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Did We Teach China to Steal Technology?

There seems to be a new headline every week or so about some company in China selling a knock off copycat version of someone else’s product. One that caught my attention was in Forbes magazine entitled How A Chinese Automaker Can Clone Porsche And Still Get Away With It. It’s really worth checking out if for no other reason than to look at the pictures.

I was stunned by the similarity in all aspects of the exterior and more so the interior design of the Zotye SR9 and Porsche Macan. Having owned six Porsches over the past 45 years, I was actually a bit pissed off about this. But then I had a flashback and came to my senses.

You see, in my early career as an analog IC marketer, I was partly responsible for doing the same thing. Actually, in those early days of the chip industry, almost everyone was. While the Chinese in this article basically admit to the wrong doing but refuse to accept blame for any copying, we proudly advertised that we were doing it, but under the name of “second sourcing”. We were justified in doing so because we were protecting the customers. From what, you may ask?

Well, much has changed in those 40 +/- years. Back then, everyone owned their own silicon wafer fabs. There were no foundries yet. Equipment was, well, a bit sketchy and process engineers… well I don’t want to hurt anyone’s feelings… let’s just say things are better now…much, much better.

In the old days, it was not uncommon for a chip company to lose a recipe for a particular process. It was as simple as that. Wafers would be running fine on a particular process for months…even years… then, suddenly, a wafer lot would come thru with zero yield, as would the next one. And then, holy hell would break loose. Production control people would go into a tail spin rescheduling orders, mostly by hand I might add.

Process engineers would set up camp in the fab trying to identify what went wrong. Product engineers would be summoned to confirm that there were no changes to the production mask set. (Yes, that was something that could easily happen with a simple ECN from an engineer…there was no ISO-9000 back then.) It could take weeks or sometimes months to resolve the problem…and many more months to get production back on line.

Meanwhile customers would be tossing hand grenades at the chip company’s sales team…threatening never to buy another product from them ever again unless they could get top priority for what little product might be available. Distributor inventories would plummet. And thus began second sourcing.

Self-inflicted availability problems were common. Customers, desperate for product, would call competing chip firms begging them to second source certain critical chips from the originating source. Sometimes these deals were managed with written agreements; most were not.

Back then, the chip market was small. IC designers were as scarce as rocking-horse droppings. Everyone wanted to sell more and the easiest thing to do, given limited design resources, was to simply copy someone else’s chips. Fairchild has several successful Op Amps. The uA709 and uA741 come to mind. Copying chips was a task of product engineers, leaving design engineers free to “invent”.

Nasty letters from one company to another kept the legal department secretaries busy… threats of lawsuits and all that sort of thing. But eventually the heat lessened as companies realized that with a second source for a product, customers were more likely to design the part in…knowing the risk of a lost recipe would not bring a halt to production.

And thus, Product Pirating began. We all filled our data-books (Remember those things? 3 pounds of paper that were mailed to you every year?) with a few proprietary products and a car load of second source chips, originally designed by our competition.

There must have been a dozen or more sources for that 741 thanks to pirated IP.

So, who are we to condemn the Chinese? After all, all they did was steal our idea.

2 comments on “Did We Teach China to Steal Technology?

  1. Victor Lorenzo
    September 17, 2017

    I have seen several diferent and also humorous ways of making references to what you call “steal technology”. I think I've coined one for one method of software cracking (piracy): “Evaluation periode extension”. Years ago one Chineese distributor came to visit us and showed several types of connectors. They looked very similar to one very known brand. His sale argument was “these are manufactured using the same machinery and production line as the ones from xyz, but at a more competitive price”. We took it with some humor. So, is it technology theft, or technology loan?

  2. Steve Taranovich
    September 18, 2017

    Hi Victor,

    I like that phrase! At least the phrase is an act of creativity by you. China should follow your example and try to be more creative.

    In my visits to China as an apps engineer, I met some very talented electronics engineers. They were very creative, but not all China's engineers or 'product copiers” are like that.

    Or maybe in many cases it is not the lack of creative engineering, but a company's merketing and product people who just want a short-cut to the market. 

    I think that most engineers want to create new things.

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