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Huawei CEO: After September 15 No More Kirin Chips

68 points by ytch 6y ago

Normille 6y ago
Another victory for the World's Playground Bully.
- fakeslimshady 6y ago
  Hopefully more motivation to vote out all Trumpublicans soon and end this world nightmare
mytailorisrich 6y ago
China made a big mistake in being too reliant on TSMC, etc. or maybe it did not have the capacity to go after too many targets. Or maybe it simply did not think it could be a problem. They are quick to learn and adapt, though, not least when the Chinese state throws its whole weight behind something, so I'm thinking that after this initial shock, in a few years the result will be a decline of the relative importance of the Taiwanese semi industry because mainland China will have its own, with all the potential strategic consequences that this might mean.
- FooBarWidget 6y ago
  I don't think it's a mistake. It's more that they don't have a choice. There are very few (maybe even only one?) foundries in the world with advanced processes. Building a foundry is not trivial. For how long has Intel stuck with 14nm now? The Dutch ASML lithography machine is one of the most advanced machines in the world, and it's pretty much the only one of its kind. China has been investing heavily in domestic foundries for years now, but it takes time.
  - samfisher83 6y ago
    This is reason US needs to ensure that a US company can make the latest and greatest technology. You never know what geopolitical issue might cut your supply off.
  - xster 6y ago
    I think it's just greed and poor risk management. Up until recently, china couldn't even manufacture ball point pens (which I think only 2 companies in the world produced). There's no money to be made at the bottom of the inverted tech pyramid. They rather put their energy in buying ball point pens and using those pens to write stuff that will in the short term make them more money on to of a foundation of sand. Similarly all of the investment from giants like Alibaba etc went into developing e-commerce on top of a tech foundation of sand
- ulfw 6y ago
  And who do you think the US of A is reliant on?
  - mytailorisrich 6y ago
    The US are also reliant on TSMC but since Taiwan is reliant on the US that's fine. As we can see the US can impose their will on them.
    - ed25519FUUU 6y ago
      And will “will” is the US imposing on Taiwan? Keeping it from being annexed by China?
      - FooBarWidget 6y ago
        Well for one, giving TSMC the ultimatum that either they stop doing business with Huawei, or stop doing business with the entirety of the US. This happened just a few months ago. And here I thought US would like to recognize Taiwan as an independent country. But then it goes ahead and tells a Taiwanese company that they can't make their own decisions on who to do business with?
    - simonblack 6y ago
      As we can see the US can impose their will on them. You can have all the will in the world, but that is not necessarily going to win out every time. "Oops, looks like there's a bad fire in that Taiwanese fab. Pity about that. They'll be out of production for years." By then of course, that fab would have been so obsolete that it's really not worth fixing.
    - paulsutter 6y ago
      This is super naive. China has a huge military, is much closer to RoC, and has absolute popular support that RoC is already a province of China. Whereas the US can barely muster popular support for wearing masks. https://www.telegraph.co.uk/news/2020/08/06/china-deploys-amphibious-weapons-eastern-coast-tensions-taiwan/ https://www.telegraph.co.uk/news/2020/08/06/china-deploys-am...
- samfisher83 6y ago
  When you have a billion people + unlimited funds + some industrial espionage I am sure china will get their chip manufacturing industry built up quickly.
  - parsimo2010 6y ago
    For very technical things, having the information is not the same as having the ability to manufacture. Some industries don't lend themselves to catching up rapidly, you have to go through all the mistakes yourself. I think semiconductors is one of those industries. An example (unrelated to semiconductors) is China's failure to manufacture a decent jet engine even though they've been trying for 30 years. It turns out that the metallurgy required for a jet engine is more complicated than what is needed for household appliances. They aren't even dealing with incomplete stolen information, they have a license from Russia and the full technical information and still can't do it (although Russia isn't sharing their most modern designs, but China still struggles to make an engine with 1980's tech).
    - mercer 6y ago
      I'd love to hear more elaboration on that, or a link to an article. As someone way out of my depth it seems almost silly that they wouldn't be able to figure that out through a combination of throwing expertise and money at it and spycraft.
      - DiogenesKynikos 6y ago
        Related: China can finally manufacture ballpoint pens. https://www.bbc.com/news/business-38566114 https://www.bbc.com/news/business-38566114
        bbarnett 6y ago
        It really bothers me, how many (I assume) PRC loyalists are on here. This BBC article is valid, and on topic to this thread, and elaborates on how "just making stuff" isn't simple. Why else would this be a vote down, other than puppets of the PRC?
- Mindwipe 6y ago
  I think the more worrying thing is what happens to the West if, when it has built it's own fab capacity (which is much easier said than done, but China will throw enormous resource at it because it has to), China decides to destabilise Taiwan's semiconductor industry. Western nations would be smart to try and decentralise some of that production capacity (also easier said than done) before that could come to be, but does anyone think the Western nations current or foreseeable leadership really have the strategic foresight to do so?
  - mytailorisrich 6y ago
    Yes, that's what I meant by 'strategic consequences', including in case of a cross-straight conflict. At the moment it is in everyone's interest that Taiwan's foundries stay up and running. But in the future, in case of a hypothetical conflict it might even be in the mainland's interest to bomb them and create havoc for Western companies.
    - Mindwipe 6y ago
      It might. I suspect we'll see a large amount of soft power disruptions first which would still make Taiwan's life fairly miserable.
  - mschuster91 6y ago
    > Western nations would be smart to try and decentralise some of that production capacity (also easier said than done) before that could come to be, but does anyone think the Western nations current or foreseeable leadership really have the strategic foresight to do so? TSMC actually plans to set up shop in Arizona: https://www.tsmc.com/tsmcdotcom/PRListingNewsArchivesAction.do?action=detail&newsid=THGOANPGTH&language=E https://www.tsmc.com/tsmcdotcom/PRListingNewsArchivesAction....
    - FooBarWidget 6y ago
      Only time will tell whether that shop is valuable. The only reason they started doing that was because the US pressured them into it — it wasn't for economic reasons.
- fakeslimshady 6y ago
  The world is reliant on TSMC even Intel is capitulating and going to use TSMC
  - Steltek 6y ago
    The West has been unwilling to use its economic levers to preserve competition and a healthy market. China has no problem using state control and doesn't care much for fair competition either. The West isn't doomed but we're not in a very defensible position either.
- shankysingh 6y ago
  I don't have enough knowledge of chip's logistics so my less informed 2 cents would be, thinking from a business perspective, if eventual dominance of chip supply-chain was in cards, Chinese businesses would have had done it regardless of ban existed or not. So, this ban gives Taiwan and US businesses some breathing space to keep that lead. How its leveraged, is upto the governments and business's .
  - mytailorisrich 6y ago
    This ban does not help Taiwanese businesses. Quite the opposite.
    - londons_explore 6y ago
      I'm sure they were given a decent financial incentive to go along with this ban. Taiwan is an ally after all, if you annoy their companies with far overreaching targeted international rules, and don't compensate them, there are going to be political costs. I would guess the new TSMC facility in the US is part of this compensation - they'll probably be receiving very favourable tax treatment for everything manufactured there.
      - coreblocks 6y ago
        Well the reason TSMC gave up Huawei so easily was because they knew they would have no trouble filling orders from AMD, NVIDIA, Xilinx and now Intel apparently.
- dirtyid 6y ago
  Look up Fujian Jinhua plant 2018. Truth is US has been sanctioning and using CFIUS to undermine Chinese IC for a while now. Many blocked acquisitions under Obama. Relationship was just less acrimonious and less public. I suspect even Nvidia's ARM ambitions is part of plan to undermine Chinese IC efforts. Like how William Barr floated idea to get CISCO to buy controlling share in SE or Nokia to rival Huawei 5G. That said, TSMC is too successful for it's own good. Once their Arizona plant opens on US tax dime, Taiwan will loose security guarantor. I suspect they'll delay for as long as they can. SMIC is basically sufficient to make IC for Chinese military use in any case. The main, and huge problem, is being commercially competitive.
  - Steltek 6y ago
    Interesting theory re Arizona meaning Taiwan loses its advantage. Although no one can ascribe too much (or really any) foresight to the current US admin, I have to imagine there's a domino theory w.r.t. to Taiwan and the SCS region. Ceding China's control (military, economic, or otherwise) of Taiwan would panic every other independent nation in the region into striking a good deal with China to hopefully maintain their autonomy. Ugh. The West has had the tail wagging the dog for so long. Arrogant transnational corporations and the rich think they can control China like everything else. It's the same arrogance on display with coronavirus: they play by very different rules and don't care who you are.
    - dirtyid 6y ago
      At least with semi there's continuity. And some of the China-hawks in the admin, though cray cray and warmongering, are also pragmatic. i.e. I think Trump banned TikTok out of spite, but probably Pompeo banned WeChat... as if Trump knows what WeChat is. And probably other hawks pushed for TikTok acquisition, and Trump poison pilled with with extortion to US treasury. A lot of the escalations are... unprecedented, kind of insane, but also calibrated enough that China can tit-for-tat. Whereas Trump would just be insane. By all accounts TSMC didn't want to open plant in US. They were denying it for months / weeks / days before. And TSMC has invested so much capex in new Taiwan plants that it makes no fiscal sense for them to open low capacity plant in US unless heavily subsidized, and US wouldn't subsidize unless it was for MIC. As for Taiwan's future, really depends on how election goes. I'm skeptical China will allow TSMC / Taiwan to cooperate with US unfettered in semi. Right now there's mediatek buffering Huawei. And other Chinese brands can still sell phones with qualcomm. But if US manage to coerce all Taiwanese semi from working with China... well glitter bombs are going to blow up in Taiwanese fabs before real bombs. I think it's semi is a much more dangerous situation than most people realize. If Trumps over November, there's a few years before Arizonal TSMC comes online to form a useful Chinese semi containment strategy. Or TSMC will delay the play until after Trump term 2. Otherwise, stock up on graphics cards now.
- chvid 6y ago
  It has been a potential threat to China for a decade and they have invested massively to counter it.
- chlee 6y ago
  The chinese govt is indeed throwing their weight behind developing a local semiconductor industry capable of rivaling TSMC. They are making heavy investment in SMIC for example. However, at the same time, unfortunately the Chinese government doesn't play fair, and they are ramping up state sponsored industry espionage and hacking of American and Taiwanese semi-conductor firms to speed up the process. This best describes China's perspective towards "technology acquisition" “They want technology by hook or by crook. They want it now. The spy game has always been a gentleman’s game, but China has taken the gloves off,” said John Bennett, the special agent in charge of the FBI’s San Francisco office, which battles economic spies targeting Silicon Valley. “They don’t care if they get caught or if people go to jail. As long as it justifies their ends, they are not going to stop.” See: https://www.wired.com/story/chinese-hackers-taiwan-semiconductor-industry-skeleton-key/ https://www.wired.com/story/chinese-hackers-taiwan-semicondu... https://www.reuters.com/article/us-basf-espionage/basf-workers-in-taiwan-suspected-of-leaking-company-secrets-idUSKCN1P10WO https://www.reuters.com/article/us-basf-espionage/basf-worke... https://www.wsj.com/articles/taiwans-technology-secrets-come-under-assault-from-china-1530468440 https://www.wsj.com/articles/taiwans-technology-secrets-come... https://www.theatlantic.com/politics/archive/2019/08/inside-us-china-espionage-war/595747/ https://www.theatlantic.com/politics/archive/2019/08/inside-... https://www.latimes.com/politics/la-na-pol-china-economic-espionage-20181116-story.html https://www.latimes.com/politics/la-na-pol-china-economic-es... https://www.justice.gov/opa/pr/prc-state-owned-company-taiwan-company-and-three-individuals-charged-economic-espionage https://www.justice.gov/opa/pr/prc-state-owned-company-taiwa...
  - greatjack613 6y ago
    +1 to this, China has never made anything real themselves. It is all stolen property from countries who actually play fair. Until the general U.S population realizes that china's end goal is to eat them alive and unanimously supports putting china in its place, nothing will change and by then I fear it will be to late.
    - beagle3 6y ago
      The assumption that any country, especially the successful ones, plays “fair” is ludicrous. IIRC the CIA (or was it NSA?) was giving state-gathered intel to American arms And aerospace manufacturers in the 1980s so that they could outbid European rivals. The Chinese might be playing by different rules than those “established” over the last few decades by the west; but no one is playing “fair”.
- Nokinside 6y ago
  Huawei will replace Kirin with other chips manufactured in TSMC fabs (MediaTek for example). Huawei is forbidden using their own chip designs if there is come US based IP components, not from buying TSMC manufactured chips.
acomjean 6y ago
Long term I feel China is going to work around these sanctions and such and end up completely independent of US tech.
- alfiedotwtf 6y ago
  ... either that, or they dive the Dow by banning Apple products in retaliation, or they invade Taiwan.
- Mindless2112 6y ago
  That was already China's stated goal in their "Made in China 2025" initiative. > The initiative encourages production of high value products and services, like aerospace and semiconductors, to help achieve independence from foreign suppliers.[1] [1] https://en.wikipedia.org/wiki/Made_in_China_2025 https://en.wikipedia.org/wiki/Made_in_China_2025
  - bmitc 6y ago
    What other countries have long term plans and initiatives and effectively execute on them as China does?
    - Seanambers 6y ago
      Chinas success in doing this can in large part be traced to the unwillingness of the U.S and the west to challenge and stop the pure theft of IP from basically all advanced industries and unfair trade practices. This has enabled an immense transfer of IP which gives China an amazing foundation to build upon. Now China has to do the final push to become self reliant, but it's much more feasible than it was say 10-20 years ago. As far as i am aware no country except for different eras of communism(specifically Soviet) have operated somewhat effectively on production output plans on the scale of entire economy.
      - ikerdanzel 6y ago
        Feasible in 10-25 years, IF there is no political turmoils, persistent calamities and foreign invasions. Recent 3 decades of positive progression doesn't really extrapolate well when it comes to China historically. Take a look at it's 5,000 years of civilization. Usually when into any succession dynasty, she frequently stagnate. If there are major calamities AND foreign invasions, the internal political struggles will initiate a dynastic change and balkanization. China frequently unite (now) and then breakup repetitively throughout the history.
robert_foss 6y ago
This is a clear loss for consumers world wide. The Kirin SOCs were competitive with Qualcomm, and now they practically have a monopoly again.
- greatjack613 6y ago
  And a clear win for democratic governments who do not send dissenters to re-training camps. From a competitive landscape, yes it sucks. But Huawei / China needs to be punished for its blatant IP theft, I think this is a great place to start.
  - greatpatton 6y ago
    At the same time the US caused (directly/indirectly) the death of 400-800k people in Iraq. Somehow there is a double standard regarding human rights. China is despicable but I think that the moral ground of the US regarding this kind of issue is quite shaky.
    - greatjack613 6y ago
      We are a democratic country, don't support a war, vote for someone in office who does not support it. China on the other hand if you don't support putting muslims in concentration camps, you end up there yourself
      - robert_foss 6y ago
        I don't think there was a vote for invading Iraq, or any of the other countries targeted by the wrecking ball that is US hegemony. Yes China is quite flawed, but this attempt at maintaining the status quo really only serves to halt progress.
        greatjack613 6y ago
        Please don't be pedantic, We do not have votes on whether the president should sneeze into a tissue or a paper towel, but yes, the president that decided to go to war was voted in by the majority of the population. Please do not try to push the CCP's propaganda by knocking the United States, it only ends one way, and that is all of us being slaves to winnie the pooh
bosswipe 6y ago
A plausible start of WWIII would be China seizing Taiwan in order to regain access to TSMC.
- FooBarWidget 6y ago
  I really doubt it. China has its own fabs, they're just a few generations behind (14nm). That "only" means their chips are not competitive in certain contexts (heat, power), not that they can't have chips at all. They're investing heavily in research and development. It's just a matter of time before they catch up. There's no need to do something risky and expensive, like starting a war over Taiwan. And taking over Taiwan will cripple TSMC's ability to provide to anyone. The moment they invade Taiwan, 100% of its population becomes anti-China (right now a portion of Taiwanese are still sympathetic to the idea of reunification). TSMC employees will revolt and the island will turn into a perpetual guerilla war zone. How do you produce chips in such an environment? I still think WWIII could plausibly happen, just not because of TSMC.
  - IndPhysiker 6y ago
    Agreed, but only to a point. Chinese foreign policy generally avoids taking sides in war in order to keep markets available, which has enabled them to remain out of major conflicts while the rest of the world throws money, resources, and lives away on endless wars. However, looking at the belt and road initiative that runs through Uighur peoples, they are showing they are willing to commit genocide to reach their long term expansionist goal. Combine that with their militarization of the south china sea, development of carrier technology, theft of stealth technology, and success of the thousand talents program and you have a power growing that only lacks the decision to resort to force. That said, don't discount the capacity for war over their long term goals of making China the sole superpower.
  - MrBuddyCasino 6y ago
    Not to mention that Taiwan will trigger the explosive devices that they have embedded into infrastructure and manufacturing plants. China may coerce Taiwanese scientists, but won’t find a functioning chip fab to use.
chvid 6y ago
I thought that SMIC were producing Kirin chips: https://www.globaltimes.cn/content/1187993.shtml https://www.globaltimes.cn/content/1187993.shtml
- bildung 6y ago
  When rereading the article with this in mind, Yu only announced the end of "Kirin high end chips", not of the complete Kirin line. So I assume those are still alive?
  - chvid 6y ago
    I don’t know this particular website but it seems like the article was angled in a certain manner. Here is the same story from Gizmo China: https://www.gizmochina.com/2020/08/07/huawei-mate40-last-flagship-kirin-chipset/ https://www.gizmochina.com/2020/08/07/huawei-mate40-last-fla...
bit33 6y ago
Maybe the Chinese government can fix this with using some extra slave labour or else steal and extortion it from some small countries? Can't they just invade Taiwan or Korea and just grab it? As a last resort they could become a democracy, without slavery, without stealing and play by the rules, but hey what a weired idea if you can be a thug as well!
- deleted 6y ago
  [deleted]
greatpatton 6y ago
Can someone provide more context about what SoC they are going to use for their phones from now on as this is not really clear from the article.
- Nokinside 6y ago
  Most likely MediaTek for the lower end and Qualcomm's Snapdragons for flagship phones. Huawei still needs license from BIS to use Snapdragons but it should be easier to get.
  - greatpatton 6y ago
    But Qualcomm is an American company. How would they be able to sell to Huawei?
    - Nokinside 6y ago
      It should be easier to get license to sell ready-made components to Huawei.
    - hungryhobo 6y ago
      the US's goal was never to stop selling to Huawei altogether, it's to prevent Huawei from moving up the value chain, i.e designing their own SOC. It's the same reason why other Chinese companies like Xiaomi and Oppo are not included in the entity list. You can bet once they starts to develop their own CPU, or their own OS, they would be immediately placed on the entity list because of "national security" reasons.
- sudosysgen 6y ago
  They will use a mix of Qualcomm chips for high end phones and Kirin chips made by SMIC for lower end phones. At least that's my guess.
dade_ 6y ago
Either the PRC has overplayed their hand, or they are up to something. 2020 still has nearly 5 months to deliver more gifts.
- alfiedotwtf 6y ago
  If you think the Trump administration has out-thought China, you need to re-read this sentence.
  - whytaka 6y ago
    When you're a gorilla, you don't really need to think through your punches if all you want is maximum damage.
  - dade_ 6y ago
    If you thing the US is the only other country on this planet, you need to recheck your atlas. Also: https://www.theepochtimes.com/chinas-neighbors-in-the-indo-pacific-stand-up-to-its-hegemonic-ambitions_3447202.html https://www.theepochtimes.com/chinas-neighbors-in-the-indo-p...
- tonyedgecombe 6y ago
  The sensible option would be to wait and see what November brings.
  - jessaustin 6y ago
    That's what Joe Biden is planning to do!
euix 6y ago
Kirin's probably source something from U.S. designs right? Hence it's production run must end. I am guessing this means Huawei needs to switch to a design that is wholly originating from China (with possible input from Japan and Korea) but right now they are not up to the level of the Kirins. This may really just mean Xiaomi or Oppo gains an advantage over Huawei and takes the top crown.
- magicsmoke 6y ago
  It's less about the designs and more about TSMC being the only company with the process node to manufacture them getting barred by the US.
- Nokinside 6y ago
  Huawei can still buy SoC with US technology in it if it's designed and manufactured by others. US restrictions are all about Huawei’s ability to use U.S. technology and software to design and manufacture semiconductors abroad. BIS made targeted rule "to impose a new control over certain foreign-produced items, when there is knowledge that such items are destined to a designated entity on the Entity List." > (i) Items, such as semiconductor designs, when produced by Huawei and its affiliates on the Entity List (e.g., HiSilicon), that are the direct product of certain U.S. Commerce Control List (CCL) software and technology; and > (ii) Items, such as chipsets, when produced from the design specifications of Huawei or an affiliate on the Entity List (e.g., HiSilicon), that are the direct product of certain CCL semiconductor manufacturing equipment located outside the United States. Such foreign-produced items will only require a license when there is knowledge that they are destined for reexport, export from abroad, or transfer (in-country) to Huawei or any of its affiliates on the Entity List. https://www.commerce.gov/news/press-releases/2020/05/commerce-addresses-huaweis-efforts-undermine-entity-list-restricts https://www.commerce.gov/news/press-releases/2020/05/commerc...
  - euix 6y ago
    >Huawei can still buy SoC with US technology in it if it's designed and manufactured by others. I don't get it, if the U.S. wants to cripple Huawei why would they let you buy SoC that way? The whole point I thought was that any company dealing with Huawei that used some material proportion of U.S. originated technology to deliver goods to Huawei had to stop. Which means in order for Huawei to build chips it needs a supply chain that is almost completely independent of the U.S. The closets analogy I can think of is like building nuclear submarines. They are notoriously hard because its not possible to globalize the supply chain, everything in its design must be sourced within the country thus requires a specialized supply chain.
Markoff 6y ago
this news does not make sense, what chips they would use for high end smartphones? because it can't be qualcomm also what are they gonna use for smart watches, TV and their other products which are powered by kirin chips? you can't replace those that easy
deleted 6y ago
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euix 6y ago
Lot of talk about TSMC building a plant in Wisconsin but as far as I could dig up its basically the same as what they already have in Nanjing. A play meant to make them appear like a neutral party.
- trynumber9 6y ago
  TSMC's fab is planned for Arizona, not Wisconsin.
Ijumfs 6y ago
What they're not saying is that the Chinese will have to completely shut down many of their silicon foundries because of a lack of specialized chemicals only available from the USA and Japan.
- gumby 6y ago
  Until now it hasn’t been cost effective to develop internal sources for these supplies. Now the US has provided an (essentially infinite) price support for domestic production and all the infrastructure and supply chain that go along with it.
- ycombonator 6y ago
  The pressure really must on PLA Hacking Unit 61398 to up their theft of industrial IP. https://en.wikipedia.org/wiki/PLA_Unit_61398 https://en.wikipedia.org/wiki/PLA_Unit_61398
noevil123 6y ago
Can you trust them?
stevespang 6y ago
For the record, I predict that the CCP will invade the island of Taiwan in a Blitzkrieg fashion, achieve victory in 72 hours, and nationalize TSMC, steal all the IP. Then the CCP will be hated even more throughout the world.

68 points by ytch 6y ago

Normille 6y ago

Another victory for the World's Playground Bully.

fakeslimshady 6y ago
Hopefully more motivation to vote out all Trumpublicans soon and end this world nightmare

mytailorisrich 6y ago

China made a big mistake in being too reliant on TSMC, etc. or maybe it did not have the capacity to go after too many targets. Or maybe it simply did not think it could be a problem. They are quick to learn and adapt, though, not least when the Chinese state throws its whole weight behind something, so I'm thinking that after this initial shock, in a few years the result will be a decline of the relative importance of the Taiwanese semi industry because mainland China will have its own, with all the potential strategic consequences that this might mean.

FooBarWidget 6y ago
I don't think it's a mistake. It's more that they don't have a choice. There are very few (maybe even only one?) foundries in the world with advanced processes. Building a foundry is not trivial. For how long has Intel stuck with 14nm now? The Dutch ASML lithography machine is one of the most advanced machines in the world, and it's pretty much the only one of its kind. China has been investing heavily in domestic foundries for years now, but it takes time.
- samfisher83 6y ago
  This is reason US needs to ensure that a US company can make the latest and greatest technology. You never know what geopolitical issue might cut your supply off.
- xster 6y ago
  I think it's just greed and poor risk management. Up until recently, china couldn't even manufacture ball point pens (which I think only 2 companies in the world produced). There's no money to be made at the bottom of the inverted tech pyramid. They rather put their energy in buying ball point pens and using those pens to write stuff that will in the short term make them more money on to of a foundation of sand. Similarly all of the investment from giants like Alibaba etc went into developing e-commerce on top of a tech foundation of sand
ulfw 6y ago
And who do you think the US of A is reliant on?
- mytailorisrich 6y ago
  The US are also reliant on TSMC but since Taiwan is reliant on the US that's fine. As we can see the US can impose their will on them.
  - ed25519FUUU 6y ago
    And will “will” is the US imposing on Taiwan? Keeping it from being annexed by China?
    - FooBarWidget 6y ago
      Well for one, giving TSMC the ultimatum that either they stop doing business with Huawei, or stop doing business with the entirety of the US. This happened just a few months ago. And here I thought US would like to recognize Taiwan as an independent country. But then it goes ahead and tells a Taiwanese company that they can't make their own decisions on who to do business with?
  - simonblack 6y ago
    As we can see the US can impose their will on them. You can have all the will in the world, but that is not necessarily going to win out every time. "Oops, looks like there's a bad fire in that Taiwanese fab. Pity about that. They'll be out of production for years." By then of course, that fab would have been so obsolete that it's really not worth fixing.
  - paulsutter 6y ago
    This is super naive. China has a huge military, is much closer to RoC, and has absolute popular support that RoC is already a province of China. Whereas the US can barely muster popular support for wearing masks. https://www.telegraph.co.uk/news/2020/08/06/china-deploys-amphibious-weapons-eastern-coast-tensions-taiwan/ https://www.telegraph.co.uk/news/2020/08/06/china-deploys-am...
samfisher83 6y ago
When you have a billion people + unlimited funds + some industrial espionage I am sure china will get their chip manufacturing industry built up quickly.
- parsimo2010 6y ago
  For very technical things, having the information is not the same as having the ability to manufacture. Some industries don't lend themselves to catching up rapidly, you have to go through all the mistakes yourself. I think semiconductors is one of those industries. An example (unrelated to semiconductors) is China's failure to manufacture a decent jet engine even though they've been trying for 30 years. It turns out that the metallurgy required for a jet engine is more complicated than what is needed for household appliances. They aren't even dealing with incomplete stolen information, they have a license from Russia and the full technical information and still can't do it (although Russia isn't sharing their most modern designs, but China still struggles to make an engine with 1980's tech).
  - mercer 6y ago
    I'd love to hear more elaboration on that, or a link to an article. As someone way out of my depth it seems almost silly that they wouldn't be able to figure that out through a combination of throwing expertise and money at it and spycraft.
    - DiogenesKynikos 6y ago
      Related: China can finally manufacture ballpoint pens. https://www.bbc.com/news/business-38566114 https://www.bbc.com/news/business-38566114
      - bbarnett 6y ago
        It really bothers me, how many (I assume) PRC loyalists are on here. This BBC article is valid, and on topic to this thread, and elaborates on how "just making stuff" isn't simple. Why else would this be a vote down, other than puppets of the PRC?
Mindwipe 6y ago
I think the more worrying thing is what happens to the West if, when it has built it's own fab capacity (which is much easier said than done, but China will throw enormous resource at it because it has to), China decides to destabilise Taiwan's semiconductor industry. Western nations would be smart to try and decentralise some of that production capacity (also easier said than done) before that could come to be, but does anyone think the Western nations current or foreseeable leadership really have the strategic foresight to do so?
- mytailorisrich 6y ago
  Yes, that's what I meant by 'strategic consequences', including in case of a cross-straight conflict. At the moment it is in everyone's interest that Taiwan's foundries stay up and running. But in the future, in case of a hypothetical conflict it might even be in the mainland's interest to bomb them and create havoc for Western companies.
  - Mindwipe 6y ago
    It might. I suspect we'll see a large amount of soft power disruptions first which would still make Taiwan's life fairly miserable.
- mschuster91 6y ago
  > Western nations would be smart to try and decentralise some of that production capacity (also easier said than done) before that could come to be, but does anyone think the Western nations current or foreseeable leadership really have the strategic foresight to do so? TSMC actually plans to set up shop in Arizona: https://www.tsmc.com/tsmcdotcom/PRListingNewsArchivesAction.do?action=detail&newsid=THGOANPGTH&language=E https://www.tsmc.com/tsmcdotcom/PRListingNewsArchivesAction....
  - FooBarWidget 6y ago
    Only time will tell whether that shop is valuable. The only reason they started doing that was because the US pressured them into it — it wasn't for economic reasons.
fakeslimshady 6y ago
The world is reliant on TSMC even Intel is capitulating and going to use TSMC
- Steltek 6y ago
  The West has been unwilling to use its economic levers to preserve competition and a healthy market. China has no problem using state control and doesn't care much for fair competition either. The West isn't doomed but we're not in a very defensible position either.
shankysingh 6y ago
I don't have enough knowledge of chip's logistics so my less informed 2 cents would be, thinking from a business perspective, if eventual dominance of chip supply-chain was in cards, Chinese businesses would have had done it regardless of ban existed or not. So, this ban gives Taiwan and US businesses some breathing space to keep that lead. How its leveraged, is upto the governments and business's .
- mytailorisrich 6y ago
  This ban does not help Taiwanese businesses. Quite the opposite.
  - londons_explore 6y ago
    I'm sure they were given a decent financial incentive to go along with this ban. Taiwan is an ally after all, if you annoy their companies with far overreaching targeted international rules, and don't compensate them, there are going to be political costs. I would guess the new TSMC facility in the US is part of this compensation - they'll probably be receiving very favourable tax treatment for everything manufactured there.
    - coreblocks 6y ago
      Well the reason TSMC gave up Huawei so easily was because they knew they would have no trouble filling orders from AMD, NVIDIA, Xilinx and now Intel apparently.
dirtyid 6y ago
Look up Fujian Jinhua plant 2018. Truth is US has been sanctioning and using CFIUS to undermine Chinese IC for a while now. Many blocked acquisitions under Obama. Relationship was just less acrimonious and less public. I suspect even Nvidia's ARM ambitions is part of plan to undermine Chinese IC efforts. Like how William Barr floated idea to get CISCO to buy controlling share in SE or Nokia to rival Huawei 5G. That said, TSMC is too successful for it's own good. Once their Arizona plant opens on US tax dime, Taiwan will loose security guarantor. I suspect they'll delay for as long as they can. SMIC is basically sufficient to make IC for Chinese military use in any case. The main, and huge problem, is being commercially competitive.
- Steltek 6y ago
  Interesting theory re Arizona meaning Taiwan loses its advantage. Although no one can ascribe too much (or really any) foresight to the current US admin, I have to imagine there's a domino theory w.r.t. to Taiwan and the SCS region. Ceding China's control (military, economic, or otherwise) of Taiwan would panic every other independent nation in the region into striking a good deal with China to hopefully maintain their autonomy. Ugh. The West has had the tail wagging the dog for so long. Arrogant transnational corporations and the rich think they can control China like everything else. It's the same arrogance on display with coronavirus: they play by very different rules and don't care who you are.
  - dirtyid 6y ago
    At least with semi there's continuity. And some of the China-hawks in the admin, though cray cray and warmongering, are also pragmatic. i.e. I think Trump banned TikTok out of spite, but probably Pompeo banned WeChat... as if Trump knows what WeChat is. And probably other hawks pushed for TikTok acquisition, and Trump poison pilled with with extortion to US treasury. A lot of the escalations are... unprecedented, kind of insane, but also calibrated enough that China can tit-for-tat. Whereas Trump would just be insane. By all accounts TSMC didn't want to open plant in US. They were denying it for months / weeks / days before. And TSMC has invested so much capex in new Taiwan plants that it makes no fiscal sense for them to open low capacity plant in US unless heavily subsidized, and US wouldn't subsidize unless it was for MIC. As for Taiwan's future, really depends on how election goes. I'm skeptical China will allow TSMC / Taiwan to cooperate with US unfettered in semi. Right now there's mediatek buffering Huawei. And other Chinese brands can still sell phones with qualcomm. But if US manage to coerce all Taiwanese semi from working with China... well glitter bombs are going to blow up in Taiwanese fabs before real bombs. I think it's semi is a much more dangerous situation than most people realize. If Trumps over November, there's a few years before Arizonal TSMC comes online to form a useful Chinese semi containment strategy. Or TSMC will delay the play until after Trump term 2. Otherwise, stock up on graphics cards now.
chvid 6y ago
It has been a potential threat to China for a decade and they have invested massively to counter it.
chlee 6y ago
The chinese govt is indeed throwing their weight behind developing a local semiconductor industry capable of rivaling TSMC. They are making heavy investment in SMIC for example. However, at the same time, unfortunately the Chinese government doesn't play fair, and they are ramping up state sponsored industry espionage and hacking of American and Taiwanese semi-conductor firms to speed up the process. This best describes China's perspective towards "technology acquisition" “They want technology by hook or by crook. They want it now. The spy game has always been a gentleman’s game, but China has taken the gloves off,” said John Bennett, the special agent in charge of the FBI’s San Francisco office, which battles economic spies targeting Silicon Valley. “They don’t care if they get caught or if people go to jail. As long as it justifies their ends, they are not going to stop.” See: https://www.wired.com/story/chinese-hackers-taiwan-semiconductor-industry-skeleton-key/ https://www.wired.com/story/chinese-hackers-taiwan-semicondu... https://www.reuters.com/article/us-basf-espionage/basf-workers-in-taiwan-suspected-of-leaking-company-secrets-idUSKCN1P10WO https://www.reuters.com/article/us-basf-espionage/basf-worke... https://www.wsj.com/articles/taiwans-technology-secrets-come-under-assault-from-china-1530468440 https://www.wsj.com/articles/taiwans-technology-secrets-come... https://www.theatlantic.com/politics/archive/2019/08/inside-us-china-espionage-war/595747/ https://www.theatlantic.com/politics/archive/2019/08/inside-... https://www.latimes.com/politics/la-na-pol-china-economic-espionage-20181116-story.html https://www.latimes.com/politics/la-na-pol-china-economic-es... https://www.justice.gov/opa/pr/prc-state-owned-company-taiwan-company-and-three-individuals-charged-economic-espionage https://www.justice.gov/opa/pr/prc-state-owned-company-taiwa...
- greatjack613 6y ago
  +1 to this, China has never made anything real themselves. It is all stolen property from countries who actually play fair. Until the general U.S population realizes that china's end goal is to eat them alive and unanimously supports putting china in its place, nothing will change and by then I fear it will be to late.
  - beagle3 6y ago
    The assumption that any country, especially the successful ones, plays “fair” is ludicrous. IIRC the CIA (or was it NSA?) was giving state-gathered intel to American arms And aerospace manufacturers in the 1980s so that they could outbid European rivals. The Chinese might be playing by different rules than those “established” over the last few decades by the west; but no one is playing “fair”.
Nokinside 6y ago
Huawei will replace Kirin with other chips manufactured in TSMC fabs (MediaTek for example). Huawei is forbidden using their own chip designs if there is come US based IP components, not from buying TSMC manufactured chips.

acomjean 6y ago

Long term I feel China is going to work around these sanctions and such and end up completely independent of US tech.

alfiedotwtf 6y ago
... either that, or they dive the Dow by banning Apple products in retaliation, or they invade Taiwan.
Mindless2112 6y ago
That was already China's stated goal in their "Made in China 2025" initiative. > The initiative encourages production of high value products and services, like aerospace and semiconductors, to help achieve independence from foreign suppliers.[1] [1] https://en.wikipedia.org/wiki/Made_in_China_2025 https://en.wikipedia.org/wiki/Made_in_China_2025
- bmitc 6y ago
  What other countries have long term plans and initiatives and effectively execute on them as China does?
  - Seanambers 6y ago
    Chinas success in doing this can in large part be traced to the unwillingness of the U.S and the west to challenge and stop the pure theft of IP from basically all advanced industries and unfair trade practices. This has enabled an immense transfer of IP which gives China an amazing foundation to build upon. Now China has to do the final push to become self reliant, but it's much more feasible than it was say 10-20 years ago. As far as i am aware no country except for different eras of communism(specifically Soviet) have operated somewhat effectively on production output plans on the scale of entire economy.
    - ikerdanzel 6y ago
      Feasible in 10-25 years, IF there is no political turmoils, persistent calamities and foreign invasions. Recent 3 decades of positive progression doesn't really extrapolate well when it comes to China historically. Take a look at it's 5,000 years of civilization. Usually when into any succession dynasty, she frequently stagnate. If there are major calamities AND foreign invasions, the internal political struggles will initiate a dynastic change and balkanization. China frequently unite (now) and then breakup repetitively throughout the history.

robert_foss 6y ago

This is a clear loss for consumers world wide. The Kirin SOCs were competitive with Qualcomm, and now they practically have a monopoly again.

greatjack613 6y ago
And a clear win for democratic governments who do not send dissenters to re-training camps. From a competitive landscape, yes it sucks. But Huawei / China needs to be punished for its blatant IP theft, I think this is a great place to start.
- greatpatton 6y ago
  At the same time the US caused (directly/indirectly) the death of 400-800k people in Iraq. Somehow there is a double standard regarding human rights. China is despicable but I think that the moral ground of the US regarding this kind of issue is quite shaky.
  - greatjack613 6y ago
    We are a democratic country, don't support a war, vote for someone in office who does not support it. China on the other hand if you don't support putting muslims in concentration camps, you end up there yourself
    - robert_foss 6y ago
      I don't think there was a vote for invading Iraq, or any of the other countries targeted by the wrecking ball that is US hegemony. Yes China is quite flawed, but this attempt at maintaining the status quo really only serves to halt progress.
      - greatjack613 6y ago
        Please don't be pedantic, We do not have votes on whether the president should sneeze into a tissue or a paper towel, but yes, the president that decided to go to war was voted in by the majority of the population. Please do not try to push the CCP's propaganda by knocking the United States, it only ends one way, and that is all of us being slaves to winnie the pooh

bosswipe 6y ago

A plausible start of WWIII would be China seizing Taiwan in order to regain access to TSMC.

FooBarWidget 6y ago
I really doubt it. China has its own fabs, they're just a few generations behind (14nm). That "only" means their chips are not competitive in certain contexts (heat, power), not that they can't have chips at all. They're investing heavily in research and development. It's just a matter of time before they catch up. There's no need to do something risky and expensive, like starting a war over Taiwan. And taking over Taiwan will cripple TSMC's ability to provide to anyone. The moment they invade Taiwan, 100% of its population becomes anti-China (right now a portion of Taiwanese are still sympathetic to the idea of reunification). TSMC employees will revolt and the island will turn into a perpetual guerilla war zone. How do you produce chips in such an environment? I still think WWIII could plausibly happen, just not because of TSMC.
- IndPhysiker 6y ago
  Agreed, but only to a point. Chinese foreign policy generally avoids taking sides in war in order to keep markets available, which has enabled them to remain out of major conflicts while the rest of the world throws money, resources, and lives away on endless wars. However, looking at the belt and road initiative that runs through Uighur peoples, they are showing they are willing to commit genocide to reach their long term expansionist goal. Combine that with their militarization of the south china sea, development of carrier technology, theft of stealth technology, and success of the thousand talents program and you have a power growing that only lacks the decision to resort to force. That said, don't discount the capacity for war over their long term goals of making China the sole superpower.
- MrBuddyCasino 6y ago
  Not to mention that Taiwan will trigger the explosive devices that they have embedded into infrastructure and manufacturing plants. China may coerce Taiwanese scientists, but won’t find a functioning chip fab to use.

chvid 6y ago

I thought that SMIC were producing Kirin chips: https://www.globaltimes.cn/content/1187993.shtml https://www.globaltimes.cn/content/1187993.shtml

bildung 6y ago
When rereading the article with this in mind, Yu only announced the end of "Kirin high end chips", not of the complete Kirin line. So I assume those are still alive?
- chvid 6y ago
  I don’t know this particular website but it seems like the article was angled in a certain manner. Here is the same story from Gizmo China: https://www.gizmochina.com/2020/08/07/huawei-mate40-last-flagship-kirin-chipset/ https://www.gizmochina.com/2020/08/07/huawei-mate40-last-fla...

bit33 6y ago

Maybe the Chinese government can fix this with using some extra slave labour or else steal and extortion it from some small countries? Can't they just invade Taiwan or Korea and just grab it? As a last resort they could become a democracy, without slavery, without stealing and play by the rules, but hey what a weired idea if you can be a thug as well!

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greatpatton 6y ago

Can someone provide more context about what SoC they are going to use for their phones from now on as this is not really clear from the article.

Nokinside 6y ago
Most likely MediaTek for the lower end and Qualcomm's Snapdragons for flagship phones. Huawei still needs license from BIS to use Snapdragons but it should be easier to get.
- greatpatton 6y ago
  But Qualcomm is an American company. How would they be able to sell to Huawei?
  - Nokinside 6y ago
    It should be easier to get license to sell ready-made components to Huawei.
  - hungryhobo 6y ago
    the US's goal was never to stop selling to Huawei altogether, it's to prevent Huawei from moving up the value chain, i.e designing their own SOC. It's the same reason why other Chinese companies like Xiaomi and Oppo are not included in the entity list. You can bet once they starts to develop their own CPU, or their own OS, they would be immediately placed on the entity list because of "national security" reasons.
sudosysgen 6y ago
They will use a mix of Qualcomm chips for high end phones and Kirin chips made by SMIC for lower end phones. At least that's my guess.

dade_ 6y ago

Either the PRC has overplayed their hand, or they are up to something. 2020 still has nearly 5 months to deliver more gifts.

alfiedotwtf 6y ago
If you think the Trump administration has out-thought China, you need to re-read this sentence.
- whytaka 6y ago
  When you're a gorilla, you don't really need to think through your punches if all you want is maximum damage.
- dade_ 6y ago
  If you thing the US is the only other country on this planet, you need to recheck your atlas. Also: https://www.theepochtimes.com/chinas-neighbors-in-the-indo-pacific-stand-up-to-its-hegemonic-ambitions_3447202.html https://www.theepochtimes.com/chinas-neighbors-in-the-indo-p...
tonyedgecombe 6y ago
The sensible option would be to wait and see what November brings.
- jessaustin 6y ago
  That's what Joe Biden is planning to do!

euix 6y ago

Kirin's probably source something from U.S. designs right? Hence it's production run must end. I am guessing this means Huawei needs to switch to a design that is wholly originating from China (with possible input from Japan and Korea) but right now they are not up to the level of the Kirins. This may really just mean Xiaomi or Oppo gains an advantage over Huawei and takes the top crown.

magicsmoke 6y ago
It's less about the designs and more about TSMC being the only company with the process node to manufacture them getting barred by the US.
Nokinside 6y ago
Huawei can still buy SoC with US technology in it if it's designed and manufactured by others. US restrictions are all about Huawei’s ability to use U.S. technology and software to design and manufacture semiconductors abroad. BIS made targeted rule "to impose a new control over certain foreign-produced items, when there is knowledge that such items are destined to a designated entity on the Entity List." > (i) Items, such as semiconductor designs, when produced by Huawei and its affiliates on the Entity List (e.g., HiSilicon), that are the direct product of certain U.S. Commerce Control List (CCL) software and technology; and > (ii) Items, such as chipsets, when produced from the design specifications of Huawei or an affiliate on the Entity List (e.g., HiSilicon), that are the direct product of certain CCL semiconductor manufacturing equipment located outside the United States. Such foreign-produced items will only require a license when there is knowledge that they are destined for reexport, export from abroad, or transfer (in-country) to Huawei or any of its affiliates on the Entity List. https://www.commerce.gov/news/press-releases/2020/05/commerce-addresses-huaweis-efforts-undermine-entity-list-restricts https://www.commerce.gov/news/press-releases/2020/05/commerc...
- euix 6y ago
  >Huawei can still buy SoC with US technology in it if it's designed and manufactured by others. I don't get it, if the U.S. wants to cripple Huawei why would they let you buy SoC that way? The whole point I thought was that any company dealing with Huawei that used some material proportion of U.S. originated technology to deliver goods to Huawei had to stop. Which means in order for Huawei to build chips it needs a supply chain that is almost completely independent of the U.S. The closets analogy I can think of is like building nuclear submarines. They are notoriously hard because its not possible to globalize the supply chain, everything in its design must be sourced within the country thus requires a specialized supply chain.

Markoff 6y ago

this news does not make sense, what chips they would use for high end smartphones? because it can't be qualcomm also what are they gonna use for smart watches, TV and their other products which are powered by kirin chips? you can't replace those that easy

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euix 6y ago

Lot of talk about TSMC building a plant in Wisconsin but as far as I could dig up its basically the same as what they already have in Nanjing. A play meant to make them appear like a neutral party.

trynumber9 6y ago
TSMC's fab is planned for Arizona, not Wisconsin.

Ijumfs 6y ago

What they're not saying is that the Chinese will have to completely shut down many of their silicon foundries because of a lack of specialized chemicals only available from the USA and Japan.

gumby 6y ago
Until now it hasn’t been cost effective to develop internal sources for these supplies. Now the US has provided an (essentially infinite) price support for domestic production and all the infrastructure and supply chain that go along with it.
ycombonator 6y ago
The pressure really must on PLA Hacking Unit 61398 to up their theft of industrial IP. https://en.wikipedia.org/wiki/PLA_Unit_61398 https://en.wikipedia.org/wiki/PLA_Unit_61398

noevil123 6y ago

Can you trust them?

stevespang 6y ago

For the record, I predict that the CCP will invade the island of Taiwan in a Blitzkrieg fashion, achieve victory in 72 hours, and nationalize TSMC, steal all the IP. Then the CCP will be hated even more throughout the world.