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Japan bets $67B to become a global chip powerhouse once again
- imwally 3y agoAnyone else reading Chip War?
- outside1234 3y agoI have it on my list - is it good?
- imwally 3y agoI’m only 100 pages in but I’m hooked! I never took the time to understand just how complex the logistics are behind the silicon that powers basically everything we rely on. Totally worth picking up.
- Brajeshwar 3y agoThanks. This comment just bumped up its importance and is now on my “must-read-soon.”
- pm90 3y agoWould recommend. Its not as detailed as I would like but paints a great overall narrative of how we went from the discovery of the transistor to the current state of the industry.
- renewiltord 3y agoIt's very entertainingly written. And in an accessible style that doesn't require any insider industry knowledge. Strongly recommend.
- Brajeshwar 3y agoIn my reading-list for this year. :-) Wikipedia for those looking https://en.wikipedia.org/wiki/Chip_War:_The_Fight_for_the_World%27s_Most_Critical_Technology https://en.wikipedia.org/wiki/Chip_War:_The_Fight_for_the_Wo...
- elpalek 3y agolistened to the audiobook, highly recommend.
- anoopelias 3y agoWhile the books is on the way, you can listen to an engaging talk by the author: https://www.youtube.com/watch?v=2tSs7aESx8s https://www.youtube.com/watch?v=2tSs7aESx8s
- gkanai 3y agoChip War is good. Acquired Podcast has done a great TSMC deep dive. https://www.acquired.fm/episodes/tsmc https://www.acquired.fm/episodes/tsmc Asianometry has done a lot of semicon videos with lots of ASML EUV videos. https://www.youtube.com/@Asianometry https://www.youtube.com/@Asianometry
- ein0p 3y agoChina bet almost three times as much. Rhetoric in the West is starting to change as they make progress. Used to be that people would laugh and say it’ll never happen. Now there’s talk of “what we’re going to do when they flood the market with cheap silicon”. All thanks to largely self-defeating sanctions. Same thing will happen with AI acceleration hardware. In fact it’s already happening.
- deleted 3y ago[deleted]
- karlgkk 3y agoThey were always going to try to in-house chip making - it's a huge point of geopolitical risk for them. Sanctions were not self-defeating, if anything, they were effective in their goals and slowed China down.
- whatshisface 3y agoSanctions on letting them buy chips 1. reduced available R&D money for US competitors by reducing their revenue and 2. raised the local price to monopoly prices, creating a great reward for the first local manufacturer to achieve parity. If you want to see effective de-industrialization, look at what happens to US industry when China applies the opposite of sanctions (subsidies). Adam Smith figured out that mercantilism is inherently self-defeating over two hundred years ago. Maybe nation-states will catch up in the next few centuries.
- seanmcdirmid 3y agoChina is still a few decades from commercially viable high end semiconductors. Yes, they can subsidize poor yields, but it doesn’t really bring them closer to figuring out the problem (they basically need to experiment a lot, and that will take time even if the money is there). China was always going to do this, they announced they were going to pour billions into semiconductors and modern jet turbines more than a decade ago. The trick is ensuring the money isn’t siphoned off to corruption.
- leemailll 3y ago"looking to mass produce state-of-the art 2 nanometer logic chips in 2027 from an initial starting point of zero" They have bold goals
- porphyra 3y agoHistorically, Canon and Nikon were some of the leading suppliers of photolithography equipment. However they seem to have missed the boat on EUV tech. Recently Canon is trying to make a comeback [1]. [1] https://arstechnica.com/reviews/2024/01/canon-plans-to-disrupt-chipmaking-with-low-cost-stamp-machine/ https://arstechnica.com/reviews/2024/01/canon-plans-to-disru...
- fomine3 3y agoRapidus buys ASML machines, because it's the only available option and developing national machine isn't their focus
- sexy_seedbox 3y agoBoth Canon and Nikon were sleeping at the wheel when GoPro and DJI both dominated the action/sports camera and drone business.
- hef19898 3y agoAnd yet it was Sony that hurt their camera market shares the most, action cams are a nieche product. None of those have anything to do with chip making so.
- coldtea 3y ago>And yet it was Sony that hurt their camera market shares the most, action cams are a nieche product. Mirrorless/DSLRs and compacts have been further niche-ified by mobile phones. Many who previously would step up from compacts to a Mirrorless/DSLR have stopped and just use their (now vastly improved) phone cameras. And mirrorless and DSLRs are maybe more of a niche than action cameras (which tons of average Joes buy, not just extreme sports fans).
- g-unit33 3y agoSoft.... You cant compete with $7T
- mrbonner 3y agoI think you got down voted because not many people know the context of your joke: https://www.cnbc.com/2024/02/09/openai-ceo-sam-altman-reportedly-seeking-trillions-of-dollars-for-ai-chip-project.html https://www.cnbc.com/2024/02/09/openai-ceo-sam-altman-report...
- burrish 3y agoClassic HN
- maxglute 3y agoIIRC that's more than CHIPs Act, but it's 2024, Sam wants (lol) 7T for OpenAI hardware, I can't tell what's a lot of money anymore.
- baq 3y agowhy not 8
- supafastcoder 3y agohttps://x.com/sama/status/1758347811786281355?s=46 https://x.com/sama/status/1758347811786281355?s=46
- ben_w 3y agoI'm sure 7T is someone having a laugh, not a real thing that's actually being attempted. I wonder what it would cost to outright buy Australia, in the sense of convincing enough voters to make you their absolute monarch…
- hardware2win 3y agoWell, current bleeding edge semicos require like hundreds of billions if you start from 0 Meanwhile what about those materials that could allow you to make 1000x faster cpus, but we arent capable of manufacturing them at scale and also their lifespan is way shorter than silicon. Im not saying 7T is reasonable, but if thats what he want to do, then it is very interesting and expensive as hell
- giireon 3y ago7T is price anchoring at it's best. When he gets 1T it will seem normal.
- soneca 3y agoOr price anchoring at its worst. When he gets 100B it will look like a failure.
- pm90 3y agoThis perhaps will do much more than the CHIPS act to remove the geopolitical risk associated with TSMC/Taiwan. A rational US administration would encourage this kind of development rather than stubbornly try to revive the sector domestically.
- ikrenji 3y agoif japan can revive the sector domestically, surely usa can to
- vasco 3y agoCan't both be done? Everyone understood semiconductors will be the oil of the next wars when the covid supply chain disruption happened. The next few years have just been everyone trying to figure out what to do so they don't have to modify designs in times of war.
- jtriangle 3y agoBoth are pretty difficult models to pull off because none of the above has the edge Taiwan has, which is cheap skilled labor. Until you can match labor cost with automation, it's DOA, regardless of how good your fabs are, and the automation isn't there yet.
- aembleton 3y agoCould provide subsidies like we do with farming.
- resolutebat 3y agoGenuine question: is labor cost really that important for cutting-edge fabs? I would have assumed the tooling would be far more expensive.
- cm2187 3y agoI am doubtful as well. We are told these factories cost 10s of billions to build though the number of people on the floor doesn't seem very different than any other factory. I find that hard to believe that labour is a primary driver.
- seydor 3y agoDoes AI actually need miniature chips? Or just a lot of them, of mediocre technology? They could do space heaters with AI inference. Power consumption is a concern but come on, we re wasting tons of power just to maintain bitcoin
- machinekob 3y agoThey need small chips but most important fast and big cache
- throwaway4good 3y agohttps://en.wikipedia.org/wiki/Dark_silicon https://en.wikipedia.org/wiki/Dark_silicon In AI training you typically use the full hardware all the time, unlike general purpose computing, so this is probably a bigger problem.
- sylware 3y ago67B? This is a serious amount of money for the task, and they are far from starting from scratch without experience. Just hope they won't favor chips with shady hardware programing manual or non-free specs (like ARM since it is own by japanese softbank).
- rajnathani 3y agoFor those wondering whether this is a state-backed venture, it is not [0]. In fact it is more interesting, as most of these large Japanese ventures (including Softbank via Arm) have significant dealings with semiconductors: > Rapidus was established in August 2022 with the support of eight major Japanese companies: Denso, Kioxia, MUFG Bank, NEC, NTT, SoftBank, Sony, and Toyota. [0] https://en.wikipedia.org/wiki/Rapidus https://en.wikipedia.org/wiki/Rapidus
- 1oooqooq 3y agoany etf tracking this bundle? edit: never mind. just saw that in 2002 the bigger player is now IBM. I don't want my money near that anymore.
- suoduandao3 3y agoI bet on IBM also when they were doing well in the quantum computing space. Similarly annoyed at their slow rate of progress relative to others. What is it about big bureaucratic orgs that they get so... tangled? It's like an institutional form of Alzheimer's.
- deleted 3y ago[deleted]
- shortrounddev2 3y agoHow is it that Japan lost its foothold in the consumer electronics market? You used to see a lot more Sony or Toshiba logos on things, but I feel like I never see japanese products anymore
- hiAndrewQuinn 3y agoGreat! I would love to see more competition in this space. Both culturally and educationally, Japan seems like it's in a strong position to make such a move.
- nojvek 3y agoGreat. We need Japan to be competitive again. More choice is better for everyone.
- niemandhier 3y agoThe human factor is one of the reasons Taiwan is as good in chip manufacturing as it is. Working in a chip factory is plain terrible for humans: Having to do anything in a clean room is exhausting. Even young people in Taiwan are sceptical about the working conditions: https://www.thinkchina.sg/taiwan-lacks-young-passionate-workers-semiconductor-industry https://www.thinkchina.sg/taiwan-lacks-young-passionate-work... Japanese work culture is famous for glorifying the ability to suffer for your job, and Shintoism even puts a spiritual component to „cleanness“.
- alephnerd 3y agoIt moved to Taiwan (and SK) from Japan because Japanese graduated from that kind of work culture. The work culture in Taiwan (and SK) is miles worse than Japan today - which makes sense as both are around 10-20 years behind Japan Median household income in Japan is around $48k [0], around $33k in SK [1], and Taiwan's I can't find but is around $28-34k based on median wage ($16k) [2] SK+TW have entered a similar doldrums to JP around 15-20 years ago, and just like how JP began outsourcing manufacturing to China, ASEAN (mostly Thailand), and India in the 2000s, SK+TW have started doing the same (Vietnam for SK, Taiwan hasn't found a major ASEAN partner yet) [0] - https://www.stat.go.jp/english/data/kakei/156n.html https://www.stat.go.jp/english/data/kakei/156n.html [1] - https://m-en.yna.co.kr/view/AEN20231123001600320 https://m-en.yna.co.kr/view/AEN20231123001600320 [2] - https://focustaiwan.tw/business/202312010011 https://focustaiwan.tw/business/202312010011
- aurareturn 3y agoTaiwan is well ahead of Japan and SK in terms of GDP PPP, which takes into account the cost of living in the country. In fact, Taiwan is closing in on the US as well.[0] If we base it on GDP PPP, then Japan and SK are actually 10-20 years behind Taiwan. The work moved from Japan to Taiwan simply because TSMC beat the competition out. [0]https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)...
- alephnerd 3y ago
- lvl102 3y agoChina’s self-inflicted reversal is unbelievable. All they had to do was make an honest progress, invest in education and research, and the rest was history. Instead they got too big headed and turned insular (again). Brain drain continues and Japan/SK/Vietnam stand to gain.
- deleted 3y ago[deleted]
- alephnerd 3y ago> China’s self-inflicted reversal People are overreading into the geopolitics. This transition already started 15 years ago when Intel opened it's first Semiconductor Packaging factory in Hanoi in 2009 (yes, 2009 is 15 years ago now) By 2008-09 it already became a bit difficult to operate within Coastal China for cost reasons. Foxconn decided to expand inwards into Interior China (eg. Zhengzhou) while Japanese+Korean companies expanded/returned to Thailand (Japan), Vietnam (South Korea), and India (Japan). The consumer electronics industry has always been a race to the bottom. 25 years ago, ASEAN and Mexico were the primary electronics manufacturing hub (Made in Thailand, Made in Malaysia, Made in Phillipines), then it became Made in China in the 2000s-2010s, now it's Made in Vietnam/India, and in a couple years who knows where.
- seatac76 3y agoBesides the obvious of this being a hedge against Taiwan being invaded. This is also a response to US sanctions, Japan is trying once again to have an independent semiconductor supply chain, just as an assurance. The government has been buying up companies to shore up their base. [1] [1]https://www.cnbc.com/2023/06/26/japan-backed-fund-to-buy-semiconductor-firm-jsr-for-6point3-billion.html https://www.cnbc.com/2023/06/26/japan-backed-fund-to-buy-sem...
- nonethewiser 3y agoAre you suggesting Japan is concerned they could be sanctioned by the US? While technically true, it's just as much of a risk for UK, Canada, etc. If they're safeguarding their access to chips that's about the least necessary risk to address.
- curiousllama 3y agoI suspect it would be more that if a company misbehaves, Japan may lose access (since the US will sanction the company). It's general resilience for critical materials given geopolitical risk, not a fear of the US per se.
- seatac76 3y agoI’m suggesting that Japan would prefer a higher degree of control and independence on semiconductor supply chain in general, to hedge against external factors like sanctions. I did not mean to imply that US would sanction them but US sanctions on equipment to China led to losses for Japanese firms. Having a deeper control of end to end semiconductor supply chain will help hedge against that, equipment sanction revenue loss can be made up by chips fab revenue as such. Makes more sense when you look at it from the government perspective, it is the government driving this despite how it appears.
- missedthecue 3y agoGoing to be a hell of a chip glut in a few years, and these billions may well have been flushed down the toilet. I get that there's a "national security" component but in 2029 when your subsidized and uncompetitive chip fabs are selling a dollar for fifty cents, your choice will be to pour more taxpayer money into the bottomless pit or admit defeat.
- kjkjadksj 3y agoPouring taxpayer money into a bottomless pit at least enables graft
- unethical_ban 3y agoYou seem to be assuming American production cannot be competitive, and that public goods operated by the government at a loss is inherently a bad thing.
- missedthecue 3y agoYes, I believe both things are pretty clearly true. And not just American. India, every major EU country + UK, and a number of others are prepared to dump billions into chip fabs. And this does not even include China, Japan, Korea, and other Asian countries. The glut is going to be incredible.
- happytiger 3y agoIt’s astonishing to look at the future and realize that all of this capacity is being created because of the forecast expansion of technology. Like, how crazy integrated into everything are we going to get? Sam’s massive fab for AI chips alone is huge news. Japan is pouring it on. I know people comment about the growth and bust cycle in chips, but it does create profound societal transformation in the process and I’m really starting to wonder just how profound the change that’s coming is going to be — if history guides us it looks pretty big. The challenge all these AI vendors are trying to solve and why national priorities are turning towards supplementing this industry is to try to capture market share to solve critical shortage of computing power specifically (in microchips or GPUs) that are necessary to advance AI technologies. And like I mentioned Nvidia has been the hot AI chip with the H100 (and it’s lead to a rather high market valuation — a trillion dollars). But their success is getting noticed and we are seeing Microsoft, Meta, OpenAI, Amazon, and Google all throw in to create their own AI processors. And that’s why you see this massive spending by nation states, because they don’t want to be left behind in this conversion and what is presumed to be ground floor opportunity for the “next big wave” of technology. Different companies are doing different things but almost all of them are going all in on in-house design and many on FAB itself: Microsoft is in-housing the Maia 100 for cloud. Google is doing the TPUs and a bunch of other stuff not public yet. Amazon won’t be left out with the hilariously named Trainium for machine learning and a bunch of chips under development for AWS. META is doing the MTIA and Artemis in house. SoftBank has realized that real estate isn’t it and now has their Izanagi project. Huawei has their 910B. Nvidia is all-in on GPUs like the H100 (and developing the H200) and making huge piles of money helping other create custom AI chips. And of course I already mentioned it by Sam Altman is seeking trillions for some unnamed chipset. What other major efforts do people know about? Seems like a massive shift and if this is as big as it looks, like I said, this is going to change society incredibly.
- jjeaff 3y agoit seems that Japanese culture and the business culture specifically is particularly suited to the precision and repeatability required to produce chips. I'm surprised that they ever got behind, but I suppose there are a lot of factors at play.
- slekker 3y agoGenuine question: Japan is in a very bad location geographically speaking: weather events like earthquakes and tsunamis are a reality. How is this still a good investment, considering the worsening of such events in the coming decades? Doesn't it make more sense for companies to look for a safer bet?
- drak0n1c 3y agoHow are you so sure that earthquakes and tsunamis will get worse in the coming decades? Their recent frequency is in line with historical records, and if anything their impact is far less damaging now due to improved construction techniques and infrastructure.
- cmlx1014 3y agochip is the future