After the US trade ban, Chinese companies like Huawei has become crippled as it cannot make chips from TSMC and this has hurt the business of these companies. China has always made its own solution to its problems and has tried native approach to curb the problem.
Obviously the headline is enough to shock you because as reported by Nikkei Asian Review, two of the Chinese government-backed chip projects have jointly hired more than 100 veteran engineers along with managers from Taiwan Semiconductor Manufacturing Co. or TSMC. Undoubtedly, this kind of hirings aims towards helping Beijing achieve its goal to achieve a self-sufficient domestic chip industry so that it can cut China’s reliance on foreign suppliers.
These two companies include Quanxin Integrated Circuit Manufacturing (Jinan), or QXIC, and Wuhan Hongxin Semiconductor Manufacturing Co., or HSMC, along with their various associations and affiliates are not among the most popular figures in this sector. Not only they have employed more than 50 former TSMC employees each, but also both of them are led by ex-TSMC executives.
These two companies aim to develop 14nm and 12nm chip process technologies in China itself. Although these are two to three generations behind TSMC but still can help the current deficit faced by the Chinese tech companies. In future also this will help them be self reliant and who knows make faster progress than expected.
TSMC is the world’s no 1 chipmaker currently with a lot of customers worldwide and provides chips to top weight US tech companies like Qualcomm, Apple, AMD, and others. They are producing 5nm process technology currently and have their research up and running up to 2nm process.
So hiring employees from such a reputed chipmaker makes sense to bring in their minds to manufacture refined chip manufacturing processes in China. Hongxin and QXIC were founded in 2017 and 2019, respectively, to boost China’s semiconductor industry. Beijing is prioritizing more on self-sufficiency in key technological advancements that are impacted by tensions with Washington.
In the coming years, China is said to be the top among other countries in chipmaking equipment spending and plans to invest more for future chip facilities, in 2020 and 2021, according to SEMI. China’s current top contract chipmaker is the state-backed Semiconductor Manufacturing International Co. or SMIC that has recently raised its capital spending for the second time this year to a whopping $6.7 billion for 2020.
Not only that, but it will also even build a $7.6 billion joint-venture factory with the Beijing Economic-Technological Development Area. This is enough to portray how much concerned the Chinese government is towards tech and making it self reliant in every aspect. On top of that these emerging semiconductor projects, like QXIC and Hongxin, are also being supported by local governments to contribute to their semiconductor project.
This is has led these companies to hunt for top talents in this field and undoubtedly, TSMC does have such talent in abundance to stand strong in the whole world. Nikkei’s sources have said, “Hongxin offered some amazing packages, as high as two to 2.5 times TSMC’s total annual salary and bonuses for those people.”
China wants to build an empire in its own country and that’s why they have become such desperate to face the US government and apart from being a superpower, it also wants to top the US in tech as well. It’s no secret anymore that already the Chinese apps, smartphones, and equipment have already captured the markets across the globe and now if they somehow become successful in the semiconductor industry as well, then they do not have to rely on anyone anymore.
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