That was already China's stated goal in their "Made in China 2025" initiative.
> The initiative encourages production of high value products and services, like aerospace and semiconductors, to help achieve independence from foreign suppliers.[1]
That'll probably happen in the long term. In the short term, China might answer by completely banning US companies from the Chinese market.
I don't see anything to win here. Probably every large company, including those from the US, have some kind of production facilities, storage or supplies in China. China applying similar restrictions would probably be a worse hit for the US than the current situation is for China.
That was always the outcome. It's the road China has been traveling down intentionally. Before the ability to use it against China runs out, the US is using it while they have it to use. China does it everywhere they compete out of a sense of hyper nationalism, necessity to become a superpower and independence (the ability to pursue its national objectives without concerns for sanctions or outside opinion). Russia would love to have the competence to do the same thing (so far all Russia has managed, mostly, is de-dollarization; China can't de-dollarize at this stage due to its exports and tight link with the global economy). China has known for two decades or more what they had to do. Mostly the only difference will be China will pull forward their plans, if and where they can.
They always planned to build up their own semiconductor industry and become heavily independent of foreign semiconductors.
They always planned to build up their own software industry and become heavily independent of foreign software.
They always planned to build up their own jet industry and become heavily independent of Boeing and Airbus.
They always planned to build up their military tech and become heavily independent of Russia.
China made a big mistake in being too reliant on TSMC, etc. or maybe it did not have the capacity to go after too many targets. Or maybe it simply did not think it could be a problem.
They are quick to learn and adapt, though, not least when the Chinese state throws its whole weight behind something, so I'm thinking that after this initial shock, in a few years the result will be a decline of the relative importance of the Taiwanese semi industry because mainland China will have its own, with all the potential strategic consequences that this might mean.
I don't think it's a mistake. It's more that they don't have a choice. There are very few (maybe even only one?) foundries in the world with advanced processes. Building a foundry is not trivial. For how long has Intel stuck with 14nm now? The Dutch ASML lithography machine is one of the most advanced machines in the world, and it's pretty much the only one of its kind. China has been investing heavily in domestic foundries for years now, but it takes time.
Look up Fujian Jinhua plant 2018. Truth is US has been sanctioning and using CFIUS to undermine Chinese IC for a while now. Many blocked acquisitions under Obama. Relationship was just less acrimonious and less public. I suspect even Nvidia's ARM ambitions is part of plan to undermine Chinese IC efforts. Like how William Barr floated idea to get CISCO to buy controlling share in SE or Nokia to rival Huawei 5G.
That said, TSMC is too successful for it's own good. Once their Arizona plant opens on US tax dime, Taiwan will loose security guarantor. I suspect they'll delay for as long as they can. SMIC is basically sufficient to make IC for Chinese military use in any case. The main, and huge problem, is being commercially competitive.
When you have a billion people + unlimited funds + some industrial espionage I am sure china will get their chip manufacturing industry built up quickly.
I think the more worrying thing is what happens to the West if, when it has built it's own fab capacity (which is much easier said than done, but China will throw enormous resource at it because it has to), China decides to destabilise Taiwan's semiconductor industry.
Western nations would be smart to try and decentralise some of that production capacity (also easier said than done) before that could come to be, but does anyone think the Western nations current or foreseeable leadership really have the strategic foresight to do so?
I don't have enough knowledge of chip's logistics so my less informed 2 cents would be, thinking from a business perspective, if eventual dominance of chip supply-chain was in cards, Chinese businesses would have had done it regardless of ban existed or not.
So, this ban gives Taiwan and US businesses some breathing space to keep that lead. How its leveraged, is upto the governments and business's .
Huawei will replace Kirin with other chips manufactured in TSMC fabs (MediaTek for example). Huawei is forbidden using their own chip designs if there is come US based IP components, not from buying TSMC manufactured chips.
The chinese govt is indeed throwing their weight behind developing a local semiconductor industry capable of rivaling TSMC. They are making heavy investment in SMIC for example.
However, at the same time, unfortunately the Chinese government doesn't play fair, and they are ramping up state sponsored industry espionage and hacking of American and Taiwanese semi-conductor firms to speed up the process.
This best describes China's perspective towards "technology acquisition"
“They want technology by hook or by crook. They want it now. The spy game has always been a gentleman’s game, but China has taken the gloves off,” said John Bennett, the special agent in charge of the FBI’s San Francisco office, which battles economic spies targeting Silicon Valley. “They don’t care if they get caught or if people go to jail. As long as it justifies their ends, they are not going to stop.”
Kirin's probably source something from U.S. designs right? Hence it's production run must end. I am guessing this means Huawei needs to switch to a design that is wholly originating from China (with possible input from Japan and Korea) but right now they are not up to the level of the Kirins.
This may really just mean Xiaomi or Oppo gains an advantage over Huawei and takes the top crown.
Huawei can still buy SoC with US technology in it if it's designed and manufactured by others.
US restrictions are all about Huawei’s ability to use U.S. technology and software to design and manufacture semiconductors abroad. BIS made targeted rule "to impose a new control over certain foreign-produced items, when there is knowledge that such items are destined to a designated entity on the Entity List."
> (i) Items, such as semiconductor designs, when produced by Huawei and its affiliates on the Entity List (e.g., HiSilicon), that are the direct product of certain U.S. Commerce Control List (CCL) software and technology; and
> (ii) Items, such as chipsets, when produced from the design specifications of Huawei or an affiliate on the Entity List (e.g., HiSilicon), that are the direct product of certain CCL semiconductor manufacturing equipment located outside the United States. Such foreign-produced items will only require a license when there is knowledge that they are destined for reexport, export from abroad, or transfer (in-country) to Huawei or any of its affiliates on the Entity List.
Lot of talk about TSMC building a plant in Wisconsin but as far as I could dig up its basically the same as what they already have in Nanjing. A play meant to make them appear like a neutral party.
What they're not saying is that the Chinese will have to completely shut down many of their silicon foundries because of a lack of specialized chemicals only available from the USA and Japan.
I really doubt it. China has its own fabs, they're just a few generations behind (14nm). That "only" means their chips are not competitive in certain contexts (heat, power), not that they can't have chips at all. They're investing heavily in research and development. It's just a matter of time before they catch up. There's no need to do something risky and expensive, like starting a war over Taiwan.
And taking over Taiwan will cripple TSMC's ability to provide to anyone. The moment they invade Taiwan, 100% of its population becomes anti-China (right now a portion of Taiwanese are still sympathetic to the idea of reunification). TSMC employees will revolt and the island will turn into a perpetual guerilla war zone. How do you produce chips in such an environment?
I still think WWIII could plausibly happen, just not because of TSMC.
i doubt it, TSMC still needs lithography machines from ASML (a Dutch company) to manufacture their chips.
US has repeatedly prevented ASML from shipping latest EUV lithography machines to China, I can't imagine the US wouldn't cut off supplies to TSMC if Taiwan was invaded.
Seizing another territory for their knowledge / expertise /manufacturing capabilities would demonstrate weakness. I am pretty sure Beijing would rather avoid that.
Maybe the Chinese government can fix this with using some extra slave labour or else steal and extortion it from some small countries? Can't they just invade Taiwan or Korea and just grab it? As a last resort they could become a democracy, without slavery, without stealing and play by the rules, but hey what a weired idea if you can be a thug as well!
[+] [-] acomjean|5 years ago|reply
[+] [-] Mindless2112|5 years ago|reply
> The initiative encourages production of high value products and services, like aerospace and semiconductors, to help achieve independence from foreign suppliers.[1]
[1] https://en.wikipedia.org/wiki/Made_in_China_2025
[+] [-] moooo99|5 years ago|reply
I don't see anything to win here. Probably every large company, including those from the US, have some kind of production facilities, storage or supplies in China. China applying similar restrictions would probably be a worse hit for the US than the current situation is for China.
[+] [-] DeonPenny|5 years ago|reply
[+] [-] danielrpa|5 years ago|reply
[+] [-] alfiedotwtf|5 years ago|reply
[+] [-] adventured|5 years ago|reply
They always planned to build up their own semiconductor industry and become heavily independent of foreign semiconductors.
They always planned to build up their own software industry and become heavily independent of foreign software.
They always planned to build up their own jet industry and become heavily independent of Boeing and Airbus.
They always planned to build up their military tech and become heavily independent of Russia.
Insert any given prominent technology here.
[+] [-] hyperpallium2|5 years ago|reply
[+] [-] robert_foss|5 years ago|reply
[+] [-] greatjack613|5 years ago|reply
From a competitive landscape, yes it sucks. But Huawei / China needs to be punished for its blatant IP theft, I think this is a great place to start.
[+] [-] Nursie|5 years ago|reply
There's also Apple doing high performance ARM, but only for their own stuff.
[+] [-] mytailorisrich|5 years ago|reply
They are quick to learn and adapt, though, not least when the Chinese state throws its whole weight behind something, so I'm thinking that after this initial shock, in a few years the result will be a decline of the relative importance of the Taiwanese semi industry because mainland China will have its own, with all the potential strategic consequences that this might mean.
[+] [-] FooBarWidget|5 years ago|reply
[+] [-] dirtyid|5 years ago|reply
That said, TSMC is too successful for it's own good. Once their Arizona plant opens on US tax dime, Taiwan will loose security guarantor. I suspect they'll delay for as long as they can. SMIC is basically sufficient to make IC for Chinese military use in any case. The main, and huge problem, is being commercially competitive.
[+] [-] samfisher83|5 years ago|reply
[+] [-] fakeslimshady|5 years ago|reply
[+] [-] Mindwipe|5 years ago|reply
Western nations would be smart to try and decentralise some of that production capacity (also easier said than done) before that could come to be, but does anyone think the Western nations current or foreseeable leadership really have the strategic foresight to do so?
[+] [-] shankysingh|5 years ago|reply
So, this ban gives Taiwan and US businesses some breathing space to keep that lead. How its leveraged, is upto the governments and business's .
[+] [-] Nokinside|5 years ago|reply
[+] [-] ulfw|5 years ago|reply
[+] [-] chvid|5 years ago|reply
[+] [-] chlee|5 years ago|reply
However, at the same time, unfortunately the Chinese government doesn't play fair, and they are ramping up state sponsored industry espionage and hacking of American and Taiwanese semi-conductor firms to speed up the process.
This best describes China's perspective towards "technology acquisition"
“They want technology by hook or by crook. They want it now. The spy game has always been a gentleman’s game, but China has taken the gloves off,” said John Bennett, the special agent in charge of the FBI’s San Francisco office, which battles economic spies targeting Silicon Valley. “They don’t care if they get caught or if people go to jail. As long as it justifies their ends, they are not going to stop.”
See:
https://www.wired.com/story/chinese-hackers-taiwan-semicondu...
https://www.reuters.com/article/us-basf-espionage/basf-worke...
https://www.wsj.com/articles/taiwans-technology-secrets-come...
https://www.theatlantic.com/politics/archive/2019/08/inside-...
https://www.latimes.com/politics/la-na-pol-china-economic-es...
https://www.justice.gov/opa/pr/prc-state-owned-company-taiwa...
[+] [-] euix|5 years ago|reply
This may really just mean Xiaomi or Oppo gains an advantage over Huawei and takes the top crown.
[+] [-] Nokinside|5 years ago|reply
US restrictions are all about Huawei’s ability to use U.S. technology and software to design and manufacture semiconductors abroad. BIS made targeted rule "to impose a new control over certain foreign-produced items, when there is knowledge that such items are destined to a designated entity on the Entity List."
> (i) Items, such as semiconductor designs, when produced by Huawei and its affiliates on the Entity List (e.g., HiSilicon), that are the direct product of certain U.S. Commerce Control List (CCL) software and technology; and
> (ii) Items, such as chipsets, when produced from the design specifications of Huawei or an affiliate on the Entity List (e.g., HiSilicon), that are the direct product of certain CCL semiconductor manufacturing equipment located outside the United States. Such foreign-produced items will only require a license when there is knowledge that they are destined for reexport, export from abroad, or transfer (in-country) to Huawei or any of its affiliates on the Entity List.
https://www.commerce.gov/news/press-releases/2020/05/commerc...
[+] [-] magicsmoke|5 years ago|reply
[+] [-] dade_|5 years ago|reply
[+] [-] tonyedgecombe|5 years ago|reply
[+] [-] alfiedotwtf|5 years ago|reply
[+] [-] chvid|5 years ago|reply
https://www.globaltimes.cn/content/1187993.shtml
[+] [-] unknown|5 years ago|reply
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[+] [-] greatpatton|5 years ago|reply
[+] [-] euix|5 years ago|reply
[+] [-] trynumber9|5 years ago|reply
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[+] [-] Normille|5 years ago|reply
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[+] [-] fakeslimshady|5 years ago|reply
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[+] [-] Markoff|5 years ago|reply
also what are they gonna use for smart watches, TV and their other products which are powered by kirin chips? you can't replace those that easy
[+] [-] bosswipe|5 years ago|reply
[+] [-] FooBarWidget|5 years ago|reply
And taking over Taiwan will cripple TSMC's ability to provide to anyone. The moment they invade Taiwan, 100% of its population becomes anti-China (right now a portion of Taiwanese are still sympathetic to the idea of reunification). TSMC employees will revolt and the island will turn into a perpetual guerilla war zone. How do you produce chips in such an environment?
I still think WWIII could plausibly happen, just not because of TSMC.
[+] [-] hungryhobo|5 years ago|reply
[+] [-] robjan|5 years ago|reply
[+] [-] bit33|5 years ago|reply
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