Notes from the ground here. My undergrad was in EE at an "elite" school - I can say definitively that ~50% of the MS/Ph.d. students in EE were from China (with the other 50% largely from India). They TA'd many of the graduate level courses and were the majority of the students taking high level semiconductor design courses that centered on fabrication and nanotechnology.
China's short term goal is clearly to reach parity so these students can enter a mature semiconductor industry. Give these students ~5-15 years to gain expertise from the American academic system and industrial research base and I think we'll start seeing China innovate.
American expertise will naturally decline because we don't have students studying EE. To many good full-stack jobs that pay ~40% more.
China dominates in the 'jelly bean[1]' chip business. This was the bread an butter for the dozen semiconductor shops in the Bay Area during the 70's through the early naughts. As fabs shut down they became 'fabless' and had their work shipped out to TSMC. Now they exist as a genre in China in much greater numbers than they do here. Companies that will make a couple of wafers of USB + ADC + random logic kinds of things.
And the innovation never comes from the chip companies, it comes from companies that are building the products. They go to the chip companies and say "Can you make a chip that does this?" and then a new jelly bean chip is born and if that product gets traction everyone decides to make one with their own bit of spin.
What is unique to the Chinese scene is that there are thousands of minute variations rather than any sort of ordered discipline. Transistors are free at the jelly bean chip level so there is no incentive to re-use or save on chips.
ARM has become the defacto microprocessor architecture because, in part, ARM will license it to anyone.
In the US all of these folks have coalesced into a few mega companies (TI, NXP, Microchip, Maxim) which don't have much in the way of competition locally. So innovation stops because conservative business practices rule.
This really became clear to me when I started perusing datasheet sites for the Chinese market and realizing there are hundreds if not thousands of chips for which there is no English data sheet. This is a complete reverse from the last century when nearly every data sheet was in English and getting a Chinese version was a challenge.
[1] Jelly Bean chips are those that are made in batches of 1 - 10 million with a set of functions that are fairly specific to their application.
Well the vast majority of these kids would prefer to stay in the US.
Clearly the solution to prevent them from taking their knowledge back to their home countries is to denigrate them politically and make it harder and more inconvenient for them to live and work here.
> To many good full-stack jobs that pay ~40% more.
The gap is even greater in China, since China has a booming Internet industry, second only to the US, while its semiconductor industry is still in infancy and cannot survive without subsidies. My friend, who graduated with a degree in EE from Tsinghua University, lamented that almost none of her classmates stayed in EE fields. Note that Tsinghua University is the undisputed best Chinese university in engineering schools.
Throughout the 20th century, the United States benefited greatly from this sort of knowledge drain, from war-torn Europe, and from the Soviet sphere of influence.
This happened with Japan too, anyone that wants to know how they dominated the electronics industry in the 70's/80's should checkout the book "We were burning"
> American expertise will naturally decline because we don't have students studying EE.
We won't decline in absolute numbers but comparatively. We will never produce as many engineers as china because they outnumber us by more than a billion people.
Having worked in China in the semiconductor industry, it really saddens me what the Chinese are trying to do. You simply cannot out innovate 4 decades of work in a few years no matter how much money you throw at it.
Also, China has a branding problem and it is only going to get worse. They can make short term progress but it takes a long time to build a great brand.
Stealing IP mostly helps manufacturing, It doesn't really help innovation. If they want to build up their semiconductor industry they need to steal the people who are creating IP, which is kinda the opposite of what is happening.
the culture that creates new tech is something that china can't steal and it can't replicate it without giving up authoritarian rule.
> You simply cannot out innovate 4 decades of work in a few years no matter how much money you throw at it.
Sure you can, as long as you have the people, resources and the infrastructure.
> Also, China has a branding problem and it is only going to get worse.
So did every country. When we were starting out as a nation, we stole IP from britain and we were known as the nation of the shoddy. Believe it or not, germany was once known as a nation of terrible brands and shoddy products. So was japan. Ask your grandparents. "Made in japan" was equivalent to junk in our grandparents time. The same with korea. It's only within the past 20 years that korea shed the "junk" image with Samsung, LG, etc.
Also, for most of history, "made in china" was considered high quality. That's why we have terms like "fine china". Until the opium wars and the collapse of china, china was renown for quality goods.
History has shown that countries move from shoddy manufacturing reputation to quality reputation. Don't really see why china would be the exception to the rule.
>Having worked in China in the semiconductor industry, it really saddens me what the Chinese are trying to do.
I too have worked in China, and there is nothing sad about fighting and investing heavily to catch your competition. If the competition isn't careful, they'll get blindsided just like auto companies were by similar looking Japanese manufacturing investments in the 80s. Japan used to have a reputation for really low-quality manufacturing.
History rhymes. American industrialists famously begged, borrowed and stole machine designs from Europe -- Slater the traitor kickstarted the American cotton industry.
Of course, the lack of foresight of Wall St is legendary! Many companies have traded long term loss for short term gain.
IP and knowledge was much less valuable in the 19th C industrial economy than it is today. Back then execution and raw materials and access to semiskilled labor was most important.
The Chinese (NK, Iranian, Russian) corporate hacks we have seen recently could have a MUCH larger economic effect.
I worked for Nokia when we outsourced part of our R&D to Huang Shu. 2 years later many of the sites employees moved on to work for Chinese gov backed tech firm, and the source code of what I wrote for Nokia and that of several colleagues popping up on github. It wasn't critical in terms of copyright or deep secrets about the product. But it contained info that allows an outsider get a very accurate picture of the software supply-chain and a potential gold-mine for further social engineering and/or attacks against the firms supply chain security.
So if you have the habit of adding your name in the /* comment stanza */ in all your source code, I urge you to "vanity search" your name in github/gitlab repos.
Also if you are serious about supply-chain security, and go to great lengths of buying in China but assembling your IP in Malaysia, Vietnam, etc, ... remember to compartmentalize.
If you're a person of interest (any engineer in a larger tech-company is), then use a dedicated phone for communicating with China where you install WeChat and be careful how you move information across the 2 domains.
"It's a very secret industry, and getting even tighter now since China has been blocked from acquiring the latest semiconductor technology. China has so far invested over $40 billion in boosting their chip-making abilities, to acquire capital, IP, and knowledge-workers. Given their history of borrowing technology from other countries without attribution, if I were at the head of a semiconductor related company, I would clamp down on the secrets ahead of the danger."
Looks like the clamp-down didn't happen soon enough...
>China has so far invested over $40 billion in boosting their chip-making abilities, to acquire capital, IP, and knowledge-workers.
There is a rumour going that the ministry of commerce has been given a war chest of ~$140B+ to establish self sufficient semiconductor industry in China. I can guess that those $40B is just a part of it that was spent on direct funding of their chipmakers. Another big part probably goes to "one day funds" like Canyon Bridge Capital that appear out of nowhere with few billion bucks just to disappear a year later when they are done buying a target company.
Considering the two sticks of Micron RAM I purchased in mid 2016 have appreciated 2-3x value, I don't have much sympathy for the big three DRAM producers. There's a reason the Chinese are looking so longingly at their lunch.
Micron and other DRAM producers were losing money due to DRAM gluts two years ago. That discouraged capacity investment and, as many insiders had predicted, it led to eventually higher price today.
Sure, you got bargain at their expense two years ago and now everyone is complaining about the higher cost of DRAM today. But that still doesn't justify IP theft.
yeah, but ... does the IP for TSMC reside in some easily transferred tangibles? wouldn't the DOD really need to transfer the whole community of engineers and ecosystem of suppliers?
It has been interesting reading the various opinions being expressed here in this discussion. As a couple of writers have noted, the appropriation of knowledge (without attribution to the source) has been the mainstay of technological advancement by the major powers over many decades, if not centuries.
Even though it is popular to classify such appropriation as "theft", it isn't theft. The term is used often in a cynical way by those who have appropriated such knowledge from others before them to provide a justification to maintain an advantage over those who follow them. Theft requires that the original party no longer have access to the items in question. For theft of knowledge, one would have to ensure that the deaths of those who know it have occurred and that there are no extent records available for that knowledge.
There have been many in the USA, including government organisations (civil and military), who have appropriated knowledge from others for their own benefit. One only needs to look at the history since the late 1800's to see many of these appropriations.
Many countries, organisations and individuals have done this. It has happened in the past, it happens today and it will happen in the future. In one sense, the only solution is for the free dissemination of knowledge in every area, but in many areas that will not happen.
I have a friend who will be prosecuted if he releases any information about a certain subject matter that he developed and was going to use commercially because a certain government pushed another government to appropriate that knowledge. These things happen and happen regularly.
So China appropriating technological know-how to various areas is nothing new and is just following in the footsteps of those who have gone before. So getting in a tizzy about it is not helping. If one wants to make a difference then be better at that area than anyone else. Produce what the consumers want at a price they are willing to pay and you will get a market share.
If someone copies you, then use that as a marketing strategy. Make sure that you can do it better than them. There are enough examples of companies and individuals that produce quality and still make enough to keep going. Look at your game plan and stop worrying inappropriately about the competition. If you are being copied then you must be doing something right and you can use that to your advantage, even if you are a one-man shop.
My comment on the article. Usually I am of higher opinion of NYT, but now this piece of writing is simply tendencious
The court case covered there is just plainly the case of plaintiff's lawyers being paranoid about about petty theft case, and having rich imagination. Think of Aron Schwartz case, except even more absurd here, as the defendant have called police on himself.
An employee from mainland who previously worked at a competitor company accidentally put coworker's phone into her bag along with papers on the table. They guy thought that his phone was stolen and called police, police found his phone in a locker of a coworker.
During investigation of that theft, they stumbled on some company docs on the phone, and opened an espionage case based on that. Why a defector would file a police report on his accomplice?
For it to be an espionage, a less lame way to exfiltrate information would be employed, and certainly, a spy will not call the police to arrest his accomplice.
Just thinking that somebody can carry netlists for a chip which take few hard drives to store in compressed form on a tiny memory of a smartphone does not pass a BS test.
Corporate and national espionage are as old as time, and senior leadership needs to wise up to this threat. China is running the most broad and sophisticated IP espionage campaign in history, and most companies think a 15m PowerPoint about not responding to phishing emails is sufficient protection against this. Until we get some strong legislation on corporate data security, this is just going to keep happening.
Is there a 'fruit of the poisoned tree' rule in international trade and tariffs? If the US puts tariffs on Chinese chips because they think they are derived from knowledge that was stolen from a US company, will they get chastised by the big international trade organizations?
Boo hoo, poor Micron. Seems there are some hidden costs to exporting all manufacturing to China. This has happened over and over (see because China often requires American companies "partner" with a Chinese company to setup shop in China:
US companies like cheap foreign labor and manufacturing, but need to realize there could be a high long-term cost - one that could put them out of business. We Americans seem to have a hard time focusing on long-term results. If an action boosts short-term profits or the stock price, we do it.
[+] [-] wishart_washy|7 years ago|reply
China's short term goal is clearly to reach parity so these students can enter a mature semiconductor industry. Give these students ~5-15 years to gain expertise from the American academic system and industrial research base and I think we'll start seeing China innovate.
American expertise will naturally decline because we don't have students studying EE. To many good full-stack jobs that pay ~40% more.
[+] [-] ChuckMcM|7 years ago|reply
China dominates in the 'jelly bean[1]' chip business. This was the bread an butter for the dozen semiconductor shops in the Bay Area during the 70's through the early naughts. As fabs shut down they became 'fabless' and had their work shipped out to TSMC. Now they exist as a genre in China in much greater numbers than they do here. Companies that will make a couple of wafers of USB + ADC + random logic kinds of things.
And the innovation never comes from the chip companies, it comes from companies that are building the products. They go to the chip companies and say "Can you make a chip that does this?" and then a new jelly bean chip is born and if that product gets traction everyone decides to make one with their own bit of spin.
What is unique to the Chinese scene is that there are thousands of minute variations rather than any sort of ordered discipline. Transistors are free at the jelly bean chip level so there is no incentive to re-use or save on chips.
ARM has become the defacto microprocessor architecture because, in part, ARM will license it to anyone.
In the US all of these folks have coalesced into a few mega companies (TI, NXP, Microchip, Maxim) which don't have much in the way of competition locally. So innovation stops because conservative business practices rule.
This really became clear to me when I started perusing datasheet sites for the Chinese market and realizing there are hundreds if not thousands of chips for which there is no English data sheet. This is a complete reverse from the last century when nearly every data sheet was in English and getting a Chinese version was a challenge.
[1] Jelly Bean chips are those that are made in batches of 1 - 10 million with a set of functions that are fairly specific to their application.
[+] [-] addicted|7 years ago|reply
Clearly the solution to prevent them from taking their knowledge back to their home countries is to denigrate them politically and make it harder and more inconvenient for them to live and work here.
[+] [-] rasz|7 years ago|reply
"Just dropped in by accident. I see 80% of them are asian girls, is this recording from Shenzhen?"
[+] [-] netheril96|7 years ago|reply
The gap is even greater in China, since China has a booming Internet industry, second only to the US, while its semiconductor industry is still in infancy and cannot survive without subsidies. My friend, who graduated with a degree in EE from Tsinghua University, lamented that almost none of her classmates stayed in EE fields. Note that Tsinghua University is the undisputed best Chinese university in engineering schools.
[+] [-] seanmcdirmid|7 years ago|reply
[+] [-] vkou|7 years ago|reply
The trend is just reverting to the mean.
[+] [-] crb002|7 years ago|reply
[+] [-] segmondy|7 years ago|reply
[+] [-] tzahola|7 years ago|reply
[+] [-] paidleaf|7 years ago|reply
We won't decline in absolute numbers but comparatively. We will never produce as many engineers as china because they outnumber us by more than a billion people.
[+] [-] madengr|7 years ago|reply
[+] [-] fermienrico|7 years ago|reply
Also, China has a branding problem and it is only going to get worse. They can make short term progress but it takes a long time to build a great brand.
[+] [-] RamshackleJ|7 years ago|reply
the culture that creates new tech is something that china can't steal and it can't replicate it without giving up authoritarian rule.
[+] [-] paidleaf|7 years ago|reply
Sure you can, as long as you have the people, resources and the infrastructure.
> Also, China has a branding problem and it is only going to get worse.
So did every country. When we were starting out as a nation, we stole IP from britain and we were known as the nation of the shoddy. Believe it or not, germany was once known as a nation of terrible brands and shoddy products. So was japan. Ask your grandparents. "Made in japan" was equivalent to junk in our grandparents time. The same with korea. It's only within the past 20 years that korea shed the "junk" image with Samsung, LG, etc.
Also, for most of history, "made in china" was considered high quality. That's why we have terms like "fine china". Until the opium wars and the collapse of china, china was renown for quality goods.
History has shown that countries move from shoddy manufacturing reputation to quality reputation. Don't really see why china would be the exception to the rule.
[+] [-] alexbeloi|7 years ago|reply
I too have worked in China, and there is nothing sad about fighting and investing heavily to catch your competition. If the competition isn't careful, they'll get blindsided just like auto companies were by similar looking Japanese manufacturing investments in the 80s. Japan used to have a reputation for really low-quality manufacturing.
[+] [-] ksk|7 years ago|reply
Could you explain your reasoning?
[+] [-] nimish|7 years ago|reply
Of course, the lack of foresight of Wall St is legendary! Many companies have traded long term loss for short term gain.
[+] [-] andygrovetheman|7 years ago|reply
The Chinese (NK, Iranian, Russian) corporate hacks we have seen recently could have a MUCH larger economic effect.
[+] [-] worldengineer|7 years ago|reply
[+] [-] DyslexicAtheist|7 years ago|reply
So if you have the habit of adding your name in the /* comment stanza */ in all your source code, I urge you to "vanity search" your name in github/gitlab repos.
Also if you are serious about supply-chain security, and go to great lengths of buying in China but assembling your IP in Malaysia, Vietnam, etc, ... remember to compartmentalize. If you're a person of interest (any engineer in a larger tech-company is), then use a dedicated phone for communicating with China where you install WeChat and be careful how you move information across the 2 domains.
edit: WeChat Security concerns: https://en.wikipedia.org/wiki/WeChat#Security_concerns
[+] [-] optimalKEK|7 years ago|reply
[deleted]
[+] [-] genericone|7 years ago|reply
"It's a very secret industry, and getting even tighter now since China has been blocked from acquiring the latest semiconductor technology. China has so far invested over $40 billion in boosting their chip-making abilities, to acquire capital, IP, and knowledge-workers. Given their history of borrowing technology from other countries without attribution, if I were at the head of a semiconductor related company, I would clamp down on the secrets ahead of the danger."
Looks like the clamp-down didn't happen soon enough...
[+] [-] baybal2|7 years ago|reply
There is a rumour going that the ministry of commerce has been given a war chest of ~$140B+ to establish self sufficient semiconductor industry in China. I can guess that those $40B is just a part of it that was spent on direct funding of their chipmakers. Another big part probably goes to "one day funds" like Canyon Bridge Capital that appear out of nowhere with few billion bucks just to disappear a year later when they are done buying a target company.
[+] [-] lsiq|7 years ago|reply
[+] [-] tooltalk|7 years ago|reply
Sure, you got bargain at their expense two years ago and now everyone is complaining about the higher cost of DRAM today. But that still doesn't justify IP theft.
[+] [-] deepnotderp|7 years ago|reply
[+] [-] groupthinking|7 years ago|reply
[+] [-] crb002|7 years ago|reply
[+] [-] HillaryBriss|7 years ago|reply
[+] [-] fermienrico|7 years ago|reply
[+] [-] tooltalk|7 years ago|reply
Intel, Micron, GlobFo and Samsung all have fab capacity in the US.
[+] [-] oldandtired|7 years ago|reply
Even though it is popular to classify such appropriation as "theft", it isn't theft. The term is used often in a cynical way by those who have appropriated such knowledge from others before them to provide a justification to maintain an advantage over those who follow them. Theft requires that the original party no longer have access to the items in question. For theft of knowledge, one would have to ensure that the deaths of those who know it have occurred and that there are no extent records available for that knowledge.
There have been many in the USA, including government organisations (civil and military), who have appropriated knowledge from others for their own benefit. One only needs to look at the history since the late 1800's to see many of these appropriations.
Many countries, organisations and individuals have done this. It has happened in the past, it happens today and it will happen in the future. In one sense, the only solution is for the free dissemination of knowledge in every area, but in many areas that will not happen.
I have a friend who will be prosecuted if he releases any information about a certain subject matter that he developed and was going to use commercially because a certain government pushed another government to appropriate that knowledge. These things happen and happen regularly.
So China appropriating technological know-how to various areas is nothing new and is just following in the footsteps of those who have gone before. So getting in a tizzy about it is not helping. If one wants to make a difference then be better at that area than anyone else. Produce what the consumers want at a price they are willing to pay and you will get a market share.
If someone copies you, then use that as a marketing strategy. Make sure that you can do it better than them. There are enough examples of companies and individuals that produce quality and still make enough to keep going. Look at your game plan and stop worrying inappropriately about the competition. If you are being copied then you must be doing something right and you can use that to your advantage, even if you are a one-man shop.
[+] [-] baybal2|7 years ago|reply
The court case covered there is just plainly the case of plaintiff's lawyers being paranoid about about petty theft case, and having rich imagination. Think of Aron Schwartz case, except even more absurd here, as the defendant have called police on himself.
An employee from mainland who previously worked at a competitor company accidentally put coworker's phone into her bag along with papers on the table. They guy thought that his phone was stolen and called police, police found his phone in a locker of a coworker.
During investigation of that theft, they stumbled on some company docs on the phone, and opened an espionage case based on that. Why a defector would file a police report on his accomplice?
For it to be an espionage, a less lame way to exfiltrate information would be employed, and certainly, a spy will not call the police to arrest his accomplice.
Just thinking that somebody can carry netlists for a chip which take few hard drives to store in compressed form on a tiny memory of a smartphone does not pass a BS test.
[+] [-] newnewpdro|7 years ago|reply
[+] [-] wetpaws|7 years ago|reply
[+] [-] Invictus0|7 years ago|reply
[+] [-] HillaryBriss|7 years ago|reply
the C-suite benefits. shareholders probably benefit. does the average US resident benefit?
[+] [-] oh_sigh|7 years ago|reply
[+] [-] prirun|7 years ago|reply
https://www.chinalawblog.com/2011/04/fellowes_brought_to_its...
US companies like cheap foreign labor and manufacturing, but need to realize there could be a high long-term cost - one that could put them out of business. We Americans seem to have a hard time focusing on long-term results. If an action boosts short-term profits or the stock price, we do it.