13 ms·
China Plans $47B Fund to Boost Its Semiconductor Industry
- sitkack 8y agoI think the Soviet Union would still exist if they had their own modern semiconductor manufacturing. They had everything they needed (education, math culture) around semiconductors to make this successful. China absolutely needs their own fabs.
- cameldrv 8y agoEast Germany had a fairly credible semiconductor industry. At the end of the Cold War, they were producing 1mbit DRAMs, about three years behind the West. This plant was shut down as uncompetitive during reunification, but the legacy of the industry lives on with a lot of semiconductor companies having operations in Dresden because they had access to inexpensive highly specialized and skilled labor.
- mepian 8y agoStasi's spies helped a lot, as told in Macrackis' book on the East German intelligence service: https://books.google.com/books?id=LLZJk4FrqwwC https://books.google.com/books?id=LLZJk4FrqwwC
- qaq 8y agoNo way it had nothing to do with semiconductor manufacturing.
- handsomechad 8y agoCurious as to the reasoning behind your theory? I'm not disagreeing, I honestly am not knowledgeable or well-read enough to decisively agree or disagree, but the rationale behind why semiconductors would have saved the USSR from its demise sounds fascinating
- ttflee 8y agoDo you think that semiconductors are the only thing required to fix GOSPLAN, make adjustments to prices of everything and save Soviet economy?
- kirillseva 8y agoImagine soviet government running Hadoop MapReduce jobs and using "big data" to drive GOSPLAN? Would be a marvel to watch this soul-crushing efficiency machine.
- ttflee 8y agoWould be a good soviet-punk fiction concept, like what-if Internet were invented in and dominated by Soviet.
- peoplewindow 8y agoGOSPLAN didn't fail because of lack of MapReduce. I don't think you could make a planned economy even with all the big data tools that exist today. There's far too much important information affecting prices that isn't represented in any database.
- ghostcluster 8y agoChina also needs the capability to build the machines that build the machines, if automation is to be their savior as their population ages. High precision heavy industry. They have no equivalent to a company like Bosch in Germany.
- ausjke 8y agogreat, I guess money talks. on the other hand, US is lagging in STEM advancements from k-12 all the way up these decades, only competition can correct the sloppiness. many of the chip designers in USA are not native citizens, which again says, our education system needs a revamp.
- kwaboi 8y agothe US does not have a shortage of STEM workers, the problem is our physics graduates are working web development jobs where thousands of companies are implementing the same CRUD application
- lettergram 8y agoCan attest, only CS BS degree working in a team of 6 other PhDs in various fields
- rb808 8y agoThat's not true! They're not just writing crud apps they're also working in hedge funds and writing ai bots for social media.
- stale2002 8y agoI guess that means that physics isn't that valuable then, and we have an oversupply of physics people. It turns out that the market believes that building CRUD apps is more valuable and useful to society than whatever it is physics researchers do. You are right that we don't have a Stem shortage. Instead we have a Technology shortage, and way too many people are going into these other fields that aren't actually very useful.
- TeMPOraL 8y agoBoth of you are right. The market has a very limited view of what's valuable, and physics is one of those things that don't make the cut.
- throwaway2048 8y ago
- deleted 8y ago[deleted]
- thotaway 8y agoHow is this not an illegal state subsidy? The WTO is a joke.
- asdsa5325 8y agoWhy would it be?
- zeusk 8y agoHow is In-Q-Tel not an illegal state subsidy?
- sanxiyn 8y agoIt's an investment fund. China can invest as it wants to.
- tanilama 8y agoIndustry stradgey exists in every country...It is just because this is China so it is on a much larger scale...
- stale2002 8y agoThis isn't even bad, lol. What will happen is that the world will now have more and better semiconductors. Everyone wins.
- baybal2 8y agoCompare it to nearly same sized sum of Chinese solar RnD state funds. Back a decade ago, they were ready to dish out few million bucks to anybody who just had word "solar" in their company name. I don't see how it will be different this time.
- sanxiyn 8y agoIt worked, didn't it? All the top solar module companies are in China, except Hanwha from Korea.
- esmi 8y agoI suppose it worked as China does manufacture most of the world's panels but these guys would disagree with your comment. https://en.wikipedia.org/wiki/Canadian_Solar https://en.wikipedia.org/wiki/Canadian_Solar They were the number 3 manufacturer in 2017 and are bigger than Hanwha.
- adventured 8y agoCanadian Solar is, in real terms, a Chinese company. In the same way that Medtronic is an American company pretending to be an Irish company. https://www.quora.com/Is-Canadian-Solar-a-Chinese-company https://www.quora.com/Is-Canadian-Solar-a-Chinese-company https://www.pv-magazine.com/2017/12/11/canadian-solar-next-chinese-company-to-consider-privatization/ https://www.pv-magazine.com/2017/12/11/canadian-solar-next-c...
- npunt 8y agoDifferent markets. China brute-forced building cheap solar panels and flooded the market with them, and the markets generally prefer cheap panels to expensive ones. It's the kind of market China has historically excelled in - high volume, labor & environment intensive, relatively low tech. Semiconductors are way more complex and the markets prefer the latest and greatest for a variety of reasons. Also (afaik) while fixed costs continue to grow at each new process node, variable costs for a given chip on each new node I believe are lower due to being able to produce more in a given wafer, so that further makes markets like the latest.
- gkanai 8y agoChina should have done this 5-8 years ago. It took the blocking of ZTE and Huawei in the US for China to realize that they don't have the fabrication capabilities for the chips that they need (the most advanced chips are all US/JP/KR/TW built.) And no one wants to sell China that fab capability- so China will have to build/use corporate espionage to make it themselves. Even though it seemed expensive at the time, Masayoshi Son was smart to buy ARM.
- desdiv 8y ago>China should have done this 5-8 years ago. They did. Beijing handed out massive subsidies, companies started building fabs, and now those fabs are starting to come online in 2018[0]. Fabs take time to build. [0] https://epsnews.com/2018/04/26/three-chinese-companies-to-start-memory-ic-production-in-2018/ https://epsnews.com/2018/04/26/three-chinese-companies-to-st...
- baybal2 8y agoBest to say, that first gen Chinese fabs never went online to begin with. CSMC and Huali for example are a ghost towns (i worked few minutes away from both) They continued to throw tenths of billions at the problem, till they managed to make a minimally well running fabs for few niche markets.
- netheril96 8y agoChina does have invested a large amount of money in semiconductor businesses over the years, of which 47B is just another. It makes some progress, such as the self-made SW26010 processors in Sunway TaihuLight, the current top one supercomputer in the world. But progress is hard for reasons other than money: * Late comers to the semiconductor industry can barely follow the trends, let alone lead. But if one cannot lead, it cannot survive in a free market. No one is going to buy a chip 3~5 years behind the latest technology when he/she has better choices. * Compatibility issues. China cannot grow its chip with x86 instruction set, at least not the latest one, for patent issues. That further reduces the possibility of commercial success of its own chips. * Semiconductor industry is now past its prime, the profit and salaries lower than the nascent Internet companies. Even in the US, plenty of EE students are jumping ship. In China, EE talents are doubly drained, by both American semiconductor industry, and by the local software industry. * The Wassenaar Arrangement bans the export of many high end equipments necessary for chip making to China. While all the other countries/regions can specialize in one part of the semiconductor industry, China has to do all of them by itself, since it has no external help. * The world politics dictate that Chinese firms are never going to buy ARM. They have the cash and the willingness, but western countries simply won't approve such buyout.
- singlewind 8y agoI think the end goal is not really develop their own chip. It is not economic to do all the research again. They just want to have some important patent and so they can avoid punishment from US government.
- neonate 8y agohttp://archive.is/QxejC http://archive.is/QxejC
- ghostcluster 8y agoChina's Debt to GDP ratio is 3 to 1 https://www.bloomberg.com/news/articles/2018-02-08/sizing-up-china-s-debt-bubble-bloomberg-economics https://www.bloomberg.com/news/articles/2018-02-08/sizing-up...
- tim333 8y agoOn the graph in the article that about the same as the US and less than the UK, France or Canada.
- ghostcluster 8y agoAnd no one is worrying about the debt loads of the United States, UK, and Italy? Unlike the US, the demographics of their population are a big problem, as their working age population peaked in 2016 and is now in decline. Maintaining a growth in GDP with an aging shrinking workforce will be a challenge.
- justinzollars 8y agoI think the way this will play out as there will be another contest of Great Powers is that the United States will in turn decide soon to compete and pour billions more into technology. This will continue to be a great time to work in Silicon Valley.
- RobLach 8y agoI wish I shared your optimism. I'm observing current government policy not being particularly forward thinking, e.g. massively subsidizing the coal industry.
- justinzollars 8y agoThink in the long term. China calls its contest with the United States "a marathon race" [1]. Soon Trump will be out of office and this problem will still be with us. This will be the greatest contest American has ever faced. [1] The China Dream: Great Power Thinking and Strategic Posture in the Post-American Era
- throwaway84742 8y ago>> Soon Trump will be out of office If he reunites Korea and keeps the US economy going (and I do believe both of those things will happen), “soon” will be late 2024. For semiconductors that’s eternity. Intel and TMSC will be cranking out 5nm with high yields by then.
- jk2323 8y agoI don't buy it. Be patience. I am not worried about the strength of China at all. It comes with too many weaknesses. What worries me is the weakness of Europe, but not the strength of China.
- hueving 8y agoThe president != the government. Doubly so if there is a change in majority in the upcoming election.
- jorblumesea 8y agoI really hope this spurs US investment in a similar route. A cold war can be dangerous but also fantastic for R&D.
- adventured 8y agoThe US and most of Europe do not use comparable approaches to such investments vs China. It will not spur investment in a similar route, the US and Europe will follow a different superior approach. The US is investing $47 billion into semiconductors: it's being directed by individual corporations rather than command & control style as in China. Intel's R&D budget alone is ~$13 billion every year. Over the decades the US approach produced: the Internet, Bell Labs, Lucent, Xerox, Motorola, Intel, Fairchild, Cisco, HP, Texas Instruments, AMD, nVidia, Apple, Analog Devices, Micron, Qualcomm, Applied Materials, EMC, IBM, Sun, and a lot more. It's also in part responsible for ARM, which was partially founded by Apple and VLSI. What has China's approach produced after their truly vast investments spanning 30+ years? Other than endless copy-cat technology. We'll see if their approach can actually lead to the kind of extraordinary innovation the US has been demonstrating for the last 70 years non-stop in tech. "Why Can’t China Make Semiconductors?" https://www.bloomberg.com/view/articles/2018-04-29/why-can-t-china-make-semiconductors-jglgice5 https://www.bloomberg.com/view/articles/2018-04-29/why-can-t...
- thedailymail 8y agoTwo years ago PRC Premier Li Kiang was publicly complaining that China could not produce a good ballpoint pen, citing weakness in precision manufacturing. That can't be good for a semiconductor fab. http://www.ejinsight.com/20160121-what-ball-pen-tells-us-about-china-s-manufacturing-weakness/ http://www.ejinsight.com/20160121-what-ball-pen-tells-us-abo...
- imtringued 8y agoThe explanation given in your article is that the chinese government doesn't invest into "ball pen" ball manufacturing. >The root cause of China’s backwardness in some of the key industrial technologies lies in the fact that state-run and private manufacturers are unwilling to invest in research and development because, This HN submission about the exact opposite: china is investing into semiconductors. Therefore it's not possible to draw conclusions from the article you linked.
- kristianov 8y agoLet's just hope China will not take back Taiwan to get the state-of-the-art fabs there.
- rangibaby 8y agoI think we would have bigger things than fabs to worry about if China decided to take over Taiwan
- baybal2 8y agoEven a nuclear war will be by far a less ruinous event to the civilisation as a whole, than destruction of 10 biggest fab complexes.
- berg01 8y ago"Take back"?
- Lionsion 8y ago> Let's just hope China will not take back Taiwan to get the state-of-the-art fabs there. I wonder if the Taiwanese or the US has a plan for destroying those and similar advanced facilities to keep the technology out of the hands of the Chinese after an invasion? It might disincentivize the Chinese a bit, though I'm sure the nationalistic motivations would override any practical concerns.
- deleted 8y ago[deleted]
- primeblue 8y agoNo government would trust Chinese made chips for such critical components. That leaves China to copy whatever IP without paying royalties. Sounds familiar.
- mtw 8y agoI'm still wondering why there should be an economic, political or commercial conflict between China and the rest of the world esp. US. Such conflicts are wasteful with when we all should work together on common goals - space exploration, fighting against diseases, climate change etc.
- madengr 8y agoMaybe communism vs freedom?
- robbiep 8y agoThat’s a false dichotomy. China is ostensibly commmunist but free market is alive and well (with heavy doses of state directed influence, but so as in other western countries, witness the military industrial complex) A truer dichotomy would be between a rigid semi-dictatorship and quasi-democracy... given that even China has token democracy at some levels despite now essentially having a rubber stamped dictator, and many western states are a long way from true democracy - the voting system in the US hardly allows representative democracy and special interest groups are adept at manipulating voting blocs very effectively, and is 2 party democracy really democracy? Other countries do better jobs (ie Australia’s preferential voting, germany’s Proportional representation) but you can argue that till the cows come home
- madengr 8y agoThe USA, with all it’s faults, is still based on the Constitution and Bill of Rights. China is based on communism with democide of 10’s of millions. Can I buy a porn magazine, a bag of weed, and assault rifle in China? Hell, the party chairman is now chairman for life.
- robbiep 8y agoYou can certainly buy the first 2, and is the third really a benefit to any civilised society? I say this as a gun owner
- crb002 8y agoObama screwed the US by stopping Intel MIC sales to China. That forced them to roll up their sleeves and bootstrap their own semiconductor industry.