Will Silicon Valley Welcome Chinese Companies?

The US high-tech industry hasn't seen a lot of Chinese companies opening up in Silicon Valley — yet. Today, China's WLCSP Co. Ltd. announced it has established an R&D subsidiary in Sunnyvale, Calif.

China WLCSP is a provider of wafer-level miniaturization technologies for the electronics industry. The R&D center will support China WLCSP’s regional activities with OEMs and industry partners in the growing mobile handset market.

“The US is a strategic market, which is experiencing solid growth in the high-end mobile device market,” says Wang Wei, CEO of China WLCSP. “We have several important customers and partners in this country, where we plan to play a leading role over the next few years.”

Chinese companies haven't received a warm welcome in California, according to an December article in The Wall Street Journal :

    California wants to tap Chinese companies to do everything from set up offices and factories to supply public busses and even maybe help build a high-speed train line. In an era of anemic budgets and eroding tax revenues, luring Chinese companies to set up shop is an increasingly attractive option for a number of state and local governments in the U.S. There’s just one problem: It’s not clear the technologies the Chinese want to bring over are entirely legal.

Given the current sentiment of many in the US, there's likely to be controversy over Chinese companies setting up shop here. However, if these companies hire US workers, pay US taxes, and compete on the US playing field, they should be given the same consideration other foreign companies get when opening up on US soil.

According to China WLCSP, its technology enables new levels of miniaturization and performance by applying its unique expertise in the electrical, thermal, and mechanical properties of materials and interconnects. As a result, China WLCSP’s technologies are widely adopted in high-growth markets including consumer, computing, communications, and medical. China WLCSP is headquartered in Suzhou, China.

12 comments on “Will Silicon Valley Welcome Chinese Companies?

  1. DataCrunch
    January 10, 2011

    I don’t see why not.  California is in desperate need of tax revenue and the Bay Area and Silicon Valley have a higher unemployment rate than the US average, so this should be perceived as welcome news.  Many US hi-tech companies have set up shop in China, so I don’t think Californians would mind seeing Chinese technology companies coming to its state.  

    What was the WSJ article referring to about the technologies that China wants to bring over may not be entirely legal?

  2. SP
    January 11, 2011

    When it comes to welcoming chinese companies, I guess common trend is a dislike because they seem to copy everything and there are IP issues.  But as long as they pay taxes and employ Americans, I dont see a reason why they wont start companies in US.

  3. Taimoor Zubar
    January 11, 2011

    I think the Silicon Valley companies may be scared of these Chinese companies. So far, the major electronic giants have outsourced their production to the Chinese companies and have retained the sales functions to themselves. If the Chinese companies have a presence in the US, they can directly deal with the consumer market or other businesses and wipe out the middle-men. This may force the US based electronic companies to lose business since they won't be able to compete directly with the Chinese low-cost producers. This may be the reason companies don't want Chinese firms to have a presence in the US.

  4. tioluwa
    January 12, 2011

    I think its a question of the reasons.


    We all know what China can do once they get into any market, they practically run everybody out.

    If taxes is what California wants, they will get it, but if it is preserving the “glory” and position that Silicon Valley holds on the world stage, only time will tell the implications of Chinese infiltration into the silicon valley.


    I think time has proven that what people (including Americans) want is good quality for the lowest possible price, which we all know China can deliver. So if China infiltrates the Silicon valley, and begins to offer competitive products, Silicon Valley may well soon become China Ville.


    If silicon Valley is worth preserving (i guess the REE wasn't) then the matter should be handled with caution.

  5. elctrnx_lyf
    January 13, 2011

    The technologies are welcomed as long as they are useful to manufacture and produce good products. It doesn't need the chinese have to set up their office in the silicon valley if they have the right technology to sell and no one can stop them if they want to set up also. The semiconductor companies are always searching for better technologies to bring down the cost of the chip manufacturing and also to improve the performance and reliability of their products.

  6. Mydesign
    January 13, 2011

         Till today we all heard about the operations of many US and European companies from China. They want to act as a place for global investment by offering many features like low cost operation, single window systems of FID etc. Up to certain extent they had succeeded also. But now they had started exploring the other options too for going global. May be they felt that the global presence is necessary for the economic growth and help to get hands on experience with the happenings in technology sector.

         Apart from home land, they had already started some companies in neighboring countries like India (Huawei), Malaysia, Taiwan etc. Now they had started exploring the other parts of the world too, as a part of going globally, to establish their presence across globe.  But I think, they have to suffer a lot for the survival in silicon city.

  7. Anand
    January 14, 2011

    I feel its secondary if these companies hire US workers, pay US taxes etc. Main issue is Illegal IP's. Its known fact that China is doing very less to curb piracy and illegal use of IP, because of which many MNC have suffered huge losses. China's philosophy is very simple, just mimic the product and sell it for cheap because they dont incuss R&D cost.

  8. Barbara Jorgensen
    January 14, 2011

    The technology that set the debate in California off was an automotive battery with a sketchy patent history. China's approach to IP is vastly different from the West's–IP belongs to everyone, or the “state”–so it's not surprising the concept will run into trouble. But patent infringement is most often litigated within the region it is called into question, so if battles are fought in the US they will be on US terms. This could have some very significant implications for the entire IP debate.

  9. Anna Young
    January 16, 2011

    I reconcile with various views expressed relating to Chinese moves to set up businesses in the USA. This is foreseeable event.

    I understand the sentiments surrounding Chinese business practices and quite right and legitimate too. However, can Chinese or other businesses be stopped from setting up in the USA? Provided they are accorded the same rights as other businesses; if they are slammed without given the opportunity, I think this would amount to protectionism.

  10. t.alex
    January 16, 2011

    It is quite a surprise move as there are many companies from US setting up R&D center in China, not quite the other way round. However, more jobs are created. Why not?

  11. Barbara Jorgensen
    January 18, 2011

    I think it can work both ways–Chinese companies in the US and vice versa–in a way that both geographies can benefit from jobs and added tax revenue. I know US companies have adjusted their business practices to do business in China. Foreign compnaies setting up in the US should expect the same–adjusting practices to meet the host country's standards. R&D centers don't produce as many jobs as manufacturing sites, but I still think the advent of Chinese compnaies entering the US could be good for the US job market.

  12. maou_villaflores
    January 30, 2011

    Also for companies going to West this is a good strategy for my point of view. This will make their company visible in the competitive IT market.

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