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CHIPS act ($39 billion) pales in comparison to Chinese subsidies. All Chinese semiconductor subsidies, both local and state subsidies, are estimated $60 billio

by nabla9 3y ago

CHIPS act ($39 billion) pales in comparison to Chinese subsidies. All Chinese semiconductor subsidies, both local and state subsidies, are estimated $60 billion __per__year__.

JumpCrisscross 3y ago
> Chinese semiconductor subsidies, both local and state subsidies, are estimated $60 billion __per__year__ Source? Note that several states, including Arizona, are topping up CHIPS.
tinco 3y ago
Even if that's true, don't forget that the semi-conductor companies that are backed by the US are already state-of-the-art and profitable companies. China has to establish a de novo industry, it's not surprising that to do that quickly and effectively it would require ten times as much funding.
- nabla9 3y ago
  True. China pays for technology. US pays for location.
- thiago_fm 3y ago
  Never doubt what China can achieve with 6.5 days of workweeks and pseudo-slavery work, as well as subsidies and currency manipulations. Just look how they managed to scale up their car manufacturing business so quickly, now they can probably make enough cars to supply 100% of the world's demand, if they had appropriate demand. What I wonder is why the world didn't cut their ties with China faster, as they are clearly killing the competition by playing a very unfair playbook. Only when China finally respect other countries by letting its population be real consumers, and also treat their population with dignity the west should be willing to talk with them.
alephnerd 3y ago
The Big Fund (Chinese subsidy) has ongoing graft and corruption issues [0] all the way to the very top [1][2], so most of that money was never actually deployed competently. This is what lead to Tsinghua Unigroup's collapse, and a number of other corruption probes. Furthermore, the Big Fund subsidy is an attempt to build a greenfield ecosystem, while CHIPS is basically reinvesting in a brownfield ecosystem. [0] - https://www.ft.com/content/8358e81b-f4e7-4bad-bc08-19a77035e1b4 https://www.ft.com/content/8358e81b-f4e7-4bad-bc08-19a77035e... [1] - http://m.ccdi.gov.cn/content/8f/24/93463.html http://m.ccdi.gov.cn/content/8f/24/93463.html [2] - https://www.reuters.com/world/china/china-watchdog-says-is-probing-head-chip-focused-big-fund-2022-08-01/ https://www.reuters.com/world/china/china-watchdog-says-is-p...
- nabla9 3y ago
  US is only paying companies to locate. If you have to pay TSMC billions so that they build their factory in Arizona, US is not a competitive place. At least Chinese are paying for technology development.
  - alephnerd 3y ago
    > paying for technology development The US is not paying for that because that is already done in the US ecosystem. For example, DUV and EUV lithography is US DoE IP that was licensed to ASML to prevent anti-trust abuse by Canon in the 2000s. There's a reason why I said "an attempt to build a greenfield ecosystem" Basically, TSMC:SMIC Micron:YTMC Hong Ha:Tower There isn't an Nvidia, AMD, etc equivalent yet in the Chinese ecosystem, and that's why the Big Fund is so big (well, also because of graft as I mentioned)
    - nabla9 3y ago
      Nvidia are AMD are fabless design companies. US has very limited edge there.
      - alephnerd 3y ago
        The Big Fund also funds Fabless design vendors like Biren [0], Ingenic [1], and Zhaoxin [2] in order to build a domestic Nvidia or AMD. The Big Fund funds HUNDREDS of companies, not just SMIC. In fact, SMIC is basically the last man standing, as almost everyone else collapsed (YMTC and Hong Ha were restructured last minute to save Tsinghua Unigroup and other players), which is what triggered Xi's graft probe and hundreds of executives and government officials getting the ax. [0] - https://www.birentech.com/ https://www.birentech.com/ [1] - http://www.ingenic.com.cn/ http://www.ingenic.com.cn/ [2] - http://zhaoxin.com/ http://zhaoxin.com/
- maxglute 3y ago
  > so most of that money was never actually deployed competently IMO that' doesn't follow. When 100s of billions are involved, graft limited to a few percentage points while rest is deployed correctly. Access money hardly stopped other PRC industrial policy from succeeding. Regardless, small % is still 100s of millions / billions meaning it will get CCDI attention. The issue was coordinating greenfield ecosystem and domestic demand to play nice together, which they couldn't when western options were available. Now PRC domestic semi looks to be integrating at rapid rate, partly because most of the money did their job and build up enough domestic players across the semi supply chain so they're not starting from zero.
Shrezzing 3y ago
>All Chinese semiconductor subsidies, both local and state subsidies, are estimated $60 billion __per__year__. The closest I can find to this figure is a Dept of Commerce report that estimates China gave $150bn in subsidies in total to its semiconductor industry in the period 2013-2023. Do you mean that they give 60bn rmb per year?
- pokepim 3y ago
  [dead]
- nabla9 3y ago
  No. They have increased subsidies dramatically after US sanctions and technology restrictions Just a single package was over $143 billion. https://www.reuters.com/technology/china-plans-over-143-bln-push-boost-domestic-chips-compete-with-us-sources-2022-12-13/ https://www.reuters.com/technology/china-plans-over-143-bln-...
  - alephnerd 3y ago
    That was because of debt restructuring due to Tsinghua Unigroup's collapse [0][1] [0] - https://asia.nikkei.com/Business/China-tech/China-s-Tsinghua-Unigroup-axes-major-memory-chip-projects https://asia.nikkei.com/Business/China-tech/China-s-Tsinghua... [1] - https://www.bloomberg.com/news/articles/2023-03-20/china-investigates-ex-unigroup-chief-in-latest-chip-graft-probe https://www.bloomberg.com/news/articles/2023-03-20/china-inv...
  - Shrezzing 3y ago
    Did the proposed package actually happen? There seem to be no follow-up articles about it. If the CCP wanted to hide it, $140bn would still represent ~1% of their GDP, so there should be some pretty obvious markers indicating that it went through. In Sept 2023, the FT reported that the Big Fund (the main pot for semiconductor subsidies) was struggling to hit its modest targets of $40bn in total across a 5-year investment. I don't see it as credible to say that China are currently investing $60bn/yr, or anything approaching that figure. They seem to currently be struggling to hit $10bn/yr.

by nabla9 3y ago

CHIPS act ($39 billion) pales in comparison to Chinese subsidies. All Chinese semiconductor subsidies, both local and state subsidies, are estimated $60 billion __per__year__.

JumpCrisscross 3y ago

> Chinese semiconductor subsidies, both local and state subsidies, are estimated $60 billion __per__year__ Source? Note that several states, including Arizona, are topping up CHIPS.

tinco 3y ago

Even if that's true, don't forget that the semi-conductor companies that are backed by the US are already state-of-the-art and profitable companies. China has to establish a de novo industry, it's not surprising that to do that quickly and effectively it would require ten times as much funding.

nabla9 3y ago
True. China pays for technology. US pays for location.
thiago_fm 3y ago
Never doubt what China can achieve with 6.5 days of workweeks and pseudo-slavery work, as well as subsidies and currency manipulations. Just look how they managed to scale up their car manufacturing business so quickly, now they can probably make enough cars to supply 100% of the world's demand, if they had appropriate demand. What I wonder is why the world didn't cut their ties with China faster, as they are clearly killing the competition by playing a very unfair playbook. Only when China finally respect other countries by letting its population be real consumers, and also treat their population with dignity the west should be willing to talk with them.

alephnerd 3y ago

The Big Fund (Chinese subsidy) has ongoing graft and corruption issues [0] all the way to the very top [1][2], so most of that money was never actually deployed competently. This is what lead to Tsinghua Unigroup's collapse, and a number of other corruption probes. Furthermore, the Big Fund subsidy is an attempt to build a greenfield ecosystem, while CHIPS is basically reinvesting in a brownfield ecosystem. [0] - https://www.ft.com/content/8358e81b-f4e7-4bad-bc08-19a77035e1b4 https://www.ft.com/content/8358e81b-f4e7-4bad-bc08-19a77035e... [1] - http://m.ccdi.gov.cn/content/8f/24/93463.html http://m.ccdi.gov.cn/content/8f/24/93463.html [2] - https://www.reuters.com/world/china/china-watchdog-says-is-probing-head-chip-focused-big-fund-2022-08-01/ https://www.reuters.com/world/china/china-watchdog-says-is-p...

nabla9 3y ago
US is only paying companies to locate. If you have to pay TSMC billions so that they build their factory in Arizona, US is not a competitive place. At least Chinese are paying for technology development.
- alephnerd 3y ago
  > paying for technology development The US is not paying for that because that is already done in the US ecosystem. For example, DUV and EUV lithography is US DoE IP that was licensed to ASML to prevent anti-trust abuse by Canon in the 2000s. There's a reason why I said "an attempt to build a greenfield ecosystem" Basically, TSMC:SMIC Micron:YTMC Hong Ha:Tower There isn't an Nvidia, AMD, etc equivalent yet in the Chinese ecosystem, and that's why the Big Fund is so big (well, also because of graft as I mentioned)
  - nabla9 3y ago
    Nvidia are AMD are fabless design companies. US has very limited edge there.
    - alephnerd 3y ago
      The Big Fund also funds Fabless design vendors like Biren [0], Ingenic [1], and Zhaoxin [2] in order to build a domestic Nvidia or AMD. The Big Fund funds HUNDREDS of companies, not just SMIC. In fact, SMIC is basically the last man standing, as almost everyone else collapsed (YMTC and Hong Ha were restructured last minute to save Tsinghua Unigroup and other players), which is what triggered Xi's graft probe and hundreds of executives and government officials getting the ax. [0] - https://www.birentech.com/ https://www.birentech.com/ [1] - http://www.ingenic.com.cn/ http://www.ingenic.com.cn/ [2] - http://zhaoxin.com/ http://zhaoxin.com/
maxglute 3y ago
> so most of that money was never actually deployed competently IMO that' doesn't follow. When 100s of billions are involved, graft limited to a few percentage points while rest is deployed correctly. Access money hardly stopped other PRC industrial policy from succeeding. Regardless, small % is still 100s of millions / billions meaning it will get CCDI attention. The issue was coordinating greenfield ecosystem and domestic demand to play nice together, which they couldn't when western options were available. Now PRC domestic semi looks to be integrating at rapid rate, partly because most of the money did their job and build up enough domestic players across the semi supply chain so they're not starting from zero.

Shrezzing 3y ago

>All Chinese semiconductor subsidies, both local and state subsidies, are estimated $60 billion __per__year__. The closest I can find to this figure is a Dept of Commerce report that estimates China gave $150bn in subsidies in total to its semiconductor industry in the period 2013-2023. Do you mean that they give 60bn rmb per year?

pokepim 3y ago
[dead]
nabla9 3y ago
No. They have increased subsidies dramatically after US sanctions and technology restrictions Just a single package was over $143 billion. https://www.reuters.com/technology/china-plans-over-143-bln-push-boost-domestic-chips-compete-with-us-sources-2022-12-13/ https://www.reuters.com/technology/china-plans-over-143-bln-...
- alephnerd 3y ago
  That was because of debt restructuring due to Tsinghua Unigroup's collapse [0][1] [0] - https://asia.nikkei.com/Business/China-tech/China-s-Tsinghua-Unigroup-axes-major-memory-chip-projects https://asia.nikkei.com/Business/China-tech/China-s-Tsinghua... [1] - https://www.bloomberg.com/news/articles/2023-03-20/china-investigates-ex-unigroup-chief-in-latest-chip-graft-probe https://www.bloomberg.com/news/articles/2023-03-20/china-inv...
- Shrezzing 3y ago
  Did the proposed package actually happen? There seem to be no follow-up articles about it. If the CCP wanted to hide it, $140bn would still represent ~1% of their GDP, so there should be some pretty obvious markers indicating that it went through. In Sept 2023, the FT reported that the Big Fund (the main pot for semiconductor subsidies) was struggling to hit its modest targets of $40bn in total across a 5-year investment. I don't see it as credible to say that China are currently investing $60bn/yr, or anything approaching that figure. They seem to currently be struggling to hit $10bn/yr.