A reappraisal of China's semiconductor strategy
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supercat
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China has also been under West arms embargo for the past 30 years. Yet China's arms industry has achieved so much with limited help from Russian. Hopefully the same will happen to China's semiconductor industry.
When some country bans something that is of interest to China- you can always bet on China ensuring that the decision would be regretted by the adversary after a decade or so. Fortunately, Chinese aren't lacking in human capital.
But as I mentioned earlier, Chinese today are much more "selfish" and "enlightened" than back in the 1960s, so if you want Chinese elites to do something for the Party, the Party has to shower them with various benefits. Otherwise, they could simply buy expensive properties in the U.S. and switch sides.
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Well, Russia was not a U.S. ally. Because of economic pains in the 1990's, the Yeltsin government had to make a deal with the PLAAF in order to ensure that Sukhoi and other Russian armament industries remain somewhat profitable, so they don't collapse. In other words, in order to survive, Russia's military-industrial complex has to transfer certain technologies to the PLA. However, nearly all of the world's semiconductor designers and manufacturers are located in the U.S. and territories of American allies. In other words, the U.S. and its allies monopolized such technology. China might be able to upgrade its engines with help from Ukraine and Russia, but semiconductors would be an uphill battle. China is truly on its own now.
If TSMC is forced by the bully, China will almost certainly exercise its sovereignty over Taiwan. This will mean a big disruption in worldwide supply of chips.
Then lets do that. Millions in China waiting to occupy they position in the Chinese economy/ politics.
Semiconductor industry is not that its used to be.
ten years ago it was a booming , exponentially growing industry, and if you wasn't in the top, then the distance between your and the cutting edge increased exponentially.
Now, it is more akin to the car industry, instead of the exponentially growing performance the small cost cuttings count.
It is only a matter of time to catch up with manufacturing, and the future trends will be centred around the analogue processing and computers, that will require different approach than the current one.
Up to 2010 if a company copied the products of the lead on the semiconductor field then the performance difference was mind blowing, like 10-50 times slower than the leader.
These days it is in the % range, like in any other industry.
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I've just realised that it is the reason of the change in US strategy regards of semi/trade and so on.
In the 00's the US companies dominance was't a question, the Chinese / etc companies wasn't close enough to the explosion of computational capacity to ride the wave.
Now, it changed , there is no more "first comers" advantage in the IT, so the USA lost its edge . All that left now is restrictions, but those are only temporary, see the
The 5G Fight Is Bigger Than Huawei
A badly implemented ban would be a Pyrrhic victory at best.
BY | MAY 22, 2019, 4:53 PM
The latest salvos in the Trump administration’s campaign against Huawei may prove, at best, to be a Pyrrhic victory—or, at worst, directly undermine U.S. interests and objectives. At the moment, it remains unclear how the recent , which creates sweeping authorities to bar and exclude companies or technologies linked to a “foreign adversary” from the United States, and the of Huawei to the government blacklist known as the will be implemented in practice.
It is not too late for U.S. President Donald Trump to recalibrate toward the smarter approach needed for such a complex challenge. In the process, the U.S. government should also pursue more proactive policies that concentrate on ensuring future American competitiveness in 5G, the fifth generation of mobile networks.
The U.S. government is justified in a forceful response to mitigate real, urgent threats to U.S. critical infrastructure, and it is reasonable to constrain high-risk vendors and carriers from U.S. critical infrastructure. However, the framing of this measure in terms of “foreign adversaries” also represents a missed opportunity for the U.S. government to present stronger arguments that reflect involved, which go far beyond Huawei.
There is no shortage of reasons to consider banning Huawei from U.S. networks, but how that determination is made—ideally with a level of credibility, objectivity, and transparency—matters greatly. In the process, coordination with countries that share similar concerns but may not see China as an outright “adversary”—as the executive order implicitly describes it—will be critical. So far, even close allies and partners in Europe have expressed some skepticism of U.S. concerns on Huawei, and greater consensus should be pursued on the basis of agreement on ‘red flags’ for risk. The U.S. approach to 5G security must continue to extend to encompass all aspects of its design, deployment, and management.
To that end, it is necessary to recalibrate the conversation on 5G security by shifting the focus away from Huawei to criteria and concerns that are underlying their infamy. Any Chinese company can be subject to exploitation in a system that to protect against arbitrary, often extrajudicial, exercise of state power and where the intention to leverage enterprises to that end. Some further factors that are prominent in the case of Huawei, but not unique to the company, include , a distinct shortfall in transparency, including about the , and connection to , not to mention a track-record . Regardless of nation of origin, any vendor with such problematic characteristics should encounter strong scrutiny.
At present, it’s important that the handling of the case of Huawei not be botched. The United States does not need Huawei, despite the firm’s , but U.S. policy responses must take care to avoid undue collateral damage. Depending on implementation, this measure risks undermining the health of critical industry stakeholders in the United States, with global repercussions. Already, a number of companies that are major suppliers to Huawei or heavily exposed to the Chinese market have seen their stock prices . The long-term damage could prove much graver without policy support to mitigate those likely losses. A decision to deny outright American companies the ability to do business with Huawei could prove quite costly if implemented without concern for the potential externalities, potentially resulting in losses in the neighborhood of . The move toward a ban against Huawei and might alienate allies and partners in Europe, which are concerned about the fallout to their networks.
The perception—and perhaps reality—that this measure may be just a stratagem in trade talks could further undermine U.S. credibility. If the Trump administration or reverses course entirely on the inclusion of Huawei on the Entity List—as it did in back in 2017—then this downplays the gravity of Huawei’s very real threats and its misconduct, the firm’s claim and the Chinese government’s propaganda that U.S. policy has been purely “political,” rather than based on real security concerns and evenhanded enforcement of U.S. laws. The Department of Commerce as a response to Huawei’s on Iran. Moreover, Huawei’s to the Chinese military and Ministry of State Security (MSS)—including as a cover and/or front for intelligence activities and funding from MSS—clearly presents ample reasons for concern.
On the other hand, if these measures are intended to force a much broader decoupling, then it is a clumsy and perhaps costly attempt to catalyze a recalibration that is critical but should be undertaken with great care. The core tension at the heart of the U.S.-China rivalry today is the uneasy concurrence of deep economic interdependence with intensifying strategic and technological competition. A rebalancing and diversification could lessen the dependence of U.S. companies on Chinese vendors that could be compromised, thus mitigating to the security and resiliency of U.S. supply chains and overall industrial base.
A badly implemented ban would be a Pyrrhic victory at best.
BY | MAY 22, 2019, 4:53 PM
The latest salvos in the Trump administration’s campaign against Huawei may prove, at best, to be a Pyrrhic victory—or, at worst, directly undermine U.S. interests and objectives. At the moment, it remains unclear how the recent , which creates sweeping authorities to bar and exclude companies or technologies linked to a “foreign adversary” from the United States, and the of Huawei to the government blacklist known as the will be implemented in practice.
It is not too late for U.S. President Donald Trump to recalibrate toward the smarter approach needed for such a complex challenge. In the process, the U.S. government should also pursue more proactive policies that concentrate on ensuring future American competitiveness in 5G, the fifth generation of mobile networks.
The U.S. government is justified in a forceful response to mitigate real, urgent threats to U.S. critical infrastructure, and it is reasonable to constrain high-risk vendors and carriers from U.S. critical infrastructure. However, the framing of this measure in terms of “foreign adversaries” also represents a missed opportunity for the U.S. government to present stronger arguments that reflect involved, which go far beyond Huawei.
There is no shortage of reasons to consider banning Huawei from U.S. networks, but how that determination is made—ideally with a level of credibility, objectivity, and transparency—matters greatly. In the process, coordination with countries that share similar concerns but may not see China as an outright “adversary”—as the executive order implicitly describes it—will be critical. So far, even close allies and partners in Europe have expressed some skepticism of U.S. concerns on Huawei, and greater consensus should be pursued on the basis of agreement on ‘red flags’ for risk. The U.S. approach to 5G security must continue to extend to encompass all aspects of its design, deployment, and management.
To that end, it is necessary to recalibrate the conversation on 5G security by shifting the focus away from Huawei to criteria and concerns that are underlying their infamy. Any Chinese company can be subject to exploitation in a system that to protect against arbitrary, often extrajudicial, exercise of state power and where the intention to leverage enterprises to that end. Some further factors that are prominent in the case of Huawei, but not unique to the company, include , a distinct shortfall in transparency, including about the , and connection to , not to mention a track-record . Regardless of nation of origin, any vendor with such problematic characteristics should encounter strong scrutiny.
At present, it’s important that the handling of the case of Huawei not be botched. The United States does not need Huawei, despite the firm’s , but U.S. policy responses must take care to avoid undue collateral damage. Depending on implementation, this measure risks undermining the health of critical industry stakeholders in the United States, with global repercussions. Already, a number of companies that are major suppliers to Huawei or heavily exposed to the Chinese market have seen their stock prices . The long-term damage could prove much graver without policy support to mitigate those likely losses. A decision to deny outright American companies the ability to do business with Huawei could prove quite costly if implemented without concern for the potential externalities, potentially resulting in losses in the neighborhood of . The move toward a ban against Huawei and might alienate allies and partners in Europe, which are concerned about the fallout to their networks.
The perception—and perhaps reality—that this measure may be just a stratagem in trade talks could further undermine U.S. credibility. If the Trump administration or reverses course entirely on the inclusion of Huawei on the Entity List—as it did in back in 2017—then this downplays the gravity of Huawei’s very real threats and its misconduct, the firm’s claim and the Chinese government’s propaganda that U.S. policy has been purely “political,” rather than based on real security concerns and evenhanded enforcement of U.S. laws. The Department of Commerce as a response to Huawei’s on Iran. Moreover, Huawei’s to the Chinese military and Ministry of State Security (MSS)—including as a cover and/or front for intelligence activities and funding from MSS—clearly presents ample reasons for concern.
On the other hand, if these measures are intended to force a much broader decoupling, then it is a clumsy and perhaps costly attempt to catalyze a recalibration that is critical but should be undertaken with great care. The core tension at the heart of the U.S.-China rivalry today is the uneasy concurrence of deep economic interdependence with intensifying strategic and technological competition. A rebalancing and diversification could lessen the dependence of U.S. companies on Chinese vendors that could be compromised, thus mitigating to the security and resiliency of U.S. supply chains and overall industrial base.
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