Chinese semiconductor industry

[steel21]

To be fair, Japanese technology was built on top of US technology and patents. Japan ought to have decoupled and tried to vertical integrate by the late 1970s. But I guess profits were so good and the government was naive.

There is a similar theme in China. The decoupling is not that harsh because of China's huge market, a spine of CCP, sovereignty and investments (belated as it may). This decade is make or break for China to fully decouple and establish a computing chain (from processors to software).

I disagree.

If this decade don't make it, there is the decade after that, and the one after that.

China is reaching critical mass this decade. By critical mass, I means a sustainable middle class in both consumption and education. There is no scenario where somehow they don't make it this decade and the chances are gone for the next 50 to 100 years.

On the other hand, it is the US that has critical decade. They cannot sustain this level of competition. Unlike the Chinese, once they lose the lead, it will be quite difficult for them to come from behind.

 

[gelgoog]

Japan's industries had a policy of vertical integration up to the early 1990s before they started outsourcing. They never built up the critical mass needed to withstand an American led IP onslaught like China has endured. After the Soviet collapse, it became clear that Japan might become a possible target if they didn't bow down completely. If Japan had to endure tech sanctions and scientific blockades, they would have clearly ended up the loser. So, it's somewhat understandable what happened, even though it doesn't look good for them.

Yeah that is basically what happened. The idea that Japan did not have their own IP is bullshit. They were the leader in storage technology, be it DRAM, NAND (they invented it), CD-ROM/DVD-ROM/BluRay (they invented it), they made their own leading CPU designs for supercomputers like the NEC SX and for commercial RISC processors like the Hitachi SuperH series. They made their own fab tools (all of them). The only stumble they made was the mass investment into "5th generation computers" i.e. AI which was a total bust. They had to sign away their semiconductor leadership to the US and then South Korea and Taiwan basically ate their lunch in everything but the highest end semiconductors. Unlike what the USA wanted the memory sector never came back to the US. And the mass market CPU segment went to Europe. Telecoms went to Europe and Japan, later China, and their sector is basically dead. The US lost big time. They are now trying to reverse all of it by force. I doubt they will succeed. Their pitiful $50 billion fab investment isn't going to cut it either.

I think it's a done deal in the case of China. They are already way past the critical mass they needed to overcome a tech decoupling, except in the case of commercial aerospace where they have a long-term disadvantage despite the C919, due to its high dependence on critically important imported components. In virtually everything else, they can and will overcome any lack of domestic alternatives within the near-medium term future. Plus, those long-term disadvantages will also fall, they will just take longer. With Japan, there were some industries where they could not possibly ever keep up just for lack of talent and strategic size.

Commercial aerospace does not matter. There is still a delay but the Russians have all the core technology the Chinese lack. Just remember what happened with the space sector. The US sanctions were meaningless because China could simply get technology from Russia. In two decades the gap was gone. This is particularly obvious if you look at the manned space sector. Even the launchers use engines derived from Soviet technology. They are their own Chinese engine design but clearly use the same principles. There is little in Western commercial aircraft that, say, the MC-21 does not do as well or better. The other aircraft the Russians don't produce are just scaled up versions of the same which require vast resources to develop and build but little new technology.

Existence of glut will be more advantageous for China in general, because the downstream industries (which consume chips) are more massive in China. Moreover, since China kind of late in the upstream, China's stake is lower.

The glut will come in 2 years because that is when a lot of fab capacity will come online. I already said it here before.
The business is cyclical. The US mostly caused the current capacity crunch with their stupid trade war. All the fab capacity being built in China was supposed to cover any shortfalls and they hindered that expansion. The whole industry was expecting the Chinese capacity to come online. Add to that the amount of companies stockpiling chips like mad because they fear they'll get sanctioned next. People being indoors and consuming more electronic entertainment also contributed but not nearly as much I think.

China needs to focus on the semiconductor problem because unlike aerospace there is no one reliable partner here. I think Japan is the only country which has enough of an integrated tools industry which could help China similarly to how the Russians can help in aerospace. But Japan is under the US's thumb so I doubt any help will be forthcoming.

 

[broadsword]

I recall during the mid 80's, Tata Elxsi was ranked among the top 10 supercomputer makers in the world. After that, ta ta.

 

[krautmeister]

Yeah that is basically what happened. The idea that Japan did not have their own IP is bullshit. They were the leader in storage technology, be it DRAM, NAND (they invented it), CD-ROM/DVD-ROM/BluRay (they invented it), they made their own leading CPU designs for supercomputers like the NEC SX and for commercial RISC processors like the Hitachi SuperH series. They made their own fab tools (all of them). The only stumble they made was the mass investment into "5th generation computers" i.e. AI which was a total bust. They had to sign away their semiconductor leadership to the US and then South Korea and Taiwan basically ate their lunch in everything but the highest end semiconductors. Unlike what the USA wanted the memory sector never came back to the US. And the

It didn't matter that Japan was the leader in those fields because they were not the leaders in enough fields to overcome America's power. Plus, a lot of the foundational technologies still laid on top of American IP just as it does today. Japan was basically being treated similarly to China today, but with kid gloves. Although Japan was the absolute tech leader in some fields, it just wasn't enough. Japan was not self-sufficient like China is. China has nearly complete industrial supply chains in a whole slew of industries that no other country can match or has ever had. The only comparable country in this situation was America during the 1950s and 60s and that is only relative to other countries of that time, not relative to today. China is almost guaranteed to achieve tech leadership in almost all industries because their technological base is growing exponentially. This is just a matter of time. Japan not only didn't have the potential for exponential tech growth, they were also too small relative to America + the runts of the litter in the OECD, who would for sure kiss the ass of the alpha dog. At that time in history, America was an absolute juggernaut. They had so many tools at their disposal to pressure and destroy that it makes their tactics today almost a joke. In the early 1990s, that knucklehead Francis Fukiyama had the entire Western world believing America was a hyperpower destined to rule the world. This mindset was pervasive everywhere. This fear became even greater after the Gulf War. The fear was palpable if you were on the wrong side of America.

Commercial aerospace does not matter. There is still a delay but the Russians have all the core technology the Chinese lack. Just remember what happened with the space sector. The US sanctions were meaningless because China could simply get technology from Russia. In two decades the gap was gone. This is particularly obvious if you look at the manned space sector. Even the launchers use engines derived from Soviet technology. They are their own Chinese engine design but clearly use the same principles. There is little in Western commercial aircraft that, say, the MC-21 does not do as well or better. The other aircraft the Russians don't produce are just scaled up versions of the same which require vast resources to develop and build but little new technology.

If it wasn't for SpaceX, China would probably surpass American rocketry by this decade. Instead, it's going to be a tough challenge catching SpaceX, but I believe it will happen, just not anytime soon.

 

[voyager1]

It didn't matter that Japan was the leader in those fields because they were not the leaders in enough fields to overcome America's power. Plus, a lot of the foundational technologies still laid on top of American IP just as it does today. Japan was basically being treated similarly to China today, but with kid gloves. Although Japan was the absolute tech leader in some fields, it just wasn't enough. Japan was not self-sufficient like China is. China has nearly complete industrial supply chains in a whole slew of industries that no other country can match or has ever had. The only comparable country in this situation was America during the 1950s and 60s and that is only relative to other countries of that time, not relative to today. China is almost guaranteed to achieve tech leadership in almost all industries because their technological base is growing exponentially. This is just a matter of time. Japan not only didn't have the potential for exponential tech growth, they were also too small relative to America + the runts of the litter in the OECD, who would for sure kiss the ass of the alpha dog. At that time in history, America was an absolute juggernaut. They had so many tools at their disposal to pressure and destroy that it makes their tactics today almost a joke. In the early 1990s, that knucklehead Francis Fukiyama had the entire Western world believing America was a hyperpower destined to rule the world. This mindset was pervasive everywhere. This fear became even greater after the Gulf War. The fear was palpable if you were on the wrong side of America.



If it wasn't for SpaceX, China would probably surpass American rocketry by this decade. Instead, it's going to be a tough challenge catching SpaceX, but I believe it will happen, just not anytime soon.

Same with Tesla, if Tesla wasn't around then the Chinese NEV companies would also dominate the market.

Notice something common?...

Elon is so much worth it for the US that it is not even funny anynore. He is singlehandedly draggin the US into the forefront to combat China's policies and tech development

China needs more Elons that Jack Mas right now

Imagine if instead of hoarding cash on of these hundreds of Chinese billionaires was committed Elon's style at building advanced IC equipment in China..

The truth is that NOONE was ready to put the money to build China into an IC superpower
They were all having their time of their life wasting and hoarding money instead of helping the country

NOONE was patriotic enough to put his money into making China IC independent, they were (and some still are) all drinking the globalisation kool-aid and were busy gaming the financial markets

Where was just a single patriotic billionaire to help China achieve even ONE of its strategic vulnerabilities???

Good, good. While China had such massive vulnerabilities and the Chinese Gov was clearly signalling that it needed IC independence, they were all hiding. NOONE stepped up

Where were all these Chinese billionaires?
Thats why Xi is slapping the whole lot of them now. Hopefully he keeps slapping them left and right until they start doing something for their country.

Bytedance and Pinduoduo founder billionaires seems to have learnt their lesson but it still TOO LITTLE. More of these rent-seeking billionaire need to follow and start breaking through the western dominated "chokeholds" on various industries and technologies

 

[antiterror13]

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ahhh, so "Japan's most advanced semiconductor plant is a 40 nanometre chip factory operated by Renesas Electronics Corp near Tokyo"

So in many ways China has more advanced semiconductor plants than Japan. Wondering how advanced the EU and the UK in semiconductor plant?

 

[antiterror13]

China is pumping billions of dollars into semiconductors, the US is pumping billions of dollars into semiconductors, S. Korea is pumping billions of dollars into semiconductors, Taiwan is pumping billions of dollars into semiconductors, EU is pumping billions of dollars into semiconductors, now Japan wants to pump billions of dollars into semiconductors....

Is there something wrong with this pattern??

extremely over supply will happen soon and then big crash. Only Chinese will survive because has very big market

All started with "genius" Trump, nobody would believe the USA anymore and big players want to have advanced chip plants which would cost tens billions $ nowadays

 

[krautmeister]

Elon is so much worth it for the US that it is not even funny anynore. He is singlehandedly draggin the US into the forefront to combat China's policies and tech development

China needs more Elons that Jack Mas right now

Elon always talks up "First Principles", which is a very simple and basic approach to doing things. This thinking is lacking in most people. It's not just a strategy, it involves personality. Look at the way Tesla cars evolved. They aimed for the safest, most cost efficient, energy efficient, fastest production, fastest speed, highest mileage per kWh, lowest cost cap.ex per vehicle, blah-blah-blah. This is usually a question of tradeoffs but with Musk, he went on to do it all at the same time creating new materials, new alloys, custom industrial robots, new vehicle production methods, radical battery designs. I'm not even getting into SpaceX rocket innovation which is absolutely insane. Musk is the Nikola Tesla of our generation.

You know who is a terrible example of the anti-Musk? Robin Li of Baidu. This knucklehead had a monopoly situation laid on his lap after Google left China in 2010 and all he did was milk Baidu's market dominance for profits instead of innovating, investing more in R&D and expanding what could have and should have been China's Google. If Huawei management was in Charge of Baidu, that company would be as powerful as Huawei itself and Harmony OS would have been created by Baidu instead and released years ago instead of Huawei just like Google has Android now. Instead, you have China's domestic companies nipping on its heels and it floundering. Huawei is a threat to America because it is the Elon Musk of China, in company form.

NOONE was patriotic enough to put his money into making China IC independent, they were (and some still are) all drinking the globalisation kool-aid and were busy gaming the financial markets

Where was just a single patriotic billionaire to help China achieve even ONE of its strategic vulnerabilities???

Good, good. While China had such massive vulnerabilities and the Chinese Gov was clearly signalling that it needed IC independence, they were all hiding. NOONE stepped up

This is not about patriotism. It's about money and especially personality. Personality is mostly formed from environment and experience. The typical environment and experience of China's population before 2000 was that China was backward and had a lot to learn from the developed countries and a looong way to go. There are studies that discuss this phenomenon as it relates to success and failure. This mentality guides peoples decisions on whether to study abroad and stay abroad, whether to invest in R&D or copy products, whether they believe wholesale in globalization or invest in themselves and their companies or country. It's only during the last 15-20 years where this started to change dramatically, especially the last 5 years. Believe you me, in the coming 10-15 years, this self confident mentality is going to get stronger, MUCH MUCH stronger. As this thinking and mentality becomes not just prevalent but dominant in China, it will translate into a different kind of China with its own Elon Musk's and then you will see this reflected in China as a nation.

 

[Tyler]

Same with Tesla, if Tesla wasn't around then the Chinese NEV companies would also dominate the market.

Notice something common?...

Elon is so much worth it for the US that it is not even funny anynore. He is singlehandedly draggin the US into the forefront to combat China's policies and tech development

China needs more Elons that Jack Mas right now

Imagine if instead of hoarding cash on of these hundreds of Chinese billionaires was committed Elon's style at building advanced IC equipment in China..

The truth is that NOONE was ready to put the money to build China into an IC superpower
They were all having their time of their life wasting and hoarding money instead of helping the country

NOONE was patriotic enough to put his money into making China IC independent, they were (and some still are) all drinking the globalisation kool-aid and were busy gaming the financial markets

Where was just a single patriotic billionaire to help China achieve even ONE of its strategic vulnerabilities???

Good, good. While China had such massive vulnerabilities and the Chinese Gov was clearly signalling that it needed IC independence, they were all hiding. NOONE stepped up

Where were all these Chinese billionaires?
Thats why Xi is slapping the whole lot of them now. Hopefully he keeps slapping them left and right until they start doing something for their country.

Bytedance and Pinduoduo founder billionaires seems to have learnt their lesson but it still TOO LITTLE. More of these rent-seeking billionaire need to follow and start breaking through the western dominated "chokeholds" on various industries and technologies

elon is just a bitcoin flipper. Most fans of elon is just deluded. Tesla does not even have battery technology for their EV. They just buy and repackage batteries from Panasonic, LG chemical and of course China's CATL. China's BYD is way ahead of tesla in battery technology.

 

[ougoah]

elon is just a bitcoin flipper. Most fans of elon is just deluded. Tesla does not even have battery technology for their EV. They just buy and repackage batteries from Panasonic, LG chemical and of course China's CATL. China's BYD is way ahead of tesla in battery technology.

CATL and BYD are still battery leaders for EV and core suppliers for Chinese companies certainly and CATL was for Tesla until recently when Tesla revealed they will be using their in house developed battery and won't be relying on CATL.

Tesla's new batteries sound more impressive and of course they are newer than the latest from BYD and CATL.

So you're wrong in saying Tesla does not have battery technology. They've been working on it for years and have now delivered it and it is supposedly market leading in many aspects if not all.