China may have to reassess chip strategy in face of US sanctions

China may be rethinking its approach to the ongoing semiconductor wars with the US and looking to other ways to boost its chipmaking industry than simply trying to match Washington's costly investments and subsidies. According to reports, Beijing is seeking alternative strategies to the massive investment that would be …

[lundril]

US semiconductor industry???

It's true that the problem are US sanctions...

But these sanctions force non-US companies from selling their tech to China.

As the article already mentions: To build EUVL. fabs, you need the machines from ASML (Netherlands) and ASML needs the mirrors from ZEISS SMT (Germany).

As far as I know the only semiconductor manufacturing companies producing chips in the sub 10nm nodes are Samsung (Korea) and TSMC (Taiwan).

So these sanctions regulate non-US companies.

What exactly is meant with the "US semiconductor industry" in this instance? Intel (LOL)?

China for sure has enough know-how to design chips (see Huawei before it was killed by Trump); what the Chinese are lacking are semiconductor manufacturers for the very small nodes; but that's also true for the US itself and Europe...

[tooltalk]

Re: US semiconductor industry???

ASML doesn't make all parts in-house. As you noticed with their depends on Zeiss glasses, which is now part of ASML, the company depends on pver 600 suppliers, of which slightly less than 25% are Americans. ASML's 2nd largest R&D center is in CT; laser/light-source R&D in San Diego, CA (via its American subsidiary Cymer), and software R&D in Silicon Valley, CA, so America's footprint in ASML's DUV/EUV dominance isn't small.

The days of one company or one country managing all layers of chip-making supply-chain is over. Taiwan and South Korea just manufacture chips; but really have no chip equipement supply-chain of their own and up to 90% of them are imported from either Japan and the US (and the Netherland). Once top-American chip makers such as AMD, IBM have given up on chip manuafcturing to focus on designing and research and, bar Intel and Micron, there is nobody else making chips inhouse. China handles mostly labor-intensive assembly/packaging/testing part of the supply-chain, but they are still too young and inexperienced -- most of China's chip initiatives are in fact spearheaded by Tawanese-expat -- ie, ex-TSMC/UMC engineers hoping to strike gold in China.

[CheesyTheClown]

Re: US semiconductor industry???

Thanks for this write up. It filled in some stuff I didn't know.

I would like to point out that most of ASML's technology and the technology of their vendors are patented which means that where patent protections work, they are safe. But in countries being sanctioned in ways they see as a violation of trust, the patents serve as blueprints to reproducing said technology.

I like to point out to people that if you were to compare China to the U.S. in a very naive way which says that "Any American is twice as good as any Chinese person", considering that there are twice as many people in China and they're demographically distributed similarly as most other countries including the U.S., then China is still twice as good as America. Or at the very least, they have the capacity to achieve twice as much as the Americans.

This tells me that if the Chinese can outperform America consistently by at least a fact of two, the Chinese are absolutely going to pass America in every conceivable way in time.

[steviebuk]

Re: US semiconductor industry???

China for sure has enough know-how to design chips (see Huawei before it was killed by Trump)

No they don't. There are smart people in China, its just a shame Winnie the fucking Pooh is in charge so you're not allowed any of your own thoughts, you must follow and read "Xi Jingping Thought". Trump didn't kill Huawei, as much as I really dislike Trump it was actually the only sensible move that happened. Huawei has been stealing tech for years. Just do a quick search online and you'll find all sorts. And look at how the CCP runs, look at what they did to Jack Ma because he criticised the little man child Xi. Then look at how they reacted when the Meng Wanzhou came home, she got a heros welcome, all because Huawei is clearly state controlled.

[RobThBay]

I spy with my little eye

Beijing is seeking alternative strategies...

Ah yes, good old fashioned industrial espionage.

[An_Old_Dog]

Espionage Doesn't Always Give Useful Results

... even when the desired info has been exfiltrated. Increasing levels of technology has increased the levels of technology required to build the initially-desired technology, as illustrated by the EUV+ASML+ASML-dependencies comments above.

[StrangerHereMyself]

Hermit Kingdom

I believe China will once again become a Hermit Kingdom, since they know they can't win this fight. The West will keep moving forward and they'll be stuck in 2020 forever.

Their home market, however, is big enough for them to make a living and not care too much about the rest of the world, like China has done for thousands of years. It was nice while it lasted.

[DustFox]

Re: Hermit Kingdom

Yes the west will keep moving forward in gender science and expanding the LGTB acronym and producing such talented people on tiktok like andrew tat. the west is nailing it. The wester tech companies are hanging by the thread wasn't for the third world students you gather from around the world to study at your unies then got absorbed in you tech companies. The west is slowly dying its going to be a museum. Look kids here this and that was invented

[steviebuk]

Re: Hermit Kingdom

You're right it will become a hermit, like North Korea but with a bit more money. But they really need the West for their economy. Currently their economy relies massively on their housing market. But their housing market is a massive scam. You have all the ghost cities and buildings that don't last a year. One person will be convinced to buy a flat in a new build. The new build will be half built then the contractor will knock it down and tell you "We're starting again, the new, new build will be even better, but you have to give us a bit more money". Rinse and repeat.

[Evil Harry]

"According to reports, Beijing is seeking alternative strategies to the massive investment .."

I sincerely hope this doesn't mean invasion of Taiwan.

[Dani_2077]

They will need no more than 2 years ...

[DustFox]

Typical western arrogance

We have heard this many time china can't do this china needs so many years to do that. Rhey prove you wrong time and time again. And the china stealiy tech BS. Well if Shenzhen city registers a year about three times more patent than the whole of the U.S and you still think they need yo steal from you then you still living in 1966.

[steviebuk]

Re: Typical western arrogance

Hello wumao.

[ClarkMills]

Capitalisim ≠ competition

The US once expounded competition, equal rights, unwavering justice.

Seems corporate America runs the roost. This is just another trade war tactic to try prevent china's inevitable rise.

[steviebuk]

Re: Capitalisim ≠ competition

Two wumaos in a row.

[teknopaul]

If you have a technical advantage its madness to not sell the fruits of that advantage. You may not have the advantage for ever.

[msroadkill]

5000 years of misery & sudden prosperityvia a blend of nationalistic controlled capitalism - yay - now lets throw our weight around.

Uts this that is the real agenda here. China's BS in the south china sea is way over the top, & so is missile stunts by their vassal nth korea.

confronting a big nuclear power on their doorstep on the other side of the pacific is a lot harder & riskier than screwing them economically - the silly bastards got rich from the even sillier laissaz faire capitalists throwing their own workforce & industry to the wolves to shave a few dollars from costs ("let them shoot smack")

I despise trump, but it took one mad bastard to confront another in a plausible way, and Biden stayed the course.

war is always a bitter pill, but this economic war beats the real thing & is very necessary to check the Chinese leadership.

[martinusher]

I don't think China cares that much. They've got the resources to explore more than one option for continuing semiconductor development.

The country that's likely to end up as a 'hermit kingdom' is the US if we're not careful.

>war is always a bitter pill, but this economic war beats the real thing & is very necessary to check the Chinese leadership

You hit a threshold one day when you realize that 80% of the world's population isn't "us" (US, Europe and other Anglosphere countries) and that 'them' is just going on without 'us' and doing just fine. Then what do we do?

The UK may have shot itself in the foot with Brexit -- promises versus reality -- but the US is in serious danger of undergoing Wexit. Large enough to be a nuisance but otherwise a largely irrelevant backwater.

[steviebuk]

And in Xi's China, there was no 5000 years, unless he finds a map that says "China owned this once". He was picked because "He seems alright". Now they've all realised he's another Mao but can't get rid of him.