Chip Overproduction and China

dmschanoes dmschanoes at earthlink.net
Sat Sep 13 18:28:04 MDT 2003


>From the FT hardcopy story 9-12-- Motorola

In 1995, Motorola invested one billion dollars in a plant in Tianjin China
to supply chips for pager for China's home market.   However the shift to
mobile phones and low import tariffs made it cheaper for Motorola to import
chips from more advanced factories in other countries.  The Tianjin plant is
basically idle.

Motorola is close to concluding negotiations with Shanghai based
Semiconductor Manufacturing International (SMIC) for transfer of the plant.
The term "sale," has not been used by either side.

SIMC is a Taiwanese run company.

Reports the FT: "Although, SMIC would be taking capacity off the hands of
Motorola, it is not clear where its new customers would come from--
especially as it is still in the process of increasing its output in
Shanghai and Beijing."

That would be a problem,wouldn't it?  Merrill Lynch estimates only 20% of
electronic equipment produced in China is for the "home market," which means
China provides only 2% of global revenue for electronics and chips.

Says the FT:  "China offers no cost advantage in a capital intense industry
such as semiconductor production, labor is a tiny party of the total
spending."

This is too good, isn't it?  They must be reading Marx-- and this then
should illuminate an aspect of uneven and combined development-- that the
introduction of the advanced techniques "evens out" in the markets as part
of the general rate of profit."  Thus the privileges, the advantages of
"super-exploitation" are overcome by the capitalist process itself.

This has considerable significance, in my opinion, for classic views of
imperialism.

dms



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