6 ms·

Huawei blames US for global chip supply crunch

38 points by RachelF 6y ago

echelon 6y ago
Isn't it rise of WFH, bitcoin, a faltering Intel, consolidation, and a growing demand throughout the industry?
- Craighead 6y ago
  Why wouldn't China seize the opportunity to say it's the U.S.'s fault?
- astrea 6y ago
  Interested to know why "global pandemic" didn't make this list.
  - dylan604 6y ago
    That's kind of covered by the WFH isn't it?
    - astrea 6y ago
      Not necessarily. WFH just means a shift in consumer demand as people need laptops, monitors, etc. Global pandemic affects supply as factories shut down, ports get closed, etc.
      - dylan604 6y ago
        Maybe so, but let's be honest. The global pandemic is what caused the shift to WFH for companies that never even considered WFH as viable. Without that artificial push to WFH, the run on devices would not have happened. Some things can be left unsaid, and still the meaning is conveyed just the same. However, there are people that are unable to read between the lines and need things spelled out explicitly for them. I'm sure those people thank you for clarifying the point.
        astrea 6y ago
        You still missed my point. "Work From Home" does not encompass CLOSED PORTS OF ENTRY and CLOSED FACTORIES. Perhaps you can use this quarantine life to brush up on your manners.
- vmception 6y ago
  There is "the market" and there is also a shortage. The market is saying this stuff is just worth more than "suggested retail price". In your world you point at bitcoin ASICs and GPU miners buying up chip supply and existing GPU inventory respectively, in other worlds people point at scalpers buying up GPUs and gaming consoles. But all worlds are saying "the price of hardware is triple the listed price". For companies with lines of chips to build, they can absolutely bid higher and get higher in the production queue and pass that price on to the their customers. But there is also a supply shortage. The markets are functioning decently, where it is 100% saying "hey go start a fab in Arizona, it's currently profitable" it is just not quick to set those things up. So for now, we have to deal with the geopolitics and point at rational market participants that are taking risk to buy up supply as it hits and successfully resale it for 2-3x markup. Someone else has to take a bigger risk and start a production line, and play both Biden, Xi and Tsai Ing-Wen like a fiddle, hoping all the heads of state throw billions of their currency at them. We can take a risk by being a scalper or buying shares/options of the fab lines.
Ericson2314 6y ago
Without weighing in on the geopolitics, I'm reminded of the quoted paper in https://twitter.com/JWMason1/status/1380253484130394114/photo/1 https://twitter.com/JWMason1/status/1380253484130394114/phot.... In other news, the modern economy suffers from a persistent aggregate demand problem, so a few supply shocks here and there, especially amongst advanced goods as opposed to raw materials (like 1970s oil), strike me as just fine; needed even. For example, this could be the thing that makes Intel's "let's stop just rent seeking and diversify" actual get off the ground, which would be great. Worrying about these supply shocks rather than celebrating them is just a sop to big big business.
- dylan604 6y ago
  Necessity is the mother of invention. Something you need isn't available? Figure out how to not need that thing.
- magicsmoke 6y ago
  There's also the problem that semiconductor manufacturing is a highly capital intensive and cyclical industry. If you spend billions to spin up a fab today along with everyone else and 5 years from now the whole world is producing a surplus of chips, now you're stuck paying back the loans for that fab in a very unprofitable environment. Semiconductor manufacturing may be one of those industries where the capital costs are so high and the necessary units sold to dilute that cost is so large that the world can only support a single fab company at the cutting edge without significant regional subsidies. Would also be interesting to compare with a similarly capital intensive industry like steel because there's also a shortage of steel and spike in steel prices right now.
  - dirtyid 6y ago
    From report by SIA a couple weeks ago. >A hypothetical alternative with parallel, fully “self sufficient” local supply chains in each region to meet its current levels of semiconductor consumption would have required at least $1 trillion in incremental upfront investment, resulting in a 35% to 65% overall increase in semiconductor prices and ultimately higher costs of electronic devices for end users. https://www.semiconductors.org/wp-content/uploads/2021/04/SIA-BCG-Report_Strengthening-the-Global-Semiconductor-Supply-Chain_April-2021.pdf https://www.semiconductors.org/wp-content/uploads/2021/04/SI...
elefanten 6y ago
In his own narrative, the most direct cause of chip shortage is stockpiling, primarily by Chinese companies worried about potential or impending sanctions. If it’s fair by Eric to say that’s the fault of the US for imposing sanctions, then it must also be fair to say that it’s the fault of Huawei for stealing, lying, cheating and violating tons of legal / contractual obligations until they got sanctioned.
- freeflight 6y ago
  > In his own narrative, the most direct cause of chip shortage is stockpiling, primarily by Chinese companies worried about potential or impending sanctions. That's mostly older machines [0] and only started happening after the US leaned hard on the Dutch to cancel the sale of state of the art ASML lithography equipment to China [1] [0] https://wccftech.com/china-has-been-buying-used-semiconductor-manufacturing-equipment-at-a-higher-rate-in-an-attempt-to-avoid-us-restrictions/ https://wccftech.com/china-has-been-buying-used-semiconducto... [1] https://www.reuters.com/article/us-asml-holding-usa-china-insight-idUSKBN1Z50HN https://www.reuters.com/article/us-asml-holding-usa-china-in...
waiseristy 6y ago
Of course they do! And in the US I'm sure the opinion is that the Chinese should play by the rules if they want access to the global semiconductor market. Geopolitics! The real winners here are the fabs who are going to be laughing themselves to the bank over the next few months/years of heightened prices
- rjzzleep 6y ago
  EDIT: I get that you don't necessarily mean that it's(playing by the rules) really the case, so I apologize should that be the case. Either way I've heard that global foundries is having an intake on orders because of the situation. So you're right in your conclusion. You mean like when the US slapped tariffs on Bombardier which were illegal but forced Bombardier[1] to sell off their assets to Airbus? Or when they pressured Germany into lifting their patents on Anthrax treatments[2]? Or when it signed into law the Hague invasion act should an american ever be held by the International Court of Justice[3]? Or when they decimated HTC but granted Apple a pass? Or when it effectively embargoed Iran and NK from the world food, medical, plane replacement part supplies? Let's be real here. The US plays fair when it CHOOSES to. Yes, I'd rather live in the US than in China. But you need a mirror to understand why countries outside of Russia and China give them a pass. It's because geopolitically speaking the USA has always been America first at any cost. The Chinese were just smart enough to play dumb until they amassed enough power to flip the table, as opposed to some other countries who've been threatening and cursing the US and as a result have had very limited access to modern technology. [1] https://www.businessinsider.com/boeings-trade-dispute-canada-bombardier-airbus-alabama-winner-2019-1 https://www.businessinsider.com/boeings-trade-dispute-canada... [2] https://www.theguardian.com/business/2001/oct/23/anthrax.businessofresearch https://www.theguardian.com/business/2001/oct/23/anthrax.bus... [3] https://www.hrw.org/news/2002/08/03/us-hague-invasion-act-becomes-law https://www.hrw.org/news/2002/08/03/us-hague-invasion-act-be...
  - waiseristy 6y ago
    I think you interpreted "play by the rules" as though I was implying they were fair & ethical rules! I think I should have said "play by the US's rules"!
justicezyx 6y ago
Huawei is right. If there is no outrageous banning on any products with >0% US IP in it, there will be lots of more fabs capacity in China. That's a showing how much political influence US commands. If China does the same thing, everyone in developed countries would literally has nothing to do other than eating junk food... Fortunately, China and the rest of the world catch up quickly. Aside from the aggressive national investment from Chinese government, EU have similar large scale investment in fabs. We are heading into a more robust supply chain for semiconductor products!
wombatmobile 6y ago
"The great liability of the engineer compared to men of other professions is that his works are out in the open where all can see them. His acts, step by step, are in hard substance. He cannot bury his mistakes in the grave like the doctors. He cannot argue them into thin air or blame the judge like the lawyers." -- Herbert Hoover

38 points by RachelF 6y ago

echelon 6y ago

Isn't it rise of WFH, bitcoin, a faltering Intel, consolidation, and a growing demand throughout the industry?

Craighead 6y ago
Why wouldn't China seize the opportunity to say it's the U.S.'s fault?
astrea 6y ago
Interested to know why "global pandemic" didn't make this list.
- dylan604 6y ago
  That's kind of covered by the WFH isn't it?
  - astrea 6y ago
    Not necessarily. WFH just means a shift in consumer demand as people need laptops, monitors, etc. Global pandemic affects supply as factories shut down, ports get closed, etc.
    - dylan604 6y ago
      Maybe so, but let's be honest. The global pandemic is what caused the shift to WFH for companies that never even considered WFH as viable. Without that artificial push to WFH, the run on devices would not have happened. Some things can be left unsaid, and still the meaning is conveyed just the same. However, there are people that are unable to read between the lines and need things spelled out explicitly for them. I'm sure those people thank you for clarifying the point.
      - astrea 6y ago
        You still missed my point. "Work From Home" does not encompass CLOSED PORTS OF ENTRY and CLOSED FACTORIES. Perhaps you can use this quarantine life to brush up on your manners.
vmception 6y ago
There is "the market" and there is also a shortage. The market is saying this stuff is just worth more than "suggested retail price". In your world you point at bitcoin ASICs and GPU miners buying up chip supply and existing GPU inventory respectively, in other worlds people point at scalpers buying up GPUs and gaming consoles. But all worlds are saying "the price of hardware is triple the listed price". For companies with lines of chips to build, they can absolutely bid higher and get higher in the production queue and pass that price on to the their customers. But there is also a supply shortage. The markets are functioning decently, where it is 100% saying "hey go start a fab in Arizona, it's currently profitable" it is just not quick to set those things up. So for now, we have to deal with the geopolitics and point at rational market participants that are taking risk to buy up supply as it hits and successfully resale it for 2-3x markup. Someone else has to take a bigger risk and start a production line, and play both Biden, Xi and Tsai Ing-Wen like a fiddle, hoping all the heads of state throw billions of their currency at them. We can take a risk by being a scalper or buying shares/options of the fab lines.

Ericson2314 6y ago

Without weighing in on the geopolitics, I'm reminded of the quoted paper in https://twitter.com/JWMason1/status/1380253484130394114/photo/1 https://twitter.com/JWMason1/status/1380253484130394114/phot.... In other news, the modern economy suffers from a persistent aggregate demand problem, so a few supply shocks here and there, especially amongst advanced goods as opposed to raw materials (like 1970s oil), strike me as just fine; needed even. For example, this could be the thing that makes Intel's "let's stop just rent seeking and diversify" actual get off the ground, which would be great. Worrying about these supply shocks rather than celebrating them is just a sop to big big business.

dylan604 6y ago
Necessity is the mother of invention. Something you need isn't available? Figure out how to not need that thing.
magicsmoke 6y ago
There's also the problem that semiconductor manufacturing is a highly capital intensive and cyclical industry. If you spend billions to spin up a fab today along with everyone else and 5 years from now the whole world is producing a surplus of chips, now you're stuck paying back the loans for that fab in a very unprofitable environment. Semiconductor manufacturing may be one of those industries where the capital costs are so high and the necessary units sold to dilute that cost is so large that the world can only support a single fab company at the cutting edge without significant regional subsidies. Would also be interesting to compare with a similarly capital intensive industry like steel because there's also a shortage of steel and spike in steel prices right now.
- dirtyid 6y ago
  From report by SIA a couple weeks ago. >A hypothetical alternative with parallel, fully “self sufficient” local supply chains in each region to meet its current levels of semiconductor consumption would have required at least $1 trillion in incremental upfront investment, resulting in a 35% to 65% overall increase in semiconductor prices and ultimately higher costs of electronic devices for end users. https://www.semiconductors.org/wp-content/uploads/2021/04/SIA-BCG-Report_Strengthening-the-Global-Semiconductor-Supply-Chain_April-2021.pdf https://www.semiconductors.org/wp-content/uploads/2021/04/SI...

elefanten 6y ago

In his own narrative, the most direct cause of chip shortage is stockpiling, primarily by Chinese companies worried about potential or impending sanctions. If it’s fair by Eric to say that’s the fault of the US for imposing sanctions, then it must also be fair to say that it’s the fault of Huawei for stealing, lying, cheating and violating tons of legal / contractual obligations until they got sanctioned.

freeflight 6y ago
> In his own narrative, the most direct cause of chip shortage is stockpiling, primarily by Chinese companies worried about potential or impending sanctions. That's mostly older machines [0] and only started happening after the US leaned hard on the Dutch to cancel the sale of state of the art ASML lithography equipment to China [1] [0] https://wccftech.com/china-has-been-buying-used-semiconductor-manufacturing-equipment-at-a-higher-rate-in-an-attempt-to-avoid-us-restrictions/ https://wccftech.com/china-has-been-buying-used-semiconducto... [1] https://www.reuters.com/article/us-asml-holding-usa-china-insight-idUSKBN1Z50HN https://www.reuters.com/article/us-asml-holding-usa-china-in...

waiseristy 6y ago

Of course they do! And in the US I'm sure the opinion is that the Chinese should play by the rules if they want access to the global semiconductor market. Geopolitics! The real winners here are the fabs who are going to be laughing themselves to the bank over the next few months/years of heightened prices

rjzzleep 6y ago
EDIT: I get that you don't necessarily mean that it's(playing by the rules) really the case, so I apologize should that be the case. Either way I've heard that global foundries is having an intake on orders because of the situation. So you're right in your conclusion. You mean like when the US slapped tariffs on Bombardier which were illegal but forced Bombardier[1] to sell off their assets to Airbus? Or when they pressured Germany into lifting their patents on Anthrax treatments[2]? Or when it signed into law the Hague invasion act should an american ever be held by the International Court of Justice[3]? Or when they decimated HTC but granted Apple a pass? Or when it effectively embargoed Iran and NK from the world food, medical, plane replacement part supplies? Let's be real here. The US plays fair when it CHOOSES to. Yes, I'd rather live in the US than in China. But you need a mirror to understand why countries outside of Russia and China give them a pass. It's because geopolitically speaking the USA has always been America first at any cost. The Chinese were just smart enough to play dumb until they amassed enough power to flip the table, as opposed to some other countries who've been threatening and cursing the US and as a result have had very limited access to modern technology. [1] https://www.businessinsider.com/boeings-trade-dispute-canada-bombardier-airbus-alabama-winner-2019-1 https://www.businessinsider.com/boeings-trade-dispute-canada... [2] https://www.theguardian.com/business/2001/oct/23/anthrax.businessofresearch https://www.theguardian.com/business/2001/oct/23/anthrax.bus... [3] https://www.hrw.org/news/2002/08/03/us-hague-invasion-act-becomes-law https://www.hrw.org/news/2002/08/03/us-hague-invasion-act-be...
- waiseristy 6y ago
  I think you interpreted "play by the rules" as though I was implying they were fair & ethical rules! I think I should have said "play by the US's rules"!

justicezyx 6y ago

Huawei is right. If there is no outrageous banning on any products with >0% US IP in it, there will be lots of more fabs capacity in China. That's a showing how much political influence US commands. If China does the same thing, everyone in developed countries would literally has nothing to do other than eating junk food... Fortunately, China and the rest of the world catch up quickly. Aside from the aggressive national investment from Chinese government, EU have similar large scale investment in fabs. We are heading into a more robust supply chain for semiconductor products!

wombatmobile 6y ago

"The great liability of the engineer compared to men of other professions is that his works are out in the open where all can see them. His acts, step by step, are in hard substance. He cannot bury his mistakes in the grave like the doctors. He cannot argue them into thin air or blame the judge like the lawyers." -- Herbert Hoover