For years, many of China’s best and brightest left for the United States, where high-tech industry was more cutting edge. But Mark R Pinto is moving in the opposite direction.
Pinto is the first chief technology officer of a major American tech company to move to China. The company, Applied Materials, is one of Silicon Valley’s most prominent firms. It supplied equipment used to perfect the first computer chips. Today, it is the world’s biggest supplier of the equipment used to make semiconductors, solar panels and flat-panel displays.
In addition to moving Pinto and his family to Beijing in January, Applied Materials, whose headquarters are in Santa Clara, California, has just built its newest and largest research labs here. It even held its annual shareholders’ meeting in Xian.
It is hardly alone. Companies — and their engineers — are being drawn here increasingly as China develops a high-tech economy that increasingly competes directly with the United States. A few American companies are even making deals with Chinese companies to licence Chinese technology.
The Chinese market for everything from electricity to fashion is surging, and companies are concluding that their researchers need to be close to factories and consumers alike. Applied Materials set up its latest solar research labs here after estimating that China would soon be producing two-thirds of the world’s solar panels.
“We’re obviously not giving up on the US,” Pinto said. “China needs more electricity, it’s as simple as that.” China has become the world’s largest auto market, and General Motors has a large and growing auto research centre in Shanghai to work with its Chinese assembly plants.
The country is also the biggest market for desktop computers and has the most Internet users, so Intel has opened a semiconductor research lab in Beijing along with a research centre to make Internet servers work better.
Not just drawn by China’s markets, Western companies are also attracted to China’s huge reservoirs of cheap, highly skilled engineers — and the subsidies offered by many Chinese cities and regions, particularly for green energy companies.
Now, Pinto said, researchers from the US and Europe have to be ready to move to China if they want to do cutting edge work on solar manufacturing because the Applied Materials complex here is the only research centre that can fit an entire solar panel assembly line.
“If you really want to have an impact on this field, this is just such a tremendous laboratory,” he said. Xian — a city about 800 km southwest of Beijing — has 47 universities and other institutions of higher learning, churning out engineers with master’s degrees who can be hired for $730 a month.
On the other side of Xian from Applied Materials sits Thermal Power Research Institute, China’s world-leading laboratory on cleaner coal. The company has just licenced its latest design to Future Fuels in the US.
The American company plans to pay about $100 million to buy a 130-foot-long maze of equipment that turns coal into a gas before burning it. This method reduces toxic pollution and makes it easier to capture and sequester gases like carbon dioxide under ground.
Future Fuels will ship the equipment to Pennsylvania and have Chinese engineers teach American workers how to assemble and operate it.
Small clean-energy companies are headed to China, too. NatCore Technology of Red Bank, New Jersey, recently discovered a way to make solar panels much thinner, reducing the energy and toxic materials required to manufacture them.
Unable to find partners in the US to commercialise the technology, NatCore reached an agreement with a consortium of Chinese companies to finish developing its invention and begin mass-producing it in China.
“These other countries — China, Taiwan, Brazil — were all over us,” said Chuck Provini, the company’s chief executive.
President Barack Obama has often spoken about creating clean-energy jobs in the United States. But China has shown the political will to do so, said Pinto. Locally, the Xian city government sold a 75-year land lease to Applied Materials at a deep discount and is reimbursing the company for roughly a quarter of the lab complex’s operating costs for five years, said Gang Zou, the site’s general manager.
Labs bigger than football fields
The two labs, the first of their kind anywhere in the world, are each bigger than two American football fields. Applied Materials continues to develop the electronic guts of its complex machines at laboratories in the US and Europe. But putting all the machines together and figuring out processes to make them work in unison will be done in Xian. The two labs, one on top of the other, will become operational late this year.
Applied Materials has built a 360-employee operation here in Xian after announcing an 18-month programme last year to reduce employment by 10 per cent to 12 per cent, including layoffs in the United States and Europe. Pinto said that the company was re-adjusting its workforce as manufacturing shifts to Asia, but that the Xian facility involved a new approach to researching the design of an entire assembly line and was not replacing laboratories elsewhere.
With China’s economy gaining strength, Pinto and his wife, then living in Santa Clara, began insisting in 2005 that their sons study Chinese once a week. Now 10 and 11, the boys are improving their Chinese and trying to master the art of eating with chopsticks.
Applied Materials has greater challenges, including fighting technological theft, a chronic problem in China. The company has taken measures, including sealing its computers’ ports here, to prevent the easy use of thumb drives to record data. Employees are not allowed to take computers from the building without special permission, and an elaborate system of computer passwords and electronic door keys limits access to certain technological secrets.
But none of that changes the sense that tectonic shifts are under way. When Xei Lina, a 26-year-old Applied Materials engineer here, was asked recently whether China would play a big role in clean energy in the future, she was surprised by the question.
“Most of the graduate students in China are chasing this area,” she said. “Of course, China will lead everything.”
The New York Times