A bombshell burst upon the market today, A Chinese company declared its intention to buy Micron, a large U.S. semiconductor manufacturer and one of the world leaders in memories, including flash chips. Of course there will be security hurdles to handle, and this government will presumably object, citing the strategic importance of semiconductor devices. Chances of a successful merger must be regarded as a 50-50 proposition at best.
As a song from Shenandoah goes, "I've heard it all before." Decades ago, it was Japanese companies that were the threat. I was on a industry committee in Washington charged with manning the ramparts. I was also on the Board of Directors of SEMI, a trade organization for the Semiconductor Equipment and Materials industry, and the subject of many meetings in Washington and Silicon Valley was "What do we do to protect our leadership in semiconductors?"
I remember one meeting when an assistant secretary of defense argued that the fate of the free world depended on our cooperation in depriving the USSR of our test systems.
"They can't even make light bulbs, let alone 64K memories," I said, "because their economic system is so screwed up. You guys should be hoping that they don't catch on to capitalism."
The Chinese, capitalists to their fingernails, have figured it out, and they are coming after us in ways the Russians and the Japanese never learned. What chance has the U.S., with 4% of the world's population, have to compete in the long haul? Information flows instantly, especially via social media, and the days of "keeping secrets" are gone forever.
Let's say the politicians are successful in convincing the Chinese that they would be better off developing their own memory technology and leaving Micron alone. How long do you think it would be before the Chinese find ways of throttling U.S. companies seeking to sell in China?
It's a tough world out there, and our only hope is a dash of what Kissinger called triangular diplomacy. We must make up our minds: Do we want to make nice with Russia or China? With a partnership with either, we have a chance.
As we enter the presidential campaign, the candidates should consider the alternatives.
