A reappraisal of China's semiconductor strategy

Max Demian said:

Current SMIC capacity at 14nm is very low and woefully incapable of meeting the demands of Huawei alone. It will likely take them several years of growth and purchasing of sensitive foreign tools and equipment to reach the capacity presently available at TSMC/Samsung/GlobalFoundries. In reality, Huwaei would have go several more nodes down, all the way to 28nm. That would put them at about 2013ish performance level at best.

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Well, I don't think SMIC has to quite catch-up to the capacity of TSMC, after all, TSMC is the world's largest chip-maker supplying the globe. SMIC just has to supply Huawei, and then China. 28nm is if the switch had to happen today (which is not the case since Huawei has stockpiled months to over a year of chips plus TSMC is continuing to send them chips as of now) but actually SMIC is racing to get the 14nm ready and they've got all the resources and momentum behind them to get it done quickly.

You know the Chinese; ban it and they'll make it themselves fast every time. Sure, sometimes we get lulled into taking short-cuts, causing us to buy foreign crap that we should have been working on ourselves but we just need a hint and a push in the right direction before we put pedal to the metal and get things done in record-smashing time. Independence is worth any amount of hard work and sacrifice and the Chinese specialize in both. I just wish there would be an international ban on selling cars to China.

manqiangrexue said:

If Huawei downgrades its 7nm chips to 14nm, what is the expected reduction to the performance of its phones from a user standpoint? Is it barely noticeable, clearly noticeable but still competitive, or does it severely handicap the phone rendering it non-competitive?

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They could do it for the mass market smartphones, but the leading edge models need to use the latest fabs and processes to remain competitive. i.e. the most expensive phones which have the largest profits need to use such processes.

Still, this is not strictly required in some markets which are price sensitive, like India, so I think Huawei and other Chinese companies should try to use domestic manufactured chips for these markets at the very least. In the long run what China needs is a robust materials and tools industry so they aren't dependent on US tools.

To be honest I have been concerned that the fact that the semiconductor industries are located in South Korea and Taiwan might eventually lead to a war in East Asia for quite some time already. I have been concerned about this for at least half a decade.

gelgoog said:

They could do it for the mass market smartphones, but the leading edge models need to use the latest fabs and processes to remain competitive.

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So if a 14nm chip replaces the 7nm chip in a P30, what does this phone become comparable to?

As far as I know, camera quality and battery life are major selling points for Huawei phones and one probably couldn't tell the difference in terms of speed of download or running apps amongst the flagships of Huawei, Apple, Samsung (and possibly many other brands like OnePlus, Xiaomi, Oppo, Vivo). So if tidalwave is correct and the performance drop is 20%, how significant is that to the actual user experience (ie, if a movie downloads in 6 minutes instead of 5)? Or do you agree with the 20% estimate? I know these are very hard questions; thanks.

s002wjh said:

whats hauwei gonna do with SD card now? this is another big hit

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The last sentence of the article is very important:

"Like with (which Huawei is already developing replacement OSes for) Huawei has prepared for an microSD card outage too: the company has its own, that are physically smaller than microSD cards and which have replaced the more universal standard entirely on its newer devices."

gelgoog said:

They could do it for the mass market smartphones, but the leading edge models need to use the latest fabs and processes to remain competitive. i.e. the most expensive phones which have the largest profits need to use such processes.

Still, this is not strictly required in some markets which are price sensitive, like India, so I think Huawei and other Chinese companies should try to use domestic manufactured chips for these markets at the very least. In the long run what China needs is a robust materials and tools industry so they aren't dependent on US tools.

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Indeed. China needs to start mass producing this sort of high tech equipment.



How responsive do you think Japanese equipment makers would be to requests and threats from the US to stop or not to sell to China?

On another thread, I asked this but I had no response.

HELP ON PATENTS PLEASE:


Patents are types of IP on products both intangible and tangible that require permission for others who wish to produce such products for commercial to obtain formal permission from the holder of the patent to legally produce, right? Unlike trade secrets patents have expiration periods.

Let's take a few products like ball bearings, automobile fuel injection systems, and semiconductor UV lithographic equipment. If I have never made the latest of each of these types that another entity has recently obtained a patent for, but using my financial resources I obtain the equipment and set up the facilities to make them. And then using my knowledge of material science and engineering, along with trial and error, I then produce the above listed items of quality comparable to those that have been patented, and trials have proven that they are adequately functional and then advertise my products for sale, have I violated IP on the basis of great similarity to the ones that have been patented?

#225Weaasel, Today at 8:22 AM

Well, it depends on how the US frames it I guess. You have to remember that, like that article said, Japan can't exactly have a 100% independent foreign policy. Not when they have US military bases on their territory. In fact, Russia gave that as an argument not to give Japan their islands back just recently.
South Korea has much the same issue as Japan. With regards to Taiwan I don't even need to explain their situation do I?
Still I think those countries will try to avoid getting placed in that situation if they can. Both Japan and South Korea have tried to produce their own weapons so they can be independent of US policy in the future if that becomes necessary. But neither are quite willing to do it yet. Plus if they did they wouldn't replace a dependency on the US with one with China.

With regards to patents they are typically protection about a given way to manufacture or produce something. Patents typically expire after 14 years. The rationale behind patents is that without them, companies would just keep that know-how as a trade secret and it would decrease competition even further. This way, the know-how has to be made public and it becomes protected for that 14 year period. Once the period is over then anyone can use it. But the thing is, there isn't a single way to do anything. So most patents can be circumvented.

Today patents are granted on a first to file basis. So, if you came up with your idea after the patent was granted, regardless if you developed it independently or not, you can't infringe on the patent. Unless you can prove you developed your technology before the patent was filed, or someone else did.

did you mean reverse engineering by your sentence:

Weaasel said:

If I have never made the latest of each of these types that another entity has recently obtained a patent for, but using my financial resources I obtain the equipment and set up the facilities to make them.

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?

localizer said:

Also wonder how the USB standard will be affected

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The USB standard (and all the other standard like WIFI) is set by an international body. No reason to think that it comes under the control of any one country including the U.S.A. I think the author is pulling our legs on this part.