China should have done this 5-8 years ago. It took the blocking of ZTE and Huawei in the US for China to realize that they don't have the fabrication capabilities for the chips that they need (the most advanced chips are all US/JP/KR/TW built.) And no one wants to sell China that fab capability- so China will have to build/use corporate espionage to make it themselves.
Even though it seemed expensive at the time, Masayoshi Son was smart to buy ARM.
China does have invested a large amount of money in semiconductor businesses over the years, of which 47B is just another. It makes some progress, such as the self-made SW26010 processors in Sunway TaihuLight, the current top one supercomputer in the world. But progress is hard for reasons other than money:
* Late comers to the semiconductor industry can barely follow the trends, let alone lead. But if one cannot lead, it cannot survive in a free market. No one is going to buy a chip 3~5 years behind the latest technology when he/she has better choices.
* Compatibility issues. China cannot grow its chip with x86 instruction set, at least not the latest one, for patent issues. That further reduces the possibility of commercial success of its own chips.
* Semiconductor industry is now past its prime, the profit and salaries lower than the nascent Internet companies. Even in the US, plenty of EE students are jumping ship. In China, EE talents are doubly drained, by both American semiconductor industry, and by the local software industry.
* The Wassenaar Arrangement bans the export of many high end equipments necessary for chip making to China. While all the other countries/regions can specialize in one part of the semiconductor industry, China has to do all of them by itself, since it has no external help.
* The world politics dictate that Chinese firms are never going to buy ARM. They have the cash and the willingness, but western countries simply won't approve such buyout.
Out of curiosity I tried to buy the Loongson 3 one year ago on Taobao (Chinese ebay/Amazon). It was basically impossible to buy except for underpowered old versions.
As far as I know the company has been called a scam by some Chinese (just sucking gov incentives etc.)
> The Wassenaar Arrangement bans the export of many high end equipments necessary for chip making to China. While all the other countries/regions can specialize in one part of the semiconductor industry, China has to do all of them by itself, since it has no external help.
Forcing your enemy to invest heavily in such key sectors is pretty stupid. Eventually, one way or another, Chinese will master the state-of-the-art. A few good examples here - LCD industry, weapons.
It also worth pointing out that the existence of the Wassenaar Arrangement relies solely on the fact that the US is the biggest economic and military power in the world. Not sure how long the US can continue to maintain it.
kinda of true, assuming you want to be more than a fabless company. But spinning up a fab 1 gen behind can be profitable, especially if it means higher yields (and thus lower costs).
true
* Still lots of money to be made at the forefront, i.e new chemistry, new lithography, better process control, etc. Lots of money in layout and software. Pretty decent money in RF work.
China has proved itself more than capable of replicating anything you put out there -- all it takes is some plans and a few key engineers, plenty of whom are Chinese nationals.
>>Semiconductor industry is now past its prime, the profit and salaries lower than the nascent Internet companies.
Past its prime in what sense? We'll need them for the foreseeable future. Salaries and all can be fixed virtually overnight, with funding...like this $47 Billion.
They did. Beijing handed out massive subsidies, companies started building fabs, and now those fabs are starting to come online in 2018[0]. Fabs take time to build.
Like already someone commend. They did! It's called "Big Fund" and started in 2005. This is just another round. They already have been multiple rounds as far I know.
There is quite a difference. In the old days, the "fund" aren't really put to use. They were given out very loosely, Many were grabbing it for their own self interest. With no results in sight, mostly just PR and stuns.
These days you are require to prove. And there are people qualify to judge whether you are actually getting somewhere.
That said, Semi Conductor is expensive, and requires lots talents and a whole IP ecosystem around it none of which China has. They are trying to paid to get these component and talent, copying and learning from it as we speak. But whether that works and how long it will take we have no idea. After all Semi moves at a very fast pace, by the time they caught up with 14nm, the world would have moved to 5nm.
With ARM opening a subsidiary in China where 51% is owned by Chinese, i don't think they have to buy ARM to access the technologies. They will simply learn and copy.
I'm still wondering why there should be an economic, political or commercial conflict between China and the rest of the world esp. US. Such conflicts are wasteful with when we all should work together on common goals - space exploration, fighting against diseases, climate change etc.
> I'm still wondering why there should be an economic, political or commercial conflict between China and the rest of the world esp. US. Such conflicts are wasteful with when we all should work together on common goals - space exploration, fighting against diseases, climate change etc.
I know! The US should just resign itself to being a provider or raw materials to the Chinese party-state, so we can focus on China achieving those glorious common goals!
China is rising to fight common perils such as "'Western constitutional democracy'; others included promoting 'universal values' of human rights, Western-inspired notions of media independence and civic participation." (https://www.nytimes.com/2013/08/20/world/asia/chinas-new-lea...)
More seriously now: your perspective is embarrassingly naive, and forgets, many, many significant areas of difference between the US and China. China's leadership, now, is committed to am authoritarian, autocratic path. No amount of progress in "space exploration" is worth throwing support behind that kind of government.
I would just like to point out that Tesla was able to have China cede their demand for part ownership of Tesla's China Gigafactory in recent months. Tesla will have full ownership of their China factories.
That’s a false dichotomy. China is ostensibly commmunist but free market is alive and well (with heavy doses of state directed influence, but so as in other western countries, witness the military industrial complex)
A truer dichotomy would be between a rigid semi-dictatorship and quasi-democracy... given that even China has token democracy at some levels despite now essentially having a rubber stamped dictator, and many western states are a long way from true democracy - the voting system in the US hardly allows representative democracy and special interest groups are adept at manipulating voting blocs very effectively, and is 2 party democracy really democracy? Other countries do better jobs (ie Australia’s preferential voting, germany’s Proportional representation) but you can argue that till the cows come home
Amazing, not one of those words are correct. China is an ultracapitalist oligarchy, communist in nothing but name. The USA has been responsible for so many atrocities against self-determination of peoples, in the name of imperialism, that when someone paints them as "freedom bringers" I know not whether to laugh or cry.
In alot of industries and examples, only when competition is introduced does innovation happen. E.G. Manhattan project (hitler can't build the bomb first), Apollo (A rocket is just a bomb delivery system, Russia can't have dominance). These examples are on a governmental scale, but the same thing happens in industries where startups are fighting to compete against entrenched competitors. I truly believe having a "nationalistic" mindset when it comes to technological advancement is the best way to develop a "humanistic" world. Innovation, technological advancement, and a higher standard of living for all spring forth from competition and necessity.
You say the Manhattan and Apollo projects are the result of "competition", but I think, on an organisational level, they are the exact opposite. They are the result of the US abandoning market competition, and having the state give resources to a group of motivated people working towards a common goal.
>These examples are on a governmental scale, but the same thing happens in industries where startups are fighting to compete against entrenched competitors.
And if they win, they become the new entrenched competitors and abuse their market position just the same, because that's exactly what they were "competing" for in the first place.
>Innovation, technological advancement, and a higher standard of living for all spring forth from competition and necessity.
I think the best way to drive technological advancement and standards of living would be an economic system that actually values those things directly.
great, I guess money talks. on the other hand, US is lagging in STEM advancements from k-12 all the way up these decades, only competition can correct the sloppiness.
many of the chip designers in USA are not native citizens, which again says, our education system needs a revamp.
the US does not have a shortage of STEM workers, the problem is our physics graduates are working web development jobs where thousands of companies are implementing the same CRUD application
Not sure if they're working in web development, it seems that a "career" in finance is more likely for most recent STEM graduates:
"Catherine Rampell found that in 2006, just before the financial crisis, 25% of graduating seniors at Harvard University, 24% at Yale, and a whopping 46% at Princeton were starting their careers in financial services."
I guess that means that physics isn't that valuable then, and we have an oversupply of physics people.
It turns out that the market believes that building CRUD apps is more valuable and useful to society than whatever it is physics researchers do.
You are right that we don't have a Stem shortage. Instead we have a Technology shortage, and way too many people are going into these other fields that aren't actually very useful.
As China continues to grow economically and far greater supply of young people it is obvious that China is going to advance rapidly in many fields and surpass USA.
USA need not be number 1 in everything because it can't. USA however can allow Chinese students to come to USA in much greater numbers and tap their talent.
US public education system does not need a revamp. It needs razing down to ground and a complete recreation.
Destructive and inane immigration policies cause US to be a greenhouse for foreign talent, only to then drive them back to their home countries as they are about pay back dividends in the professional market; US loses talent - and at the same time, other countries gain it (it's like a single game outcome decides if you're up 2:0 up or tied 1:1).
What would the disgruntled Chinese-born, US-educated engineers and scientist do back home in China if not compete with US?
> Let's just hope China will not take back Taiwan to get the state-of-the-art fabs there.
I wonder if the Taiwanese or the US has a plan for destroying those and similar advanced facilities to keep the technology out of the hands of the Chinese after an invasion? It might disincentivize the Chinese a bit, though I'm sure the nationalistic motivations would override any practical concerns.
The US and most of Europe do not use comparable approaches to such investments vs China. It will not spur investment in a similar route, the US and Europe will follow a different superior approach.
The US is investing $47 billion into semiconductors: it's being directed by individual corporations rather than command & control style as in China. Intel's R&D budget alone is ~$13 billion every year.
Over the decades the US approach produced: the Internet, Bell Labs, Lucent, Xerox, Motorola, Intel, Fairchild, Cisco, HP, Texas Instruments, AMD, nVidia, Apple, Analog Devices, Micron, Qualcomm, Applied Materials, EMC, IBM, Sun, and a lot more. It's also in part responsible for ARM, which was partially founded by Apple and VLSI.
What has China's approach produced after their truly vast investments spanning 30+ years? Other than endless copy-cat technology. We'll see if their approach can actually lead to the kind of extraordinary innovation the US has been demonstrating for the last 70 years non-stop in tech.
Two years ago PRC Premier Li Kiang was publicly complaining that China could not produce a good ballpoint pen, citing weakness in precision manufacturing. That can't be good for a semiconductor fab.
Their approach has been partially dictated by circumstance. Certainly China has been playing catchup for the past few decades. But I think it's unwise to bet on this happening indefinitely.
And in the case of some technologies, like thorium reactors, humanity ought to hope it changes sooner rather than later.
I think the way this will play out as there will be another contest of Great Powers is that the United States will in turn decide soon to compete and pour billions more into technology. This will continue to be a great time to work in Silicon Valley.
I wish I shared your optimism. I'm observing current government policy not being particularly forward thinking, e.g. massively subsidizing the coal industry.
Think in the long term. China calls its contest with the United States "a marathon race" [1]. Soon Trump will be out of office and this problem will still be with us. This will be the greatest contest American has ever faced.
[1] The China Dream: Great Power Thinking and Strategic Posture in the Post-American Era
> I think the way this will play out as there will be another contest of Great Powers is that the United States will in turn decide soon to compete and pour billions more into technology. This will continue to be a great time to work in Silicon Valley.
My guess is that any such money will flow elsewhere. The government likes to spread its money around, and Silicon Valley is an expensive place and too hot on selling ads.
China brute-forced building cheap solar panels and flooded the market with them, and the markets generally prefer cheap panels to expensive ones. It's the kind of market China has historically excelled in - high volume, labor & environment intensive, relatively low tech.
Semiconductors are way more complex and the markets prefer the latest and greatest for a variety of reasons. Also (afaik) while fixed costs continue to grow at each new process node, variable costs for a given chip on each new node I believe are lower due to being able to produce more in a given wafer, so that further makes markets like the latest.
I suppose it worked as China does manufacture most of the world's panels but these guys would disagree with your comment.
https://en.wikipedia.org/wiki/Canadian_Solar
They were the number 3 manufacturer in 2017 and are bigger than Hanwha.
Readit News
Even though it seemed expensive at the time, Masayoshi Son was smart to buy ARM.
* Late comers to the semiconductor industry can barely follow the trends, let alone lead. But if one cannot lead, it cannot survive in a free market. No one is going to buy a chip 3~5 years behind the latest technology when he/she has better choices.
* Compatibility issues. China cannot grow its chip with x86 instruction set, at least not the latest one, for patent issues. That further reduces the possibility of commercial success of its own chips.
* Semiconductor industry is now past its prime, the profit and salaries lower than the nascent Internet companies. Even in the US, plenty of EE students are jumping ship. In China, EE talents are doubly drained, by both American semiconductor industry, and by the local software industry.
* The Wassenaar Arrangement bans the export of many high end equipments necessary for chip making to China. While all the other countries/regions can specialize in one part of the semiconductor industry, China has to do all of them by itself, since it has no external help.
* The world politics dictate that Chinese firms are never going to buy ARM. They have the cash and the willingness, but western countries simply won't approve such buyout.
https://en.wikipedia.org/wiki/Loongson#Loongson_3
Out of curiosity I tried to buy the Loongson 3 one year ago on Taobao (Chinese ebay/Amazon). It was basically impossible to buy except for underpowered old versions.
As far as I know the company has been called a scam by some Chinese (just sucking gov incentives etc.)
If you are interested, not very powerful MIPS boards are available: https://creatordev.io/ci20.html
I guess the company "imagination" is for sale too. There were some issues last year.
Forcing your enemy to invest heavily in such key sectors is pretty stupid. Eventually, one way or another, Chinese will master the state-of-the-art. A few good examples here - LCD industry, weapons.
It also worth pointing out that the existence of the Wassenaar Arrangement relies solely on the fact that the US is the biggest economic and military power in the world. Not sure how long the US can continue to maintain it.
kinda of true, assuming you want to be more than a fabless company. But spinning up a fab 1 gen behind can be profitable, especially if it means higher yields (and thus lower costs).
true* Still lots of money to be made at the forefront, i.e new chemistry, new lithography, better process control, etc. Lots of money in layout and software. Pretty decent money in RF work.
China has proved itself more than capable of replicating anything you put out there -- all it takes is some plans and a few key engineers, plenty of whom are Chinese nationals.
I agree.Past its prime in what sense? We'll need them for the foreseeable future. Salaries and all can be fixed virtually overnight, with funding...like this $47 Billion.
They did. Beijing handed out massive subsidies, companies started building fabs, and now those fabs are starting to come online in 2018[0]. Fabs take time to build.
[0] https://epsnews.com/2018/04/26/three-chinese-companies-to-st...
CSMC and Huali for example are a ghost towns (i worked few minutes away from both)
They continued to throw tenths of billions at the problem, till they managed to make a minimally well running fabs for few niche markets.
Like already someone commend. They did! It's called "Big Fund" and started in 2005. This is just another round. They already have been multiple rounds as far I know.
These days you are require to prove. And there are people qualify to judge whether you are actually getting somewhere.
That said, Semi Conductor is expensive, and requires lots talents and a whole IP ecosystem around it none of which China has. They are trying to paid to get these component and talent, copying and learning from it as we speak. But whether that works and how long it will take we have no idea. After all Semi moves at a very fast pace, by the time they caught up with 14nm, the world would have moved to 5nm.
Deleted Comment
I know! The US should just resign itself to being a provider or raw materials to the Chinese party-state, so we can focus on China achieving those glorious common goals!
China is rising to fight common perils such as "'Western constitutional democracy'; others included promoting 'universal values' of human rights, Western-inspired notions of media independence and civic participation." (https://www.nytimes.com/2013/08/20/world/asia/chinas-new-lea...)
More seriously now: your perspective is embarrassingly naive, and forgets, many, many significant areas of difference between the US and China. China's leadership, now, is committed to am authoritarian, autocratic path. No amount of progress in "space exploration" is worth throwing support behind that kind of government.
A truer dichotomy would be between a rigid semi-dictatorship and quasi-democracy... given that even China has token democracy at some levels despite now essentially having a rubber stamped dictator, and many western states are a long way from true democracy - the voting system in the US hardly allows representative democracy and special interest groups are adept at manipulating voting blocs very effectively, and is 2 party democracy really democracy? Other countries do better jobs (ie Australia’s preferential voting, germany’s Proportional representation) but you can argue that till the cows come home
>These examples are on a governmental scale, but the same thing happens in industries where startups are fighting to compete against entrenched competitors.
And if they win, they become the new entrenched competitors and abuse their market position just the same, because that's exactly what they were "competing" for in the first place.
>Innovation, technological advancement, and a higher standard of living for all spring forth from competition and necessity.
I think the best way to drive technological advancement and standards of living would be an economic system that actually values those things directly.
many of the chip designers in USA are not native citizens, which again says, our education system needs a revamp.
If research paid above starvation wages I'd do it.
But crud pays 10x as much as working on the latest particle accelerator and I can plan more than 1 year in the future.
"Catherine Rampell found that in 2006, just before the financial crisis, 25% of graduating seniors at Harvard University, 24% at Yale, and a whopping 46% at Princeton were starting their careers in financial services."
in https://www.project-syndicate.org/commentary/the-rent-seekin...
It turns out that the market believes that building CRUD apps is more valuable and useful to society than whatever it is physics researchers do.
You are right that we don't have a Stem shortage. Instead we have a Technology shortage, and way too many people are going into these other fields that aren't actually very useful.
USA need not be number 1 in everything because it can't. USA however can allow Chinese students to come to USA in much greater numbers and tap their talent.
US public education system does not need a revamp. It needs razing down to ground and a complete recreation.
What would the disgruntled Chinese-born, US-educated engineers and scientist do back home in China if not compete with US?
I wonder if the Taiwanese or the US has a plan for destroying those and similar advanced facilities to keep the technology out of the hands of the Chinese after an invasion? It might disincentivize the Chinese a bit, though I'm sure the nationalistic motivations would override any practical concerns.
The US is investing $47 billion into semiconductors: it's being directed by individual corporations rather than command & control style as in China. Intel's R&D budget alone is ~$13 billion every year.
Over the decades the US approach produced: the Internet, Bell Labs, Lucent, Xerox, Motorola, Intel, Fairchild, Cisco, HP, Texas Instruments, AMD, nVidia, Apple, Analog Devices, Micron, Qualcomm, Applied Materials, EMC, IBM, Sun, and a lot more. It's also in part responsible for ARM, which was partially founded by Apple and VLSI.
What has China's approach produced after their truly vast investments spanning 30+ years? Other than endless copy-cat technology. We'll see if their approach can actually lead to the kind of extraordinary innovation the US has been demonstrating for the last 70 years non-stop in tech.
"Why Can’t China Make Semiconductors?"
https://www.bloomberg.com/view/articles/2018-04-29/why-can-t...
http://www.ejinsight.com/20160121-what-ball-pen-tells-us-abo...
And in the case of some technologies, like thorium reactors, humanity ought to hope it changes sooner rather than later.
Deleted Comment
[1] The China Dream: Great Power Thinking and Strategic Posture in the Post-American Era
"Soon"? You're putting too much faith in the Almighty Cheetos' thinking skills.
My guess is that any such money will flow elsewhere. The government likes to spread its money around, and Silicon Valley is an expensive place and too hot on selling ads.
Back a decade ago, they were ready to dish out few million bucks to anybody who just had word "solar" in their company name.
I don't see how it will be different this time.
China brute-forced building cheap solar panels and flooded the market with them, and the markets generally prefer cheap panels to expensive ones. It's the kind of market China has historically excelled in - high volume, labor & environment intensive, relatively low tech.
Semiconductors are way more complex and the markets prefer the latest and greatest for a variety of reasons. Also (afaik) while fixed costs continue to grow at each new process node, variable costs for a given chip on each new node I believe are lower due to being able to produce more in a given wafer, so that further makes markets like the latest.