Disgraceful record by US
The United States basically does not allow any country in the world to lead it. It only allows US to set fires, but does not allow others to light lamps. The record of the United States in this regard is really poor. Here are a few well-known cases to awaken everyone’s memory.
Notable countries cases
Soviet Union
This needs no further explanation. After the collapse of the Soviet Union, the United States has since become the world’s only super power, dominating the world for more than thirty years to this day.
Japan
In the 1980s, Japan was the world’s leader in the semiconductor industry and beat American companies to the point where they couldn’t hold their heads up. Later, Japan was forced to sign the famous Japan-U.S. Semiconductor Agreement, forcing Japan to reduce its semiconductor market share in the United States. Since then, Japan’s semiconductor industry has been in decline and has been in decline ever since.
Japan was forced to sign the Plaza Accord and paid a heavy price. The national economy fell into stagnation for decades and has not recovered to this day.
Please see my other post “Japan is already a country of mediocrity, not as advanced as you think” for this part, as well as my explanation in my first book “The Rules of Super Growth Stocks Investing“.
In order to suppress Japan’s semiconductor industry, the United States also supported South Korea and TSMC as a plan to replace Japan. Lest Japan’s semiconductor industry resurgence that day and threaten the survival of U.S. industries again.
Taiwan
Many people in Taiwan secretly rejoice that the United States’ suppression of Huawei is helping Taiwan. But I would like to remind people who hold this kind of Ah Q idea and self-righteousness to wake up from the spiritual law of self-victory. The three examples in the next section of the United States’ suppression of Taiwan’s electronics industry will serve as a wake-up call to you, I believe.
Famous corporate cases from the past
Toshiba
In 1987, Toshiba sold equipment to the Soviet Union. The United States took advantage of this and imposed a series of sanctions on Toshiba.
In March 1987, it was revealed that Toshiba Machinery, a subsidiary of Japan’s Toshiba Group, had illegally exported multiple CNC multi-axis milling machines to the Soviet Union. The United States used this as a reason to put strong pressure on the Japanese government and severely punished Toshiba Machinery and Toshiba Group.
Investigation reports at that time showed that Toshiba Machinery, located in Numazu City, Shizuoka Prefecture, Japan, was a large machinery manufacturer controlled by Toshiba Group, and its turnover accounted for about 10% of Toshiba Group’s. From December 1982 to 1984, Toshiba Machinery exported a total of eight milling machines with advanced CNC devices and related software to the Soviet Technical Machinery Import Company.
Toshiba Machine, knowing that exports of high-performance machinery and equipment to communist countries (socialist countries) required state review and approval, took a deceitful approach and disguised these precision CNC machine tools as ordinary machine tools to apply for approval from the Ministry of International Trade and Industry (now the Ministry of Economy and Trade). Ministry of Industry and Commerce) and assembled overseas for delivery to the Soviet Union. This move not only violated Japan’s Foreign Exchange and Foreign Trade Law, but also violated the Agreement on the Export Control Committee of the Communist Bloc, which was drawn up mainly by the United States and to which Japan also joined.
In the 1996 Fortune Global 500 list, Toshiba ranked 32nd with revenue of US$53 billion, ranking ahead of Sony, Honda, and Nestlé. However, Toshiba gradually lost its market position in the early 2000s, and this year, Toshiba has fallen off the 2023 Fortune 500 list.
The most direct reason is Toshiba’s failure in nuclear power and semiconductor businesses. In addition, Toshiba’s decline is also related to financial fraud. Toshiba, which was in poor operating condition, embarked on the road of financial fraud in order to maintain prosperity on its books. On September 7, 2015, Toshiba informed the public that in the past seven years, it had falsely exaggerated its earnings by 224.8 billion yen (approximately US$1.9 billion) higher than its actual earnings. This amount was at the beginning of the investigation into the scandal. More than four times the estimated amount.
Toshiba is the pride of the Japanese, but this year it was delisted from the Japanese stock market and privatized.
Alstom
Alstom was a technological giant in France at the time. Alstom was responsible for the manufacturing, maintenance and updating of all steam turbine generators for the 58 nuclear reactors in France. It produced 75% of France’s power equipment and even supplied the Charles de Gaulle in France. Aircraft carriers provide propulsion turbines. In addition, Alstom is also extensively involved in the public transport industry.
Note: Nuclear energy accounts for the vast majority of France’s electricity, with statistics in 2021 of 68%.
Alstom is the brightest pearl in French industry. In its glory days, Alstom achieved it, ranking first in the world in hydropower equipment, first in the world in conventional nuclear power plants, first in the world in environmental control systems, and first in ultra-high-speed trains and high-speed trains. In terms of energy, we provide 15% of the world’s total installed capacity of equipment with a total of 460 megawatts, ranking second in the world. Alstom and the American giant General Electric (ticker: GE) have fierce competition around the world.
On April 14, 2013, at JFK International Airport in the United States, Alton International Sales Vice President Pierucci was arrested by the FBI as soon as he got off the plane. Alstom, a business giant that once spanned the global power energy and rail transportation industries, was not only fined a huge US$772 million by the US Department of Justice. The core business was also “forced” to be acquired by its main competitor General Electric of the United States. As a result, the United States gained partial control of most nuclear power plants in France.
Taiwan’s panel industry
In 2006, AUO, South Korea’s Samsung, and Japan’s Sharp competed for the world’s number one spot in the panel industry. At the end of 2006, the U.S. Department of Justice conducted a large-scale investigation into eight Asian LCD panel manufacturers for allegedly jointly manipulating prices and violating the U.S. Antitrust Law. They were investigated in the name of antitrust by the United States.
The following are important events from that year:
- In 2006/12, the U.S. Department of Justice investigated eight major panel manufacturers for violating antitrust laws from 2001 to 2006.
- In 2008/11, Sharp, CPT, and LG Display agreed to plead guilty, and three executives including former CPT chairman Zhenhong Lin were subsequently sentenced. At the end of 2008, three senior executives of CPT reached a plea agreement with the United States and have served nine months in prison in the United States.
- In 2009/12, Chimei agreed to a plea bargain and paid a fine of US$220 million, with its senior managers serving prison terms.
- In 2010, Chimei Electric general manager He Zhaoyang went to the United States and served 14 months in prison.
- In 2010/6, the U.S. Department of Justice accused AUO of violating antitrust laws and participating in a pricing agreement that sought US$500 million in illegal benefits. AUO Vice Chairman Xuanbin Chen, former General Manager Laizhu Chen, Director Xiong Hui and others who went to the United States to assist in the investigation in 2010/8 were restricted from leaving the country.
- In 2010/12, the European Commission accused AUO and Chimei of violating antitrust laws and fined Chimei 300 million euros and AUO 116 million euros.
- On March 13, 2012, the jury decided that AUO was found guilty of violating antitrust laws, Xuanbin Chen and Xiong Hui were guilty, and Xuanbin Chen served 2,343 days in prison in the United States.
After this incident, AUO ADR was delisted from the US market in 2019. Taiwan’s panel industry has since completely disappeared from the forefront of the world’s panel industry; now it can only rely on the production of backward panels and is struggling on the edge of losses. Even the company’s survival may be a problem, let alone the the right to speak in this industry.
HTC
HTC’s status in smartphones back then was comparable to that of Apple today. However, in just a few years, HTC’s smartphones fell from the cloud to the earth. The fundamental reason is that the United States does not allow HTC to dominate the world’s mobile phone industry. It is as simple as that.
The Americans just used a lot of reasons for violating intellectual property rights and countless lawsuits to knock down HTC, thereby suppressing HTC’s mobile phone development. Of course, HTC, a Taiwanese company, cannot withstand various pressures from the United States. It can only give up its former world No. 1 position and swallow all unfairness sadly.
Famous corporate cases currently underway
Huawei
This case is so important that I will post another article to explain it.
TikTok
Regarding TikTok, please refer to my other previous article “Let’s talk about TikTok“.
TSMC
TSMC (ticker: TSM) is forced to set up a wafer fab in the United States. No one with some industrial knowledge would think that TSMC’s US wafer fab can make money. Please refer to my other two posts “TSMC gets emerging and serious challenges” and “Why is TSMC’s profit margin much greater than competitors?” for a detailed explanation. TSMC already has a wafer fab in the United States, but it has been unable to make money for a long time. If it could make money, TSMC would have gone long ago, and it would still need to be forced.
The matter doesn’t stop there. After the wafers are produced, they still have to be shipped back to Taiwan for packaging. Americans are still worried. In August 2023, Taiwanese media reported that the governor of Arizona came to Taiwan in person to put pressure on TSMC, requiring TSMC to build a new semiconductor packaging plant in Arizona. Compared with wafer production, semiconductor packaging is an industry that relies more on manpower. There is no money to be made in wafer production. The packaging factory is located in the United States, which is a bottomless pit for burning money.
It is recommended that you refer to my other two articles: “Two long-term threats to TSMC: US and SMIC” and “TSMC gets emerging and serious challenges” for in-depth explanations.
Related articles
- “How did Japan, Alstom, Toshiba, HTC and Taiwan’s panel industry collapse?“
- “How did three listed companies make money after GE spinoff? What are the prospects?“
- “Two long-term threats to TSMC: US and SMIC“
- “TSMC gets emerging and serious challenges“
- “Why is TSMC’s profit margin much greater than competitors?“
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