What it does do, of course, is raise the level of capability in China — design capability, which currently lags quite a bit behind the developed world. TSMC and these other names that I mentioned... are learning to straddle or learning to command an increasingly open global world, and the customers happen to be in China in that example.
Are you talking about facilities that are going to churn out chips that end up going back to the US or the European markets? Or are these chips ultimately for Chinese consumers? Or both?
Both. China over the next five years will produce about a third, maybe as much as 40 percent, of the world's semiconductors, and the projections are that they will consume about half those themselves.
So in your view some of these recent advances in the Chinese semiconductor industry are not necessarily a sign of doom for the US semiconductor industry and jobs in that industry?
Not all. I think it's an enormous market opportunity for the electronics industry, and the strongest players on Earth in the electronics industry are in the United States.
Do you have feelings about the issue of R&D funding from the federal government? One argument is that we've been short-changing the IT arena.
I don't think it's the biggest issue, but I think it's an important issue. Everyone needs to be investing. Every business, if it's looking at the horizon rather than the next quarter or the next year, needs to be making longer-term investments than most do. I can tell you that at Cadence, over the last five or six years, we're investing more heavily in R&D as a percentage of our size and a percentage of our revenue than we have ever in our history. Would I like to leverage that with federal dollars or state dollars? Sure I would. I think that'd be a good thing.
