Chinese semiconductor industry

[manqiangrexue]

A few more ways the US could escalate:

1) Put semiconductors on ITAR list: basically means that no company can sell any semiconductor related items to ANY company in China without license from the US

2) Sanction China like Iran. No foreign company can sell any semiconductors to China. So no more Samsung fabs or Japanese IC materials and equipment.

3) Prevent all US citizens and other foreign nationals from working in any strategic sector in China like semiconductors. So no more talent from the US or South Korea or Japan.

Obviously, if the US escalates it to this point, there probably will be a war. I could see China invading Taiwan in retaliation.

I don't think there will be war, at least China would not start one because war only happens out of desperation (though it's long past due that the ROC had it coming). America is already far overstretched with its sanctions, making "allies" angry and developing alternatives for the Chinese market. Further sanctions only help break away at the remaining control that America has. And it has also successfully spurred Chinese investment and development of these crucial technologies. Number 3 is just funny; there's neither mechanism nor precedent to try to do something like that. For America dealing with China, all the good cards are played early; the stuff that's left gets more and more desperate and less and less effective/feasible.

 

[free_6ix9ine]

I don't think there will be war, at least China would not start one because war only happens out of desperation (though it's long past due that the ROC had it coming). America is already far overstretched with its sanctions, making "allies" angry and developing alternatives for the Chinese market. Further sanctions only help break away at the remaining control that America has. And it has also successfully spurred Chinese investment and development of these crucial technologies. Number 3 is just funny; there's neither mechanism nor precedent to try to do something like that. For America dealing with China, all the good cards are played early; the stuff that's left gets more and more desperate and less and less effective/feasible.

Maybe they won't go that far. But at this point Trump has stopped caring about market share or losing business from China. This is full on assault on China short of war.

Number 3 could involve designating all Chinese companies as national security threat similar to the state sponsor of terrorism list that Iran or North Korea is on. So if anyone works for Chinese companies they will be sent to Guantanamo Bay if the US detains them etc.

 

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[QianXuesen]

Maybe they won't go that far. But at this point Trump has stopped caring about market share or losing business from China. This is full on assault on China short of war.

Number 3 could involve designating all Chinese companies as national security threat similar to the state sponsor of terrorism list that Iran or North Korea is on. So if anyone works for Chinese companies they will be sent to Guantanamo Bay if the US detains them etc.

US certainly in theory could go that far, or even escalate even more than what you outlined. But at some point it becomes a question of whether or not the decree could be enforced. Trump last year went on Twitter to command all US companies to immediately begin pulling out of China and bringing their factories back. That decree in and of itself wasn't enforced and is useless. If America pits the whole world in the position where basically they are forced to choose between continuing to do business with China or all ganging up on and isolating China for the sole benefit of America (with all the nations essentially agreeing to become US colonies at that point) what do you think will happen?

Think of hypothetical thought experiment of the situation of #3, but instead of limiting it to semiconductors, expand it to everything. What if the US/Trump decided one day to tell the entire world that all nations/companies must immediately stop trading/doing business with all China and all of China's businesses... using whatever rule it cooks up or justification sceheme. How do you envision such a decree /stance to play out?

In terms of technological choke-points yes semiconductors is where the US can weld its political leverage to set back China's tech development the most. The fact that both China and Huawei didn't really seem to be even reasonably prepared for it means they were probably overly confident in their naivety that the US wouldn't pull such a maneuver.

But this card can only be played once, and now that its played, they better hope it is enough because if China prevails then they cannot ever use this card again.

 

[free_6ix9ine]

US certainly in theory could go that far, or even escalate even more than what you outlined. But at some point it becomes a question of whether or not the decree could be enforced. Trump last year went on Twitter to command all US companies to immediately begin pulling out of China and bringing their factories back. That decree in and of itself wasn't enforced and is useless. If America pits the whole world in the position where basically they are forced to choose between continuing to do business with China or all ganging up on and isolating China for the sole benefit of America (with all the nations essentially agreeing to become US colonies at that point) what do you think will happen?

Think of hypothetical thought experiment of the situation of #3, but instead of limiting it to semiconductors, expand it to everything. What if the US/Trump decided one day to tell the entire world that all nations/companies must immediately stop trading/doing business with all China and all of China's businesses... using whatever rule it cooks up or justification sceheme. How do you envision such a decree /stance to play out?

In terms of technological choke-points yes semiconductors is where the US can weld its political leverage to set back China's tech development the most. The fact that both China and Huawei didn't really seem to be even reasonably prepared for it means they were probably overly confident in their naivety that the US wouldn't pull such a maneuver.

But this card can only be played once, and now that its played, they better hope it is enough because if China prevails then they cannot ever use this card again.

I think Huawei saw this rule coming. but there isn't much that can be done in the immediate short term to prepare for it. TSMC and being reliant on US equipment and parts is the choke point that can't be overcome in such a short time period.

Yes Trump could escalate it even further, but I guess we will cross that bridge when we get there.

 

[AndrewS]

plus Moore's law is pretty much dead beyond 5Nm.TSMC and Samsung know that, 5Nm and beyond is pure marketing hype. The performance improvement is not worth the extra cost. The next breakthrough of semiconductors will be in optical or graphene or carbon based chips, which no country really has a lead in. So the effects of banning Huawei is merely a tactical retreat for China, we have to keep our eye on the ball, and be in the lead for the next breakthrough and leapfrog this 5nm, 3nm, etc rat race.

I suspect 3nm is viable is for chips that are produced in very large volumes or really need to be energy efficient.

Yes, the design and upfront fab cost will be higher.
But the benefits in terms of less silicon used and energy consumption should still be worthwhile.
I'm looking at the customer list and chips for 5nm, and they should find 3nm viable.

But I think the verdict is still out for whether 2nm will work.

 

[supercat]

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More information: with the capital injection ($2.2 billion from Chinese state investors+$2.8 billion from this IPO on Shanghai stock exchange = $4 billion), SMIC could march into the production of 7-nm and even 5-nm wafers in the coming three years.

Hong Kong-listed SMIC plans to raise about 20 billion yuan ($2.8 billion) through its secondary listing in Shanghai, the company said in a prospectus on Monday. The announcement came on the heels of the US' intensified crackdown on Huawei by restricting its sourcing of chips with US technology.

The IPO proceeds will be used for its 12-inch chip project, supplementing its cash flow as well as providing reserve capital for other advanced R&D projects, the foundry company said. The IPO prospectus revealed that SMIC has started R&D on its second-generation 14-nm FinFET manufacturing technology.

"Once the project is completed, SMIC's manufacturing level could inch closer to 7-nm scale," Ma Jihua, a veteran industry analyst, told the Global Times on Tuesday. With the capital injection, SMIC could march into the production of 7-nm and even 5-nm wafers in the coming three years, Ma said.

The key takeaways from SMIC's IPO prospectus are first, that it will invest 8 billion yuan in its 12-inch SN1 chip, which industry insiders believe will elevate its chip manufacturing ability to a more advanced level, smaller than 14-nm.

And, there will be rising investment from other state players, which shows that the "national team" is deploying the resources on hand to fully support the chipmaker's technological breakthrough amid a relentless US crackdown.

SMIC made a splash last year by delisting from the New York Stock Exchange at a time when the US government tightened crackdowns on Chinese tech companies.

In May, SMIC secured $2.2 billion investment from Chinese state-run investors.

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[free_6ix9ine]

I suspect 3nm is viable is for chips that are produced in very large volumes or really need to be energy efficient.

Yes, the design and upfront fab cost will be higher.
But the benefits in terms of less silicon used and energy consumption should still be worthwhile.
I'm looking at the customer list and chips for 5nm, and they should find 3nm viable.

But I think the verdict is still out for whether 2nm will work.

Yep, I agree but I think the days where Moore's law was unquestionably true is close to being over. Which for China is a good thing, because it gives us time to catch up.

Regardless, I think that a break through from China in some other material besides silicon, whether it's graphene or other material that has even better performance than silicon, would be a true 'assasins mace', even if it takes longer to commercialize. But it would negate much of the West's IP in the long term and in the short term put immense pressure on US companies to lobby a roll back on the Huawei ban rules, especially if Trump is out of office in November and the US get a corporate shill like Biden as president.

 

[Skywatcher]

More information: with the capital injection ($2.2 billion from Chinese state investors+$2.8 billion from this IPO on Shanghai stock exchange = $4 billion), SMIC could march into the production of 7-nm and even 5-nm wafers in the coming three years.

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Huh, looks like SMIC will pace/may even slightly over take Intel in technology.

 

[free_6ix9ine]

Huh, looks like SMIC will pace/may even slightly over take Intel in technology.

Intel isn't really competing in phone processors tho, so it's not apples to apples comparisons. I think this is mostly posturing on part of SMIC. Unless they figure out their lithography issue, its unlikely they can go past 14nm.

The other kicker is that SMIC still uses US equipmemt and IP. So they are no better than TSMC.