Array
(
    [content] => 
    [params] => Array
        (
            [0] => /forum/index.php?threads/killing-the-golden-goose.12466/
        )

    [addOns] => Array
        (
            [DL6/MLTP] => 13
            [Hampel/JobRunner] => 1030170
            [SemiWiki/Newsletter] => 1000010
            [SemiWiki/WPMenu] => 1000010
            [SemiWiki/XPressExtend] => 1000010
            [ThemeHouse/XLink] => 1000670
            [ThemeHouse/XPress] => 1010394
            [XF] => 2010872
            [XFI] => 1030270
        )

    [wordpress] => /var/www/html
)

Killing the Golden Goose

TDaly

Moderator
Beneath the understandable exclusive focus on COVID-19, a policy time bomb continues to tick. Should the US embargo Huawei’s access to US semiconductor technology? The United States views Huawei as a national security threat and is working to convince allies to join a US boycott on deploying Huawei 5G networks. A Commerce Department proposal to implement the "foreign direct product rule" would require that semiconductor manufacturers worldwide secure a license for use of equipment from US companies when used to manufacture chips for Huawei.



Implementation of this rule would diminish the global competitiveness of the US semiconductor equipment industry, reduce critical R&D supporting emerging technologies such as 5G and Artificial Intelligence, force a wedge between allies and hand share to Japanese and South Korean competitors. It will accelerate Huawei’s push to design-out all US semiconductor devices and achieve self-sufficiency.



As those in the industry know well, semiconductor equipment companies are at the core of US technology leadership. They supply the equipment to manufacturers such as Intel, Micron, TSMC and Samsung for use in the production of chips. They enable chip manufacturing at near atomic levels, delivering the high performance, low power, miniaturization and low cost essential to emerging technology applications. These companies must have access to the full global revenue opportunity in order to invest at competitive R&D levels and sustain innovation leadership.



The three leading US companies in this segment are Applied Materials, Lam Research and KLA. Together they invested $16.8 billion in R&D over the past five years, 13.6% of revenue. Their combined revenues comprise roughly 50% share of the entire global semiconductor equipment market. If the US moves forward with the proposed rule, upstream semiconductor manufacturers will be forced to favor non-US alternatives to avoid constraints on their ability to meet customer demand. The trade association SEMI (pre-COVID-19) forecasted equipment sales of $128 billion spanning 2020 and 2021, 89% of which is outside the US. China is projected to comprise 25%. The loss of a substantial portion of that future off-shore revenue opportunity due to real or perceived constraints on the use of US-origin equipment will cripple US equipment suppliers’ ability to compete.



When this policy decision comes back on the table, the President needs proper counsel. Semiconductor manufacturing is not a plug-and-play assembly process. Equipment and materials suppliers work closely with manufacturers on the development of the process technology on which products are designed and manufactured. The new rule would force chip manufacturers to either re-qualify their process on existing or new non-US equipment or forfeit Huawei as a customer. They will wonder what customer is next on the US embargo list. And there are very capable non-US firms competing for every equipment purchase, including TEL and Screen from Japan and Wonik and SEMES from South Korea. US actions must be aligned with allies or risk handing hard-earned share to non-US competitors.



The foreign direct product rule is ill-conceived policy for this segment of the semiconductor industry.



The Administration has an effective defensive strategy for Huawei and China, including the expansion of restricted technologies under the 42 nation Wassenaar Arrangement, adding Huawei to the denied parties "Entity List" and enforcing a 25% "percentage of US content" rule on shipments to Huawei. It signed the Foreign Investment Risk Review Modernization Act, expanding the mandate of the Committee on Foreign Investment in the United States (CFIUS) to cover minority-position investments and overseas joint ventures. It aborted Chinese attempts to acquire Micron and denied the Chinese-owned investment firm Canyon Bridge Capital from acquiring Lattice Semiconductor. Even the acquisition of Cypress Semiconductor by German stalwart Infineon came under close CFIUS scrutiny for back-door Chinese access to US technology. These are effective rear-guard actions to diminish Chinese access to US technology while allowing US companies to compete.



But the US needs stronger offense. First, it must provide a more compelling story to convince allies against the deployment of Huawei in 5G network rollouts. Next, the US should re-invest revenue from the FCC 5G spectrum auction into US firms to accelerate 5G capability, potentially including partnerships with Ericsson and Nokia. US government funding of emerging technologies must be dramatically increased, a standing recommendation from experts under Presidents Obama (Presidential Commission on Semiconductor Competitiveness, January 2017) and Trump (National Security Commission on Artificial Intelligence, November 2019). The White House Office of Science and Technology Policy recently announced an initiative to advance semiconductor R&D. The US needs leadership action and funding, not another report, most especially in the aftermath of COVID-19.



Semiconductors are the literal heart of the digital economy, powering applications across virtually every segment. Proposals such as the foreign direct product rule should be put back on the shelf. The US must play a stronger game of offense in balancing national security and competitiveness with China and limit harmful defensive actions. Do not kill the golden goose of our digital economy.





Terry Daly is a retired semiconductor industry executive
 

Arthur Hanson

Active member
I agree, but stupidity and ignorance rule, as seen by our response to the virus. There are almost infinite solutions to make environments more functional, but locking down economic activity is among the worst, most damaging way of dealing with it as it is now handled. Destroying economies is one of the leading causes of war and conflict, just read history. The level of fear mongering and bad solutions is extreme. Man has learned to live in many, many hostile environments and this is but one more to learn from. Through massive over population we have created a tinder box full of disasters just waiting to happen and spread fast and the tech sector is the only one that moves fast enough to give us ways of dealing with man literally becoming a cancer on the planet, destroying or damaging ecosystem after ecosystem. Since we aren't going to reduce our population, tech is the only answer until we change this trajectory. Tech has already been key in increasing food supply, next we have to figure out how to increase the carrying capacity of the planet until we get our population under control. This will require the use of massive data gathering and processing so we can even get an accurate view of the problem. The mass media of all types has proven in this crisis it can spread fear and panic on a scale once unimaginable and we haven't learned how to spread solutions to match. Tightly packing humanity has two solutions, we either figure out how to do it on a sustainable basis or nature will do it for us by reaching a stable equilibrium by reducing our numbers through death.

The key thing to remember is, we are all in this together and when the environment, economy or a ship sinks, first class goes down to. Right now, we are starting to sink and the coronavirus is but one of many, many threats. We are up to the challenges before us, but ignorance and fear have no place in overcoming a challenge.

One example of a solution is online, adaptive education on a lifetime subscription basis. This provides relevant education in a far, far more efficient manner that doesn't go out of date and keeps one's skill set up to date and relevant. Even labs can be done in virtual reality, even with a lab partner or partners. This is also an ideal market for tech at many, many levels and would save a dramatic amount of resources and time, while producing more productive people at a rate the current educational system couldn't even hope to match.
 
Last edited:

Portland

Member
You can't get a straight answer from the news if infections are increasing, decreasing or staying the same; It's just focused on individual tragedies. The news has become all hysteria and no facts.

It will be an interesting story in hindsight.
 

hkwint

Member
At this moment, both the US and Europe don't have leading edge chip making technology anymore.
The only working EUV processes currently in use for mass production, are in Taiwan and South Korea.
If the US wants to use Ericsson or Nokia for 5G, I think they can only lead if there's a 'leading edge' node in mass production in either Europe or the US.
That's probably only possible if the US and Europe work together; under the current US government and 'scare of possibly anti-competitive industry-politics' in the EU, such a thing is impossible.
We're already at least 2 years behind.

Instead of focusing on Huawei, it's much better to focus on how to bring back (part of) manufacturing to the US; or Europe.

Possibillities are limited, in the practical sense:
-Ask Samsung to set up a 7nm fab in Austin, if they don't have one already,
-Ask TSMC to rent / buy a currently unused fab in the US, or license their process to a US company.

Besides, instead of the Boeing vs. Airbus situation, where one side of the ocean blames the other one for helping industry, it would be much better if _both_ helped the semiconductor industry.

But I'm afraid it's already at least 5 years too late to fix it; technological leadership of Huawei (5G) / TSMC (logic nodes) and Samsung (DRAM-nodes) already shows Asia is technology leader. Instead of bullying the technology leader, better start fixing the environment to make it attractive for technology leaders to invest in 'the West'.
 
Top