Tech Sales to China Questioned
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The Bush administration is facing questions from weapons experts about whether some equipment â newly authorized for export to Chinese companies â could instead end up helping China modernize its military.
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China spent $2.2 billion ( 1.6 billion) on German planes and trains this week. The Wall Street Journal reported German Chancellor Gerhard Schroeder also called for an end to a European arms embargo on China, as ...
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(InfoWorld) - Taipei may have to rethink its China investment policies in the wake of an offer by a foreign group to buy the world's largest chip assembly company, Taiwan's Advanced Semiconductor EngineeringÂ (ASE). Part of the attraction of the deal is that by changing ownership, the company would cease to be Taiwanese, and therefore be allowed to invest in China as it pleases, pundits say. The trouble for many Taiwanese chip makers in recent years has been the tight leash Taipei keeps on technology investment bound for political rival China. Taiwan and China remain enemies after splitting in 1949 amid civil war. The island fears China could use chip technology to bolster its military capabilities against Taiwan. Despite the strained relationship and tough investment rules, China remains by far the favored destination for Taiwanese investment due to their shared language and culture, and China's lower costs and huge potential market. The deal for ASE, a $5.5 billion offer from a consortium led by the private equity firm Carlyle Group, would be a huge positive for ASE, transforming it into a foreign entity and allowing it to build chip assembly plants in China, according to Fubon Securities. Currently, ASE has no chip assembly investments in China, despite the fact that earlier this year Taipei gave a green light to chip makers to invest in low-end chip assembly. Despite the apparent opening, not a single application has been approved by Taipei, and companies remain unsure of how to proceed with such investment. Analysts argue that the approval process remains very much subject to politics in Taiwan, due mainly to the rivalry with China. A foreign takeover such as the one Carlyle and ASE are discussing would remove such political pressures and put China investments on the fast track. Indeed, theÂ embattled former chairmanÂ of chip foundry giant United Microelectronics, Robert Tsao, was quoted by local media as saying the possibility of such buy-outs excited him, and that UMC would welcome similar offers. Tsao is a prime example of the difficulties Taiwanese tech companies and executives face when investing in China. He and another key UMC executiveÂ resigned early this yearÂ after beingÂ indicted by Taiwanese prosecutorsÂ over their alleged role in the establishment of Chinese chip maker, He Jian Technology (Suzhou). The court case is still being heard. The government began investigating UMC over He Jian a few years ago, and fined UMC for failing to apply for permission to work with He Jian. Taipei has also leveled fines on UMC and He Jian executives. Tsao and his colleagues maintain that they have done nothing wrong. For its part, the government plans to review the possible ASE deal over its potential impact on the Taiwan Stock Exchange, since the company would likely be de-listed if it is purchased by Carlyle. Economics Minister Chen Ruey-long on Monday said Taipei needs to keep on top of the issue in case it becomes a trend, because such purchases could have long term effects on the economic development of the island. The review has nothing to do with China policy, he said.
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But Chinaâs move to cool its heated stock market limited Wall Streetâs broader advance and raised concern about a global equity sell-off.
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Is Apple the Kathy Lee Gifford of the technology biz, or just another U.S. company hoping that its overseas manufacturers aren't engaging in labor violations? It's a more complicated question than many might think.
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For China, it could reinvigorate a chip industry that has slowed over the past few years as major chip makers posted a string of money-losing quarters. It also represents a token of goodwill by Taiwan to political enemy China.
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It may be the factory to the world, but China's consumers aren't exactly splashing out. And credit cards are not widely accepted
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The pending sale of International Business Machines Corp.'s personal-computer business to a Chinese company will be investigated by the Bush administration to determine whether the deal threatens national security, according to administration and congressional sources.
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There's a lot of uncertainty surrounding the Chinese cell-phone powerhouse.
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(InfoWorld) - China Tuesday denied allegations that its militaryÂ hacked a Pentagon networkÂ in JuneÂ -- the second time in as many weeks that the country has responded to charges of sponsoring computer attacks. "Some people are making wild accusations against China and wantonly saying the Chinese military attacked the Pentagon's computer network," Jiang Yu, a foreign ministry spokeswoman said in Beijing, according to the state-controlled Xinhua news service. "These are totally groundless and also reflect a Cold War mentality," she added. Jiang was responding to a story published by the Financial Times this weekend that quoted American officials who said the People's Liberation Army (PLA) was behind the June hack. One person familiar with the incident told the Financial Times that there was a "very high level of confidence... trending towards total certainty" that the PLA was responsible. Other sources told the publication that Chinese hackers probed the Pentagon system for months before the attacks, which forced the U.S. to take the network offline for more than a week. The Department of Defense downplayed the attack, but declined to point the finger at any one country or group. The attack on an unclassified e-mail network in the Office of the Secretary of Defense required that the systems be taken offline, spokesman Bryan Whitman acknowledged today, but backup networks kicked in. He would not confirm that China hackers were behind the assault, saying only that it's often difficult to pinpoint the origin of an intrusion into computer systems. But the Pentagon did not stand idly by, he said. "Cyber or non-kinetic type threats to military computer networks are viewed as just as real and just as significant as physical or kinetic threats," Whitman said in a statement. "The department aggressively responds to deter all intrusions to defend what is known as the GIG, the global information grid." Just a month before the attack, the Department of Defense had issued a report claiming that the PLA fieldsÂ first-strike cyberwarfareÂ units whose arsenals include computer viruses they might unleash on enemy networks. When the Pentagon released its annual report on the state of China's military strength in late May, Jiang, the same foreign ministry spokeswoman who blasted the story today, took exception to its overall tone, although she didn't mention cyberwarfare specifically. The U.S., she said then, "continues to spread myth of the 'China Threat' by exaggerating China's military strength and expenses out of ulterior motives." Last week, Angela Merkel, Germany's chancellor, raised the same issue during her visit to Beijing after the popular weekly Der Spiegel said systems at several government ministries, including Merkel's own office, had beenÂ infected with spywareÂ planted by Chinese hackers. In statements made during a press conference Aug. 27, Chinese premier Wen Jiabao called the reports of "grave concern" and promised that China would cooperate with Germany in its investigation. Today, Jiang seemed to echo Wen's comments. "The Chinese government has always opposed any Internet-wrecking crime, including hacking, and cracked down on it according to the law," she said. The Chinese military has been involved with hacking and viruses since at least the early 1990s, according to a 2000 paper written by Timothy Thomas of the Foreign Military Studies Office at Fort Leavenworth. Coincidentally, the president of both China and the U.S. will face off this week in Australia during meetings of the Asia-Pacific Economic Cooperation (APEC) forum. Hu Jintao, China's president, arrived in the country yesterday, while President George W. Bush arrived in Sydney today. Trade and climate change are expected to lead the agenda during the 21-country talks. Hu and Bush are scheduled to meet one-on-one during the conference. Â  Computerworld is an InfoWorld affiliate.
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(InfoWorld) - News coming out the chip sector has been great so far this week, but analysts warn that economic woes such as the housing mess might still spoil the party. The consensus among analysts appears to be that corporate and personal spending on technology products will be hurt by the housing issues in the U.S., but nobody knows how bad the impact will be, according to Peter Sutton, head of research at CLSA Asia-Pacific Markets in Taipei. Demand for technology products, especially computers and mobile phones, in the rest of the world is going strong, he said, but even that demand could pull back in the event of a U.S. slowdown because many developing countries depend on exports to the U.S. for income. By the end of this year, people should know how bad the loan and home foreclosure situation will be, according to Sutton. The housing market in the U.S., he said, is expected to bottom in the first quarter of next year. The fear is that the housing issues could hurt consumer spending at some point later this year, but so far the technology industry isn't showing any signs of trouble. The flow of good news started in Asia on Monday with the world's largest contract chip maker, Taiwan Semiconductor Manufacturing Co. (TSMC), reporting record high sales in August and revising up its third quarter financial guidance. The company, considered a bellwether for the overall tech industry because of the variety of gadgets it makes chips for, said consolidated sales in August rose 10 percent year-over-year to NT$30.02 billion (US$907.0 million), beating its previous record of NT$27.96 billion from July of last year. TSMC also predicted its third quarter revenue will likely hit between NT$87 billion to NT$89 billion, higher than a previous forecast of NT$85 billion to NT$87 billion, and said its gross margin would come out at the top end of expectations. Some customers asked TSMC to ship some chips earlier than expected, a spokesman for the company said, but the company won't comment on how that might impact the fourth quarter. Taiwanese chip designer MediaTek followed up TSMC's news, announcing an agreement to buy certain telecommunications chips products from Analog Devices Inc., of Norwood, Massachusetts, for US$350 million in cash. The deal itself isn't huge, but merger and acquisition activity normally takes place when companies see bright prospects for the future, and MediaTek is looking to use the acquisition as part of its mobile phone chip strategy. Among the products the company acquired is a chipset used in TD-SCDMA (Time Division-Synchronous Code Division Multiple Access) basebands and radio receiver products, which will help it increase its presence in its main market, China. TD-SCDMA is the 3G (third-generation) telecommunications standard being pursued in China. Positive corporate news for chip makers didn't stop in Asia. As the work day opened in the U.S., technology industry watchers were treated to theÂ long-awaited launch of Barcelona, the new quad-core processors from Advanced Micro Devices. The Sunnyvale, California company announced a number of companies are already using the chips, including IBM, Sun Microsystems, Dell, and Gateway. The world's largest chip maker capped Monday with the biggest news of the day.Â Intel raised its third quarter revenue forecastÂ to between US$9.4 billion and US$9.8 billion from a previous range of US$9.0 billion and US$9.6 billion, and said its gross margin would be at the upper end of guidance due to stronger than expected global demand for computing products. Despite the strong chip news and outlook for the current quarter, which ends Sept. 30, the future remains uncertain. "Near term data shows little evidence of order cutbacks in the tech supply chain," said Warren Lau, chip analyst at Macquarie Research Equities. "But having said that, the question remains: will the sky come crashing down because of the meltdown in the U.S. subprime markets?"
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The administration is facing questions from weapons experts about whether some equipment â newly authorized for export to Chinese companies â could instead end up helping China modernize its military.
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(InfoWorld) - Ultramobile PCs attracted the biggest crowds at an electronics show in Shanghai over the weekend, although a secret exhibit marked "No Foreigners Allowed" also drew attention, at least of curious reporters. The exhibit, which consisted of about 100 tables set up to show components and gadgets, was in an area of the conference walled off by 10-foot high white dividers. âYou must have a China ID to enter,â said one of four uniformed guards at the entrance, as he moved to block the view of a reporter. The existence of such an area conjured up images of imitation iPods, Razr handsets, and PlayStation 3 consoles. It's easy to imagine such pirated gear in China, where DVDs of the new James Bond movie, "Casino Royale," are already being sold in city streets for 6 Chinese renminbi ($0.77). It turned out to be less mysterious. A helpful local resident reported that the area had been set aside for military components, hence the enclosure. What grabbed the most attention from Chinese visitors was a display ofÂ ultramobile PCs by Samsung Electronics. That may have been due to the entertainment nearby as much as the devices themselves. Samsung's booth was next to a Korean exhibit that featured traditional dancing, Korean singers, and a Taekwondo exhibition where martial arts experts broke boards with leaping kicks, all of which drew people in for a look at the Q1. Three of the devices were set out in Samsung's booth, powered up and ready for action. The crowd around the exhibit was three deep for much of the show. âIâve never seen one. Itâs small and cute, but it seems expensive,â one attendee said. The Q1, which runs on a 900MHz Celeron processor from Intel, retails in the U.S. for $1,099. A manager at Samsungâs booth said a less expensive version of the device, the Q1B, was originally supposed to arrive in China in December, but it's introduction there has been delayed. She declined to discuss the reason. The main difference between the Q1 and Q1B is in the processor and the price. The Q1B carries a 1.0GHz C7 microprocessor from Via Technologies and sells for $899.99 at Newegg.com . Also notable at the event was the cancellation of a forum on creating a China-Taiwan standard for Mobile TV. The meeting was cancelled for no reason anyone cared to discuss. In an interview, Roger Liao, deputy director of international affairs at one of Taiwanâs biggest industry groups, the Taiwan Electrical and Electronic Manufacturersâ Association (TEEMA), said there has been a lot of talk about Taiwan and China teaming up to create industry standards for electronics products, but that no concrete actions have yet been taken by either side. Cancelling the meeting was apparently another sign that work towards such standards has not gone smoothly. The Shanghai electronics exhibition was a combination of three shows, the China Electronics Fair (CEF Shanghai 2006), the Asia Electronics Exhibition in Shanghai (AAES 2006), and the 2006 International Electronics Expo (IEE Shanghai 2006).
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China with its large population provides a big market for the PC Manufacturers. However, it is the local computer makers who rule the Chinese PC Market.
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Talks between China Mobile and Apple are on ice.
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China's purveyors of counterfeit goods may bode ill for the country at large
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Exports from Taiwan jumped 17.9 percent in January on demand from China for electronics.  Overseas shipments rose to $19.9 billion, the Taiwanese Ministry of Finance said Wednesday in a statement. It was nearly double the 9.1 percent gain in December.