Take SMIC. The chipmaker will soon operate plants in five cities across China. By contrast, SMIC's Taiwanese rivals, United Microelectronics Corp. (UMC ) and Taiwan Semiconductor Manufacturing Co. (TSM ), have built most of their factories in two science parks just a few hours' drive from one another in Taiwan, making it easier to manage the plants. So why has SMIC spread out so much? "Every [local] government wants to go into high tech," says Pranab Kumar Samar, an analyst in Hong Kong with Daiwa Institute of Research. That might make for good politics, but it's not exactly smart business.
Sunday, May 06, 2007
The troublesome way going global
Business Weeks sums up the trouble Chinese IT-companies are having in finding their way in a fast globalizing world. (h/t China Law Blog). While the Motorola's, Nokia's, Intel's and Dell's look with fear at the upcoming Chinese competition, life is tough for Lenovo, Ningbo Bird, TCL, Huawei, ZTE and SMIC. Making a profit is not that easy, when the government is keeping a close eye on you.
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2 comments:
Five plants at different locations may be a headache for the management, but what has it to do with going global?
The headline refers to the BW-article and it helps to discover the link with the quote. It illustrates how Chinese companies have to maintain relations with the governments on all departments, forcing them to make economic not very sound decisions. The link is there, but in the hurry I have skipped a few steps.
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