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China Has Painted Itself Into a Semiconductor Corner

Daniel Nenni

Admin
Staff member
Lost billions, graft probes, and broken dreams are the result of over-ambitious goals to build a leading chip sector

China Graft SMIC.jpg


As Washington embarks on a multi-billion dollar, decade-long semiconductor development campaign, Beijing is reckoning with its own 20-year effort that’s largely failed to deliver. Both will need to grapple with wasted funds and misguided goals as they play catch-up to Taiwan and South Korea.

Architects of China’s ambitious efforts may be facing the music for having not produced world-beating technology, Bloomberg News reported this week. Multiple corruption probes announced by authorities stem from anger among the nation’s top leaders over an inability to develop semiconductors that could replace American components, it reported. Two of the most scrutinized areas are the $9 billion bailout of Tsinghua Unigroup Co., and the National Integrated Circuit Industry Investment Fund — known as the Big Fund.

For all intents and purposes, China has failed to achieve its semiconductor goals, and those tasked with realizing them are being brought to account. Beijing won’t be smarting at the loss of money — it’s been willing to burn cash — but at the lack of progress such expenditure was supposed to buy.

Those looking at China’s achievements are mostly finding what they seek, and ignoring the rest. Semiconductor Manufacturing International Co., for example, got a lot of attention recently when industry analysts TechInsights wrote: “SMIC has been able to fabricate features that are small enough to be considered 7nm.” That “nm” figure refers to nanometers, a metric for the size of connections within a chip (smaller is better), and these days is as much a marketing term as a scientific one.

China chip cheerleaders see this as an incredible breakthrough, bringing the Shanghai-based firm closer to the capabilities of world leaders Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. But it’s not, really. What SMIC appears to have done is produce a somewhat standard chip, used for bitcoin mining, and with little evidence it can churn these out with good yields or at scale...

If China’s goal is to build up its prowess and cut itself off from the world, then it will fail at the first and surely succeed at the second. The US, if it spends billions of dollars with a similar independence-minded attitude, has every chance of repeating the same mistake.

 
If China’s semiconductor development is a total failure,then why the US is feeling more and more nervous about China's advancement in semiconductor field?Every time when a Chinese tech company made some progress,the US will respond by sanctions. It's a clear sign of lack of confidence and desperation.

Had TSMC refuse to build advanced fab in the US,they would be sanctioned as well,because the US would not tolerate tech capability of others ahead of the US. The president of the US said it loud and clear,to ensure US leadership in technology is the core national interest.
 
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I would not say the China semiconductor effort is a total failure. Progress has definitely been made but in my opinion they are maybe half the way to self sufficiency. No other country is self sufficient and will never be (my opinion) so China is all alone on this one. I don't know politics so I cannot explain the sanctions but my guess is that it is part of a bigger picture to control the perceived military threat of China. Hopefully the Russia/Ukraine situation will teach us restraint in the Taiwan Strait.

I do not see the possibility of Taiwan sanctions from the US at all. TSMC is building fabs around the world for geopolitical reasons in my understanding. There is no financial gain for TSMC, just strengthening the silicon shield.
 
If China’s semiconductor development is a total failure,then why the US is feeling more and more nervous about China's advancement in semiconductor field?Every time when a Chinese tech company made some progress,the US will respond by sanctions. It's a clear sign of lack of confidence and desperation.
I don't think China's semiconductor development is a failure. I think their foreign and domestic policies are failures, the sanctions have nothing to do with lack of US confidence, they have everything to do with Chinese government policies which are perceived as existential threats to US security and its economic system. The threats from the Chinese government and the need for a defensive position are one of the few US policy questions which have bipartisan support. The rarity of bipartisan support these days is a very telling indicator.
Had TSMC refuse to build advanced fab in the US,they would be sanctioned as well,because the US would not tolerate tech capability of others ahead of the US. The president of the US said it loud and clear,to ensure US leadership in technology is the core national interest.
I'm with Daniel on this; Taiwan wouldn't be sanctioned. The Taiwan question is another issue with strong bipartisan support. Personally, I think TSMC is building fabs in the US to pacify Apple and other customers who are looking for supply chain diversity, and TSMC doesn't want to lose business to Intel's foundry, if Intel succeeds in catching up. As I've posted before, I highly doubt the TSMC fabs in the US could survive very long if they were cut off from Taiwan. IMO, it's all for show.
 
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Not sure what Bloomberg's definition of "the world" is.

Bloomberg’s reference to “The World” may be at least the 63% that are ~democratic, but likely includes a fair number of authoritarian countries that worry about their sovereignty from China’s growing expansionism.
 
then why the US is feeling more and more nervous about China's advancement in semiconductor field?Every time when a Chinese tech company made some progress,the US will respond by sanctions. It's a clear sign of lack of confidence and desperation.
America has always been driven by existential paranoia over some nefarious "other". Before the civil war it was Native Americans and African American slaves, and basically anyone not a WASP. Then up to WWII it was freedmen and the "yellow peril", the days when the Ku Klux Klan had legitimate democratic control of the state of Indiana. And then postwar it was the "red scare", and then after those wars failed it became "war on drugs" and radical Islam, and now that those wars have failed it's China. But I think nowadays that thinking is mostly limited to the DC corridor and people who read national news. For most Americans of all political affiliations, their enemies are now entirely domestic.

a fair number of authoritarian countries that worry about their sovereignty from China’s growing expansionism.
I think the last time China tried expanding it was into Vietnam in the 70s and they got owned.
 
We have to separate the objectives of market dominance, from self-sufficiency.

What China has achieved is at most a heavily subsidised production of commodity chips.

You do not achieve the semiconductor self-sufficiency by making chips, you achieve the semiconductor self-sufficiency by making equipment for making these chips.

Whomever devised that giant $100B Chinese investment scheme has clearly no understanding of that.
 
We have to separate the objectives of market dominance, from self-sufficiency.

What China has achieved is at most a heavily subsidised production of commodity chips.

Isn't that what the the US and EU are doing right now?Attempt to bring back supply-chain onshore by heavy subsidise,in order to achieve self-sufficiency.

You do not achieve the semiconductor self-sufficiency by making chips, you achieve the semiconductor self-sufficiency by making equipment for making these chips.

Whomever devised that giant $100B Chinese investment scheme has clearly no understanding of that.

Lol, everyone in China knows that,from the rank to top. Fun fact,ASML went from unheard of to household name in China in just few years time. Right now equipment is one of hottest investment area within semiconductor industry

2022-09-17_193856.png
 
Isn't that what the the US and EU are doing right now?Attempt to bring back supply-chain onshore by heavy subsidise,in order to achieve self-sufficiency.



Lol, everyone in China knows that,from the rank to top. Fun fact,ASML went from unheard of to household name in China in just few years time. Right now equipment is one of hottest investment area within semiconductor industry

View attachment 897
Fun Fact - its very patronising!
 
ICs Self sufficient on mid way ,by the way CN eating up 35% Chips of world wide , any locationlization mean huge amount , already a lot of achievement
 
@coldsolder215: This is common talking point of comunist propaganda...
Thanks for proving my point by responding to a list of historical observations about America's white supremacist and anticommunist foundations with a McCarthyist insinuation. If you can explain the paranoia I'm all ears, but I'm pretty sure the only reason US started teaching calculus in high school because the Soviets launched Sputnik.
 
Thanks for proving my point by responding to a list of historical observations about America's white supremacist and anticommunist foundations with a McCarthyist insinuation. If you can explain the paranoia I'm all ears, but I'm pretty sure the only reason US started teaching calculus in high school because the Soviets launched Sputnik.
I think you're biased in being overly critical of the US regarding racism, when so many countries comprised of several races have also been historically racist. I don't think this forum is an appropriate place to have that discussion, so beyond this comment I won't participate in it.

Nonetheless, you are completely correct about the origins of widespread teaching of calculus and other higher areas of mathematics in US public schools, as detailed by the website of the US Senate:

 
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