China’s new 2.8 Billion Chip Maker will shakeup Global Semiconductor Industry

China created the country’s largest chip maker last week, taking a giant step towards Beijing’s plan of becoming less reliant on foreign technology. Under the government’s direction, Tsinghua Unigroup, China’s largest chip designer, acquired a majority stake in XMC, one of China’s leading chip makers and backed by the national semiconductor fund, the Wall Street Journal reported. A new holding company was created for XMC called Yangtze River Storage Technology, which has a registered capital of 18.9 billion yuan ($2.8 billion).

Yangtze combines Tsinghua Unigroup’s investment power and XMC’s engineering team, said Roger Sheng, a Shanghai-based research director for semiconductors at Gartner IT +0.25%, adding that the merger is the first case between two Chinese companies in the semiconductor industry. Full Story

China is preparing to be self-reliant and in the process disrupt another industry.  The key goal, however, is to wallop American companies and hit them where it hurts.  China and Russia have teamed up, and the idea is to cut the US out of the equation.  In the years to come you will find every industry in America being replicated and then improved in Asia and Russia.  This is how you topple a superpower; you chop their legs off as opposed to trying to threaten your opponent forever. The US continues with its attempts to bully other nations, but it is failing; China is challenging it in Asia and Russia in Europe and the Middle East.

The next step will be to force the US to retreat and sadly there is nothing the US can do now to stop it. The biggest mistake the US made was to force Russia and China into each other’s arms.  We suspect that Russia is going to challenge NATO openly within the next 12-18 months showing the whole world that NATO is nothing but a paper tiger.  China is going to start pushing back very hard in the South China Seas; their goal is to deploy assets at strategic places so that American bases in Guam are within striking distance. Once this is achieved its game over for the U.S and China will aggressively defend these waters against America.  The US wants to be in a position to control this area as it can use it to strangle China by controlling the flow of goods in and out of China. However, China is hip to this and is moving very fast to thwart these efforts.



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