Appeal to the Trump
Representatives of the American it industry has turned to Donald Trump (Donald Trump) with the request to protect domestic producers of semiconductors from competitors from China. The request is consonant with the common intention of the trump to take action against the negative influence of China on the US economy, writes the Business Insider.
The document was submitted by the Council for the development of science and technology under the President of the United States. The Council among others include the Chairman of the Board and former CEO of Google Eric Schmidt (Eric Schmidt). In the preparation of the report was attended by former CEO of Intel Paul Otellini (Paul Otellini) and the current Chairman of Qualcomm Paul Jacobs (Paul Jacobs) that also are on the Board.
The report is formally addressed to the incumbent President Barack Obama (Barack Obama), but to guide them to have a trump administration, which in General are not very good in Silicon valley.
The problem of absorption
Industry leaders asked the President to ban Chinese companies to buy U.S. chip manufacturers. In the report they note that the monopolization of the market is a big problem in the semiconductor business. If in 2006 the top five producers owned 32% of the market, now their share is 40%, according to the report. The consolidation of the business in one hand facilitate mergers and acquisitions. American semiconductor company in the last five years, annual spending on M&A of about $23 billion.
China, which entered the semiconductor market much later, in the last 10 years has spent on mergers and acquisitions of comparable amount, about $150 billion of private and public funds. The report’s authors note that the acquisition or division of the foreign companies, primarily in Japan, USA and Taiwan, is one of the main methods of expansion of the Chinese market. Some companies are acquired on the cheap after the destabilization of their situation by collusion.
Chairman of Google Eric Schmidt asks Donald trump protection for the chip manufacturers