A reappraisal of China's semiconductor strategy

ZeEa5KPul said:

These people are just mercenaries. They'll show up to China if the money's there.

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s002wjh said:

some have to consider their family, living condition etc.

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Hendrik_2000 said:

But but INTEL is not even at the cutting edge of semiconductor anymore They have bee trying to migrate to 10nm with no success sofar and has been postponing it for years
They try to get into SOC for smartphone again with no result to show for
Ditto for smartphone modem

Remember The most advance semiconductor is in far east right now Taiwan, Singapore, Korea and Japan
With enough incentive China can lure talent like Dr Liang Mong Song that sparhead the development of 14nm in Taiwan and Korea


—Alan Patterson covers the semiconductor industry for EE Times. He is based in Taiwan.

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ZeEa5KPul said:

Yeah, but all that has a price: there are private schools, gated communities, etc. It's all about money, directly or indirectly. I guess the only real sticking point would be pollution, but China's getting that under control. China built a small city for Ukrainian aerospace engineers, it can furnish amenities for foreign electrical engineers.

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ince the U.S. government put Huawei Technologies Co Ltd on a trade blacklist, effectively banning American firms from doing business with it, China’s leaders have spoken boldly about achieving self-sufficiency in the critical semiconductor business.
But industry insiders are less optimistic that Chinese chip makers can quickly meet the challenge of supplying all the needs of Huawei and other domestic technology firms.

The prospectuses of Chinese chip companies preparing to list on a new tech-focused stock exchange are blunt, characterizing the domestic industry as “relatively backward”, lacking in talent and requiring “a long time to catch up”.

Chinese chip engineers tell tales of local manufacturing that just is not up to snuff, while analysts point out the many areas where China remains reliant on technology from the United States, Taiwan, South Korea, Japan and Europe, with some questioning whether government policies are in the right place.

“Compared to the constraints of equipment, materials, or talent, I think what China lacks more is understanding of the industry,” says Gu Wenjun, chief analyst at Shanghai-based consultancy ICWise. He called some of the government subsidies for the industry “counter-productive”, because too many well-funded ventures end up chasing the same talent.

Government appeals to patriotism also go only so far.

A former top engineer the Chinese chip design firm Unisoc, a unit of Tsinghua Unigroup told Reuters the company was often encouraged to use a sister company’s memory chips. But that firm, called Guoxin, could not offer technology that was advanced enough.

“The internal speeches that were given were always ‘Please look at Guoxin because we do want to support the Chinese supply chain’,” said the engineer. “But we never got anything we could use.” The companies did not respond to requests for comment.
BETTER TECHNOLOGY
Chip industry officials outside China caution that the country is making good progress in some areas and should not be under-estimated. For a key type of memory chip known as NAND, for example, Chinese firms are closing the gap.

“Money is not an issue for the Chinese government,” says one executive at a South Korean memory chip maker who declined to be named, acknowledging China’s progress in NAND, or flash chips, which provide long-term data storage. “We cannot stop the Chinese companies, it is a free competition, but we believe we have better technology and a better product.”

One of China’s biggest challenges, however, is in chip manufacturing, an exacting process that requires both highly specialized tools and many years of experience to master.

A May report from China’s Everbright Securities identified one aspect of the problem.

“The manufacturing process relies on equipment, and U.S. firms such as AMAT, LAM, KLA and Teradyne have very high market share in many niche markets,” Everbright wrote. “There is no production line in China that uses only equipment made in China, so it is very difficult to make any chipsets without U.S. equipment.”

Even when Chinese chip makers do have gear from the top chip equipment firms in the United States, Japan and Europe, they cannot always take full advantage.

One former engineer at Semiconductor Manufacturing International Corp. (SMIC), China’s leading chip production firm, said the equipment vendors often had non-disclosure agreements (NDAs) with Taiwan Semiconductor Manufacturing Corp. (TSMC), the world leader in chip-making.

The manufacturing process for advanced chips requires a lot of fine-tuning, and the NDAs covered the crucial tips and tricks on how to best use the machinery and achieve the necessary levels of “yield”, or the number of working chips in each batch.

“Equipment vendors are all under NDA with TSMC,” says the engineer. “If SMIC asks a vendor for instructions, the vendor will only disclose very basic information about the instructions, just to show good faith,” he says.

A TSMC spokeswoman said: “TSMC has always been diligent in protecting our trade secrets, including signing NDAs with our counterparts.”

Industry experts say SMIC is consistently about two generations behind TSMC, even with up-to-date equipment. While TSMC was launching chips with circuit widths of just 7 nanometers in 2018, SMIC is only now readying production of 14 nanometer chips - which was state-of-the-art in 2014.


Huawei uses TSMC for most of its advanced chipset manufacturing demand and SMIC for low-end products. A former Huawei employee said the company chose TSMC to make its server chips over SMIC because HiSilicon, its semiconductor arm, designed the chip with 7 nanometer technology. Re-designing for SMIC’s capabilities was possible, but would result in an inferior chip.

SMIC said it was committed to meeting customer needs. “Our 14nm technology will start risk production by 2019, 12nm process development is completed and under customer verification,” a spokesman said.

Huawei did not respond to requests for comment.

TALENT GAP
The talent shortage comes up repeatedly, with some analysts noting that it took Japanese, South Korean and Taiwanese firms decades to develop their expertise. China has sought to recruit top overseas talent, especially from Taiwan and South Korea, with lucrative contracts, but has not always succeeded.

China’s CXMT, a maker of DRAM memory chips, tried to recruit a former top Samsung Electronics chip engineer last year, but the South Korean firm obtained a court injunction to block the move this January.

The Suwon District Court in South Korea accepted Samsung’s request to prevent Kim Chi-wook, who headed DRAM design, from joining the Chinese firm and ordered him not to work for the company until November this year.

“Chinese semiconductor companies are estimated to be three years to 10 years behind in technology gap regarding DRAM designing technique,” the court wrote, adding that Kim’s hiring would help CXMT close the gap and thus hurt Samsung.

Samsung and CXMT declined to comment. Kim could not be reached.

For microprocessors, the most complex chips, Huawei has developed cutting edge designs for use in its Kirin chips, which power many of its high-end phones. But still relies on overseas firms for key intellectual property and production.

Meanwhile Unisoc, the leading Chinese microprocessor company, primarily works with low-end, white-label phones in the $100 range. Rockchip and Allwinner, two other Chinese system-on-a-chip companies, primarily supply white-label tablet computers and smart home devices. Those segments use chips with less demanding technology than high-end phones.

Rockchip and Allwinner did not respond to requests for comment.


Eric Yang, who invests in Chinese chip companies at venture capital firm Glory Ventures, says that the complex nature of contemporary “system-on-a-chip” microprocessors gives incumbent players an advantage that’s hard to break.

“It requires a lot of know-how to build a big chip,” says Yang, noting that they include separate areas for CPUs, GPUs, and several other components. “Qualcomm might have 800 people working on one part of the chip. If you don’t have the talent you can’t win, and all the talent is in the U.S.”

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s002wjh said:

depends, some for money, some have to consider their family, living condition etc. $$$ just one of many factors.

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PeoplesPoster said:

I've been working in China for the past 4 years and not a day goes by where something isn't hugely annoying because the system just isn't geared to be easy to navigate for non Chinese citizens and its just getting worse.

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ZeEa5KPul said:

@s002wjh, so what do you think should be done? A lot of Negative Nancy defeatists crying and complaining, but not a single one offering a constructive solution. Should Xi go to Trump on bent knee and beg him to stop the technology embargo? Maybe he should offer him a 99 year lease on Beijing, how about that?

And China doesn't need tens of thousands of foreign electrical engineers, it graduates more than enough. It needs a handful (measured in tens) of the most senior engineers like Liang Mong Song with very specific technical knowledge. One individual, Liang, managed to advance SMIC's 14nm program by a year. It didn't take thousands or tens of thousands to accomplish that, just one guy.

As for the specialized equipment, the proposal I gave in the first post takes care of that.


I don't mean to be insulting, so I'll put this as delicately as I know how to: if the job you did were all that important, and you were all that indispensable, accommodations would be made for you. You wouldn't have to worry about VPNs or bank accounts or anything of the sort. As it stands, the benefits the Chinese government gains from tightening enforcement of the law outweighs the costs to the country from inconveniencing you.

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ZeEa5KPul said:

@s002wjh, so what do you think should be done? A lot of Negative Nancy defeatists crying and complaining, but not a single one offering a constructive solution. Should Xi go to Trump on bent knee and beg him to stop the technology embargo? Maybe he should offer him a 99 year lease on Beijing, how about that?

And China doesn't need tens of thousands of foreign electrical engineers, it graduates more than enough. It needs a handful (measured in tens) of the most senior engineers like Liang Mong Song with very specific technical knowledge. One individual, Liang, managed to advance SMIC's 14nm program by a year. It didn't take thousands or tens of thousands to accomplish that, just one guy.

As for the specialized equipment, the proposal I gave in the first post takes care of that.


I don't mean to be insulting, so I'll put this as delicately as I know how to: if the job you did were all that important, and you were all that indispensable, accommodations would be made for you. You wouldn't have to worry about VPNs or bank accounts or anything of the sort. As it stands, the benefits the Chinese government gains from tightening enforcement of the law outweighs the costs to the country from inconveniencing you.

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Hendrik_2000 said:

Exactly western media tend to cherry pick comment from people critical to any development in China and amplify it hundred times
There are hundred of excellent retiree from Japan, Korea and Taiwan semiconductor who as we speak now working in Chinese semiconductor industry

And as you said it does not need thousands of foreign expertise all you need it dozens or maybe hundred of good engineer that has previous experience in semiconductor industries

Fact speak for itself we will know soon whether Chinese effort to be independent successful or not no need to quote western media who has the habit of critical and condescending toward China

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