Moon of Alabama Brecht quote
February 08, 2021

U.S., Taiwan Manipulate Chip Supplies To Press For War With China

The current government of Taiwan is trying to break the U.S. and Europe's One-China policy to become an independent country under U.S. and NATO protection.

The Peoples Republic of China, the mainland, insist, historically correct, that Republic of China, Taiwan, is a part of mainland China.

Since 1972, when Nixon went to China, the U.S. has supported that position:

In the case of the United States, the One-China Policy was first stated in the Shanghai Communiqué of 1972: "the United States acknowledges that Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States does not challenge that position."

The ruling Taiwanese nationalist Democratic Progressive Party under President Tsai Ing-wen's leadership now has a plan to break that policy. Despite regime change in Washington DC it has support from U.S. anti-China hawks:

[Taiwan's Representative to the US] Hsiao’s invitation to Biden’s inauguration, taken together with Blinken’s language at the confirmation hearing, indicates that the Biden administration is willing to adopt a large chunk of the Trump administration’s Taiwan policy.

While in office, Pompeo pushed back against China and acted as a guarantor to Taiwan — Beijing viewed him as an outright enemy.

Through well planned economic development policies Taiwan has achieved a near monopoly in the production of computer chips. There were until recently three companies which could mass produce computer chips with the most tiniest structures. Then the U.S. company Intel screwed up its development of a production process for 7 nanometer chips. It is now at least two years behind the competition. Its newest chips are no longer the most powerful in the market. The CEO and the technical leadership have since been fired but it still will take years, if ever, to regain the leadership. A second big production facility is owned by the South Korean Samsung conglomerate. It is mainly used to produce the chips for Samsung's own products.

The third and by far biggest producer of chips is the Taiwan Semiconductor Manufacturing Co (TSMC). TSMC does not produce consumer products. It manufactured, until recently, for everyone in the global industry. It is the go-to producer for high-end chips other companies need. It has now become a weapon in the hand of the Taiwanese government.

Under pressure from Trump, who put sanctions on Chinese companies including Huawei, TSMC reduced its sales to China. It also had to commit to open a production facility in the U.S. Trump's use of the chip production capacities as economic and political weapon has given the government of Taiwan new ideas:

Taiwan’s role in the world economy largely existed below the radar, until it came to recent prominence as the auto industry suffered shortfalls in chips used for everything from parking sensors to reducing emissions. With carmakers including Germany’s Volkswagen AG, Ford Motor Co. of the U.S. and Japan’s Toyota Motor Corp. forced to halt production and idle plants, Taiwan’s importance has suddenly become too big to ignore.

U.S., European and Japanese automakers are lobbying their governments for help, with Taiwan and TSMC being asked to step in.

The ongoing pandemic first led to a slump in consumption. Car manufactures lowered their sales target numbers and their orders for new chips. But soon chip demand increased for products needed to work from home. When the car demand came back TSMC told the car manufactures that there was not enough capacity to produce chips for them. Whether that explanation for the current shortages is really true is questionable:

The auto industry’s pleas illustrate how TSMC’s chip-making skills have handed Taiwan political and economic leverage in a world where technology is being enlisted in the great power rivalry between the U.S. and China -- a standoff unlikely to ease under the administration of Joe Biden.

Taiwan’s grip on the semiconductor business -- despite being under constant threat of invasion by Beijing -- also represents a choke point in the global supply chain that’s giving new urgency to plans from Tokyo to Washington and Beijing to increase self-reliance.

It takes some ten years to build a new chip fabrication facility. The investment necessary for an up-to-date 'fab' has steadily increased and is now more than $10 billion. While the U.S., Japan and Europe have recognized the danger of a chip production monopoly it will take quite some time before they can become less dependent on TSMC.

This gives the Taiwanese government a window of several years to use TSMC for strategic purposes:

“Taiwan is the center of gravity of Chinese security policy,” said Mathieu Duchatel, director of the Asia program at the Institut Montaigne in Paris. Yet while Taiwan’s status in the global chip supply chain is a “huge strategic value,” it’s also a powerful reason for Beijing to stay away, said Duchatel, who’s just published a policy paper on China’s push for semiconductors.

Assuming Taiwanese forces were to be overwhelmed during an invasion, “there is no reason why they would leave these facilities intact,” he said. And preserving the world’s most advanced fabs “is in the interests of everyone.”

For all the moves to reel back domestic chip fabrication, it’s optimistic to think the supply chain for such a complex product as semiconductors could change in short order, Peter Wennink, ASML chief executive officer, told Bloomberg TV. “If you want to reallocate semiconductor build capacity, manufacturing capacity, you have to think in years,” he said.

China has threatened to invade Taiwan should it declare independence. But as long as it depends on Taiwanese chips it can only do that while also damaging its own industries. Still there is little doubt that China would be willing to take that risk:

The Chinese government said Wednesday that actions like its warplanes flying near Taiwan last weekend are a warning against both foreign interference in Taiwan and any independence moves by the island.

Asked about the flights, Zhu Fenglian, a spokesperson for China's Taiwan Affairs Office, said China's military drills are to show the nation's resolution to protect its national sovereignty and territorial integrity.

"They are a stern warning against external interference and provocation from separatist forces advocating for Taiwan independence,” she said at a regular briefing, giving the Chinese government's first official comment on the recent flights.

Taiwan thus still needs protection. But as long as the U.S. and others still adhere to the One-China policy it is unlikely to get sufficient support. The plan then is to use Taiwan's chip industry to press others into guaranteeing it military support:

Wang Che-jen (汪哲仁), an assistant research fellow at the government-funded the Institute for National Defense and Security Research (INDSR), said in a recently published paper that the current shortage of automotive chips has highlighted Taiwan's strategic place in the global semiconductor industry. The shortage shows that the supply chain for such products has become a matter of diplomatic, security and strategic concern, Wang said in the paper, titled "Automotive chip shortage: A look at Taiwan's strategic place in the semiconductor supply chain."
The American and Japanese governments, for example, have invited Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, to build facilities in their countries, he noted.

Wang, however, warned against such a move, saying that while it may help to shorten the global supply chains, it may also weaken Taiwan's strategic advantage in the semiconductor industry.

"For Taiwan to maintain its 'silicon shield,' it needs to persuade the European countries and the U.S. that keeping TSMC in Taiwan is the best option," he wrote.

The concept of a "silicon shield" describes Taiwan's strategic position in the technology supply chain as a shield against any attack by China.

The blackmailing through chip supplies is not just an academic concept. The Taiwanese government is now openly using chip supplies to press other governments into economic and political concessions:

Taiwan's high-tech chip foundries are some of the world's biggest and most advanced, and so European car manufacturers have been reaching out to Taipei for help.

"Our government and chip manufacturers are mulling how to assist them," Minister of Economic Affairs Wang Mei-hua told reporters on Thursday.
Wang said she spoke to industry representatives on Wednesday, including Germany's de facto ambassador to Taipei.

She said she hoped Europe would help Taiwan obtain vaccines for the coronavirus.
"We need other countries to help Taiwan acquire vaccines, especially for medical workers as a top priority," Wang said.

"I told the German representative yesterday that we can help them acquire automotive chips to solve the problems facing the auto industry and we hope they can do what they can to help Taiwan acquire vaccines," she added.

Vaccine blackmail is one thing.

Nick Siemensma @nicksiem - 6:05 UTC · Feb 6, 2021

Taipei openly offering a quid pro quo to Germany. Is vaccine a fair price? Taipei turned up its nose at Fosun-manufactured supply of the Pfizer-BioNTech vaccine, so perhaps Germany can offer something more. And was no similar exchange of favours available to the USA?

The exchange with the U.S. is about much bigger things than vaccines. To press for political support that involves a potential war with China is on a different scale. Still the ball seems to start rolling:

The Daily Mao @TheDailyMao - 8:58 UTC · Feb 4, 2021

8/ Up until 2020, US tech-economic strategy was mainly to profit off the Chinese market. But after the COVID shock, that's shifted: the US now wants to bleed out the Chinese economy and specifically cripple Chinese tech companies with semiconductors

9/ In terms of bleeding out the Chinese economy, autos are where it starts. My TSMC source tells me they have been asked by the TW/US govts to prioritize chips for auto plants outside China and for US/JP carmakers, to punish the EU for the #CAI

10/ Yesterday, he mentioned that his TW govt counterpart was literally 'trying to stifle a smile' when he told her some of TSMC's Chinese customers in auto would have to shut down because they weren't getting enough chip supplies.

11/ But this isn't just some sort of 'happy accident' that a 'free market' will fix. TSMC does not have carte blanche to expand capacity as much as it wants. The market is not allowed to function in this instance... thanks to the TW regime.

12/ He has disclosed to me that the DPP has been using enviro regulations and other methods of pressure to keep TSMC from expanding its facilities 'too fast' - the TW regime seems to want an artificial shortage of chips to give them greater leverage in international negotiations

13/ And again, this is done in collaboration with the US government - to make sure 'every planned production line that comes online is instantly filled with US orders only.'

This is what was agreed upon between Tsai, Krach, and Morris Chang...

14/ ...and maintaining these artificial shortages to hurt companies producing in China are what Tsai means when she talks about restructuring the global supply chain away from China.

15/ As you may already have guessed, the EU is not happy about this arrangement. Besides the surface issue of their automakers being caught in an undeclared trade war, the EU also feels deeply betrayed by Taiwan's regime over this issue.

Please see the linked thread for more details and supporting sources. 

This Taiwanese and U.S. brinkmanship make a war with China more likely and put it nearer than I had previously thought. This summer the situation could already become critical:

The Daily Mao @TheDailyMao - 18:05 UTC · Feb 5, 2021

BREAKING: The DPP of Taiwan has privately indicated to the US it might back an independence referendum in August of this year

In an interesting coincidence this summer will also see some European forces deployed to the South China sea:

In an interview with the Sydney Morning Herald on November 2, German Defense Minister Annegret Kramp-Karrenbauer declared that her country  will dispatch a frigate to patrol the Indo-Pacific from next year.
Her remarks comes two months after Germany became the second European Union member to release guidelines for the Indo-Pacific. France’s foreign ministry released a strategy document in 2018 for the Indo-Pacific, following a major policy speech by President Emmanuel Macron in Australia earlier that year. A subsequent French security strategy for the region was released by the country’s defense ministry in 2019.

The Brits, now a mere U.S. proxy force, also join in:

Japanese and British foreign and defence ministers on Wednesday began a meeting via videoconference to affirm stronger security cooperation amid China's growing assertiveness in the East and South China seas.
The ministers were also expected to agree to work closely on Britain's plan to dispatch an aircraft carrier strike group, centred on the Queen Elizabeth, to the western Pacific for joint naval exercises with the Japanese Self-Defense Forces, the officials said.

Japan welcomes the dispatch of the Queen Elizabeth, Britain's largest warship commissioned in 2017, as it shows the country's strengthened commitment to the Indo-Pacific region, they said.

From the U.S. perspective a conflict with China as soon as possible is preferable to one in later years after China had time to build its capabilities.

It may therefore well be that the U.S. is pushing Taiwan into an summer independence referendum while both use the chip supply issue to press 'allies' into supporting them in a potential war.

Posted by b on February 8, 2021 at 18:16 UTC | Permalink

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It's definitely not an IQ or work ethic problems. The USSR, for example, has far better universal living standards than even modern China (where homeless is still a thing in big cities) with much less population and being sanctioned by the world and much harsher weather.

The West falls not due to their moral panic or lower IQ or higher culture any other mystical nonsense, but because it houses a parasitical upper class that takes but never produces anything, just like Qing era China back then, no amount of good work ethic, high IQ or racial stock can salvage that. History is repeating itself, except the West is now the decadent backwards empire and China is now the rising power.

Posted by: Smith | Feb 12 2021 1:27 utc | 201

Anecdotally, I have to agree with C1ue.

I have an engineering pal who works in the semiconductor industry. Nothing that China has or has shown can compete CURRENTLY with what we have in the west and what they have in Taiwan. Imitation then of course is always the most sincere form of flattery.

I don't wish China's inability to provide technical advances to advance the spirit of their country. That would be cruel and hegemonic. I do wonder if the yearning for Taiwan is composed of equal parts nationalism and jealousy on the part of the mainlanders. One thing is for sure: the future of Taiwan boasts no winnable-outcome for any of the involved parties, save the U.S. conservatives who want out of out-of-region internationalism.

China may win geographically over a technologically-advanced island people, but the resentment of this subjection will come back as a pox on China. They will have to force-emigrate many Taiwanese and interject mainlanders among them on the island.

I am not writing this to dissuade Chinese-nationalism. I am just pointing out facts of spirit when you institute forces of subjection.

Posted by: NemesisCalling | Feb 12 2021 1:59 utc | 202

Posted by: c1ue | Feb 12 2021 0:03 utc | 199

@William Gruff #192

Your faith in technology and Chinese development is touching but sadly not consistent with actual results.

On the contrary. It is VERY consistent with actual results unless you've had your head under a rock for some years.

My observations have been as follows and should be blindingly obvious to you even if your only source of news was the BBC:

- China's recent mastery of launch science has resulted in it being in the lead in terms of numbers of successful space launches in 2020. This is a massive advance in terms of technology derived from pure science.

- China's recent advances in Quantum communications and computing technology has resulted in it's implementation of the largest quantum communications network in the world, putting it in the lead on secure communications networks vital for future military and commercial applications. A clear realisation technological results from pure science.

- Alibaba Cloud's recent innovations has resulted in its consumer and enterprise grade a.i (m.l), data processing platforms exceeding the transaction capability of the world's cloud leader (Amazon). This represents the realisation of commercial technological results from the development of custom algorithms derived from theoretical principles.

- China's recent landing of a robotic probe on the far side of the moon is no mere endeavor of "pure science", it is a technological result thereof.

- Tianwen and the pending mar landing. Need I say more.

- The Chinese scientific progress on EUV lithography technologies is moving forward and has resulted in a technological outcome (prototype) capable of 5nm lithography (Suzhou Institute of Nano-tech and Nano-Bionics under the Chinese Academy of Sciences (Sinano), along with the National Center for Nanoscience and Technology, announcement last year)

- China's first indigenous 28nm lithography machine is on track to be delivered within 2021-2022. A technological result of pure science. I fail to see how, having achieved a system capable of 28nm, given the rapid pace of technological breakthroughs over the past 3 years, the next few rapid iterations cannot bring this 28nm capability down to 7, 5 and 3 within the next 5 years. Regardless, China is already in the cutting edge game at this point, though one could always raise the bar and talk about "the cutting edge of the cutting edge".

In pure science endeavors, China has achieved great results in a couple of areas. However, they have yet to demonstrate that same capability in advanced technology fields.

Please elabourate on what you mean by "advanced technology fields" in particular how it is distinguished from pure science endeavours? As far as I'm concerned, the most advanced technology is that which is able to take advantage of the most recent developments in pure science. The one field of advances leads the other.

Please explain how "great results in a couple of areas" are excluded from your rather fuzzy and vague characterisation of "advanced technology fields" ?

How many "great results" in how many areas are needed before your threshold is reached for having achieved suitable progress in "advanced technology fields" ?

From my perspective your entire response to Mr. Gruff seems largely fluff. Try being more precise.

Posted by: Arch Bungle | Feb 12 2021 6:02 utc | 203

@schmoe | Feb 10 2021 15:29 utc | 159

Here is what I was referring to: " By 2023, SMEE wants to produce machines good enough for a 20 nm node, the report says."

The "report" the article cites is by some organization named "Verdict"; the article does not link to this alleged report. I have never heard of Verdict.

Even if true, it doesn't matter. As I said, if you have a 28 nm lithography machine, you can automatically do 14 nm with multi-patterning. There's no need to wait for SMEE to make a 20 nm machine. Multi-patterning is more expensive, but then the 14 nm market is tiny; multi-patterning will do until other companies finish their 5 nm lithography machines. SMEE is not the only player in this market in China.

"The upcoming scanners are said to use certain components made in Japan, but they don't use any ingredients from the USA. Link

The use of Japanese components may be true -- as a stopgap. As I said, China is developing everything in the semiconductor field, in parallel. Lenses, steppers, resists, everything. So any foreign components will be replaced.

A comprehensive strategy is necessary to prevent further interference by the US. A side effect of this effort is that in a few years, US semiconductor manufacturers will be almost totally locked out of China. When that happens, it will be a mighty shock to arrogant Americans, as China is already 60% of the global market for semiconductors. As I said earlier, the present chip blockade is not so much a weapon against China as it is a delayed demolition of American high technology. Best of all, from China's point of view, the US will have done it to itself.

Posted by: Cyril | Feb 12 2021 9:04 utc | 204

@c1ue | Feb 11 2021 15:02 utc | 172

So: would foreign companies like Apple or Samsung trust its designs in a mainland Chinese fab?

Probably not. But so what? China has giant companies too. According to Fortune ("It's China's World"), "As the Chinese Century nears its third decade, Fortune’s Global 500 shows how profoundly the world’s balance of power is shifting. American companies account for 121 of the world’s largest corporations by revenue. Chinese companies account for 129 (including 10 Taiwanese companies)."

In fact, Chinese organizations like Huawei are growing so quickly that the US had to cheat to try to stop the heavy competition. I doubt the US sanctions will work, as China's internal market is already larger than the US's -- and will be much larger.

Posted by: Cyril | Feb 12 2021 9:48 utc | 205

vk | Feb 9 2021 13:22 utc | 100

All they have to do is to cross he strait (which is bridged).

Ah! The wonders of Chinese engineering!,117.860952,6.87z/data=!4m5!3m4!1s0x346bb47539a7d0a1:0x9cbf6a40736efe26!8m2!3d24.658084!4d119.697944

Posted by: foolisholdman | Feb 12 2021 14:50 utc | 206

@foolisholdman | Feb 12 2021 14:50 utc | 206

Yeah, I had noticed that one too.

Stay strong and never let the facts get in way of ideologically drivel^Hn opinion, vk!

Posted by: Lurk | Feb 12 2021 15:57 utc | 207

michael | Feb 9 2021 12:28 utc | 93

What is never clearly explained anywhere is why 7nm is soo important that we cannot continue to use any 10nm chips, produced in existing fabs outside Taiwan.

To me as an engineer, the fuss seems much exaggerated. Especially as AI, outside from rather dumb ML, is completely lacking the promised capabilities, so far. Progress will be made [in AI] by better algorithms, not by 10x faster chips.

If the problem is real at all, I should think it is that you can get many more circuit elements on a single chip with 7nm technology than you can with 14 or even 10nm and so to make the same circuit with the bigger tech, you have to redesign the PC boards. If that is not the case, then I agree with you.

Posted by: foolisholdman | Feb 12 2021 16:21 utc | 208

Debsisdead | Feb 9 2021 5:16 utc |

well that makes 3 of us wanting an old school car with no computers in it.... it reminds me of the time i needed a part for my yamaha exciter motorcycle.. i think i paid maybe 500 for the bike and i found out i needed the computer replaced which was going to cost me about 450 for the part - new or used, i can't remember.... at that moment in time - 90's i think - i realized how i was being held hostage to a computer and the new design of everything with computers.. same deal the 2007 honda fit... when the ignition system went - you can't just replace the ignition system yourself, as you have to get the computer to recognize the new system you install... the dealership has you over a barrel as it has to be ''coded'' which is short for - ''we got you'' with the computer feature!! so, yeah these computers in cars are a bitch! do i need an electric window, or can i roll it down on my own?? apparently not!!

I used to repair generators for a living and I noticed, though I never made use of it, that one could buy computers for cars much more cheaply than the garages would sell them. You could try:

Posted by: foolisholdman | Feb 12 2021 17:27 utc | 209

Sorry! That last post was misattributed, it should have been headed not Debsisdead | Feb 9 2021 5:16 utc |, but: james | Feb 9 2021 5:09 utc | 74

Posted by: foolisholdman | Feb 12 2021 17:42 utc | 210

Hoarsewhisperer | Feb 9 2021 5:09 utc | 73

One can only imagine why it would take 10 years to build an IC chip factory from scratch. It's either that you have to wait for something to "grow" such a chemical crystals, or that the a vital element in the production process is so temperamental that it takes 5 years of trial-and-error tinkering to get it to work properly?

If they are going to start with raw materials (sand), it is quite a long, multi-step process to extract and then purify the silicon sufficiently and then to cause it to grow as a huge single crystal (From molten silicon, melting point 1410 degrees C.). I don't know, but I would imagine that one of the problems is to get things clean enough, as it takes only a few atoms in the wrong place to upset semiconductors.

I was once shown a linear accelerator in Aahus, Denmark and the professor i/c told me that it took three months of cooking it at 300 degrees C to get the water out of the stainless steel that it was made from, before they could get the vacuum they needed to start work. I can imagine there maybe similar difficulties in semiconductor work.

However, like you, I shall be very surprised, if it takes the Chinese anything like ten years.

Posted by: foolisholdman | Feb 12 2021 18:21 utc | 211

norecovery | Feb 8 2021 20:36 utc | 28

Why do humans (especially males) periodically have this urge to FIGHT one another? Why can’t we evolve beyond those primitive and destructive motivations? “We can work it out!”

It isn't so much "males" as financiers who employ/wind up stupid males to fight for them. All wars are ruling class wars. Until humans formed societies with class differences there were only very small local fights. Shortly after the invention of agriculture and class societies you find burned cities and massacres in the archeological record.

Posted by: foolisholdman | Feb 12 2021 18:35 utc | 212

foolisholdman | Feb 12 2021 14:50 utc | 206
Lurk | Feb 12 2021 15:57 utc | 207
I refer you to
tucenz | Feb 9 2021 15:25 utc | 107

Posted by: tucenz | Feb 12 2021 19:28 utc | 213

@Smith #200
I'm curious as to why you think bitcoin mining is affected. The miners don't use either CPU or GPU chips anymore - they're using custom FPGAs.

Posted by: c1ue | Feb 13 2021 16:07 utc | 214

@Smith #201
I agree - the faults in the West: the US and Europe - are largely a function of ruling oligarchies that have long since chosen to focus on selfish class and individual interests over national interests.

Posted by: c1ue | Feb 13 2021 16:10 utc | 215

@Arch Bungle #203
I have little interest in debating with someone who clearly derives all their information from press releases.
What I have written about here regarding semiconductors: technology and business - is based on real world experience and direct personal interactions with the people, institutions, infrastructure and technology.
Yes, certainly it is possible that things have changed dramatically - yet there are plenty of secondary indicators that back up my existing view.
For example: if China is so advanced in semiconductor manufacturing - why is it that Huawei buys so much from Western chip companies? This is a serious negative indicator on Chinese internal technological and/or manufacturing capability.

I am not anti- or pro- China; I have long since recognized the amazing outcome China has achieved in economic progression.
At the same time - I have direct and long term familiarity with China, mainland Chinese, the country, the infrastructure, the customs etc. This informs what I write concerning China's strengths and also its weaknesses.

So far, I have yet to see a single credible or believable comment from you - one which is not clearly informed by press releases/propaganda.

Until you bring something of value to this discussion, I will continue to write off your opinions as being valueless.

Posted by: c1ue | Feb 13 2021 16:15 utc | 216

@Cyril #205
I don't think you quite understand the difference between a core technology capability and a systems house.
A more familiar example: Sony.
Sony is a systems house. They actually have little to no semiconductor technology of their own. The Playstation has traditionally been designed - the major parts - by Toshiba. Toshiba is a technology company: they created the flash memory device, for example.
Apple, as another example, started out as a systems house. All through its iMac/Newton/Lisa/iPhone 3-5 era, Apple got its technology from somebody else and created the products it is known for. However, Apple in the last few years has started going its own way: it is creating its own CPUs, for example. So Apple is bridging into at least some core technology, beyond its still largely system house setup.
Samsung is the opposite: they were originally a technology supplier that has been bridging its way into the systems house arena.

Huawei is a systems house. They rely on Qualcomm, Broadcom, TSMC etc for the core technology pieces with which they build their cell phones, routers etc.
If they get cut off from one or more of these technology suppliers - they will either have to develop substitutes or stop selling cutting edge devices.

Thus the ability of China in general, and Huawei in particular, to develop and manufacture core technology is vital beyond just "size" of the company - it is existential, particularly if its technology supply is endangered by geopolitics.

Posted by: c1ue | Feb 13 2021 16:23 utc | 217

@ Posted by: foolisholdman | Feb 12 2021 14:50 utc | 206

Love (for money) knows no bounds!

Taiwan battles a brain drain as China aims to woo young talent

Taiwan Is Suffering From a Massive Brain Drain and the Main Beneficiary is China

Posted by: vk | Feb 13 2021 17:05 utc | 218

@c1ue | Feb 13 2021 16:23 utc | 217

I don't think you quite understand the difference between a core technology capability and a systems house.
[Sony, Apple, Huawei are systems houses.]
Thus the ability of China in general, and Huawei in particular, to develop and manufacture core technology is vital beyond just "size" of the company - it is existential, particularly if its technology supply is endangered by geopolitics.

You misunderstand. In comment "c1ue | Feb 11 2021 15:02 utc | 172", you said that it's unlikely that China would be able to "support 2 cutting edge fabs", as large companies like Apple, Samsung, Intel, AMD would probably not give any business to a Chinese fab. The implicit assumption is that a Chinese fab would not survive without business from large companies in the West (and in some Western lackeys like South Korea).

I disagree, for two reasons.

First of all, as I said (and as you clearly did not understand), China has lots of huge companies too, and these are quite capable of keeping a Chinese fab completely busy.

Second, China was already most of the global semiconductor market two years ago. (According to Deloitte, already in 2018 "[China] consumes more than 50 percent of all semiconductors annually".) Clearly, China's appetite for semiconductors will only grow. If China mostly stopped buying chips from US companies -- and the US has done a mighty fine job destroying China's trust -- China's internal market for chips will be gigantic; this market alone would be enough to support several fabs.

Foreign fabs like TSMC would have to survive on China's leftovers. Good luck.

Of course, when Chinese companies meet most of China's needs for chips, American semiconductor firms will starve.

Posted by: Cyril | Feb 13 2021 20:57 utc | 219

@Cyril | Feb 13 2021 20:57 utc | 219

Foreign fabs like TSMC

Please make that "Offshore fabs like TSMC".

Posted by: Cyril | Feb 13 2021 21:02 utc | 220

schmoe | Feb 8 2021 21:36 utc | 35

There is also this in that article

In the past half year, progress in domestic chip manufacturing technologies has exceeded the CSIA’s expectations, says Li. “We’ve seen breakthroughs in millimetre-wave 5G chips, monopolies disbanded, and the success of the self-developed 7nm chip from China’s Semiconductor Manufacturing International Corporation (SMIC).” Technological advancements will help IC production move to mainland China, says Li, “and a domestic chip manufacturing industry chain is likely to emerge with the support of policies for industries”.

(My emphasis.)

Posted by: foolisholdman | Feb 14 2021 21:46 utc | 221

RKelly | Feb 9 2021 0:51 utc | 58

Nuclear Winter? Maybe. Garden, sustainable, gas in metal containers generators running quietly on no alcohol super unleaded, PRI-G. 1 yr food, survival. Bosnea collapse on PBS worth watching

Is this some sort of coded message?

Posted by: foolisholdman | Feb 14 2021 22:28 utc | 222

daffyDuct | Feb 9 2021 2:36 utc | 60

The ban on US exports of high-end chips to Huawei hasn’t slowed the buildout of China’s 5G network, but it has added to the cost. As Frank Chen reported in Asia Times Dec. 2, Huawei has installed locally-made chips in its 5G ground stations, rather than the more efficient chips formerly fabricated for Huawei in Taiwan. The chips have the same functionality, but electricity usage is substantially higher.

China also has access to semiconductor fabricating equipment outside the United States, although firms like Applied Materials and LAM still dominate some segments of the complex, variegated machinery market. China sales at Tokyo Election, number three in the semiconductor equipment market by some rankings, doubled between 2018 and 2019. The US may put pressure on Tokyo Electron to limit equipment sales to China, as it did in the case of Holland’s ASML, but Japan is less likely to accept American dictates on its China trade after the signing of the Regional Comprehensive Economic Partnership trade pact earlier this year.

Interesting article. Puts me in mind of Burns' "To a Mouse".

"The best laid plans o' Mice an' Men,
Gang aft agley,
An' lea'e us nought but grief an' pain,
For promised joy!"

Posted by: foolisholdman | Feb 14 2021 23:10 utc | 223

imo | Feb 9 2021 3:15 utc | 64

Why these idiots build such critical infrastructure on political fault-lines is beyond me.

Well, as usual, it seemed like a good idea at the time.

Posted by: foolisholdman | Feb 14 2021 23:15 utc | 224

Following the author's logic about Taiwan we can conclude that Israel is part of Palestine and that's that.

End of story.

Or we could realize that the world does not work that way. That from time to time people fight for their independence and kind of sort of win it.

Posted by: Freemon Sandlewould | Feb 15 2021 12:58 utc | 225

@ Posted by: Freemon Sandlewould | Feb 15 2021 12:58 utc | 225

The difference is that nobody recognizes or ever recognized Taiwan as an independent country, while Palestine is a real country.

Posted by: vk | Feb 15 2021 13:25 utc | 226

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