back to article Chips for Huawei are fried: TSMC stops shipping parts to Middle Kingdom mega-maker this September

Super-duper chip maker TSMC told investors it will stop exporting supplies to its number-two customer Chinese telecoms manufacturer Huawei from mid-September. The move comes after the US government’s Bureau of Industry and Security (BIS) announced strict rules that effectively cut Huawei, its chip design wing HiSilicon, and …

  1. Duncan Macdonald Silver badge
    Mushroom

    The sooner Trump is out of office the better

    He is following the old story for unpopular Republican presidents - dream up some enemy and try to set the US against them and try to look strong in the process.

    He saw how Bush rode the Gulf War to a second term and hopes to do the same.

    Icon for what could happen if he lets his ego go too far. =========================>

    1. redpawn Silver badge

      Re: The sooner Trump is out of office the better

      Which isn't to say that China is not trying to take over the world.

      1. John Doe 12

        Re: The sooner Trump is out of office the better

        Like the US is trying to do?

        1. Michael Habel Silver badge

          Re: The sooner Trump is out of office the better

          Yes remind us how thats working out again? Do you just suppose that everyone + Dog are pulling up their stakes and, moving to the "Middle Kingdom" because its the trendy fasion of the day? Or, is it the overbearing regulations placeced on thses Coproations by the Left, looking to "sock it to the "rich"!"? Or, do you think it just might be that plus the extortion tactics used by the Unions, who are always demanding more bennifits for their clients, for the least amount of work? Somehow >implying that this is just a North American thing. Because, it isnt like every home grown indutry (looking at you Auto Industry), from Astin to TVR, hasn't gone bust. Ok to switch off Automobiles, to Model Trains, Does Hornby even produce anything at home anymore?

          Hell even all the great US Bicycle manufatures of the 80s & 90s (Cannondale, and Trek), are all either made in China, or Indonesia these days, and I can't really blame them for it. But, it robs one of being able to actually buy a USA Built Bike.

          1. batfink Silver badge

            Re: The sooner Trump is out of office the better

            Yep - we can't be having people being paid reasonable wages. Bloody commie ideas.

            1. jelabarre59 Silver badge

              Re: The sooner Trump is out of office the better

              Yep - we can't be having people being paid reasonable wages. Bloody commie ideas.

              It isn't the wages. It's the overbearing and sometimes (often?) contradictory regulations being dumped upon the companies *and* citizens at an ever increasing rate. Can't do business with both hands and one foot tied behind your back while blindfolded.

              1. MR J

                Re: The sooner Trump is out of office the better

                List some of those overbearing regulations that tell you to do and not do the same thing. I hear a few people moan about overregulation but none can ever give a good example of where it does bad (Other than paperwork management cost).

                One of the largest is the ACA, because healthcare for poor workers is something that they would have had anyhow - just look at how much insurance poor workers had historically, they had great insurance and supportive companies.

                Sick Leave and PTO is starting to be allowed in now, your correct that this is stepping way over the mark. When most people get a job, they really enjoy the idea of working there 365 days a year without ever being able to have a week at home with the family. PTO regulations should be removed straight away right?. And Sick Leave, what the heck is that all about huh? If you love your job you will avoid getting sick. I have never understood how people can be sick for more than 2 days a year, repeal that huh?

                I look forward to you giving some good examples. I come from a state with no public policy exception when it comes to employment. I have seen sewerage dumped in a river, police force people to sign over assets, people get fired after their first single sick day after working for months, and much worse. My original employer (by a company owned and ran by a preacher) ran three companies out of the same building, our working hours were split between the three so they could avoid having anything other than temporary staff, as such I never gained any form of benefits nor ever god paid any overtime even on one day that was about 22 hours long (but they did buy us happy-meals). So, hook us up with examples of bad regulation.

      2. Schultz Silver badge
        Stop

        Which isn't to say that China is not trying to take over the world.

        This statement is too vague to be meaningful. They have an increasingly assertive foreign policy. They started international initiatives on trade and economic cooperation. But trying to take over the world? I'd say other countries throw much more of their weight around - especially if you consider the size of their population and economy.

        I won't defend any aspect of their 'communist' system, the one party rule, etc. But accusing China that their current policy goals are aimed at 'taking over the world' is hyperbole.

        1. Anonymous Coward
          Anonymous Coward

          Re: Which isn't to say that China is not trying to take over the world.

          I won't defend any aspect of their 'communist' system, the one party rule, etc. But accusing China that their current policy goals are aimed at 'taking over the world' is hyperbole.

          They're not taking over the world, but analysing their activity shows they're actually close to ending US supremacy if they decided to do so. I think they deem it a bit too early as not everything is in place yet (Covid19 didn't help them either).

    2. TheInstigator

      Re: The sooner Trump is out of office the better

      Isn't this how Germany pre WW2 started ?

  2. HildyJ Silver badge
    Facepalm

    Patents?

    One wonders if Huawei should announce that they will only license their 5G patents to countries that do not discriminate against Huawei kit?

    1. aki009

      Re: Patents?

      That would not work, as Huawei also uses 5G patents of others under various cross-licensing agreements. This is also why -- if memory serves me right -- patents were excluded from the sanctions.

  3. cornetman Silver badge

    This is not going to end well.

    1. W.S.Gosset Silver badge

      That decision was made by China 70yrs ago.

  4. sanmigueelbeer Silver badge
    Coat

    He who laughs last ...

    This only motivates China to make their own fabrication plant.

    Getting the plans, blueprints & other architectural designs is the easy bit.

    Once China gets theirs going, it won't be long before they start killing off their competitors and sell prices way below market values -- funny that. This is exactly what Huawei is doing now.

    1. W.S.Gosset Silver badge

      Re: He who laughs last ...

      Already in train in various parts of China. Not all going terribly well, mind you.

      Eg, https://www.caixinglobal.com/2020-07-14/nanjing-28-billion-computer-chip-project-goes-bust-101579407.html

      1. Justthefacts

        Re: He who laughs last ...

        True but....

        One of the dirty secrets of CPU design over the last more than thirty years, is that all the clever stuff is actually redundant in the long term. It’s a bunch of insanely clever workarounds that just won’t be needed once a very specific key technology problem is solved: memory interconnect speed. Intel, AMD and ARMs technical lead and “moat” isn’t forever, it’s dependent on that one problem.

        Just making a CPU that has the basic execution units, even in whatever parallel microarchitecture, with whatever Deep Learning accelerators, that’s just not that hard. It can be done by any good engineering team with less than a hundred engineers in a couple of years.

        Treble that, at most, for really optimised local power consumption.

        No. What’s hard is: out-of-order execution. micro-op optimisation to make that efficient. Branch prediction. Translation lookaside buffers. Cache architectures with snooping.

        The common theme is that they are all workarounds for the memory wall problem.

        Figure out a transport interconnect from external RAM to CPU that’s high-bandwidith without drawing insane amounts of power, and absolutely the first thing that will happen is *removing* all those clever widgets from CPUs, massively increasing core count by replacing the silicon area and power used by the caches, and hooking it straight into main RAM.

        Obviously, I’ve got no idea how to solve that problem. Perhaps optical-RAM-to-CPU interconnect. Or spin-wave-transistors (which don’t drive capacitance load). Perhaps in-memory-computation.

        But at some point, maybe a decade away, or even two, it will be solved. Then, almost overnight, Intel, AMD etc just own a bunch of IP that consumes 95% of silicon area for little benefit.

        Given that owning such CPU IP forms a major part of the West’s strategic advantage and leverage over China, that’s really something to think about. Being only a single brainwave insight away from a major strategic shift that will likely happen within ten or twenty years. I’m not talking about FTL travel here, just a board-level signalling technology that breaks no laws of physics.

    2. Charlie Clark Silver badge

      Re: He who laughs last ...

      They're placing all their hopes on SMIC, though they're probably several years behind everyone else. Otherwise, there are still other fabs in other countries where the US has less leverage: it's not as if the Chinese haven't evaded sanctions in the past.

      The real problem for the US is the loss of reputation: countries and companies will now actively have to develop strategies to avoid getting caught up in what are pretty petty sanctions.

    3. aki009

      Re: He who laughs last ...

      Bleeding edge fabs are not easy to set up and operate. I believe they've tried and failed more than once.

      1. sanmigueelbeer Silver badge

        Re: He who laughs last ...

        Bleeding edge fabs are not easy to set up and operate.

        Agree and so is designing and manufacturing smart phones but look at how many smartphone manufacturing companies China has.

        America gave China, in a silver platter, the keys to America's industrial & manufacturing might. Nothing can stop China now from plodding on.

        Sure, standing up fabs, no matter how "bleeding edge", is challenging but China has demonstrated several times over they can get over the difficulty and get there. Look, China is building two aircraft carriers & COMAC c919 is awaiting certification with China's aviation regulators. China has an army of computer developers, scientists, engineers, etc. embedded in western companies ready and waiting to return to China with volumes of industrial plans and secrets.

        Give China ten years (or even less) and they'll be churning out high-end chips in no time. When that time comes, it'll be payback-is-a-b1tch moment.

        Hold `em by the balls and their hearts-and-minds will follow.

  5. Yes Me Silver badge

    Stepping up

    "Back home, America is stepping up its domestic chip production efforts to minimize security risks inherent in overseas supply chains."

    I think you might find that China is doing the same, only more so. This will just be a minor blip for Huawei in the long run.

    1. Joe W Silver badge

      Re: Stepping up

      Plus you'll find that the wages in China are likely lower than in the US, leading to lower costs in China and higher costs in the US (for domestic customers, who'll then source chips via Alibababay or whatever them Chinese websites are called).

      1. phogan

        Re: Stepping up

        Assume the hostilities continue, at least for the US domestic market I suspect those chips will be subject to tariffs or worse their makers placed on the Entities List making it illegal for U.S companies and citizens to do business with them. Of course there is alway litigation from broad patents that already plague tech.

      2. W.S.Gosset Silver badge

        Re: Stepping up

        "likely"??

        *boggle*

        China's Premier announced June 2020 that 40% of China's workforce earns less than US$1700/yr, $4.65/day

    2. DS999

      Re: Stepping up

      The US isn't stepping up anything. The announcement that TSMC is going to invest in a fab in Arizona is meaningless - it will be 3-4 years out of date by the time it comes online and will have less capacity than is needed for iPhone SoCs alone, let alone the chip needs of all the other US companies that use TSMC's services.

    3. Kevin McMurtrie Silver badge

      Re: Stepping up

      China and the US making their own chips is a good thing. Two countries depending on each other too much leads to disputes about which one depends on the other more, especially if you have megalomaniacs running them both.

      Taiwan can't be liking the Hong Kong situation since they're likely next on the list for hostile assimilation. They'll be friends with the US and hope that the next US president has competence in international affairs*.

      * With the correct meaning of 'affairs.'

      1. Anonymous Coward
        Anonymous Coward

        Which could be where it gets "interesting"

        How will the US penalise TSMC for selling to Huawei when both are "in China"?

        I guess they would try to stop TSMC supplying outside of China, but that would be a real hit on US businesses.

        1. Natalie Gritpants Jr

          Re: Which could be where it gets "interesting"

          You do know what the T in TSMC stands for?

        2. MR J

          Re: Which could be where it gets "interesting"

          Payment processing often happens in USD and as such passes through the US financial system. So regardless of them being in Taiwan or nearly anywhere else in the world. The risk of having your money seized while in transit is a big risk. This is one reason why OPEC has so much power in the US, if they change it so they process in currencies other than the US then the US takes a huge finical hit, plus they no longer have leverage against the purchasers of said product. This is the greatest fear of the US becoming number #3, once currency processing moves then so does much of their global overreach.

          1. W.S.Gosset Silver badge

            Re: Which could be where it gets "interesting"

            Errr....

            You're right about the power deriving to the US from the USD being used as the default international currency. But:

            You're wildly wrong about OPEC vs US. Put it this way: you're saying the US dances to the tune of Venezuela, Iran, Iraq, Angola, Equatorial Guinea, etc. (US imports only 6% from Saudi Arabia).

            .

            Worth pointing out too, that US exports about as much oil as it imports. Oils ain't oils. It's an economic optimisation thing, not a hard need thing. But if it chose, it could build custom refineries, suck up perhaps a 2-5% hit on wholesale prices (maybe half to 1% at the retail pumps), and eliminate imports.

      2. TheInstigator

        Re: Stepping up

        You mean not involving golden showers ?

  6. fajensen Silver badge
    Pint

    The USA is becoming more and more like the old USSR but somehow in reverse .... instead of spreading its ideas to the world, it is isolating itself into it's own bubble-world of strange thinking that was maybe seen as edgy 70 years ago. Guess that comes from letting all those geriatrics into High Office.

    1. Anonymous Coward
      Anonymous Coward

      re: becoming more and more like the old USSR

      Indeed. Add in a good dose of 1930's isolationism with MAGA etc and you have a disaster waiting to happen. US Farmers have already seen their main market for SOYA almost disappear overnight. We'd better watch out as they look like they are going to dump it on us and as it is a GMO crop... you can guess the what will happen when the French Farmers start dumping the US grown Soya (and other rancid stuff produced in their agri-biz mega farms) into the sea.

      This won't end well especially if the current POTUS gets re-elected by some miracle (or vote rigging)

      1. Tom 38 Silver badge

        Re: re: becoming more and more like the old USSR

        la fête des soya de La Rochelle?

      2. jelabarre59 Silver badge

        Re: re: becoming more and more like the old USSR

        This won't end well especially if the current POTUS gets re-elected by some miracle (or vote rigging)

        As opposed to the severe shit-storm of Seniile Joe and his puppetmasters?

        1. aki009

          Re: re: becoming more and more like the old USSR

          Seniile Joe? And here I thought he was just the Pedo Joe who's telling 13 year olds how horny he is next to them, and then talking to them about making some films "back home". That's a bit on the sick side if you ask me.

    2. Merrill

      Re: becoming more and more like the old USSR

      Around 1990, the US could have tried to become Greece and bequeath its culture and values to the world.

      Instead, it went for becoming Rome.

  7. Keith Oborn

    Politics aside-

    One thing recent events have shown up is the folly of relying on making all of a product in one place. PPE? We have to buy from China. Car parts? and so on and so forth. Outsourcing production to such a huge extent, and allying this with "just in time" processes, means that the whole supply chain may be cheaper *while everything is working normally* but it is also utterly fragile. Remember the Japanese semiconductor encapsulation resin plant that got knocked out by an earthquake? Then everyone realised that it was the only one--.

    Also: quite happy for semiconductors and network kit to be made in China and offered on the free market, as long as there are viable alternatives and even-handed tariff and anti-dumping rules. The Japanese electronics industry managed to get past that hump quite well. In the 70s and 80s there was a huge "grey imports" scandal where Japanese kit (cameras notably) appeared on Western markets via third parties, and the manufacturers refused to honour warranties. Chap from Fujitsu told me why: they had to make a sales projection for 12 months, and that was what got shipped to them. So they always over-ordered, then shipped the surplus out of the back door. This was resolved by simple application of legal levers around product liability.

    Chinese huffing about the Huawei ban is nonsense. They banned foreign suppliers from their networks ages ago. Some backroom "diplomatic conversations" needed methinks.

    1. TheInstigator

      Re: Politics aside-

      If you were an company based in the Eastern world, would you install Western IT gear in your company ?

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