two-year-old, U.S. postal giant, Uncategorized, United Parcel Service Inc (UPS.N), used, vehicles’ platforms, while, will enable |
Leave a Comment »
26/03/2020
- For many small factories and service businesses, the process of returning to normal operations after disruptions from the coronavirus pandemic has been harder
- Chinese authorities have been pushing for SMEs to make use of technologies such as remote working and smart manufacturing platforms to resume operations quickly
Workers pack instant river snail rice noodles at a factory in Liuzhou, south China’s Guangxi Zhuang Autonomous Region, Jan. 2, 2020. Photo: Xinhua
(SMEs) in China have been resuming work at a faster rate since March with the help of government measures to promote their adoption of technology, China’s Ministry of Industry and Information (MIIT) said in a news conference on Wednesday.
As of Tuesday, 71.7 per cent of SMEs using cloud-based platforms had resumed production, up from 29.6 per cent a month earlier, said Qin Zhihui, deputy director of MIIT’s SME bureau.
Industrial internet platforms, which help to “coordinate production and prevent risks, ensure the integrity and safety of supply chains and give support to key areas which may experience potential work disruptions”, have helped some businesses resume operations, MIIT spokesman Xie Shaofeng said at the same news conference.
“Others used cloud-based computing to help enterprises move their business operations online, promoting remote working, teleconferencing, online training, co-researching and e-commerce,” he added.
For many small factories and service businesses, which account for most employment in China, the process of returning to normal operations
has been more difficult than for larger firms. The smaller firms, for example, are often unable to meet virus prevention conditions set by local governments, including having enough facial masks for employees.
Workers at 60 per cent of Chinese firms still telecommuting under lockdown
In a notice last week, MIIT encouraged SMEs to make use of digital tools such as
and smart manufacturing platforms to resume operations as soon as possible, and urged cloud services providers to open up services for SMEs in both services and manufacturing sectors.
The ministry also said in the notice that it had rolled out more than 370 online training courses for SMEs to stay informed about government policies and access opportunities to learn managerial and technological skills. It said the courses had been viewed more than 8 million times.
China’s cloud infrastructure, which enables remote working and online learning among other applications, has grown rapidly over the past few years. The market grew 66.9 per cent to US$3.3 billion in the fourth quarter of 2019, according to a Canalys report last week, with Alibaba Group Holding’s Alibaba Cloud accounting for 46.6 per cent of the market, followed by Tencent Cloud with 18 per cent and Baidu’s AI Cloud with 8.8 per cent.
Alibaba is the parent company of the South China Morning Post.
Source: SCMP
Posted in Alibaba, Alibaba Cloud, Alibaba Group Holding’s, Baidu’s AI Cloud, China’s Ministry of Industry and Information (MIIT), chinese authorities, Chinese SMEs, cloud-based computing, co-researching, Coronavirus pandemic, digitise businesses, Guangxi Zhuang Autonomous Region, Industrial internet platforms, Liuzhou, online training, remote working, resumed work, river snail rice noodles, service businesses, small factories, smart manufacturing platforms, supply chains, technologies, teleconferencing, Tencent Clou, Uncategorized |
Leave a Comment »
CHINDIA ALERT: You'll be living in their world, very soon 
Chinese self-driving truck startup Inceptio raises $100 million – sources
BEIJING/SHANGHAI (Reuters) – China’s Inceptio Technology, a startup developing self-driving trucks, has raised $100 million in its latest funding round from logistics firm GLP, its key strategic investor G7 and other investors, two sources familiar with the matter told Reuters.
The proceeds from its series A funding round will be used to further develop its technologies and to start commercial trials, said the sources, who declined to be named as they were not authorised to speak to media.
The company, which aims to operate a freight network with autonomous driving trucks in China from 2022, has partnerships with Dongfeng Automobile Co Ltd (600006.SS), Sinotruk Hong Kong Ltd (3808.HK) and Foton (600166.SS).
The two-year-old firm is developing autonomous driving software and an in-car computing system while the truckmakers are responsible for the vehicles’ platforms.
Inceptio declined to comment. G7 and Singapore-based GLP did not immediately respond to requests for comment.
Inceptio focuses on level 3 and 4 technologies. A level 3 vehicle will enable drivers to turn their attention away from driving but they still need to take over if the car encounters a problem, while with level 4 technologies, there is no human intervention in most circumstances.
The trucking industry is expected to an earlier adopter of autonomous driving technology compared to passenger vehicle makers as driving on highways is more predictable than on busy city streets.
German automaker Daimler (DAIGn.DE) and U.S. postal giant United Parcel Service Inc (UPS.N) have invested in self-driving trucks.
Source: Reuters
Posted in $100 million, 2022, aims, attention, authorised, autonomous driving, autonomous driving technology, away from, busy, car, China, Chinese, circumstances, city streets, comment, commercial, Company, compared, computing system, DAIMLER (DAIGn.DE), declined, developing, Dongfeng Automobile Co Ltd, drivers, driving, earlier adopter, encounters, expected, firm, focuses, Foton, freight network, funding, funding round, further develop, G7, German automaker, GLP, Highways, human intervention, immediately, in-car, Inceptio Technology, investors, key strategic investor, latest, level 3 and 4, level 3 vehicle, level 4 technologies, logistics firm, Makers, media, most, named, partnerships, passenger vehicle, predictable, problem, proceeds, raised, respond, responsible, round, self-driving truck, self-driving trucks, series A, Sinotruk Hong Kong Ltd, software, sources, speak, start, startup, take over, technologies, to operate, to requests, trials, trucking industry, truckmakers, trucks, turn, two-year-old, U.S. postal giant, Uncategorized, United Parcel Service Inc (UPS.N), used, vehicles’ platforms, while, will enable | Leave a Comment »