Japan bets $67B to become a global chip powerhouse once again
finance.yahoo.com
finance.yahoo.com
Working in a chip factory is plain terrible for humans: Having to do anything in a clean room is exhausting. Even young people in Taiwan are sceptical about the working conditions:
https://www.thinkchina.sg/taiwan-lacks-young-passionate-work...
Japanese work culture is famous for glorifying the ability to suffer for your job, and Shintoism even puts a spiritual component to „cleanness“.
The work culture in Taiwan (and SK) is miles worse than Japan today - which makes sense as both are around 10-20 years behind Japan
Median household income in Japan is around $48k [0], around $33k in SK [1], and Taiwan's I can't find but is around $28-34k based on median wage ($16k) [2]
SK+TW have entered a similar doldrums to JP around 15-20 years ago, and just like how JP began outsourcing manufacturing to China, ASEAN (mostly Thailand), and India in the 2000s, SK+TW have started doing the same (Vietnam for SK, Taiwan hasn't found a major ASEAN partner yet)
[0] - https://www.stat.go.jp/english/data/kakei/156n.html
If we base it on GDP PPP, then Japan and SK are actually 10-20 years behind Taiwan.
The work moved from Japan to Taiwan simply because TSMC beat the competition out.
[0]https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)...
They are productivity metrics (aka how much shit a country can produce)
GDP is just a measurement of how much shit a country produces a year.
GDP per Capita is a measurement of how much shit is produced per entire population - from a 5 month old toddler to a 92 year old geriatric.
GDP PPP is a lossy transformation of GDP into supposed "international dollars" that have varying calculations and are based on the (imo flawed) assumption that goods can be substituted.
GDP PPP Per Capita is dividing that flawed transformation across the entire population.
> because TSMC beat the competition out
Because American and Japanese companies in the 2000s viewed the foundry model as commodified and a race to the bottom, like battery tech (eg. BYD), and as such decided to divest and let much poorer/less well compensated Koreans and Taiwanese work on it in the 2000s.
This is why GlobalFoundries exists. AMD was falling drastically behind Intel in the 2000s because their foundries were a massive operational expense preventing them from investing in R&D.
As such, AMD divested their fabs into a PE funded company called GlobalFoundaries in 2009
Japanese companies did the same thing, creating joint ventures or gaining controlling stakes in Chinese, Taiwanese, and Korean conglomerates while transferring commodified IP.
This is how CATL was formed by Japanese TDK, BYD by Samsung's cellphone battery division (yes they're Korean but same story), and others
No, it's a measure of much money goes through the economy, regardless if any "shit" is produced there. Look at Ireland, Netherlands and Luxembourg or any other tax heaven.
Or are you saying that any dollars made selling software you wrote is useless?
In what fantasy universe?
>Or are you saying that any dollars made selling software you wrote is useless?
I never said anything about software. You're building your own strawmen at this point.
By definition - https://data.oecd.org/gdp/gross-domestic-product-gdp.htm#:~:....
> I never said anything about software
Software, Banking, Foreign shell companies holding all global profits, etc all fall under SERVICES.
False.
Products are products, services are services. Product si a Macbook or video game I just bough which I can return, but I can't return the cleaning service the handyman just offered on site.
"A service is also regarded as a type of product."
You can see references to this even in early Simpsons (eg. Germans buying the nuclear plant or Japanese being viewed as god tier overworked manufacturers).
AMD sold their fabs for a variety of reasons including loss of design leadership to Intel Core designs, huge debt load from overpaying (at the time) for ATI, loss of node leadership, financial strain that almost led to full bankruptcy, trend towards fab cost needing multiple customers to profit, and a focus on chip design.
Further more, your point about chip nodes racing towards the bottom does not support why Intel chose to keep its fabs and won until they got stuck on 14nm.
It’s weird how you describe advanced chip manufacturing as a commodity when there is only one company in the world capable of producing 3nm chips at scale and make a profit. Furthermore, TSMC is worth more than AMD, Intel, and ARM combined. Up until recently, it was the most valuable company in the semiconductor industry before the Nvidia run.
The logical conclusion is that advanced chip design takes a tremendous amount of skill and is not a commodity. Arguably, chip design is more of a commodity in 2024 since many vendors are capable of producing fast CPUs, GPUs, NPUs, SoCs, network chips, etc.
You should be comparing PPP adjusted household income and not GDP if you want to make this argument.
Miles worse? Nah. At worst, on par maybe.
I bet it would do wonders for my allergies!
That may be less and less relevant for younger generations, based on what I can observe.
Most fabs are largely automated already, but you still need support staff to repair and QA processes, as well as scientists+engineers to R&D new processes and optimizations.
Isn't this typical of many (most?) religions? "Cleanliness is next to godliness" is a common idea in Christendom.
Isn't that just a cliché? Christians don't see that as anywhere near the core of the religion.
There are straightforward reasons for Japan to be attractive:
- Yen is cheap, at a 20-year low
- Developed infrastructure
- Attracts immigrant workers in search of better living standards
- Open to immigration for workers in manual labour jobs
- The wages at Taiwan (and China) are reaching parity with other countries
But then again that impression is based solely on information found on the Internet and may be incorrect.
Japan receives a steady influx of immigrants working on manual labour since the 80s - notoriously, from countries with large Japanese descendant populations like Brazil, Peru.
In the past, it was common for these workers to live frugal lives and make some savings before emigrating back. With the current Yen, today's workers go after better standards of living compared to their home countries.
They have bold goals
[1] https://arstechnica.com/reviews/2024/01/canon-plans-to-disru...
None of those have anything to do with chip making so.
Mirrorless/DSLRs and compacts have been further niche-ified by mobile phones. Many who previously would step up from compacts to a Mirrorless/DSLR have stopped and just use their (now vastly improved) phone cameras.
And mirrorless and DSLRs are maybe more of a niche than action cameras (which tons of average Joes buy, not just extreme sports fans).
Chinese leaped ahead once the US banned exports to certain Chinese companies, Turks have become top players in the military drone business after the West didn't sell them the drones.
I mean, obviously there's lots of work to be done but I think people who believe that others can’t do things they can do are very misguided. Laws of physics is the same everywhere and scientific research is quite open, engineers are everywhere and it only takes someone to invest resources to do something.
> Why just twice as fast? Once you know that something is doable, it works and the rough direction things can get done really really fast.
I agree on the first part. The second part is full of details. The mirrors have to be just right. The lasers have to be just right. The timings have to be just right. There's a million other things that have to be just right and the path to get there may not be very parallelizable.
This is not Taliban getting into semiconductors, this is Japan who is already into semiconductors but lost its edge in this particular field but its leading in some other fields. Therefore they already have a considerable know how on mirrors and laser that they will have to improve on. IMHO the catch up will be much quicker and much cheaper than what the Europeans and Americans spent on to explore the path leading to what we have today.
I mean, that's true from a business perspective.
But they were trying very hard to make the next process node work. They went from a process upgrade every other design generation (the famous "tick-tock") to just tock-ing at 10nm because they couldn't get the next process generation working.
That was very much an engineering problem.
In many domains they do. Once the original creators are retiring or not involved, there are tons of tacit knowledge at every step of the way, from the high level abstract design to specific quirks of some manufacturing equipment, that's very hard to build back.
Until now it's just an announcement and some money thrown at the problem, so less than vapor.
Everything is cheaper in Turkey.
They can produce a lower quality drone for 1/10th the price. Bayraktar = $5M, Reaper = $32M.
Of course there's a market!
I doubt the US could produce a drone the quality of Bayraktar for $5M domestically. It's just too expensive here.
The Turks aren't succeeding because they're building better drones. They're succeeding because the market for drones is disposable, and so the quality doesn't need to be as high - in many cases it's better to have a lower price.
China didn't succeed because they can make better T-shirts than the US. They succeeded because they made cheaper T-shirts.
Don't confuse the two.
Some of the Turkish drones are better off not to be well known though, as there are accusation of launching AI controlled attacks and the machines were in charge of picking the humans they killed in Libya - which is a no-no but probably developed by all the leading states.
Here is a link if you want to take a look: https://www.voanews.com/a/africa_possible-first-use-ai-armed...
So no, Turkey isn't in the business of making cheap low quality drones, the range is quite extensive with some models at the cutting edge. All thanks to being in need of drones but not being able to purchase even if they have the resources.
- 55kg payload versus 1746kg payload
- 24k feet versus 50k feet altitude
- 150km versus 1850km range
It's not a fair comparison. They're very different classes of devices.
I do think the US could produce a Bayraktar-quality drone for under $5M. The major upside of the Bayraktar is that non-NATO countries can buy it.
Heck, I think many readers of HN could do the same (which obviously wouldn't help with sanctions). Stick a control system on a basic Cessna 152, and you've pretty much got the same capability. That's well south of $1M even.
You don't hear much about Bayraktar TB-2 (specifically) anymore since it's also not very useful anymore. It worked well before Russia was prepared. Now, we're generations ahead. Sky is full of drones, anti-drone warfare, and largely ones the ones used are a fraction of the cost of the Bayraktar TB-2 so it doesn't matter if they're shot down. The other end of the scale is ones less easy to shoot down.
edit: Corrected to write about the specific famed drone useful at the beginning of hostilities in Ukraine, versus Turkish drones in general.
Can China make the same quality T-shirts as the US, but at a cheaper price? Then it could be considered better. For most things involving ordinary people, what matters is not what the highest possible quality thing is given no price constraints; what matters is what is economically feasible.
People care about quality in many profitable very large industries: health care, technology, military, automotives, aircraft, etc.
Do you really want to fly on the cheapest airplane money can buy?
No.
hate to nitpick, but this was actually well underway before the US sanction kicked in. SMIC's 7/5nm was already completed by former head of R&D at TSMC in 2020, which was more or less a replica of TSMC's 7nm. It certainly didn't help that the US dept of Commerce allowed over $100+B worth of export licenses to China, 1/3 of them to "blacklisted" entities, in 2022. The Dutch gov't export restriction likewise didn't really start until few months ago, which also allowed latest DUVs capable of 5/7nm.
> Dutch equipment manufacturer ASML Holding announced they would also open an office in Chitose with 40-50 technical staff to assist Rapidus. While full operation is not expected until 2027, a pilot line is expected to start in 2025.
The tech's quite cool in the latest one with 13nm UV. It's absorbed by all known substances so has to operate in a vacuum and the light is produced by them squirting liquid tin at 4000 psi and then zapping the droplets with a 30 KW laser. The machine takes three fully loaded 747s to ship.
I think this stuff may be a bit of a bottle neck with Sam Altman's proposal to invest $7tr in chip making - they are the only people making the state of the art machines and are pretty much flat out already.
Licensing:
> To address the challenge of EUV lithography, researchers at Lawrence Livermore National Laboratory, Lawrence Berkeley National Laboratory, and Sandia National Laboratories were funded in the 1990s to perform basic research into the technical obstacles. The results of this successful effort were disseminated via a public/private partnership Cooperative R&D Agreement (CRADA) with the invention and rights wholly owned by the US government, but licensed and distributed under approval by DOE and Congress.[8] The CRADA consisted of a consortium of private companies and the Labs, manifested as an entity called the Extreme Ultraviolet Limited Liability Company (EUV LLC).[9]
> Intel, Canon, and Nikon (leaders in the field at the time), as well as the Dutch company ASML and Silicon Valley Group (SVG) all sought licensing. Congress denied the Japanese companies the necessary permission as they were perceived as strong technical competitors at the time, and should not benefit from taxpayer-funded research at the expense of American companies.[10] In 2001 SVG was acquired by ASML, leaving ASML as the sole benefactor of the critical technology.[11]
[…]
> This made the once small company ASML the world leader in the production of scanners and monopolist in this cutting edge technology and resulted in a record turnover of 18.6 billion € in 2021, dwarfing their competitors Canon and Nikon who were denied IP access. […]
* https://en.wikipedia.org/wiki/Extreme_ultraviolet_lithograph...
Specifically, Antitrust (as is mentioned).
Canon and Nikon were leaders in lithography at the time, and ASML/Philips were a laggard 3rd.
The state has a monopoly on violence, is that generally bad?
Luring legacy operations, sure, why not, but ... it doesn't make much sense. It's race to the bottom. If they want to do geopolitically useful thing they should put down their feet and spend on defense of Taiwan.
"If chip supplies from Taiwan halt, ..." yes, economies will collapse. Chips will be the least of our problems. Unless they mean chips for smart bombs.
https://en.wikipedia.org/wiki/List_of_semiconductor_fabricat...
IBM still does a lot of research in chip manufacturing, they revealed a 2nm chip 3 years ago. Arguably they don't do large scale production, and the 2nm isn't mass production technology, but they aren't exactly at the retired gas station clerk level. Honestly they might be a good choice, because who else? Why would TSMC, GlobalFoundries and Intel help a potential competitor?
I really doubt they can compete with TSMC, Samsung, and GlobalFoundaries alone.
Oh god, they're serious.
To catch up to TSMC would take decades at this point, dumping endless money into it.
I'm not saying it can't be done, but it absolutely cannot be done in 3 years.
If you want to see effective de-industrialization, look at what happens to US industry when China applies the opposite of sanctions (subsidies).
Adam Smith figured out that mercantilism is inherently self-defeating over two hundred years ago. Maybe nation-states will catch up in the next few centuries.
The West is able to lean on existing knowledge Intel has from running its own fabs in the US and the knowledge of ASML in the Netherlands who makes the machines.
Basically, they could get a machine and take it apart and figure out how it works, but that's meaningless if they don't understand how to make the stuff or how to keep it working well.
If you believe that every Taiwanese engineer is rabidly anti-China then I have a vaccine I want to sell you.
It is my belief that China will steal what it can, corrupt who it can, threaten who it can and most importantly, re-invent what it is missing (they have a bigger STEM education pipeline that most Western countries combined) until they no longer have this achilles heel.
The only unknown is if there is will be hot war before they reach that inflection point.
ASML tools are step 432 of 1234. There’s a whole fab built around it and a whole supplier ecosystem.
They will eventually succeed. That is obvious. High end chips have become existential in the modern world, especially now with AI, but have already been before that. When will they succeed is an open question as stealing the blueprint is absolutely not enough.
https://en.wikipedia.org/wiki/Semiconductor_Manufacturing_In...
China has done what you said since 2005. it've been 20 years. is China leading the semis industry?
So, from 10,000ft I see what you're saying, and might even agree.
But what possesses someone to describe a people or country like this? We do the same with Russia; "other" them, like they have inherently "evil" traits. As if the US isn't above or involved in espionage.
I guess I'm confused how otherwise seemingly intelligent people can look at another country and think their people are fundamentally different. But god forbid you point that lens at the wrong group.
It doesn't even have to be something as advanced as semiconductors, duplicating a line that manufactures something as prosaic as paint is an exercise in patience and frustration. It's like building software from source using documentation, you may think you wrote down all the steps, but you find all the crap you missed when you actually try to execute the task.
2) Top-down command is anathema to engineering progress
American corporations are bad enough for only reporting good news up the chain (see: Intel and deep UV lithography). A dictatorship like China is going to be ridiculous. You will deliver good news to Dear Leader, and you will deliver it when expected, or you will find yourself in the doghouse. So, especially if your task fails, you will make bloody sure that it either gets reported as successful or that you leave someone else hanging with the consequences (see: China and water and rocket fuel). This slows the engineering process to a crawl as nobody can trust anything delivered from anybody else.
I lived for a few years behind the iron curtain, in an actual honest to god dictatorship. The fear pervading and perverting society was palpable. Say the wrong thing at the wrong time and you might die, and your family will suffer too. Not to mention destroying your career and social status. Best to lie most of the time, even to realtives. You never know who to trust, and the price of a mistake is enormous.
From the way you phrased your question, I get the feeling you have no idea what a dictatorship is like. The two are only very superficially similar. Look at how Navalny ended up vs Ilya Sutskever.
/r/redditmoment
This is not an attempt to suggest China's government is good, because it's not, but it's also not a carbon copy of the worst sides of the Soviet Union - for all of Deng's brutal authoritarianism, he did recognise and address a lot of the worst mistakes of Mao and the Soviets in terms of the economy.
It also still doesn't necessarily mean employees in a private company in China will be as open to reporting issues as they might have been elsewhere, but it does mean there are incentives in play that at least make many executives want to put effort into identifying and addressing issues.
So China can glean some of the process, but, because the design, assembly, and setup of the machines is done by western contractors, they're effectively locked out of 'the hard part'. Not to say they can't learn it, it's just not nearly as trivial as the rest of the things they clone.
Also worth noting that, many of the chinese clones are made in the same plants as the orignals, sometimes in parallel to the originals as to benefit from existing successful processes that were already in place, but using cheaper materials, less QC, different branding, etc.
It's actually quite impressive engineering really, they can often reduce part count and cost significantly while shipping a functional, albeit inferior, product. Chip fabs don't work in that model though, so, that presents an additional difficulty.
I'm going to set a reminder to check in on this comment in three years to see how it has aged. My guess is, very poorly.
It's a total coincidence it has a ton of karma, too. Yup
I believe in Hong Kong instead. And thus has so many prejudices.
This guy has quite an obsession, don't you think? Oh, right We shouldn't think. Let's just blindly eat the narrative.
It's of course difficult to remain respectful to other people when their views are remote from yours. The temptation is strong to think that they can't possibly be reasonable or fair, they must be in bad faith, etc. But after many years of moderating these disputes I can tell you that most of these perceptions are mistaken—what's really going on is that people have such different backgrounds that it's hard for them to relate to each other.
Do what you have to do.
At the same time, users aren't allowed to accuse each other of being shills, etc. - this too is well-established and also in the site guidelines: https://news.ycombinator.com/newsguidelines.html. If you feel that users are breaking the rules you're welcome to flag the comments or to let us know at hn@ycombinator.com but responding by breaking the rules yourself is not ok.
The government was both going to demand, and fund local companies creating a competing product and was already doing so long before sanctions arrived. Nothing about the sanctions sped up the process in the least. The Western sanctions had almost 0 bearing on accelerating local chip production, but it did do a GREAT job of limiting their ability to buy the hardware required for advanced fabrication.
You also seem to have a belief that a "monopoly" in China is anything remotely like the West. It's not a free market, if a company in China tries to gouge the market or take it in a direction that's not approved at the expense of what the party wants, their executive leadership will quickly find themselves on the outside looking in (if they're lucky) or sitting in a jail cell if they aren't. See: Jack Ma
Semiconductors were core to the "Made in China" strategy the party was pushing in 2014...
https://www.mckinsey.com/industries/semiconductors/our-insig...
Whatever encouragement or pressure the Chinese government was applying was insufficient to get manufacturers like Huawei to switch to domestic suppliers. Chinese companies still worked with established companies like TSMC, until forced by US sanctions to switch to worse domestic alternatives.
They could, but a domestic trade sanction, just like foreign sanctions, would guarantee at least near-term damage to Chinese companies.
Domestically, Beijing would be seen as the responsible party for the resulting economic damage, causing resentment towards the government, with no actual guarantee of self sufficiency. Companies, in general, do not care about having a domestic supply chain; they want to increase profits.
Internationally, other countries would also see China as the initiator of the conflict, and those that are negatively affected may want to respond with sanctions of their own, escalating it beyond what Beijing intended.
The risk analysis is different between foreign sanctions and domestic sanctions. In the end, the Chinese government was not prepared to take that risk, but the American government was.
One of the reasons groups like the USSR or Serious Communist China ended with everyone starving is that there is literally no known method to determine the correct price without mass signalling through a free market. Ditto what direction "should" be taken - the only known method is 10s of companies (ideally with funding weighted by what clever investors think is likely to work) where 9s of them fail and a selection succeed.
China isn't getting where they are because the party is helping. If anything it is the opposite, the party must have some capitalist incubators where they are holding themselves back from interfering all that much, otherwise the whole thing will collapse at some point because some bureaucrat refuses to believe prices were set too low until the shortages starve millions to death.
This is certainly a claim, let's see how it stands up against the historical record (as from wiki): 1961: Last famine in the PRC 1966: Start of the Cultural Revolution 1976: Mao dies
I'm having a bit of trouble reconciling these, but if you've got some arguments explaining why the Cultural Revolution was after the end of "Serious Communist China" I'd be interested.
https://en.wikipedia.org/wiki/Household_responsibility_syste...
The 'USSR' starved in the 90s after the fall of communism.
> Serious Communist China ended with everyone starving
Oh this nonsense. Serious Communist China had to deal with nuclear threats from both the US and the USSR. Serious communist china tok a back water colonized nation to a nuclear power within a single generation.
> there is literally no known method to determine the correct price without mass signalling through a free market.
You have it backwards. 'Free markets' led to 'starvation'. That's why we, in the US, have farm subsidies. A form of 'price control' along with many other measures. There is no nation ( especially a major ) on earth that has a 'free market'. There was also never a time when we had 'free trade' either. I'll let you figure that one out by yourself.
Every industry, from housing to oil, has price controls on them. It's all a matter of the degree and levers used.
The same idiots who praise government subsidies to build up our own chip industry are whining about 'price controls'.
Nazi Germany and the Soviet Union had close partnerships with Detroit auto makers that helped their industry.
I believe that, unfortunately, the US has a much lesser grip on the global economy nowadays. So, these kinds of sanctions only slow them down (the US), while other economies benefit immensely, even China itself.
i.e. there will always be a buyer for a billion surplus chips in the market.
I am afraid the train left the station, or more like the rocket has launched already. I don't think the sanctions are going to make that big of an effect and if anything, they might come to bite the US back than anything else.
Who knows if it comes back to bite the US. If I were China, I'd remember how the US treated them. I don't know.
Had we continued to collaborate with China in space, it's likely that most of these developments would have happened at a much slower pace, simply because they'd have had a lower overall priority. Sanctions, in general, are just a very poor weapon that increasingly obviously seem at least as likely to hurt the sanctioner as the sanctioned.
And the West would have had access to the same tech. The issue with putting a wall between yourself and the biggest manufacturing hub on the planet is that the well manufactured stuff might not be on your side of the wall.
the world need strong rival like China to challenge western hegemony. that's why we have Artemis now, if China still in backwater like in 60's, we would not have project Artemis
What goal is that again? China is down to 5-7nm chips in practically no time which is more than enough for virtually every industrial and military application (the latter being the ostensible target of sanctions).
Huawei is even shipping phones now again on domestic supply chains. Pretty much the only thing the sanction have achieved is what, that Chinese gamers can't play Cyberpunk 2077 at max graphic settings? The irony is that cutting edge chips are predominantly used in sectors that China itself regulates to hell already. If you're concerned with China's generative AI advances you could have spared yourself the sanctions because so is the Chinese government
Chinese toolmakers sucked because they didn't have market share and lacked practice. With a captive market, they finally have customers to practice on. This learning-by-doing cycle is what allows them to rapidly improve their quality, something they couldn't do before.
The sanctions hurt short-term, but also gave them a long-term opportunity which they didn't have before.
Semi is probably going to be less like oil and more like agriculture in coming years, it's just something strategic many govs have to subsidize.
I think the power issue is because the camera and mic are on 24/7, they showed QR codes being read while the screen is off.
The copium levels in the atmosphere here are reaching critical levels.
They’ve stuck with DUV, which everybody else in the world decided was a dead end. Sticking with DUV may cause further progress to be impossible for all we know (maybe somebody should ask Intel). Going to EUV will require a different set of skills. They’ll have to replicate ASML’s machines to do so. Nobody else has figured it out. Their process on figuring out DUV tricks doesn’t tell us anything about their progress making that other type of machine.
Yet you have no problem proclaiming it's leading them to a dead end.
Don’t read more into the post than that. I’m not going to defend an affirmative claim that they aren’t making progress. They have a ton of engineers and are willing to invest in the field, so it is entirely plausible to believe that they’ll catch up.
Release day of Mate 60 saw Huawei stores empty.
I trust the live videos on the release day providing more evidence of demand that sales numbers which are as manipulated as much as their covid numbers.
https://www.gsmarena.com/huawei_reaches_30m_sales_of_mate_60...
There’s no rhetoric. When you phrase things this way it just makes you sound like an anti-USA pro-China troll.
https://news.ycombinator.com/item?id=37894925#37896319
So I'd wager that this investment is to bring technologies such as this up to scale.
But do-it, do-it-cheap, do-it-at-scale, do-it-right has been the standard playbook out of Asia for 50 years now. I'd suggest that Canon is going down the road of being a player in the 5nm market.
Even if it has a lower yield, having a competing technology to EUV is absolutely amazing in several ways.
So the playbook atm is more promise than concrete reality.
Nor is there some law that says "they did it for other technologies, so they'll manage it for this one too" (besides, this is survivorship bias, forgetting about the technologies they didn't manage to do it).
"Wright found that every time total aircraft production doubled, the required labor time for a new aircraft fell by 20%"
Everything I have read/seen not only points to the Chinese being decades behind but their efforts being black holes of money time and effort that yield NO progress.
Their domestic share of semi equipment machines with publuc tenders (=legacy) has gone through the roof and is over 60% (was 10? I think five years ago). These are legacy, so unsanctioned tools.
There is a lot of waste, but there are results.
https://www.techinsights.com/blog/techinsights-finds-smic-7n...
7nm and 3nm are not even in the same ballpark.
And the legacy tech is useful, but this isnt "progress" its production. The distinction is large, production did not sustain declining producers.
I recommend this piece for anyone who is interested in the current state of the Chinese semi industry:
New Era for the Chinese Semiconductor Industry: Beijing Responds to Export Controls by Paul Triolo
https://americanaffairsjournal.org/2024/02/a-new-era-for-the...
> Rapidus was established in August 2022 with the support of eight major Japanese companies: Denso, Kioxia, MUFG Bank, NEC, NTT, SoftBank, Sony, and Toyota.
edit: never mind. just saw that in 2002 the bigger player is now IBM. I don't want my money near that anymore.
What is it about big bureaucratic orgs that they get so... tangled? It's like an institutional form of Alzheimer's.
I wonder what it would cost to outright buy Australia, in the sense of convincing enough voters to make you their absolute monarch…
Meanwhile what about those materials that could allow you to make 1000x faster cpus, but we arent capable of manufacturing them at scale and also their lifespan is way shorter than silicon.
Im not saying 7T is reasonable, but if thats what he want to do, then it is very interesting and expensive as hell
Until you can match labor cost with automation, it's DOA, regardless of how good your fabs are, and the automation isn't there yet.
Also remember the tooling is a fixed cost, it'll cost you (many) millions in Taiwan the same as it will in Japan or the US, so the cost of skilled labor is what ultimately affects your margins.
So, basically TSMC as a corporate entity's profits/revenues can keep chugging along. Taiwan itself continues to have a risky/uncertain future.
Most of the US subsidies are going to Intel (including for them setting up their foundry services which directly competes with TSMC). However there are some for TSMC for setting up in the US, that is true.
I get that there's a "national security" component but in 2029 when your subsidized and uncompetitive chip fabs are selling a dollar for fifty cents, your choice will be to pour more taxpayer money into the bottomless pit or admit defeat.
And not just American. India, every major EU country + UK, and a number of others are prepared to dump billions into chip fabs. And this does not even include China, Japan, Korea, and other Asian countries. The glut is going to be incredible.
Wikipedia for those looking https://en.wikipedia.org/wiki/Chip_War:_The_Fight_for_the_Wo...
Acquired Podcast has done a great TSMC deep dive.
https://www.acquired.fm/episodes/tsmc
Asianometry has done a lot of semicon videos with lots of ASML EUV videos.
Just hope they won't favor chips with shady hardware programing manual or non-free specs (like ARM since it is own by japanese softbank).
[1]https://www.cnbc.com/2023/06/26/japan-backed-fund-to-buy-sem...
It's general resilience for critical materials given geopolitical risk, not a fear of the US per se.
Having a deeper control of end to end semiconductor supply chain will help hedge against that, equipment sanction revenue loss can be made up by chips fab revenue as such. Makes more sense when you look at it from the government perspective, it is the government driving this despite how it appears.
Sam’s massive fab for AI chips alone is huge news. Japan is pouring it on.
I know people comment about the growth and bust cycle in chips, but it does create profound societal transformation in the process and I’m really starting to wonder just how profound the change that’s coming is going to be — if history guides us it looks pretty big.
The challenge all these AI vendors are trying to solve and why national priorities are turning towards supplementing this industry is to try to capture market share to solve critical shortage of computing power specifically (in microchips or GPUs) that are necessary to advance AI technologies.
And like I mentioned Nvidia has been the hot AI chip with the H100 (and it’s lead to a rather high market valuation — a trillion dollars). But their success is getting noticed and we are seeing Microsoft, Meta, OpenAI, Amazon, and Google all throw in to create their own AI processors. And that’s why you see this massive spending by nation states, because they don’t want to be left behind in this conversion and what is presumed to be ground floor opportunity for the “next big wave” of technology.
Different companies are doing different things but almost all of them are going all in on in-house design and many on FAB itself:
Microsoft is in-housing the Maia 100 for cloud.
Google is doing the TPUs and a bunch of other stuff not public yet.
Amazon won’t be left out with the hilariously named Trainium for machine learning and a bunch of chips under development for AWS.
META is doing the MTIA and Artemis in house.
SoftBank has realized that real estate isn’t it and now has their Izanagi project.
Huawei has their 910B.
Nvidia is all-in on GPUs like the H100 (and developing the H200) and making huge piles of money helping other create custom AI chips.
And of course I already mentioned it by Sam Altman is seeking trillions for some unnamed chipset.
What other major efforts do people know about? Seems like a massive shift and if this is as big as it looks, like I said, this is going to change society incredibly.
People are overreading into the geopolitics.
This transition already started 15 years ago when Intel opened it's first Semiconductor Packaging factory in Hanoi in 2009 (yes, 2009 is 15 years ago now)
By 2008-09 it already became a bit difficult to operate within Coastal China for cost reasons.
Foxconn decided to expand inwards into Interior China (eg. Zhengzhou) while Japanese+Korean companies expanded/returned to Thailand (Japan), Vietnam (South Korea), and India (Japan).
The consumer electronics industry has always been a race to the bottom.
25 years ago, ASEAN and Mexico were the primary electronics manufacturing hub (Made in Thailand, Made in Malaysia, Made in Phillipines), then it became Made in China in the 2000s-2010s, now it's Made in Vietnam/India, and in a couple years who knows where.
How is this still a good investment, considering the worsening of such events in the coming decades?
Doesn't it make more sense for companies to look for a safer bet?
In AI training you typically use the full hardware all the time, unlike general purpose computing, so this is probably a bigger problem.