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SNS: China’s Chips Strategy

SNS: China’s Chips Strategy


In This Issue
Week of 01/08/2018
Vol. 23 Issue 2

FEATURE: China’s Chips Strategy

  • Artificial Intelligence
  • Chips
  • China’s New Plan: “The Third Wave”
  • Clearing the Way
  • The Story of Apple in China
  • The Story of Qualcomm in China

Quotes of the Week

Takeout Window

  • China Cracks US Car Market – in the Usual Ways
  • Huawei Expands by Copying
  • Google Puts AI Center in China


  • China’s Dual-Use Programs



The Standing Committee of the Chinese Communist Party maintains a list of high-priority targets for theft and domestic development, which is updated every five years. Right now, the top two targets are artificial intelligence (AI) and chips. This means that any person, company, or country around the world doing advanced research and development (and production) of either of these two technologies is a likely target for espionage, theft, forced technology transfer, and ultimately market share loss, at the hands of the Party.

Our INVNT/IP division is now well-known around the world for its leading expertise in understanding – and revealing – the Chinese national business model. SNS members have already seen the 60 Minutes episode (“The Great Brain Robbery”) based on our work, and know that the US Department of Justice has described it as “the best work done on the Chinese national business model.”

China made its early money ripping off CDs and DVDs, Gucci bags and Rolex watches, copying and counterfeiting almost every item made in the West. Party members soon realized they needed to move up the intellectual-property food chain if they were to achieve their ultimate goals of “returning” China to world-power status, and Huawei was born, in a mix between the Party and the People’s Liberation Army. In a model now common to many Chinese “champion” companies, an overnight multibillion-dollar firm was created out of nothing but stolen IP (from Cisco, in this case) and huge orders for copycat routers from the PLA. All that was needed was money to support dumping pricing on the world markets, which the state provided beyond any measure seen on the planet before, and Huawei dominated and then destroyed all of its global competitors, with Ericsson failing rapidly and now the last to die.

This is competition, “with Chinese characteristics,” as the Party likes to say of things copied from the West.


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