Chinese semiconductor industry

gadgetcool5 said:

My point is that there are no short term solutions.

You won't be able to poach talent because most non-Chinese and especially non-Asian cutting edge lithography engineers don't want to migrate to China to work on lithography. If you look on the ASML page for senior engineers, 90% of them are Caucasian. And even for the few engineers who are Chinese enough that they may want to move to China for a high salary, recruitment can be banned:

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And frankly, I wouldn't rule out the US imposing exit visa bans in the future for personnel who are extremely skilled. Heck, even the West is facing a shortage of highly skilled semiconductor line engineers.

You cannot just throw money, money and R&D at the problem to solve it. It requires a process of step-by-step experimentation where each step depends on the previous step, and throwing x10 more people at the same step does not make it go faster because there is a minimum physical time required to do each step. Therefore, there is a limit to the speed you can go and China will always be behind when chasing a moving target. Especially when the West has more skilled engineers who have 20+ years of experience in the field which is what you really need. Inferior technology means inferior market position, which means less money coming into your industry, which is vicious cycle where you become dependent on government largesse but you are never actually sustaining yourself on your own revenue. In short, your technology might be bought by the military or central government, but only due to political reasons. If the political issues ever become resolved between the US and China, all your efforts could be abandoned due to inefficiency. This is what happened to the USSR and also China in the past in aerospace.

Therefore, there is no way to overcome the first mover advantage for existing technologies. And there is no way to catch up in the short term. It is like a game of "Go" where your enemy has already surrounded an area with its pieces. You cannot try to place more pieces in that area as it is too late. The traditional semiconductor game for China is lost. You can only try to create a bigger circle or take territory somewhere else.

That is why I recommend China to look towards leapfrog technologies like photonic chips where it can have a first mover or early mover advantage.

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If that's true then Nokia should still be #1 in phones. Too consumer? Maybe AT&T should still be #1 in telecom hardware. How about Ford cars? Debunked part 1.

Korean talent already got poached for the process part. Another argument debunked.

SMEE already beat Canon, an established player, in packaging lithography. Triple debunk.

I'd be embarrassed if I was wrong this often.

End customers never see the manufacturing equipment and even DUV litho equipment is built in the tens to per year.

That is comparable to the number of LNG ships, trains and bridges being built - each highly customized, and of course highly subsidized. So what's the issue with subsidies?

Semiconductor demand inside China is so high that some Chinese foundries are warning their non-Chinese clients that they might not be able to provide them as much capacity as before.

gadgetcool5 said:

"Semiconductor talent" is a broad term. Where China lags is manufacturing equipment and manufacturing process. That is the chokepoint. China needs a lot more people trained in basic sciences, such as physics, chemistry, mathematics, electrical and mechanical engineering, optics, and materials science, *NOT* chip design. But even after that, it will take years of practice and know-how to get the same level of talent that the West has, and by that time the West will have moved on to bigger and better. This is not an easy task at all and it requires a lot of people working overtime and a lot of patience. It essentially has to be treated as a wartime industry where you are already at war -- with that level of urgency.

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I am certain people will go into those areas if there are centers of excellence with jobs for them. IMHO China has lacked proper state entities to promote advanced semiconductor tools, aviation engines, etc. Japan managed to do their own semiconductor tools industry in the 1980s to the point they ousted the US market leaders then, but to be honest they also failed with aviation engines.
Contrary to what a lot of people say, I don't see how lithography tools are all that much harder to do than other complicated pieces of machinery to be honest. What there has been in my opinion is a clear lack of investment plus effort to make those tools economically competitive.

gadgetcool5 said:

That is why honestly China should invest more in researching leapfrog technologies, like photonic chips. These are still in their infancy and if China can start early there, it will be in an early mover position if not a first mover position.

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I am not saying photonic chips are useless but thus far they are only usable in niche applications. They simply aren't required in nearly the same amounts. Plus saying "photonic chips" only describes how they work, but a lot of photonics chips types are made with the same lithography tools as standard chips. Because those are what's available to make small detailed features on the cheap en masse.

ChongqingHotPot92 said:

Yea, but the thing is the US has no lithography machine sanctions on Russia, but has them on China.

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You would be surprised at the amount of sanctions the US has on Russia. Some date back from Soviet times even. The Wassenaar Arrangement being used now against China was originally called COCOM and was aimed against COMECON countries. Russia simply hasn't even bothered trying to buy advanced tools. They just bought some 2nd hand tools and made a couple of fabs for government use. If they ever bothered to try to buy an EUV machine I doubt they would be allowed to get one. As it is the Russian market doesn't justify such an investment. The Russian government has plans to build a modern 300mm wafer fab but it might just be capable of 28nm.

ChongqingHotPot92 said:

Just curious, could chip (processors in general) be one of the reasons why Chinese and Russian solid-fuel SAMs (and some other guided weapons) tend to have bigger size but shorter range compared to their most recent American counterparts? Just asking.

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Any range advantage US missiles used to have is likely gone by now. To the best of my knowledge the problem was not miniaturization of electronics but things like propellant density and use of composite materials in missile casings. The US was not at the forefront of solid missile technology for all of the XX-XXIst centuries though. Back at the time of WW2 arguably the Russians had the best solid rocket people together with the Germans. Then in the 1950s-1960s their military switched rocket development mostly to liquid propellants because they needed something with enough range to throw nukes at the US and back then liquid rockets seemed the most promising. The German V2 rocket had far greater range than any solid rockets back then which were mostly tactical weapons. Korolev still had a team working on solid rockets however and these guys produced the RT-1 and RT-2 missiles. The RT-2 was basically the Soviet equivalent of the US Minuteman missile and had similar performance but it was a severely underfunded project. The US managed to miniaturize their nuclear weapons faster than the Soviets in the 1960s, by getting to the hydrogen bomb earlier (hydrogen bombs have 1000x the destructive capability per mass unit compared with fission bombs), and focusing on making smaller warheads for submarine missiles. The US had an advantage with miniaturization with the Polaris and Trident missiles because of this, denser propellants, and in the case of Trident composite casings. Arguably Russian solid rocket technology only caught up with Trident with the Bulava a couple years ago. AFAIK modern China is on the leading edge of solid rocket technology and shouldn't be behind the US there.

With regards to SAMs or AA missiles you might have some mass difference in things like on board radars. But you have to see the US already had the VT fuse (radar fuse) in artillery shells using vaccum tubes in late WW2. So how small do you need the avionics to be really?

FairAndUnbiased said:

ASML has established IP for wafer stages and component suppliers. They have documentation. Job posting is for a sustaining engineering type position who delegates to an existing team that already knows what they're doing.

None of that applies to a breakthrough situation.

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I understand and will be excellent, ideal to have a team of individuals that have done before exactly what you company wants to implement . That is the Ideal OPAMP, but reality is different, is difficult to poach someone who very especially knows what your company wants to solve and even dangerous because the company doesn't know if the poached person is going to implement a previous patented solution . What a company do is to form a team from people with people with knowledge closely related to the problem in question from Academia and other industries to tackle the company problem. The people working in the Chinese lithography problem come from Academia or other industries, i don't think none of them have worked in Nikon or ASML. The same goes for the people who develop Nikon first Immersion scanner or the people who worked in the first model of ASML EUV scanner. Maybe i am wrong about this or worse i am misinterpreting what you are saying, but that is the way i view the situation.

gadgetcool5 said:

My point is that there are no short term solutions.

You won't be able to poach talent because most non-Chinese and especially non-Asian cutting edge lithography engineers don't want to migrate to China to work on lithography. If you look on the ASML page for senior engineers, 90% of them are Caucasian. And even for the few engineers who are Chinese enough that they may want to move to China for a high salary (and keep in mind, average salaries in this field in China aren't necessarily higher than in the West), recruitment can be banned:

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And frankly, I wouldn't rule out the US imposing exit visa bans in the future for personnel who are extremely skilled. Heck, even the West is facing a shortage of highly skilled semiconductor line engineers.

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Nah, rather that is just an example of glass ceilings that Asians face in the West. Case in point - American big tech companies are all powered by skilled East Asian specialists and engineers but the percentage of East Asian executives or team leads is way smaller. Companies like Facebook (META) even had like 0 East Asians in top positions. Every East Asian person working in American IT can tell you stories where he was passed over in promotion for a less qualified white person.

The points about the impossibility of overcoming or catching up with "first-mover advantage" are just straight-up ridiculous. Sorry but it kinda indicates that you are not well-versed in the semiconductor industry. If first-mover advantage was so significant, then all the semiconductor foundries would be located in the US - but, whoops, TSMC & Samsung surpassed the US who had the headstart. Similarly, Japanese companies in 70-80s snatched up both the semiconductor and semiconductor equipment markets, and the US took some of it back only after using economic coercion through the Plaza Accord & 1987 semiconductor agreement which forced Japan to guarantee the US semiconductor companies share on the Japanese market and limited the exports of leading Japanese semiconductor companies. Even in lithography equipment, if your theory was correct, then the market would be dominated by Canon or Nikon. I can give plenty of other examples.

Overbom said:

No weak companies
No mediocre companies
No lazy companies
No companies looking to make quick money

We want only the very best and be able to compete worldwide

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Which country does not wish so? One needs to be practical and take the growing up pain knowing that others are not waiting for their potential competitors to catch up. Chinese companies were taking it easy until Trump woke them up.

gadgetcool5 said:

My point is that there are no short term solutions.

You won't be able to poach talent because most non-Chinese and especially non-Asian cutting edge lithography engineers don't want to migrate to China to work on lithography. If you look on the ASML page for senior engineers, 90% of them are Caucasian. And even for the few engineers who are Chinese enough that they may want to move to China for a high salary (and keep in mind, average salaries in this field in China aren't necessarily higher than in the West), recruitment can be banned:

Please, Log in or Register to view URLs content!

And frankly, I wouldn't rule out the US imposing exit visa bans in the future for personnel who are extremely skilled. Heck, even the West is facing a shortage of highly skilled semiconductor line engineers.

You cannot just throw money, money and R&D at the problem to solve it. It requires a process of step-by-step experimentation where each step depends on the previous step, and throwing x10 more people at the same step does not make it go faster because there is a minimum physical time required to do each step. Therefore, there is a limit to the speed you can go and China will always be behind when chasing a moving target. Especially when the West has more skilled engineers who have 20+ years of experience in the field which is what you really need. Inferior technology means inferior market position, which means less money coming into your industry, which is vicious cycle where you become dependent on government largesse but you are never actually sustaining yourself on your own revenue. In short, your technology might be bought by the military or central government, but only due to political reasons. If the political issues ever become resolved between the US and China, all your efforts could be abandoned due to inefficiency. This is what happened to the USSR and also China in the past in aerospace.

Therefore, there is no way to overcome the first mover advantage for existing technologies. And there is no way to catch up in the short term. It is like a game of "Go" where your enemy has already surrounded an area with its pieces. You cannot try to place more pieces in that area as it is too late. The traditional semiconductor game for China is lost. You can only try to create a bigger circle or take territory somewhere else.

That is why I recommend China to look towards leapfrog technologies like photonic chips where it can have a first mover or early mover advantage.

Click to expand...

WRONG, the biggest problem of the Chinese semiconductor industry is not just "inferior" technology because is not but market, if people don't buy your product, your Income-R&D cycle get stuck, and the company grow into irrelevancy to either get bankrupt or occupy a niche area, that is the reason why ASML surpassed Canon and Nikon, even at a time that Nikon tech was way superior than ASML. Having Intel as a client made a huge difference to ASML. Chinese electronics companies have preferred the low risk path of buying foreign components instead of nurturing a local supply chain, Huawei could have nurtured companies like SMIC and SMIC companies like Naura, AMEC, SMEE and local EDA companies. that is how the modern semiconductor industry was created. That is why every time China master a new technology, the wassenar agreement remove that technolgy from the control list. Now i hope they learned the lesson in the hard way.

China already has as much wafer capacity as either the US or Japan. They have companies like YMTC and SMIC and they certainly have enough of a market to justify making their own CPUs and GPUs.

Huawei tried to scale up quickly so they didn't bother building their own fabrication facilities (because fabrication ain't where the profit is) and it cost them. Now a lot of Chinese companies are into chip design. They are taking advantage of the tax credit to make chip companies and software companies. I hope the government has better plans than just the tax credit. It isn't solving the main issue.

In 2014 even before RISC-V exploded, i become interested in this really interesting ISA from China i tougth that this ISA was going to take over China, sadly didn't take traction maybe because Chinese electronics companies don't like to take risks unless they are forced to take risks like the U.S. sanction, i think China doesn't lack creativity but risk.
There is no successful industry that is not built on top of a graveyard of failed projects.

tonyget said:

It is alleged that SMEE 28nm lithography machine failed to pass the 02 project acceptance exam

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What genius decided to benchmark the SSA800 to the NXT2000i?