Qualcomm and Brazil: Semiconductors in Sao Paulo

Screen Shot 2018-02-12 at 16.59.24Qualcomm is San Diego’s claim to fame in high tech.  The company was founded by Irwin Jacobs and held naming rights to our major stadium until the Chargers decamped to Los Angeles last year.  Currently, the company faces a hostile take over bid from its competitor Broadcomm.  It is not clear, at this point, if the Broadcomm will have success but Qualcomm has also faced litigation with Apple over patents and royalty payments

In the larger scope of Qualcomm”s endeavors, Brazil has not been that significant although the company has had a presence there at least since the 1990’s with its Omnitrac system, which the corporation sold several years ago.

Qualcomm now has just announced plans for an important joint venture to build a major semi-conductor module  factory in Sao Paulo.  Investe Sao Paulo, which has also worked with All Abroad Consulting has provided significant support to Qualcomm and their Chinese joint venture partner ASE.  My friend, Sergio Rodrigues Costa, the Managing Director at Investe Sao Paulo stated: “The implementation of this project has the support from Investe São Paulo, the investment promotion agency of the state government, which is advising Qualcomm and USI on site location, environmental, infrastructure and tax matters. We are proud of serving this investment, offering strategic information key to the success of the project,”  More information can be found at http://www.investesp.org.br

Here is the press release from Qualcomm and ASE:

Qualcomm and USI Enter Agreement to Form Joint Venture for Semiconductor Module Factory in Brazil FEB 5, 2018SAO PAULO Qualcomm products mentioned within this press release are offered by Qualcomm Technologies, Inc. and/or its subsidiaries. In São Paulo today Qualcomm Technologies, Inc., a subsidiary of Qualcomm Incorporated, and Universal Scientific Industrial (Shanghai) Co., Ltd. (USI), a subsidiary of Advanced Semiconductor Engineering, Inc. (ASE), signed an agreement to form a joint venture. This joint venture, which remains subject to various closing conditions, would focus on an installation of a semiconductor module facility in São Paulo dedicated to the design, development and fabrication of modules and components for smartphones and IoT devices in Brazil. The agreement formalizes the non-binding memorandum of understanding signed by the two parties in March 2017 with the Ministry of Science, Technology, Innovation and Communications (MCTIC), the Ministry of Industry, Foreign Trade and Services (MIDC) and Investe Sao Paulo, representing the Sao Paulo State government. The agreement to form the joint venture is a result of ongoing collaboration among Qualcomm Technologies, USI and the government entities who have been working together to lay the foundation and foster the growth of the semiconductor industry in Brazil, as well as set the conditions for the possible creation of this joint venture. Building on the heritage and industry leading Qualcomm® technologies, the flagship products of the joint venture will be a line of system in package modules powered by Qualcomm® chipsets and the modules include, in a single component, the radio frequency and digital components for smartphones and IoT devices. These products are designed to help dramatically simplify the device engineering and manufacturing processes, and should also provide cost and development time savings to OEMs and IoT device manufacturers. Manufacturing these components in Brazil may also assist in the reduction of the import deficit of integrated circuits, by expanding and diversifying the Brazilian production of semiconductors. “The platforms and solutions of Qualcomm Technologies continue to support and accelerate the mobile industry and beyond,” said Cristiano Amon, president, Qualcomm Incorporated. “The collaboration between Qualcomm Technologies and USI aims to develop best-in-class solutions for smartphones and IoT system platforms by offering connectivity, security and accessibility that customers need to create innovative products and better user experiences.” “This project should help foster the adoption of IoT in Brazil, as some of the technology platforms being supported by this joint venture will be designed with an eye towards helping to facilitate the development and manufacturing of connected devices beyond smartphones across the country,” said Rafael Steinhauser, senior vice president and president, Qualcomm Latin America. “USI has been at the forefront of miniaturization technology for more than 15 years. Our track record and experience make us an ideal collaborator for the manufacturing of highly integrated multi-component modules used in smartphones and IoT devices,” said Mr. C. Y. Wei, president of USI. “Brazil is the largest economy in Latin America with a significant growth potential for integrated modules. USI will be utilizing the technological competence of its parent company, ASE, to help build up the semiconductor cluster in Brazil and Latin America. We are excited to be a part of this joint venture that could help boost local employment in the next five years,” he added. “The creation of this joint venture by world class companies is a major step towards the insertion of Brazil into the global semiconductor chain, accelerating the development of high technology products and creating important competencies in our country by bringing highly specialized jobs to Brazil in the areas of design and manufacturing of semiconductor modules”, says the Minister of Science, Technology, Innovations and Communications, Gilberto Kassab. The joint venture is likely to be set up in the state of Sao Paulo as a result of the effort and collaboration between the State of Sao Paulo, USI and Qualcomm Technologies. Assuming successful formation, the joint venture is expected to start manufacturing in 2020. About Qualcomm Qualcomm’s technologies powered the smartphone revolution and connected billions of people. We pioneered 3G and 4G – and now we are leading the way to 5G and a new era of intelligent, connected devices. Our products are revolutionizing industries, including automotive, computing, IoT, healthcare and data center, and are allowing millions of devices to connect with each other in ways never before imagined. Qualcomm Incorporated includes our licensing business, QTL, and the vast majority of our patent portfolio. Qualcomm Technologies, Inc., a subsidiary of Qualcomm Incorporated, operates, along with its subsidiaries, all of our engineering, research and development functions, and all of our products and services businesses, including, our QCT semiconductor business. For more information, visit Qualcomm’s website, OnQ blog, Twitter and Facebook pages. About the ASE Group The ASE Group is among the main independent suppliers of semiconductor manufacturing services in mounting, testing and conception of materials and design fabrication. As a global leader, it meets the growing demands and necessities of the industry for more performance in faster and smaller chipsets by developing and offering an ample portfolio of solutions and technologies that include design of integrated circuit test programing, front-end engineering tests, wafer probes, flip chips, systems in package, final test services and manufacturing of electronics through Universal Scientific Industrial Co., Ltd. and its subsidiaries, members of the ASE Group. For more information, visit the website www.aseglobal.com. About USI USI is a global ODM/EMS leading company providing design, miniaturization, material sourcing, manufacturing, logistics, and after services of electronic devices/modules for brand owners. USI is a member of ASE Group and has been listed in Shanghai Stock Exchange in 2012. It has many years of experience in the electronics manufacturing services industry and leverages the industry-leading technology of ASE Group, which enables USI to offer customer diversify product in the sectors of wireless communication, computer and storage, consumer, industrial, and automotive electronics worldwide. Through the sales service network in North America, Europe, Japan, China, Taiwan, and manufacturing sites in China, Taiwan and Mexico. USI has about 15,000 people worldwide. For more information, please visit the website www.usish.com.

The proposed investment is reported at approximately 200 million US dollars with funding coming from the BNDES, Qualcomm and ASE Group.  It is also important to note that this announcement was first made in March of 2017 and hopefully with Investe SP and the new announcements, the project is ready to move forward.  On the positive side, it definitely shows that Qualcomm has a long term commitment to Brazil, while the downside could be a change if the Broadcomm acquisition goes through and leads to a change of plans.  Semiconductor plants and their functioning depend on the rapid evolution of technology and production processes.  Such plants can quickly become obsolete if the technology is not continually upgraded.  It is unlikely, in my opinion, that Qualcomm will be making the latest versions of its Snapdragon chips.  Nevertheless, the project represents technology transfer and the creation of high tech opportunities which Brazil needs and welcomes.






Abuse and Other Addictions: USA x Brazil


Source: FrostSnow.com, Rio Gold Medal Winner Simone Biles and Larry Nassar


I can’t but help compare the actions of Larry Nassar, the so called Michigan physician in charge of the US Olympic gymnastics team and the many abuses that take place in Brazil on a daily basis.  Curiously, I am not thinking of sexual abuse under the guise of authority.  Maybe this type does not frighten that much.  After all, for years, Brazilian women would not go to their doctor unaccompanied under the presumption of abuse.  What I have in mind is the type of malfeasance causing furor on Brazilian social media: the current outcry over a housing stipend for judges.

The Nassar story in the US caused outrage because young girls and women were victimized for years, no one complained, a pattern of acceptance of authority prevailed and there supposedly was a reward (gold medals) at the end of the story which perhaps resulted in complicity and connivance.

In recent years, with the rise of social media, Brazilians have identified corruption as their most detested form of systemic abuse.  However, corruption is only a symptom

Brazilians are strivers and see competition and tests as a means to meeting their goals.  These public exams cover everything from being hired as a primary school teacher, a highway patrolman, a public servant, a public prosecutor, a university professor or a judge.  In the end, all of these positions are offered and controlled within the state apparatus.  In most cases, these positions offer success in that once you pass your public exam, you have job stability, with benefits and compensations for life.

On the gymnastics team, Nassar somehow created, and my feeling is that he was not alone, an image that he was instrumental to athletic triumph.  It is well known that sports involve training, physical and mental preparation and possible injury.  Nassar positioned himself as one who could help, assist, facilitate, advise, support and contribute to winning at the highest levels of competition.

The state and those in control are thus positioned similar to Nassar.  The paternalistic state authority offers power, influence and reward to those who are willing to participate and win as well as those who participate and fall by the wayside.  People make assumptions, play the game and render authority in a cavalier fashion.  The state channels and even censures, and its actions are not transparent.  Participants accept the state’s paternalistic power, a certain the invasion of their privacy and a loss of political autonomy.  All this, in the hope that the same state will offer something in return, i.e., a sinecure or a contract.

In Nassar’s case, many, if not most, of his victims were minors.  They lacked experience, knowledge, maturity, information and strength.  He apparently described his actions as necessary even as they were physically painful and mostly unrelated to anything but the satisfaction of his own perverse desires.

While the Brazilian state does not usually engage directly in sexual assault, it does consider the citizenry as uninformed, inexperienced, weak and vulnerable.  As such the individual is subject to abuse and even becomes, as with the athletes, accustomed to it.

Many in Brazil are upset that judges are abusing the public trust by accepting a housing subsidy and other largesse.  These bonuses are seen as unneeded, immoral and corrupt.  Yet most Brazilians seek public employment or public contracts with an eye to enjoying similar perks.  If we look at the many unions, associations and labor organizations in Brazil we discover that each category has its own lobby whose mission is self-preservation through gaining and protecting benefits.  Thus when one category discovers that magistrates, for example, receive a housing allowance, another caste seeks isonomy or equalization.  Brazilians are well known for being creative with taxes. They are apt to copy revenue enhancements from anywhere in the world.  What people do not know is that Brazilians also create many publically funded perquisites ranging from special commissions, “jetons”, attendance awards, repayments, special compensation, 13th, 14th and even 15th month salaries, vacation stipends and much more.  Moreover, these additional benefits are codified and as such are not seen as special favors but legally sanctioned endowments.

While this is the system, Brazilians miss the mark complaining about corruption while failing to recognize their own participation in and sanctioning of institutional advantages which are viewed (from the outside) as un warranted and immoral .  Larry Nassar is certainly a despicable individual but it is hard to believe that he acted for so many years abusing so many without institutional support and societal connivance.  Likewise, Brazilian only fool themselves if they think they will solve the systemic problem by attacking the individual housing allowance or even the beloved 13th month salary.  As the expression goes, “O buraco é mais embaixo.” (The problem runs deeper.)