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Companies from over the world have been leaving China for a long time now.
They realized the perils of relying too much on China and China-focused supply networks after the epidemic. Global supply chain disruptions, a severe semiconductor shortage, a deterioration in China's transparency and its unreliable intellectual property rights (IPR) policies are just some of the major reasons why businesses are moving out of the country. Others include a crackdown by the Chinese government, an increase in conflict between western countries and China over the South China Sea, Xinjiang, Hong Kong, and Taiwan.
One more Chip Giant has departed China
In the newest example, Micron Technology is the latest major brand to adopt this strategy. Memory chips such as RAM, SSD, etc. are manufactured by this US-based semiconductor manufacturing behemoth. DRAM design activities in Shanghai will be shuttered by the end of the year, according to a corporate announcement on Wednesday. Around 150 Chinese engineers are said to be employed by the corporation in the center, and they will all be required to migrate to either the United States or India. There is an estimated completion date of 2022 for this procedure.
This decision, according to several workers and industry analysts, is based on a desire to protect intellectual property (IP) from Chinese rivals. The poaching of former workers and management by Chinese internet giants has resulted in an unprecedented loss of technological expertise. Preventative action by Micron seems to be in the company's best interests, those of its workers and those of its patents and other intellectual property rights.
"Micron's Shanghai team has lost more than a third of its 300 personnel because rival chip design businesses in China poached their staff with big wages and stock options," said Chen Rang, a longtime investor and entrepreneur in China's semiconductor sector. He also said that Micron's decision to relocate was not unexpected.
The Departure From China
The problems that Chinese enterprises face are neither new or shocking; they have existed for a long time. From cyberattacks to IPR violations and patent theft to staff poaching to the Chinese culture of reverse engineering and plagiarized goods, technology, and sensitive data breaches, there are numerous reasons why companies in China are losing ground to their domestic rivals.
Many memory chip design businesses from the United States have chosen to have their design teams located outside of China in the first place, and Micron is following suit.
Many nations throughout the world have been lobbying for China's withdrawal from the global supply chain and industry for some time now. Companies that migrate from China have been welcomed and granted incentives by nations such as Japan and India.
The large fiscal stimulus plan proposed by Japan last year, totaling 56 trillion yen ($490 billion), would go toward luring semiconductor makers to the nation. Taiwan Semiconductor Manufacturing Company and Sony Group Corporation soon received government funding to build a $7 billion semiconductor facility in western Japan. It was predicted that the government will provide TSMC with a short-term subsidy of up to 400 billion. Japanese chipmakers are hoping to entice manufacturers from China and the United States to set up operations in the nation by putting up about half of the startup expenses.
A PLI (Production-Linked Incentive) program of Rs 76,000 crores was unveiled by India last year to lure investments from global chip makers and assist them in shifting their plants to India. Over the next six years, this plan is targeted at increasing local chip manufacture, creating jobs and employment, and reducing import costs. More and more firms are making investments in the nation as a result of the incentive, including TSMC, Micron, Samsung, and many more. Chip and semiconductor manufacturers from throughout the globe, but mostly from China, are targeted by the plan.
In many instances, the departure of companies from communist countries has a direct impact on China. More and more individuals in China are losing their jobs; China's "Ideal Investment Destination" reputation is being tarnished as a result; and revenues and taxes are decreasing.
It's all China's fault. Due to China's regressive and discriminatory policies that are driving corporations out of the country. Other nations benefit from China's downfall, most notably those in the region, such as Japan and India, who are close by.