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Chinese chips
China could become a global semiconductor power by 2010, but so far—despite newly announced investments in chip fabrication—that potential hasn't been realized. The Chinese semiconductor industry supplies only 5 percent of total domestic demand, and production technologies are two or more generations behind the leading edge.
The take-away: In some respects—market demand, government support, technological sophistication, talent, and capital supply—China's present situation resembles that of Taiwan in 1990. But a study suggests that China may achieve world-class status by taking the road less traveled, emphasizing chip design rather than the capital-intensive manufacturing that helped Taiwan become a leader.
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