China Chip Decapitation

[Hefeweizen 5310]

New analysis that’s seemed to fly under the radar about serious FAFO for the semiconductor and chip industries.

 

  
Going to be very interesting to watch this unfold.  

[Armybrat 40819]

Holy shit…. That is a big deal!

[Dbeasy 15040]

I'd like to hear from a surlyite from the semiconductor industry. Between these new rules and the multi-billion dollar investment in the US semiconductor industry, it sure seems like there is a very serious national security threat to the US from China. If I were to guess, it would be that China is about to invade Taiwan, where we get a ton of our chips.

[Amos Moses 795]

[veritas aequitas 442]

It's about time

[Parliament 14230]

That's a shame...

[futureman 22440]

2 hours ago, Dbeasy said:

I'd like to hear from a surlyite from the semiconductor industry. Between these new rules and the multi-billion dollar investment in the US semiconductor industry, it sure seems like there is a very serious national security threat to the US from China. If I were to guess, it would be that China is about to invade Taiwan, where we get a ton of our chips.

there’s a thread here somewhere about TSMC

[Eastwood 4394]

2 hours ago, Amos Moses said:

Was going to post this exact gif. China has never been and will never be our ally under the Xi regime or any successor appointed by Xi. We need to detach ourselves from any dependence on Chinese goods, especially goods that end up integrated into critical infrastructure. 

[Parliament 14230]

So I went are read that Twitter thread.  It's illegal for an American to have anything to do with Chinese chip-making?  Do I understand that right?

[Sam Lin 3550]

Basically, yes.

And for all the talk about China taking Taiwan to get chipmaking, they'd get the fabs but wouldn't get working processes and equipment, and support staff would all be yanked overnight just like in China. Best case at that point is multiple years to get back to production, and probably never achieving yields like now. It isn't that easy. There's a reason every equipment maker has full time staff positioned in every fab, support is constant. They really need to take Taiwan via soft power and leave the country and specifically mfg infrastructure operating for it to be of tactical value.

[Post Oak 20205]

Peter Zeihan had a video about this a few weeks or more back. Basically the Chinese can make the low quality chips but even the mid grade chips are beyond their grasp.  They're not close to make the high quality chips

[Captainant 27625]

10 hours ago, Post Oak said:

Peter Zeihan had a video about this a few weeks or more back. Basically the Chinese can make the low quality chips but even the mid grade chips are beyond their grasp.  They're not close to make the high quality chips

And most importantly, ASML is no longer shipping their lithography equipment to China nor supporting it in any way whatsoever. ASML is who's been pushing the industry further and further with it's ultra low wavelength and high intensity laser research. Literally every fab around the world relies on ASML - if you're making anything newly designed or cutting edge, ASML is the only company that can make the hardware to produce your chip designs 

[TwiceHorn 31435]

I didn't realize how far behind US equipment makers like PerkinElmer and KLA had fallen.  Looks like PerkinElmer is out of the game entirely.

It appears that the thrust of the legislation and rulemaking is to require export licenses to ship certain "high end" semiconductor technology to China, which imposes control on what goes and under what conditions, as opposed to the kind of free-for-all we currently have.

It doesn't entirely foreclose China from obtaining this technology (maybe in practical effect it will), but puts more control over the process.

[Parliament 14230]

So why all the sudden a big pivot?  China has always been stealing tech and selling it to n'er do goods.  Seems we brought the big hammer down all the sudden, nttawwt.  

Are we finding Chinese chips in all those Iranian drones getting shot down?  Finding more and more tech stealing?

[Hefeweizen 5310]

Personally I think the covid supply shock showed everyone how dependent we’ve become on external manufacturers.  It’s an annoyance for consumers but a National security issue for a lot of industries.  Basically a giant wake up call to the US.  And there were voices ahead of this, but mainly focused on trade, not supply chains.

[gsoda3 3245]

it's not a splashy news event because in the short-term it's not that important. these high-level chips are super expensive and aren't widely used in consumer products.  they're mostly used by big tech firms and even future forecasts saw them as specialty chips.  what needs to be watched are the chips a few generations behind that china's been trying to produce, and subsequently mass produce.  for instance, apple had a deal with yangtze memory tech to produce flash memory to be used initially in chinese iphones which they've now put on hold.  it's speculated if this was successful they had plans to use these chips in up to 40% of all their upcoming phones.  the chinese way has never been to innovate.  it's steal, reproduce in mass, and undercut in price.  it's more of the same here.  

[Post Oak 20205]

Two Peter Zeihan video on chips and china.  This will throw China into a "technological winter". China fucked around now they're finding out.

 

 

 

 

[gsoda3 3245]

i just went through that twitter thread in the OP.  it's not accurate.  

 

 

engineers are being evacuated from chinese premises but there are no mass resignations from American staff.  here's part of an internal memo ASML sent out last week.

 

from barron's.

Quote

ASML US employees must refrain -- either directly, or indirectly -- from servicing, shipping or providing support to any customers in China until further notice, while ASML is actively assessing which particular fabs are affected by this regulation,” according to an email from the US management team addressed to employees in the country. The ban applies to all US employees, including American citizens, green card holders and foreign nationals who live in the country, according to the email. 

 

 

 

 

[RDCanecutter 26378]

Foolish mortals squabble over chips, when true power resides in control of the Spice.

[Brisketexan 105050]

14 hours ago, RDCanecutter said:

Foolish mortals squabble over chips, when true power resides in control of the Spice.

mmmmmm.....Chinese five spice.

But, umm, you might want to get it now, while it's "non-irradiated."   Not sure how long that's gonna be an option for humanity.....

[BabaYaga 15286]

On 10/15/2022 at 10:11 PM, Sam Lin said:

Basically, yes.

And for all the talk about China taking Taiwan to get chipmaking, they'd get the fabs but wouldn't get working processes and equipment, and support staff would all be yanked overnight just like in China. Best case at that point is multiple years to get back to production, and probably never achieving yields like now. It isn't that easy. There's a reason every equipment maker has full time staff positioned in every fab, support is constant. They really need to take Taiwan via soft power and leave the country and specifically mfg infrastructure operating for it to be of tactical value.

Heard one of the contingencies being floated by the chip manufacturers is to rig all the plants with demo and blow them all if China tries to invade.  It's also not just the plants, but the intellectual capital of those that really understand how to make them work efficiently.  They are the equivalent of the German scientists getting the space race up and running.  They are decades ahead of us in almost every way.  

[TwiceHorn 31435]

On 10/17/2022 at 11:01 AM, gsoda3 said:

it's not a splashy news event because in the short-term it's not that important. these high-level chips are super expensive and aren't widely used in consumer products.  they're mostly used by big tech firms and even future forecasts saw them as specialty chips.  what needs to be watched are the chips a few generations behind that china's been trying to produce, and subsequently mass produce.  for instance, apple had a deal with yangtze memory tech to produce flash memory to be used initially in chinese iphones which they've now put on hold.  it's speculated if this was successful they had plans to use these chips in up to 40% of all their upcoming phones.  the chinese way has never been to innovate.  it's steal, reproduce in mass, and undercut in price.  it's more of the same here.  

Yeah, historically, cutting edge SC production is not a profit center, but the chips have highly specialized applications, in some cases implicating national security.

But the advancements leading to those niche chips trickles down to more commercially useful/saleable chips, that have commercial and security implications.

TI used to be absolutely dominant in DRAM design and production, but they never could make any money off those chips until they started licensing Japan, Inc. a few years later when the bleeding edge became the leading edge and even commodity stuff.  They abandoned that business model entirely and have directed their prowess to ASIC and SOC specialty chips that don't become commodities, but are highly marketable.

This is kind of a variant on that story.

It would appear that this is a lot like imposing DFAR/ITAR type requirements on less obviously defense-related technologies.

[Amos Moses 795]

Heard one of the contingencies being floated by the chip manufacturers is to rig all the plants with demo and blow them all if China tries to invade.  It's also not just the plants, but the intellectual capital of those that really understand how to make them work efficiently.  They are the equivalent of the German scientists getting the space race up and running.  They are decades ahead of us in almost every way.  

Data where are you going?

I’m setting booty traps.

You mean booby traps?

That’s what I said! Booby traps!

[BabaYaga 15286]

26 minutes ago, Amos Moses said:

Data where are you going?

I’m setting booty traps.

You mean booby traps?

That’s what I said! Booby traps!

More like Masada

[KeysPhoneWallet 807]

Heard one of the contingencies being floated by the chip manufacturers is to rig all the plants with demo and blow them all if China tries to invade.  It's also not just the plants, but the intellectual capital of those that really understand how to make them work efficiently.  They are the equivalent of the German scientists getting the space race up and running.  They are decades ahead of us in almost every way.  

Who is they?

[Deej 76751]

On 10/17/2022 at 11:34 AM, Post Oak said:

Two Peter Zeihan video on chips and china.  This will throw China into a "technological winter". China fucked around now they're finding out.

 

 

 

 

Peter Zeihan is what I imagine Jon Hamm's older brother looks and sounds like. 

[freyguy 4260]

On 10/16/2022 at 9:14 AM, TwiceHorn said:

I didn't realize how far behind US equipment makers like PerkinElmer and KLA had fallen.  Looks like PerkinElmer is out of the game entirely.

It appears that the thrust of the legislation and rulemaking is to require export licenses to ship certain "high end" semiconductor technology to China, which imposes control on what goes and under what conditions, as opposed to the kind of free-for-all we currently have.

It doesn't entirely foreclose China from obtaining this technology (maybe in practical effect it will), but puts more control over the process.

Tell me you're old without directly telling me you're old.  🤣

There's tons of articles out there about how China constantly re-engineers everything they can get their hands on, and also inserts their own Spyware into as much of their hardware as possible.  It's a nightmare for U.S. customs to stay on top of.

That analyst lamenting about it on his Twitter feed seems to totally avoid the real issue behind it all.  Fuck the Chinese and their economy.  If they played by the rules and could be trusted, this would not be happening.  

[washparkhorn 9939]

According to the Bloomberg:

The Biden administration is exploring the possibility of new export controls that would limit China’s access to some of the most powerful emerging computing technologies, according to people familiar with the situation.

The potential plans, which are in an early stage, are focused on the still-experimental field of quantum computing, as well as artificial intelligence software, according to the people, who asked not to be named discussing private deliberations. Industry experts are weighing in on how to set the parameters of the restrictions on this nascent technology, they said.

The efforts, if implemented, would follow separate restrictions announced earlier this month aimed at stunting Beijing’s ability to deploy cutting-edge semiconductors in weapons and surveillance systems.

https://www.bloomberg.com/news/articles/2022-10-20/us-eyes-expanding-china-tech-ban-to-quantum-computing-and-ai?srnd=premium&utm_source=website&utm_medium=share&utm_campaign=mobile_web_share
 

File under “shaping the battlefield” in the China v. the West Cold War. 

[Armybrat 40819]

Fuck Tricky Dick for sowing the seeds of this China fiasco.

[tbone_ 14106]

Fuck Tricky Dick for sowing the seeds of this China fiasco.

He fucked up an awful lot of shit

[Parliament 14230]

And how many Presidents since then for continuing it?

[TonyTexas 10505]

On 10/27/2022 at 8:18 PM, Armybrat said:

Fuck Tricky Dick for sowing the seeds of this China fiasco.

 

10 hours ago, tbone_ said:

He fucked up an awful lot of shit

I feel dumb saying this with armybrat commenting but Nixon’s foreign policy was pretty damn good. 

[Armybrat 40819]

Nah, no worries, but I think he was way too naive in the way he opened up the technology “sharing” with the Chicoms. 
That government is not our friend and never has been.

I think the people are good folks, but have bad leadership.

Edited to add:  My biases are showing because I lived in Taiwan for two years in the late 1950s while my Dad was a US Army advisor to Chiang Kai Shek’s 1st Field Army.

Edited November 25, 2022 by Armybrat

[Blotto 23486]

To my knowledge, the US government didn't force any domestic manufacturers to move production to China,  hollowing out our manufacturing base in the process. That was just good ole American greed doing what it does, chasing every last penny of profit around the globe, consequences be damned. When faced with the choice of boosting their profits/bonuses at the expense of American manufacturing jobs, they couldn't trip over their dicks fast enough to move production to China. 

And you can make the argument that the american consumer played an equally important role by insisting on cheap shit. If they refuse to pay a premium for "made in America" and would just as soon purchase imports for a 40% discount, they make it awfully easy for executives to justify the move to China. 

And finally the financial markets rewarded every company that juiced profits by migrating manufacturing overseas. 

Its easy to blame the Chinese for doing what they do, but... 

China couldn't force us to manufacture all our shit over there. American CEOs leapt at the opportunity to exploit China's cheap labor in ways that would never be tolerated here in the US. I laugh every time I see one of them on TV bemoaning our current state of affairs. 

[Parliament 14230]

All true, but let's not go too hard on ourselves.  Back then we thought (hoped) that a China engaged in World commerce would pull it's head out of it's butt.  And for awhile, they were on track to.  Didn't work out, and that stinks.

But I believe the practice of trading with historic adversaries is a good thing.  Japan and Vietnam come to mind.  And doing business with the central America's I hope will be good too.

That said, picking up our toys and coming home is absolutely the right thing to do.  We need to shame America countries into doing more.

Edited November 25, 2022 by Parliament

[Parliament 14230]

All true, but let's not go too hard on ourselves.  Back then we thought (hoped) that a China engaged in World commerce woulda pulled it's head out of it's butt.  And for awhile, there were on track too.  Didn't work out, and that stinks.

But I believe the practice of trading with historic adversaries is a good thing.  Japan and Vietnam come to mind.  And doing business with the central America's I hope will be good too.

That said, picking up our toys and coming home from China is absolutely the right thing to do.  We need to shame American companies into doing more.

Edited November 25, 2022 by Parliament

[Captainant 27625]

2 hours ago, Parliament said:

That said, picking up our toys and coming home from China is absolutely the right thing to do.  We need to shame American companies into doing more.

Sounds like socialist regulations that will harm the pay structure for executives