China stealing secrets from US semiconductor companies. (Allegedly)

[chrisjames61]

Every culture has engaged in technological "borrowing" from other cultures. The smart ones add to this instead of just copying.

"Borrowing" isn't quite the same thing as industrial espionage on a massive scale. Sheesh....

 

[MagnusTheBrewer]

In 1987 Japan was so ahead in semiconductor industry that the US forced them to share their manufacturing secret with US firms, with Intel, Motorola and TI among other beneficiary recipients...

redacted I worked for Motorola during that time period. You don't know what you're talking about.

No profanity in the tech areas.

AT Mod Usandthem

 

[whm1974]

Bullshit! I worked for Motorola during that time period. You don't know what you're talking about.

Even though I'm only 44, I do remember the big fight we had with the Japanese over their dumping and other trade issues.

 

[MagnusTheBrewer]

Even though I'm only 44, I do remember the big fight we had with the Japanese over their dumping and other trade issues.

I'm just saying that all of Motorola's innovations came from in house although they were clueless idiots who had to be walked through the manufacturing process by the people doing the manufacturing.

 

[ehume]

I have read that the Chinese method is for everyone to bring home just a bit of knowledge and report it. The philosophy is called the "thousand grains of sand" approach.

 

[whm1974]

I have read that the Chinese method is for everyone to bring home just a bit of knowledge and report it. The philosophy is called the "thousand grains of sand" approach.

That is a good philosophy to have.

 

[dark zero]

If you want to do business in China you also have to give up your trade secrets to gain access to their markets. It is time western countries make some kind of stand.

Not only China.. But it applies on all Big Markets... At the end people will start to copy each other and the patents will be a joke...

 

[lopri]

U.S. Patents are granted by the USPTO. Why does anyone expect them to be honored by foreign countries, unless we have some sort of a treaty on point with them?

 

[realibrad]

U.S. Patents are granted by the USPTO. Why does anyone expect them to be honored by foreign countries, unless we have some sort of a treaty on point with them?

Because there are international agreements of which China is part of that regulate this type of thing.

https://en.wikipedia.org/wiki/Patent_Cooperation_Treaty

 

[Abwx]

Bullshit! I worked for Motorola during that time period. You don't know what you're talking about.

Are you sure you had access to infos..??.

This "agreement" ACTUALY mandated each japanese firm to "associate" with a recipient US firm..

Few time after it was signed Motorola got technical infos and rights from Toshiba to manufacture the latter s high performance discrete power transistors (for audio purposes) , transistors that Motorola and any US or european firm was incapabale to design and manufacture while these were produced by Toshiba and many japanese firm since the late 70s.

Heck, Motorola used the JEDEC referencing used by Toshiba with the same referencing of course and was the only second source for those exact components, in the consequent applications notes that Motorola published (and wich i m familiar with) they didnt even bother to aknowledge that they got the technology from Toshiba, so no wonder that you noticed nothing at all, lol..

Notice that discrete power transistors have nothing to do with RAM, so just imagine the scale of the theft...

 

[Abwx]

Even though I'm only 44, I do remember the big fight we had with the Japanese over their dumping and other trade issues.

That wasnt dumping, they were more efficient in the aggregated industrial process, FI Toshiba, Hitachi, Panasonic/NEC, Mitsubishi (Fuji) or even Sony and now deceased Sanyo did manufacture the components they used in their consumer dedicated products, while US and European were not integrated firms if we except cases like Phillips.

By doing so they had much better reactivity in respect of the market needs, indeed the big push they made in the late 70s and early 80s bankrupted most of the US/European electronic industry.

 

[realibrad]

So it took some time, but here is what I found.

https://www.press.umich.edu/pdf/0472113585-ch5.pdf

The problem looks to be a misunderstanding of what happened. Japanese firms were dumping products as well as working together to keep American firms out of their country. They were also working together to make sure American firms did not have the ability to access patents.

Companies often share, sell, or lease patents to others. The Japanese firms would work together and share patents with Japanese firms only. So, the trade agreement said that Japan had to stop dumping productions, open its markets so US goods could be bought and sold, and US firms had to have the right to get access to patents like other Japanese companies could.

The Japanese firms were not forced to give up their patents, but they were forced to not only limit access to their patents to other Japanese firms.

 

[realibrad]

That wasnt dumping, they were more efficient in the aggregated industrial process, FI Toshiba, Hitachi, Panasonic/NEC, Mitsubishi (Fuji) or even Sony and now deceased Sanyo did manufacture the components they used in their consumer dedicated products, while US and European were not integrated firms if we except cases like Phillips.

By doing so they had much better reactivity in respect of the market needs, indeed the big push they made in the late 70s and early 80s bankrupted most of the US/European electronic industry.

Um, they very much were dumping. They admitted it and agreed to stop doing it.

http://www.nber.org/chapters/c8717.pdf

 

[Abwx]

Um, they very much were dumping. They admitted it and agreed to stop doing it.

http://www.nber.org/chapters/c8717.pdf

They agreed to raise prices as the US industry couldnt keep up because according to your link :

On the U.S.side, the high cost of capital in the early 1980s, the appreciation of the U.S. dollar, lagging adoption of new process technology, and quality control problems all hampered
U.S. firms.

So a much overvalued dollar and US firms using outdated processes and methodologies, in these conditions anything imported in the US could be called dumping.

 

[whm1974]

They agreed to raise prices as the US industry couldnt keep up because according to your link :



So a much overvalued dollar and US firms using outdated processes and methodologies, in these conditions anything imported in the US could be called dumping.

No dumping is intentionally selling goods below the cost of producing them in order to drive a rival or rivals out of the market.

 

[realibrad]

They agreed to raise prices as the US industry couldnt keep up because according to your link :



So a much overvalued dollar and US firms using outdated processes and methodologies, in these conditions anything imported in the US could be called dumping.

You can cherry pick that quote, but, Japan was dumping and they admitted it. Japan was selling goods at about 60-70 of the cost of production. That is dumping.

 

[Abwx]

Japan was selling goods at about 60-70 of the cost of production. That is dumping.

At thoses ratios one is bankrupt in a matter of months, so i doubt this ratio has any existence other than in the US dpt claims...

I would rather say that they were selling at a production cost that was 60-70% of the US production cost, aided by the fact that the dollar/yen rate went upward by rouhgly 50% in 1985-86..

 

[realibrad]

At thoses ratios one is bankrupt in a matter of months, so i doubt this ratio has any existence other than in the US dpt claims...

I would rather say that they were selling at a production cost that was 60-70% of the US production cost, aided by the fact that the dollar/yen rate went upward by rouhgly 50% in 1985-86..

http://articles.latimes.com/1987-03-18/business/fi-7681_1_gray-market

TOKYO — An official of the Ministry of International Trade and Industry acknowledged Tuesday that Japanese semiconductors are being sold by "gray market" trading firms in other Asian countries at prices below the level that the ministry has set to prevent dumping.

As for going bankrupt, they were starting to lose money. What they did was have 3rd parties sell the chips at reduced prices so the original company would look fine.

The U.S., Korean and gray market Japanese firms are selling 256-K D-RAM chips for as little as $1.60 in such markets, he added.

Japanese semiconductor manufacturers themselves and their sales subsidiaries in third-country markets, however, are offering their 256-K D-RAM chips at prices of more than $2, the minimum export price MITI has established to prevent dumping, Honda said.

Here they admitted to selling them at 20% less than what they would sell them for directly.

And, it was starting to cost them as dumping always does.

As a result, he said, the Japanese makers are suffering a decline in their sales of 256-K D-RAM chips. The volume of Japanese monthly sales in the Asian third-country market has plummeted to only 37% of the level that prevailed between last July and September, he added.

 

[whm1974]

http://articles.latimes.com/1987-03-18/business/fi-7681_1_gray-market



As for going bankrupt, they were starting to lose money. What they did was have 3rd parties sell the chips at reduced prices so the original company would look fine.



Here they admitted to selling them at 20% less than what they would sell them for directly.

And, it was starting to cost them as dumping always does.

That is the problem with using dumping since if pursued long enough will bankrupt the company unless you have a monopoly in a large home market where you can sell at very high prices.

 

[Hitman928]

The Japanese companies I believe also were enjoying government subsidies at the time, so they basically had a lifeline from their own government to help them survive while they dumped inventory and tried to drive US companies out of the market.

 

[realibrad]

That is the problem with using dumping since if pursued long enough will bankrupt the company unless you have a monopoly in a large home market where you can sell at very high prices.

Well, if you are dumping, and you have a competitive advantage, you can kill all competition and at worst break even and possibly make money. This is what standard oil did. It was not that they were increasing the price, they actually reduced it so low that nobody could compete, while still making massive profits. If you have enough margins, you can undercut everyone. In this case though, they did not have that ability and were losing money but being propped up by the central government of Japan though different measures.

 

[ehume]

Well, if you are dumping, and you have a competitive advantage, you can kill all competition and at worst break even and possibly make money. This is what standard oil did. It was not that they were increasing the price, they actually reduced it so low that nobody could compete, while still making massive profits. If you have enough margins, you can undercut everyone. In this case though, they did not have that ability and were losing money but being propped up by the central government of Japan though different measures.

It's what Saudi Arabia tried to do.

 

[William Gaatjes]

Reading this thread made me think of this topic.

Human nature is the same in all countries. There are many articles on this.

https://www.pri.org/stories/2014-02...re-stealing-us-technology-america-has-history

"In 1787, American agent Andrew Mitchell was intercepted by British authorities as he was trying to smuggle new technology out of the UK.

His trunk was seized after being loaded on board a ship. Inside the trunk were models and drawings of one Britain's great industrial machines.

Mitchell himself was able to escape and sought refuge in Denmark. But his mission marks the start of a sustained US campaign to steal technology from the world's hi-tech superpower of the day."

It happens everywhere, all the time...
Ideas are stolen en sometimes improved upon.
It makes me think of the magnetic tape audio player/recorder technology. From origin a German invention but was taken after the war to the US by us soldier who was also an avid engineer.
The German radio service, the Reichs-Rundfunkgesellschaft (RRG) used it to play propaganda.
AEG and BASF improved the magnetic tape. RRG invented AC bias technology to prevent the distortion from the hysteresis loop of the magnetic particles.

It took the initiative of a U.S. Army Signal Corps officer, Major John T. (“Jack”) Mullin, to help get the
advanced German recording technology to America.
While working on radar and other electronics in England before the Allied invasion of Europe, Mullin occasionally listened to German classical music broadcasts from the RRG. An avid audiophile, he noticed the “live” quality of the continuous nocturnal broadcasts and assumed the Germans were using some
sort of advanced recording apparatus for high-fidelity reproduction of sound. While based in Paris during
and shortly after the war, Mullin led a team of engineers evaluating captured German equipment. The
group became acquainted with the AEG K 4 and Tonschreiber DC-bias tape machines, as well as
Magnetophon Type C and Type L tapes, but they still had not heard about the AC-bias studio decks in use
throughout German radio. The Allies’ mysterious ignorance of high-fidelity German tape recording was
continuing!

The war ended in Europe on 8 May, 1945, and two months later Mullin visited Bad Nauheim, a “branch”
radio station of Radio Frankfurt, and saw the AC-bias AEG/RRG Magnetophon studio machines in use. By
that time, the entire RRG broadcasting apparatus had been turned over to the Allied occupation forces for
transmissions in their languages, as well as programs for the German populace. Under Allied military supervision, the German technicians at the stations continued their normal routine of using tape recording throughout their broadcast day.
Mullin was so impressed by the audio performance of the AC-bias studio decks that he collected information on them, including schematic drawings and
specifications, and immediately returned to his headquarters in Paris to file full reports to his Army superiors on the technology. Following strict U.S. Army
protocol, he also obtained for his own use the parts for two K 4 Magnetophon transports to ship home to
San Francisco, California. In Germany, the post office ran the telephone service. During the war, the
“Reichspost” had used many K 4s like Mullin’s machines as eavesdropping recorders to monitor domestic and diplomatic telephone calls. Mullin took
only mechanical components—especially head stacks—as well as many reels of tape, material he
knew he could not find in the States. An accomplished electrical engineer, Mullin knew he could
recreate using American tubes the entire electronic assemblies for a successful tape recorder, also replacing the 220 V reel motors with 117 V types and
exchanging the German asynchronous capstan motor to an US 60 Hz synchronous type. He also accumulated 50 reels of tape, mostly Type L, which remained the only professional tape in America until
1947, when 3M and others began making limited batches of coated tape that closely resembled Type LG: a gamma ferric oxide (γ-Fe2O3) formula.

Working with his partner Bill Palmer of W. A. Palmer Films in San Francisco in 1946, Mullin built two Magnetophons with American electronics. U.S. broadcasters and entertainment stars, including the ABC Radio Network and Bing Crosby, soon heard about the machine, as did a tiny electronics manufacturer in San Carlos, California, named Ampex Corporation.
Ampex wanted to be the first in the U.S. to build professional tape recorders. With help from Jack Mullin and Bill Palmer, the little company succeeded.
Ironically, the American entry into tape recording— and the country’s immediate dominance in the shattered post-war world economy—meant that the tape
width and recording speed specifications established by the joint AEG-BASF team ten years earlier were
changed forever. When Mullin and Palmer measured the tape width of 6.5 mm, they decided to assign a
nominal width of a quarter inch, or 6.35 mm. The tape speed of 77 centimeters per second became 30
inches per second, nominally 76.2 cm/second. The differences were so negligible that the English measurements became the dominant world standard, even
in Germany. The quarter-inch tape and 30 ips speed also became the standard measure on which most
future audio, video, and data tape formats were based, from the audio “Compact Cassette” to twoinch audio multitrack and “quad” video tape.
Starting in 1948, dozens of American companies joined the race to build the best or the cheapest or
the largest or the smallest professional and consumer tape recorders. 3M’s “Scotch 111” audio tape brand
became the world sales leader. The Americans made rapid progress in their research in and development
of magnetic recording technology. BASF accepted the fact that 3M had made certain technical advances

in tape manufacturing by naming their 1953 consumer tape series “Magnetophon Tape Type LGS”.
Only industry insiders knew the “S” designation meant “Scotch-compatible”, indicating the technical
compatibility of Type LGS with the new 3M formulation being used on many consumer tape decks of the time.
Cellulose acetate tape such as Scotch 111, whose base film was almost identical to Type C tape, was
widely used in America until well into the 1960s, when it was replaced with polyester. American
broadcasters who used acetate tape for decades and who hear the story of the birth of German tape are
surprised to learn that a plastic-based PVC tape was in use in Germany as early as 1943.
From its rebirth in America, magnetic recording spread rapidly around the world in radio broadcasting, consumer sales, professional and military data
recording, including computers, and the motion picture industry. Since the post-war Allied Commission
had invalidated most German patents and therefore the rights to royalties on their pre-war and wartime
inventions, AEG, BASF, and Agfa received no immediate benefit from the tremendous worldwide growth
of their inventions. Patents filed after the war by the German companies and by European newcomers
such as Studer/Revox and Kudelski in Switzerland and EMI in Britain later re-established Europe as a
place of magnetic recording innovation. Japanese companies also began to play an increasingly important role in post-war magnetics, especially video recording, with Sony Corporation’s entry into the field in the late 1940s, followed by Matsushita (Panasonic), Toshiba, and others. The birth of the Magnetophon in Germany and the
quick adoption of the technology in America led directly to the rapid and important advancements in
videotape recording. While working for Bing Crosby, Jack Mullin invented the first prototype magnetic television recorder in 1950 using one-inch-wide tape with
fixed heads. Ampex in 1956 introduced the world’s first practical videotape recorder, the VR-1000, which
used two-inch tape and spinning heads. The machine used 3M’s new Scotch 179 video tape. Originally, the
video technology was designed to time-delay programs to bridge the three-hour time difference between the U.S. East and West coasts. But almost
immediately, magnetic video recording revolutionized the production methods in television studios worldwide.

 

[chrisjames61]

U.S. Patents are granted by the USPTO. Why does anyone expect them to be honored by foreign countries, unless we have some sort of a treaty on point with them?

Uh yes. In a civilized world patents are honored amongst trade partners.

That is the problem with using dumping since if pursued long enough will bankrupt the company unless you have a monopoly in a large home market where you can sell at very high prices.

No, the companies in question don't have to turn a profit. That is exactly how the Chinese took over the rare earth market. Their companies are actually owned and subsidized by the Chinese "government" which is totalitarian in nature. They don't have to be profitable. They just have to run their competitors out of business. When that is accomplished then they jack the prices up.

 

[whm1974]

No, the companies in question don't have to turn a profit. That is exactly how the Chinese took over the rare earth market. Their companies are actually owned and subsidized by the Chinese "government" which is totalitarian in nature. They don't have to be profitable. They just have to run their competitors out of business. When that is accomplished then they jack the prices up.

Well in that case, that is true.