Chinese semiconductor industry

Status
Not open for further replies.

Weaasel

Senior Member
Registered Member
Japan has "internal discussions" about what sanctions they should impose on China

Please, Log in or Register to view URLs content!
This is probably true. It is not surprising. Not a single American ally can be trusted to act against American interests even when their interests diverge.

Look, people, accept that to the United States and also increasingly its allies, China is the new Soviet Union. But the confrontation has absolutely nothing to do with the nominal clash between socialist and capitalist ideology of the 20th century, but just as in the 20th century, it a clash between the two largest economies in the world - by far - in which one side, the United States is trying to supress the progress and growth of influence of the other, China, because American political elites have an intense zero-sum mindset and/or just do not want to be surpassed by China out of a obsession to be and remain number one, despite the fact that the reality of China's demographic, human, and natural resources superiority in combination with just a much more competent system of government as far as ensuring socio economic development and order, in addition to a collectivist prevailing mindset of society over four millennia of history just makes it almost impossible that China will not eclipse the United States. It certainly will eventually socio economically in most indicators in the next two decades.

Another difference between this brewing cold war and the one of the 20th century, is that the United States already has a network of allies and other countries that it can cajole, threaten, and coerce into following its interests, while China lacks such a system and has shown little interest in the costs associated with having such as system of its own.

China is not going around the world aggressively proselytizing the virtues of its system of government and society as being superior to that of the United States or that of any other government and certainly not insisting that any other country follow its system of government as the United States and Western countries are wont to do. As such, one again, socio-political and economic ideology is not at the fore of America's attempts to contain China and see China fail. It is just resentment and fear at likely being surpassed socio economically by the China decisively.
 

FairAndUnbiased

Brigadier
Registered Member
This is probably true. It is not surprising. Not a single American ally can be trusted to act against American interests even when their interests diverge.

Look, people, accept that to the United States and also increasingly its allies, China is the new Soviet Union. But the confrontation has absolutely nothing to do with the nominal clash between socialist and capitalist ideology of the 20th century, but just as in the 20th century, it a clash between the two largest economies in the world - by far - in which one side, the United States is trying to supress the progress and growth of influence of the other, China, because American political elites have an intense zero-sum mindset and/or just do not want to be surpassed by China out of a obsession to be and remain number one, despite the fact that the reality of China's demographic, human, and natural resources superiority in combination with just a much more competent system of government as far as ensuring socio economic development and order, in addition to a collectivist prevailing mindset of society over four millennia of history just makes it almost impossible that China will not eclipse the United States. It certainly will eventually socio economically in most indicators in the next two decades.

Another difference between this brewing cold war and the one of the 20th century, is that the United States already has a network of allies and other countries that it can cajole, threaten, and coerce into following its interests, while China lacks such a system and has shown little interest in the costs associated with having such as system of its own.

China is not going around the world aggressively proselytizing the virtues of its system of government and society as being superior to that of the United States or that of any other government and certainly not insisting that any other country follow its system of government as the United States and Western countries are wont to do. As such, one again, socio-political and economic ideology is not at the fore of America's attempts to contain China and see China fail. It is just resentment and fear at likely being surpassed socio economically by the China decisively.
unlike with the Soviets, they aren't going to get triple lucky with a Nazi ground invasion mauling the competition again, nor with an overspending on arms race, nor with a Gorbachev. China already has 100% defensible land borders, spends wisely on the military, and potential Gorbachevs were removed.

they also aren't going to get lucky with a domestic demographic dividend, or a high/easy energy world, or growing easy markets, etc.
 

Weaasel

Senior Member
Registered Member
Korea's dependence on semiconductor equipment from the U.S., Japan and the Netherlands has reached 77.5 percent, sparking worries that the high level of dependence could be geopolitically and diplomatically risky in the future. Some experts are advising Korea to join the Chip 4 Alliance to ensure a stable supply of semiconductor equipment (So to become even more dependent to this risks, great go for it), according to a Korea International Trade Association (KITA) report, Thursday.
Korea is highly dependent on semiconductor equipment supplied by these companies. As of last year, China ($38.6 billion), Taiwan ($29.8 billion), and Korea ($25 billion) were ranked as the top three importers of semiconductor equipment, while Korea was more dependent on foreign equipment imports than Taiwan and China. As of last year, Korea's dependence on equipment imported from the U.S, Japan and the Netherlands reached 77.5 percent, which is higher than Taiwan (70.6 percent) and China (56.2 percent).

The report pointed out that Korea's semiconductor equipment imports are likely to increase further in the future. China's import of semiconductor equipment has started to decline due to U.S. sanctions on the export of advanced semiconductor equipment, which is likely to result in a spike in domestic imports in the near future.

The KITA added that Korea's semiconductor supply chain structure is vulnerable to diplomatic and geopolitical risks because of its heavy dependence on overseas semiconductor equipment. The fact that Korea's self-sufficiency in domestic semiconductor equipment is only 20 percent is of concern.

Please, Log in or Register to view URLs content!

I think the Koreans are starting to figure out that the industry that are so proud is not more than a high tech sweatshop were the Americans made their chips and they have very little or no control.
Like what is going to happen when uncle Sam says that wants his fabs back? What kind of coercion he is going to use? Like Japan in 80s?

View attachment 100839
There are Koreans who have for decades called for South Korea to undertake an all out effort to have a much more robust domestic semiconductor and IC chip manufacturing equipment sector, but the prevailing attitude of Korea's business and political elite has been that South Korea to entrench itself and then remain as a manufacturer of predominantly memory chips using foreign equipment. They bought into and were very comfortable with the Adam Smithsian theory of comparative advantage and division of the world supply chains for semis and chips into different countries mostly providing particular parts of the supply chain.

When Japan imposed restrictions and controls in 2019 following deteriorations in relations following the Moon regime's coming to power, that's when they half heartedly began talking a lot more about producing much more photoresists, etching gas, fluorinated polyamides, and chip making equipment of all types themselves...
 

Weaasel

Senior Member
Registered Member
US thinks it could coerce EU and Japan to restrict and ban exports of chipmaking equipment to China within 6 to 9 months.
Please, Log in or Register to view URLs content!
There is a very good chance of them succeeding... China will not forget... When China makes breakthroughs, they can forget about their companies having significant access to the Chinese market for decades to come...
 

Weaasel

Senior Member
Registered Member
It may or may come true, but better to assume it will and prepare for it.

Assuming there is some truth to it, two implications for Chinese companies:

1. Fabs need to fast track more orders for DUVs from ASML and other equipment from Japan.
2. Chinese equipment manufacturers need to speed up their development of equipment that are still in need of import and ramp up production capacity of domestic ones.
China will overcome, but those internationalists and liberals who for well over a decade had refused to join efforts to create domestic supply chains free of foreign products to hedge against this eventuality that others said was a probability will get much much more than an earful. Their only path to redemption is if they themselves contribute greatly to solutions that will enable China to have a comprehensive high quality entirely domestic supply chain for semiconductor materials, making-equipment, and IC chips themselves...

"Why patronize domestic equipment and material suppliers and manufacturers who are very few or do not even exist and why make the effort to even develop such an industry when most the profits are to be made in making the chips using state of the art foreign equipment that already established foreign chip makers are ready to supply to us? " That is the sort of rhetorical question mind set that prevailed in China in the industry before Trump's trade war.

"The answer is because the companies supplying such equipment and materials are from ones that are not friendly to China. Not a single East Asian or European (NOT. A. SINGLE. ONE.) treaty ally of the United States is friendly to China, even if they are not unfriendly and every single one of them is amenable to becoming hostile to China if the United States demands them to be so. EVERY. SINGLE. ONE. OF. THEM. China is not looking for their friendship, but the fact that they are allies of the United States makes them inherently unreliable. Make no mistake about that. China is looking for reliability. Since China will not get that from them, it is absolutely necessary that China hedge against their unreliability and potential hostility by having supply chains and the capability of producing commercially to good quality ANY AND EVERY PRODUCT THAT IS WORTH PRODUCING! F ADAM SMITH ECONOMICS!"
 

Weaasel

Senior Member
Registered Member
US narrative on this topic is reaching grotesque levels. Ok, being the world's boss, they never needed to be smart in writing realistic narratives to start with, but here we are reaching new lows.

1. Banning of ASML has nothing to do with playing level field with US equipment makers because ASML makes lithography machines. Banning ASML will not make a favor to US equipment makers in any way.

2. Even if US succeeds in forcing a ban on Holland and Japan, I expect they will reach a compromise and it will be a "professional" one, including do not stop after sales service, still sell spare parts, define a grace period, etc. So US equipment makers are and will remain the last extreme option for Chinese customers. US equipment makers are now doomed in China, no matter what.

The reality is that US administration does not care at all about US toolmakers, US choose to sacrifice their toolmakers to try to crumple China and choose to do it as soon as they can. That's why they started without before reaching an agreement (read "succeed coercing") with others. They think they had no time to wait, they think time is on China side...and they think correctly! China has still a couple of years of suffering, then all this nonsense will end by natural death.

ASML has to resist now as much as they can. What Japan does is less important, gap with Japanese toolmakers will be the first to be closed up, already is for 28nm and above nodes and largely also for 7-14nm nodes. Below 7nm at the moment is not interesting for China.

If ASML succeed in proving itself a reliable and dependable partner in these very critical times, they know they will have an open market in China for the foreseeable future. SMEE will never get 100% China market for many reasons: installed legacy base (1000 ASML machines in China, 1500 mostly Chinese ASML people), competition and healthy market, strategic consideration (to allow ASML doing a lot of money in China is important also for China).

ASML has to resist now and in Holland they know it....
Be prepared to ditch ASML entirely in the near term future for a long time come... 100% ditch them. ASML is powerless to prevent what the Dutch government will very likely be forced to do. Keeping a relationship with ASML is much less important than having a thoroughly reliable supply chain for the semiconductor and IC chip sector. The only such reliable chain is an ENTIRELY DOMESTIC ONE. The long term and everlasting value of that is MUCH MUCH MUCH GREATER than the short term costs of not having it.
 

Weaasel

Senior Member
Registered Member
Japan is the key card. Nikon is on life support and TEL is on China support AKA life support.

Please, Log in or Register to view URLs content!

Please, Log in or Register to view URLs content!

Even in 2020, if TEL is banned from China they will lose 80% (!) of their sales in FPD development and 18% in semiconductor. In 2022, their share of semiconductor sales is 28%. China-support AKA life-support.
Yet, despite them being such iconic companies of Japan, the Japanese government is likely ready to see them die on orders of the United States. Do not rely on Japan. I will not be surprised if they follow the letter of American policy vis a vis China in EVERYTHING.
 

PopularScience

Junior Member
Registered Member
Yet, despite them being such iconic companies of Japan, the Japanese government is likely ready to see them die on orders of the United States. Do not rely on Japan. I will not be surprised if they follow the letter of American policy vis a vis China in EVERYTHING.
Japanese are not crazy as American.
 

olalavn

Senior Member
Registered Member
Yet, despite them being such iconic companies of Japan, the Japanese government is likely ready to see them die on orders of the United States. Do not rely on Japan. I will not be surprised if they follow the letter of American policy vis a vis China in EVERYTHING.
The Japanese government doesn't interfere in the affairs of their companies.
 

visitor123

New Member
Registered Member
I just want to say that in the entirety of human history, the West has committed heinous crimes just to reach and force China to "open the market" to their merchants. Now these American mongrels are asking their allies to stop trading with China because "muh morals, muh values." This actually reminds me of the Godfather when Vito Corleone asked the other house to stop selling cokes.
I wonder what will happen next ;)
 
Status
Not open for further replies.
Top