25th Anniversary Issue of The Chip Insider. Why China will fail.

G. Dan Hutcheson

The Chip Insider®

25 Years Ago Today, I started a new e-mailing to subscribers to address the increasing need for instantaneous analysis of events in a time when market research and news came on paper. It took weeks for news to circulate the globe… As I wrote then, “my purpose is to focus on the strategic angle and always try to cover new ground. It is meant for senior executives…” The idea was to take my insider access to C-Suite issues and write openly about what could not be talked openly about between suppliers and customers. At the time the industry was heading into the Asian Financial Crisis as mid-level executives in the semiconductor industry were demanding a new wafer-size generation of equipment based on plans set in motion four years earlier in an upturn by senior managements. Now, they had no plans to buy what they demanded. This first 300mm generation would fail and the second would not enter production for five years. Addressing this made ‘The Chip Insider’ required reading for industry insiders. My series around the theme of 98’s 300mm version not being a tech revolution but a bloody French one made friends and enemies. More importantly, it shocked customers into realizing how unreasonable it was to make such demands amid the Asian Financial Crisis. The demands fell away and a second generation of 300mm tools would eventually come. Later I was told it brought the leading Semiconductor and Equipment C-Level execs to SEMICON West to smooth things out. The head of SEMI-SEMATECH flattered me with the comment that I was the “most powerful person” in the industry. Far more important, the power of my pen had made a difference, which I would strive to do in the future.

The Brand: I came up with ‘The Chip Insider®’ brand … in the classic way of rearranging a bunch of words ... For inspiration were the many C-level executives’ stock-play pitches. The epiphany was that I was an insider among insiders that knew how to speak to their issues behind closed doors. So why not write about what they wanted to say but could not? …

Why China will fail … When one looks at China’s rise through a western lens, it seems almost inevitable that it will displace the United States as the world’s leader on many fronts. I remember many thinking the same about Japan in the 1980s. Until I wrote a note in 1988 – ten years before The Chip Insider – predicting they would peak and go into a long decline in the 90s. Given this is the 25th Anniversary issue, I thought it would be fun to go out on a limb and speculate again. This time about China’s rise. There’s no need to predict China peaking as… My point here is … to beat on the defeatists who believe the west can’t compete with China. The challenge China presents in its pursuit of innovative solutions is just a challenge the west should not shirk from. Competition is healthy. Healthy competition in innovation makes us need each other, which in the end lessons the chance of war. That is my point.

“A good plan, violently executed now is better than a perfect plan tomorrow” — General George S. Patton

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