Reply to post: Re: Unexpected consequence ?

China cooks covert chips, recruits global geeks to dodge US restrictions

Avon B7

Re: Unexpected consequence ?

There are no unintended consequences here.

Ironically, it was SIA which wrote to the White House on several occasions warning of the damage a ban on Huawei would cause to its members.

Up to the first year of sanctions, Huawei was pumping billions into US semi conductor firms which, in turn, used those revenues to fund R&D for future advances.

So, losing revenues was bad, but what would be worse was 'de-Americanisation' by foreign firms which were suddenly seeing their own products being affected by the 'weaponisation' of US technology. That process is already underway and will also impact US interests.

By the way, SIA was not alone in warning the US to tread carefully with any sanctions. ASML has been very vocal and recently a high ranking South Korean official went on record as saying it shouldn't be put between a rock and a hard place as a result of US unilateral sanctions.

On top of that it was logical that Huawei, and all other affected Chinese firms, would have to 'brew their own' to be able to move forward. They have no alternative.

Huawei was clear on this and said it would take between two and three years to get US technology out of its systems.

They have already erradicated US technology from over 13,000 components.

They also invested in over 40 companies specialising in specific semi conductor related companies.

They upped R&D too. Patent filings a plenty.

One American EDA company executive even said he would rather Huawei used their tools by cracking them than see Huawei create competing tools.

Well, in both software and hardware and different platforms and industries, Huawei is going self sufficient and literally everyone (with perhaps the exception of Trump & Co) saw it coming.

EDA, chip packaging, photoresist, lithography...

The only difference is that it's now coming far faster than it otherwise would have - because of sanctions!

On a wider note China (as a whole) now has 7nm capacity. It might be low yield and more expensive but the US doesn't have any native 7nm capacity to call it's own. And if China were to refocus all its capacity (it won't) on 7nm, it's capacity would outstrip that of TSMC and Samsung - combined!

They went from 14nm to 7nm in two years,too.

SIA probably had a collective bed wetting episode after TechInsights published their report.

Of course the vast majority of chips used worldwide are not even produced on nodes anywhere near the cutting edge so China will be happy to improve yields and overall capacity on older nodes in the short term.

But we all know where they're heading.

As for Huawei in particular, my guess is that before year end they will announce a chip stacked solution on a flagship-like phone.

That will be another major step for them.

Unrelated or not, Qualcomm has recently said they expect no further 'material revenue' from Huawei.

I suspect something is in the pipe.

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