5 ms·

US Government's new export controls are wreaking havoc on China's chip industry

62 points by jron 4y ago

opyate 4y ago
Does the USA still have chip fabrication capability locally, or in another partner country? If so, can they maintain capacity, or ramp up quickly enough?
jron 4y ago
https://threadreaderapp.com/thread/1580889341265469440.html https://threadreaderapp.com/thread/1580889341265469440.html
superchroma 4y ago
I feel mildly positive on this matter for the moment. I'm disappointed that this is coming from a protectionist angle and not as a principled response to Chinese moral failings, but you take what you can get I guess.
- croes 4y ago
  > response to Chinese moral failings? China's morals hasn't changed since the west outsourced it's production to it. What has changed is that China has gone from being a contractor to a competitor.
  - luckydata 4y ago
    Not a competitor, that was also the case. They have become an enemy, a fact that most people here seem to want to ignore on purpose. The Biden administration has simply acted on the reality that the PRC to all extent and purpose is an enemy of the USA as it strive to undermine our political system and influence around the world, and is preparing for more aggressive action to support that agenda. Clear as day, expect more action on that front.
  - superchroma 4y ago
    I know, I never wanted to give them my business in the first place. Awful country.
    - igravious 4y ago
      Ignorant comment. Par for the course around here though.
- PKop 4y ago
  Geopolitics are not about morality but rather national interests. Morality can certainly be a smoke-screen to get buy-in from people that worry about that. Also "global" morality is a sort of contradiction of the term. Morality applies to the in-group not the out-group. Thus actions like using nuclear weapons on an enemy; morality doesn't come into play.
chii 4y ago
While this might inflict short term pain to the chinese chip industry, it gives huge incentives to their indigenous chip industry to develop their own capabilities. It costs a lot of R&D to do so, and when western off-the-shelf chips are available, there's no profit motive to make such R&D (which has been CCP funded). So i think this may be a mistake in the very long run - the profits are denied to the western chip makers, and such profits are necessary for continued investment and innovation; and secondarily, sanctions like this will give a massive incentive for indigenous industry development. If successful, their competitiveness is going to be higher than that of the US & west's.
- lithos 4y ago
  China is in a funny situation of this hitting right after government investment of several billion has disappeared (for their chip industry). And serval thousand microchip companies have closed shop already. Sure some countries could leverage the recent flushout of corruption and hundreds of thousands of employees of the microchip industry looking for work. But I doubt China will be able to.
  - dirtyid 4y ago
    > funny situation Not really, it's expected quirks of ambitious PRC industrial policy which have historically been successful. Spam it until you make it. Inefficient on paper, but ultimately extremely efficient because the alternative is to have no indigenous options. Losing few billions out of ~100B worth of big funds over ~10 years is just cost of business (fast, cheap, good etc). It's about as inefficient as Intel insisting on divident payments + layoffs even with CHIPs. But in PRC, folks actually get punished / incentives aligned via anti-corruption / CCDI. Meanwhile, actual PRC semi capacity has increased dramatically in last few years, after leadership decided to stop halfassing post Huawei sanctions. > some countries Thousands semi shops closed down because that's what it takes to speedrun the ENTIRE semi supply chain, an effort no other country can even attempt. > looking for work US export controls just destroyed 1/3 of western semi revenues, there will likely be mass layoffs in west coming. Meanwhile PRC domestic semi industry just became a gold rush for non-American companies / talent and the incentive to de-Americanize US origin tech to create parallel semi supply chain to service PRC's 400B semi industry. There's a reason US Gov had to unilaterally announce these new measures on the steps of CHIP4 when other countries said they're not interested in proposed level export controls.
throwaway4good 4y ago
It is an extremely aggresive move on US part; in particular the part about criminalizing "US persons" that currently work in China. It is too early to tell how it will play out. Here is another perspective: https://asiatimes.com/2022/10/china-chip-ban-a-us-exercise-in-extreme-self-harm/ https://asiatimes.com/2022/10/china-chip-ban-a-us-exercise-i... China chip ban a US exercise in extreme self-harm CapEx and R&D implode in hard-pressed Western semicon industry while China pours massive funds into chip independence
- throwaway4good 4y ago
  I am fairly optimistic about Chinese semiconductor even in the face of a full western blockade. The internal Chinese market is simply too big to not be served. Also it is not correct that the value the Chinese semiconductor industry has been "reduced to zero overnight". If anything, judging by the stock market price of the China's largest contract fab SMIC relative to TSMC, the Chinese have been hurt less.
  - igravious 4y ago
    As with wave after wave of munitions to Ukraine targeting Russia this latest round of export control tightening against China reeks of desperation. All this does is push Russia and China into each others arms – not a strategy designed to maintain a globally dominant position.
- stjohnswarts 4y ago
  I can't agree with this. The cross pollination is bound to end. We found out two decades ago that sharing tech with China does nothing to help spread democracy, so why do it? There's a whole world outside of China that isn't running concentration camps and controlling every aspect of their citizens lives. Why should we reward Chinese oppression and human rights violations? Also note that Asia Times is out of Hong Kong and we know that press there has to tow the CCP party line or face ramifications if they don't.
throwaway67743 4y ago
Is it really, though? It just seems like yet another attempt to push a truth that doesn't exist, the USA is a very small fraction of the world, despite what Americans think - China also has domestic skill, again despite the USA thinking they're better (probably less than 1% of chips are designed in the USA) - this chest beating is getting really old.
- stjohnswarts 4y ago
  So move to China and bask in their awesomeness?
  - throwaway67743 4y ago
    There are other countries you know, ones that are neither of the above
    - PKop 4y ago
      Though then the question is are these other countries opposing US geopolitical actions or are they conceding to them as well. US numerical impact is not limited to their own population count; if they get Europe to do their bidding then add them to the mix as well as other NATO aligned countries.
      - throwaway67743 4y ago
        Unfortunately while everyone plays along with the games that are solely intended to preserve the USA as the world's only superpower (which may well be tested if they keep provoking others) they have an excessive influence on others, yes
phendrenad2 4y ago
Interesting fact followed by tweet upon tweet of really stupid predictions.
- DigitallyFidget 4y ago
  Twitter is full of fortune telling experts who gaze into the crystal ball to predict the future (horribly inaccurately).
djmips 4y ago
There's a lot of finger pointing and political fallout from what is partly a situation caused by the end of Moore's law
rurban 4y ago
Revoking US citizenship for Americans working abroad would be a godsend to them, not a threat. Extremely inaccurate translation. It's more like the sanctions are threatening them with DOJ prosecution.

62 points by jron 4y ago

Does the USA still have chip fabrication capability locally, or in another partner country? If so, can they maintain capacity, or ramp up quickly enough?

jron 4y ago

https://threadreaderapp.com/thread/1580889341265469440.html https://threadreaderapp.com/thread/1580889341265469440.html

superchroma 4y ago

I feel mildly positive on this matter for the moment. I'm disappointed that this is coming from a protectionist angle and not as a principled response to Chinese moral failings, but you take what you can get I guess.

croes 4y ago
> response to Chinese moral failings? China's morals hasn't changed since the west outsourced it's production to it. What has changed is that China has gone from being a contractor to a competitor.
- luckydata 4y ago
  Not a competitor, that was also the case. They have become an enemy, a fact that most people here seem to want to ignore on purpose. The Biden administration has simply acted on the reality that the PRC to all extent and purpose is an enemy of the USA as it strive to undermine our political system and influence around the world, and is preparing for more aggressive action to support that agenda. Clear as day, expect more action on that front.
- superchroma 4y ago
  I know, I never wanted to give them my business in the first place. Awful country.
  - igravious 4y ago
    Ignorant comment. Par for the course around here though.
PKop 4y ago
Geopolitics are not about morality but rather national interests. Morality can certainly be a smoke-screen to get buy-in from people that worry about that. Also "global" morality is a sort of contradiction of the term. Morality applies to the in-group not the out-group. Thus actions like using nuclear weapons on an enemy; morality doesn't come into play.

chii 4y ago

While this might inflict short term pain to the chinese chip industry, it gives huge incentives to their indigenous chip industry to develop their own capabilities. It costs a lot of R&D to do so, and when western off-the-shelf chips are available, there's no profit motive to make such R&D (which has been CCP funded). So i think this may be a mistake in the very long run - the profits are denied to the western chip makers, and such profits are necessary for continued investment and innovation; and secondarily, sanctions like this will give a massive incentive for indigenous industry development. If successful, their competitiveness is going to be higher than that of the US & west's.

lithos 4y ago
China is in a funny situation of this hitting right after government investment of several billion has disappeared (for their chip industry). And serval thousand microchip companies have closed shop already. Sure some countries could leverage the recent flushout of corruption and hundreds of thousands of employees of the microchip industry looking for work. But I doubt China will be able to.
- dirtyid 4y ago
  > funny situation Not really, it's expected quirks of ambitious PRC industrial policy which have historically been successful. Spam it until you make it. Inefficient on paper, but ultimately extremely efficient because the alternative is to have no indigenous options. Losing few billions out of ~100B worth of big funds over ~10 years is just cost of business (fast, cheap, good etc). It's about as inefficient as Intel insisting on divident payments + layoffs even with CHIPs. But in PRC, folks actually get punished / incentives aligned via anti-corruption / CCDI. Meanwhile, actual PRC semi capacity has increased dramatically in last few years, after leadership decided to stop halfassing post Huawei sanctions. > some countries Thousands semi shops closed down because that's what it takes to speedrun the ENTIRE semi supply chain, an effort no other country can even attempt. > looking for work US export controls just destroyed 1/3 of western semi revenues, there will likely be mass layoffs in west coming. Meanwhile PRC domestic semi industry just became a gold rush for non-American companies / talent and the incentive to de-Americanize US origin tech to create parallel semi supply chain to service PRC's 400B semi industry. There's a reason US Gov had to unilaterally announce these new measures on the steps of CHIP4 when other countries said they're not interested in proposed level export controls.

throwaway4good 4y ago

It is an extremely aggresive move on US part; in particular the part about criminalizing "US persons" that currently work in China. It is too early to tell how it will play out. Here is another perspective: https://asiatimes.com/2022/10/china-chip-ban-a-us-exercise-in-extreme-self-harm/ https://asiatimes.com/2022/10/china-chip-ban-a-us-exercise-i... China chip ban a US exercise in extreme self-harm CapEx and R&D implode in hard-pressed Western semicon industry while China pours massive funds into chip independence

throwaway4good 4y ago
I am fairly optimistic about Chinese semiconductor even in the face of a full western blockade. The internal Chinese market is simply too big to not be served. Also it is not correct that the value the Chinese semiconductor industry has been "reduced to zero overnight". If anything, judging by the stock market price of the China's largest contract fab SMIC relative to TSMC, the Chinese have been hurt less.
- igravious 4y ago
  As with wave after wave of munitions to Ukraine targeting Russia this latest round of export control tightening against China reeks of desperation. All this does is push Russia and China into each others arms – not a strategy designed to maintain a globally dominant position.
stjohnswarts 4y ago
I can't agree with this. The cross pollination is bound to end. We found out two decades ago that sharing tech with China does nothing to help spread democracy, so why do it? There's a whole world outside of China that isn't running concentration camps and controlling every aspect of their citizens lives. Why should we reward Chinese oppression and human rights violations? Also note that Asia Times is out of Hong Kong and we know that press there has to tow the CCP party line or face ramifications if they don't.

throwaway67743 4y ago

Is it really, though? It just seems like yet another attempt to push a truth that doesn't exist, the USA is a very small fraction of the world, despite what Americans think - China also has domestic skill, again despite the USA thinking they're better (probably less than 1% of chips are designed in the USA) - this chest beating is getting really old.

stjohnswarts 4y ago
So move to China and bask in their awesomeness?
- throwaway67743 4y ago
  There are other countries you know, ones that are neither of the above
  - PKop 4y ago
    Though then the question is are these other countries opposing US geopolitical actions or are they conceding to them as well. US numerical impact is not limited to their own population count; if they get Europe to do their bidding then add them to the mix as well as other NATO aligned countries.
    - throwaway67743 4y ago
      Unfortunately while everyone plays along with the games that are solely intended to preserve the USA as the world's only superpower (which may well be tested if they keep provoking others) they have an excessive influence on others, yes

phendrenad2 4y ago

Interesting fact followed by tweet upon tweet of really stupid predictions.

DigitallyFidget 4y ago
Twitter is full of fortune telling experts who gaze into the crystal ball to predict the future (horribly inaccurately).

djmips 4y ago

There's a lot of finger pointing and political fallout from what is partly a situation caused by the end of Moore's law

rurban 4y ago

Revoking US citizenship for Americans working abroad would be a godsend to them, not a threat. Extremely inaccurate translation. It's more like the sanctions are threatening them with DOJ prosecution.