Tom's Hardware: U.S. Wants China's SMIC to Stop Making 14nm Chips

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China’s Trillion-Dollar Research Funds Squandered On Travel and Leisure

https://www.theepochtimes.com/chinas-trillion-dollar-research-funds-mostly-spent-on-travel-and-leisure-chinese-state-media_4672564.html

In the past four years, many Chinese IC stars that emerged from the
CCP’s "rapid chip-making" campaign have gone awry or ended in a
disastrous failure. ( NICOLAS ASFOURI/AFP via Getty Images)

Chinese authorities had high hopes for China’s chip industry,
expecting to see a “semiconductor miracle,” which would then affirm
the “advantage of China’s whole nation system,” as well as overcome
technology sanctions imposed by the United States.

However, eight years into establishment of China Integrated Circuit
Industry Investment Fund, also known as the “Big Fund,” trillions of
yuan have been exhausted with little success in tech innovation.

China’s anti-corruption watchdog launched an investigation into the
former and current executives of the “Big Fund” in July, and seven
senior officials linked to the “Big Fund” have demoted since.

In fact, misusing government research and development (R&D) subsidies
and grants is common within China’s scientific community.
Where Did China’s Trillions in Research Funding Go

In April 2018, Chinese state media Sina Finance published an article,
asking the question, “China has long been spending trillions of yuan
in the field of semiconductors every year, but where did the huge
amount of funds go?”

The article went on to say that in the past several years, roughly
only 40 percent of the country’s research funding was actually spent
on science and technology research and development, and 60 percent was
spent on meetings and business trips.

“Whenever there are chances of business meetings, one can reimburse
travel expenses, gasoline cost, and the travel cost can be huge when
people go abroad to attend meetings. Even researchers at Tsinghua
University and Peking University are no exception,” it said. “Anhui
University of Engineering has also found that research funds are used
to reimburse entertainment, foot spa, HOA cost and other expenses
unrelated to the project. Moreover, the university noted a drastic
increase of business trips abroad in recent years.”

A researcher revealed to Sina Finance that usually for the so-called
inspection trips in foreign countries, the researchers simply made a
brief appearance at their targeted inspection sites, and the rest of
the time was spent on travel, leisure, and sightseeing.

In addition to holding or attending business meetings, Chinese
research institutions are also obsessed with buying equipment,
according to the article.

“Every year, when the funding is allocated, the first thing they do is
to update all the laptops, scanners, cell phones, and other resources
in the team, and sometimes a mentor with several topics in hand can
get himself several of the latest laptops,” it said.
R&D Fraud

Many researchers are very skillful at selling an idea—hyping up a
concept, sometimes to the point of committing R&D fraud, in order to
apply for a hefty amount of funding. “Some key projects can get
several millions or even several tens of millions of yuan as research
grant. These people’s desire for capital is greater than getting
down-to-earth with scientific research,” the article said.

Citing the Wuhan Hongxin scandal as an example, the article recounted
that in August 2002, Chen Jin, then dean of the microelectronics
school of Shanghai Jiaotong University, bought a Motorola chip from
the United States, and hired a few migrant workers to polish off the
MOTO logo from the chip with sandpaper. He then paid a small company
to put a “Hanxin One” trademark on polished surface of the chip.
Through layers of his personal connections, he was able to obtain
various certifications, claiming that it was China’s first high-end
DSP chip with independent intellectual property rights.

“As the whole nation was thrilled at his claim, Chen applied for
dozens of research projects in one shot, and even deceived the General
Armament Department of China’s military into filing a Weapons and
Equipment Technology Innovation Project. No one noticed any problems
before or afterwards. So he succeeded in defrauding over 100 million
yuan of scientific research funds,” the article said.

In an interview with The Epoch Times on Aug. 12, overseas China expert
Lu Tianming pointed out that China’s ambition of rapid chip R&D itself
is a good goal to set, but the thing is, the Chinese Communist Party
is rotten to the core.

“It can be said that every single communist official is corrupt,” Lu
said. “Actually, it would be abnormal if any official or supervisor
involved would not embezzle from the funds. They all wish to line
their own pockets when given such an opportunity.”