Chip Wars

[Randy W]

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An interesting interpretation of "a contentious US government request to submit chip data" as "a move described by industry observers as yet another instance of US hegemony that coerces global semiconductor supply chains to bow to arbitrary requirements way beyond commercial standards".

US #chip information request, seen as a possible maneuver to target China, a thorn in the flesh for US desires for chip leadership, could create more problems than it solves, analysts say. The affected businesses can resort to legal action. https://www.globaltimes.cn/page/202111/1238455.shtml

from the Global Times on Facebook 
https://www.facebook.com/globaltimesnews/posts/4643765325704331

Chip data request latest instance of US hegemony, may hit legal snags

By GT staff reporters
Published: Nov 08, 2021 10:38 PM

Political trickery 

The request, unveiled by the US Commerce Department in late September, smacks of an attempt to contain China's tech rise under the disguise of addressing chip shortages, according to industry insiders.

It remains obscure as to what might be next on the US government agenda after the collection of chip supply chain information, but it seems almost for sure that such a request aims at cornering Chinese tech firms, a semiconductor industry insider told the Global Times on Sunday on condition of anonymity. 

TSMC and other possible submitters such as Samsung have partnerships with Chinese firms including Huawei. What the US requests to submit largely falls under commercial secrets and products parameters of some Chinese mainland firms are among them, the insider said, arguing against the unreasonable request.

Edited July 22, 2023 by Randy W (see edit history)

[Randy W]

Part of the concern about a Chinese takeover would be the impact on the smiconductor industry, particularly TSMC. I'm hearing that TSMC would be unable to operate as a Chinese company.

America Chips Act

https://www.facebook.com/XH.NewsAgency/photos/a.446942328709816/7656644454406198

Edited December 13, 2022 by Randy W (see edit history)

[Randy W]

AI chip maker ordered by US government to halt exports to China

US chip maker Nvidia revealed on August 31 that Washington had ordered it to stop exporting two top computing chips to China.

I wonder what this will do to my ability to access decent video cards here? I would think this would apply to AMD as well.

from the SCMP on Facebook
https://www.facebook.com/scmp/videos/5401956576553240/

Edited September 2, 2022 by Randy W (see edit history)

[Randy W]

U.S. Suppliers Halt Operations at Top Chinese Memory Chip Maker
Tool makers are pulling out staff and pausing work as they assess the impact of Commerce Department restrictions on semiconductor exports to China

from the WSJ

U.S. export control measures restrict companies sending chips and chip-making equipment to China. FLORENCE LO/REUTERS

Quote

 

State-owned Yangtze Memory Technologies Co. is facing a freeze in support from key suppliers including KLA Corp. and Lam Research Corp. , the people said. The suspensions follow last week’s sweeping curbs imposed by the U.S. on China’s chip sector, ostensibly to prevent American technology from advancing China’s military power, though the impact might reach further into the industry.

The U.S. suppliers have paused support of already installed equipment at YMTC in recent days and temporarily halted installation of new tools, the people said. The suppliers are also temporarily pulling out their staff based at YMTC, the people said.

Chip-making equipment vendor Applied Materials Inc. on Wednesday slashed its sales projection for the current quarter by about $400 million, citing the restrictions. The company, one of the largest producers of chip equipment in the world, counts China’s leading chip-makers among its many customers. It generated more than 27% of its sales from China in the second quarter, or nearly $1.8 billion. A large portion of those sales go to multinational firms that operate in China and are expected to be exempt from controls targeting Chinese chip-makers.

. . .

U.S. chip equipment manufacturers have dozens of employees stationed at YMTC’s factory. They play a crucial role in operating the factory and developing its manufacturing capabilities, as they bring in expertise on highly technical chip production tools, people familiar with the situation said. If the halt is extended, customers such as YMTC face being cut off from upgrades, maintenance expertise and future technology they need to develop chips.

. . .

The rules, announced Friday by the Commerce Department, add new license requirements for advanced semiconductors and chip-making equipment destined to a facility in China. Licenses for facilities owned by U.S. and U.S.-allied firms would be decided on a case-by-case basis, while Chinese-owned facilities would face a presumption of denial.

. . .

“I believe the U.S. government intends to force the more advanced production facilities of Chinese companies like SMIC and YMTC to shut down entirely,” Gregory Allen, a senior fellow at the Center for Strategic and International Studies, said. “However, the more advanced Chinese production facilities of South Korean and other internationally-owned companies will merely be prevented from expanding beyond their current production footprint.”

 

 

Edited October 13, 2022 by Randy W (see edit history)

[Randy W]

China’s chip industry faces a brain drain under personnel rules; supercomputers take a hit; and chipmakers may have to just make do with old technology.

from the Sixth Tone on Facebook 
https://www.facebook.com/sixthtone/posts/pfbid0UUdSFLH9wiiPifm1XCUSVu5E85fRzqsJg37jyHxBZw3t1k6xDpooK4vBhg8qHJ3al

The Sweeping Impact of New U.S. Semiconductor Restrictions
China’s chip industry faces a brain drain under personnel rules; supercomputers take a hit; and chipmakers may have to just make do with old technology.

Quote

 

This article was originally published by Caixin Global. It has been republished here with permission.

American tech watchdog

Under the new rules, any chip that exceeds benchmarks set by the BIS, the American government’s tech watchdog, will be subject to export controls, regardless of use or industry, several lawyers familiar with U.S. export controls told Caixin. The new rules cover all kinds of computing chips, including graphics processing units, memory chips, and other traditional or new computing architecture chips. In terms of end use, the new restrictions mainly affect data center chips. The computing power of chips for mobile phones and self-driving vehicles has not exceed the BIS benchmarks.

The ban will limit China’s development and maintenance of supercomputers. Future supercomputers in China may not be able to obtain chips made using American technology from anywhere in the world, a source at the U.S. Semiconductor Industry Association told Caixin.

The BIS also expanded a national security-related control known as the Foreign Direct Product Rule to cover 28 Chinese enterprises. Previously it applied the rule in sanctions against Huawei Technologies Co. to target a broader range of exports, including non-U.S.-origin items that are the direct products of specified U.S.-origin software and technology. The move practically banned Taiwan Semiconductor Manufacturing Co. from producing chips designed by Huawei’s HiSilicon unit, crippling Huawei’s 5G smartphone business.

The U.S. also added more Chinese businesses to a list of companies that it regards as “unverified,” meaning American suppliers will face new hurdles in selling products to those entities. The list names companies that the BIS could not verify because an end-user check could not be completed to a satisfactory level. If a persistent lack of cooperation from local governments effectively prevents the BIS from identifying compliance, companies on the unverified list may be moved to the entity list and subjected to more stringent export limits.

This poses a dilemma for Chinese companies, said semiconductor industry market research institute ICwise director Wang Xiaolong. If they refuse to be investigated, businesses might be added to the entity list, but if they accept investigation, they could risk exposure of key information.

 

 . . . or the original in Caixin

Cover Story: The Sweeping Impact of New U.S. Semiconductor Restrictions

By Du Zhihang, Liu Peilin, Zhai Shaohui, Tan Min, Qu Yunxu, Zhang Erchi and Denise Jia

 

 

Edited October 20, 2022 by Randy W (see edit history)

[Randy W]

 

Berlin stops Chinese companies from investing in German chip makers over security concerns

The German government has blocked Chinese companies from investing in chip makers Elmos Semiconductor SE and ERS electronic GmbH over security concerns.

 

from the SCMP on Facebook
https://www.facebook.com/scmp/videos/816453919578953/

[Randy W]

On 8/14/2022 at 6:55 PM, Randy W said:

Part of the concern about a Chinese takeover would be the impact on the smiconductor industry, particularly TSMC. I'm hearing that TSMC would be unable to operate as a Chinese company.

America Chips Act

https://www.facebook.com/XH.NewsAgency/photos/a.446942328709816/7656644454406198

Chinese newspaper vents anger at TSMC over new Arizona fab, calling it a ‘dark turn’ for the global semiconductor industry

• The Chinese government has stayed silent over the TSMC plant in Arizona, but has repeatedly voiced opposition to US restrictions on its chip industry
• TSMC’s US$40 billion commitment in the US state came four months after President Joe Biden signed the US Chips and Science Act into law

from the SCMP

Signage outside the TSMC facility under construction in Phoenix, Arizona, on Dec. 6, 2022. Photo: Bloomberg
 

Quote

 

Chinese nationalist tabloid Global Times has blasted the investment by Taiwan Semiconductor Manufacturing Co (TSMC) in Arizona as “a dark turn” in the global semiconductor industry, and accused Washington of tricking the world’s most advanced chip maker into setting up a wafer fab in the US.

In an editorial on Friday, the newspaper, which is affiliated with the official People’s Daily, said TSMC’s decision to invest in cutting-edge technology in the US showed that Washington had tricked it, and that the US was stealing from the world’s most important technology in “our Taiwan region” – a reference to Beijing’s claim of sovereignty over the self-ruled island.

The Chinese government has remained silent over the new TSMC plant in Arizona, but Beijing has repeatedly voiced opposition to Washington’s restrictions on China’s chip industry. Due to restrictions from Taipei and Washington, TSMC is not allowed to invest in advanced chip capacity on the Chinese mainland. The company’s factory in Nanjing, the capital of China’s eastern Jiangsu province, only produces mature node chips.

 

 

[Randy W]

Parsing the normally bellicose China’s meek response to US chip restrictions
18 Dec, 2022 - 11:09 pm
Beijing typically ‘retaliates fully plus 10 per cent’, but this time it doesn’t seem to have many punitive options.

Normally bellicose China’s meek response to US chip restrictions raises eyebrows

• Beijing typically ‘retaliates fully plus 10 per cent’, but this time it doesn’t seem to have many punitive options
• ‘It is a puzzle,’ says an American analyst. ‘On everything else, they seem to have skin that’s thinner than Saran Wrap.’

 

Quote

 

“China retaliates fully plus 10 per cent,” said Jeffrey Moon, president of China Moon Strategies. “They have consistent goals when they retaliate. They want to inflict proportionate pain, avoid negative impact on China and want to claim deniability.”

The relatively muted response from normally blustery Beijing after Washington announced restrictions on high-end semiconductors and chip-making equipment – a potentially huge blow to its economy, youth employment and vision of a reshaped society under the Communist Party blueprint – has analysts and former US officials parsing China’s thinking even as they wait for the other shoe to drop.

 . . .

Blocking – or threatening to block – Intel, Texas Instruments, Micron, Nvidia, Apple and other US companies’ access to the Chinese market would further curtail chip supplies that China needs and scare away already skittish multinationals in other industries. This comes as China struggles to attract foreign investment, its economy swoons on the heels of Covid restrictions and unemployment among new college graduates hits a record high.

A sledgehammer option where it does have leverage would be an export ban on rare earth alloys and magnets, lithium and other minerals. China accounts for 63 per cent of the world’s rare earth mining, 85 per cent of rare earth processing, 92 per cent of rare earth magnet production and 60 per cent of lithium processing. These materials are vital for a wide array of hi-tech products, from cellphones, missiles and stealth aircraft to electric vehicles and wind turbines central to Biden’s climate agenda.

But Beijing would potentially face even tougher US tech restrictions and suffer a major hit to its global stature with such a move. When China limited rare earths exports after 2006, ostensibly on environmental grounds, and threatened shipments to Japan after a 2010 collision near contested islands, it faced global opprobrium and a World Trade Organization (WTO) challenge by the US, Japan and the European Union that it ultimately lost.

“Beijing has few ready options to engage in a punitive symmetric response, and the tools that are available all have major downsides, like further poisoning the business climate for foreign firms,” said Triolo. “With the economy already reeling from Covid lockdowns, Beijing is eager to avoid making things worse.”

 

 

[Randy W]

Battered by Covid, China Hits Pause on Giant Chip Spending

from BNN Bloomberg

Quote

 

China is pausing massive investments aimed at building a chip industry to compete with the US, as a nationwide Covid resurgence strains the world’s No. 2 economy and Beijing’s finances.

Top officials are discussing ways to move away from costly subsidies that have so far borne little fruit and encouraged both graft and American sanctions, people familiar with the matter said. While some continue to push for incentives of as much as 1 trillion yuan ($145 billion), other policymakers have lost their taste for an investment-led approach that’s not yielded the results anticipated, the people said. 

Instead, they’re seeking alternative ways to assist homegrown chipmakers, such as lowering the cost of semiconductor materials, the people said, asking not to be identified revealing sensitive negotiations.

That would mark a shift in Beijing’s approach toward an industry regarded as crucial to challenging American dominance and safeguarding Chinese economic and military competitiveness. It underscores how the country’s economic ructions are taxing Beijing’s resources and hobbling its chip ambitions — one of President Xi Jinping’s top priorities. That could have ramifications for spending in other critical areas, from the environment to defense.

 

 

[Randy W]

China gave 190 chip firms US$1.75 billion in subsidies in 2022 as it seeks semiconductor self-sufficiency

• China’s largest chip maker, SMIC, was also its biggest subsidy recipient at US$282.1 million, illustrating national priorities amid a protracted tech war
• Other top recipients include Apple supplier Wingtech Technology and equipment maker Naura Technology, although some companies received as little as US$30,000

from the SCMP

 

Quote

 

The report only covered companies listed in mainland China, meaning either in Shanghai or Shenzhen. Many other unlisted firms have also received government support, including through loans and direct investment.

China’s largest foundry operator, Semiconductor Manufacturing International Corp (SMIC), was also its largest subsidy recipient for the year at 1.95 billion yuan.

 . . .

Since late last year, a number of municipal governments in China – including Chengdu in southwestern Sichuan province, Nanjing and Suzhou in eastern Jiangsu province, as well as Guangzhou and Shenzhen in southern Guangdong province – have answered the Beijing’s call to boost the development of the country’s integrated circuit industry by setting aside millions or billions of yuan in subsidies.

Suzhou alone promised to foster the development of 10 “leading innovative companies” and add three more listed firms to its local semiconductor ecosystem this year.

 

 

[Randy W]

Tech war: Nvidia founder calls China a ‘very important’ market as AI frenzy fuels huge demand for its chips

• Huang told the Financial Times that the Biden administration export controls on China were like having ‘our hands tied behind our back’
• Tencent Cloud last month introduced new servers for large-scale model training, which are based on Nvidia’s less powerful H800 AI chip

from the SCMP

Nvidia CEO Jensen Huang holds one of the company’s new RTX 4090 chips for computer gaming, September 20, 2022. Photo: Handout via Reuters
 

Quote

 

Huang, 60, was quoted by the Financial Times as saying that the Biden administration’s export controls that bar the company from selling its most advanced chips to one of its biggest markets is like having “our hands tied behind our back”.

The US government ban on its most advanced graphic processing units (GPUs) has impacted about a quarter of Nvidia revenues, forcing the company to tailor-make alternative, lower-end versions for Chinese clients to comply with the export rules.

“If we are deprived of the Chinese market, we don’t have a contingency for that. There is no other China, there is only one China,” Huang was quoted by the newspaper as saying. He also said Chinese companies were starting to build their own chips to rival Nvidia’s market-leading processors used for gaming, graphics and AI applications.

Nvidia’s shares are poised to have their best day ever, with a 29 per cent surge in post-market trading after it raised its demand outlook for AI chips.

 

 

Edited May 25, 2023 by Randy W (see edit history)

[Randy W]

China bans Micron chips for ‘severe cybersecurity risks’, drawing rebuke from Washington as tech war revs up

• The US chip maker failed a cybersecurity review, making its products prohibited for sale to China’s critical information infrastructure operators
• The ruling will effectively erase a market that contributed about 11 per cent of Micron’s total revenue of US$30.8 billion in 2022

from the SCMP

The Micron Technology offices in Shanghai, China. Photo: Bloomberg

Quote

 

The Chinese government said on Sunday that products made by Micron posed a national security risk and would be banned for sale to China’s key information infrastructure operators in a move seen as retaliation for Washington’s tightened restrictions on chip exports to China.

The US Commerce Department issued a statement saying it “firmly opposes restrictions that have no basis in fact”, calling the Micron ruling and recent “raids and targeting of other American firms” inconsistent with Beijing’s stated commitment to an open market and transparent regulatory framework.

“We will engage directly with PRC authorities to detail our position and clarify their action,” the department said, using the abbreviation for People’s Republic of China. “We also will engage with key allies and partners to ensure we are closely coordinated to address distortions of the memory chip market caused by China’s actions.”

Micron said in an email on Monday that it was aware of Beijing’s decision and assessing its next steps. “We look forward to continuing to engage in discussions with Chinese authorities,” the company said.

 

 

[Randy W]

This company has been accused by YouTubers of re-branding chips simply "stolen" from Intel.

Chinese computer maker Powerleader says its CPU was developed ‘with the support of Intel’

• Powerleader said that its first-generation Powerstar CPU, which was released on May 6, ‘is a customised product’ developed with Intel’s support
• In a statement on Weibo, Powerleader’s chairman said the company would ‘stick to the plan and … become a new force in the Chinese chip industry’

from the SCMP

The Chinese flag is seen on a microprocessor attached to a circuit board in this photo illustration. Photo: Shutterstock Images
 

Quote

 

Shenzhen-based computer maker Powerleader, which was suspected by hardware testing websites of rebadging one of Intel’s older microprocessors as its own, said its central processing unit (CPU) was developed “with the support of Intel”.

The Chinese company’s Powerstar P3-01105 CPUs were found to be identical to Intel’s Core i3-10105 Comet Lake CPU, according to a recent report published by online tech news site Tom’s Hardware, citing results of a CPU benchmark test conducted by Geekbench on May 26.

Powerleader said in a statement on Wednesday that its first-generation Powerstar CPU, which was released on May 6, “is a customised product developed with the support of Intel”.

Intel has not made any public comment on the Powerleader chip.

 

See this also (earlier) from the SCMP

Intel inside? Chinese firm Powerleader’s ‘home-grown’ chip suspected of being a rebadged microprocessor from US giant, test results show

A man holds between his fingers an example of Intel Corp’s eighth-generation Core i3 microprocessor. The 10th generation of this chip, code-named Comet Lake, was reportedly rebadged as Powerleader’s Powerstar P3-01105 central processing unit. Photo: Shutterstock

Edited June 2, 2023 by Randy W (see edit history)

[Randy W]

On 6/2/2023 at 11:39 PM, Randy W said:

This company has been accused by YouTubers of re-branding chips simply "stolen" from Intel.

Chinese computer maker Powerleader says its CPU was developed ‘with the support of Intel’

• Powerleader said that its first-generation Powerstar CPU, which was released on May 6, ‘is a customised product’ developed with Intel’s support
• In a statement on Weibo, Powerleader’s chairman said the company would ‘stick to the plan and … become a new force in the Chinese chip industry’

from the SCMP

The Chinese flag is seen on a microprocessor attached to a circuit board in this photo illustration. Photo: Shutterstock Images
 

See this also (earlier) from the SCMP

Intel inside? Chinese firm Powerleader’s ‘home-grown’ chip suspected of being a rebadged microprocessor from US giant, test results show

A man holds between his fingers an example of Intel Corp’s eighth-generation Core i3 microprocessor. The 10th generation of this chip, code-named Comet Lake, was reportedly rebadged as Powerleader’s Powerstar P3-01105 central processing unit. Photo: Shutterstock

 . . . and here is Intel's 'Partner Profile' - https://www.intel.com/content/www/us/en/partner/showcase/storefront/a5S3b0000016OS0EAM/powerleader-computer-system-coltd.html

[Randy W]

Escalating chip war, indiscreet remarks and China's outbound tourists

BEHIND THE HEADLINES

Dear reader,

In late March, a Beijing-based producer of solid-state drives (SSD) called Memblaze Technology withdrew its application to raise capital through an initial public offering (IPO) on the Shanghai stock exchange.

The retraction, done without much fanfare, went little noticed, and was not reported until May.

But it took place a mere three days before the Chinese government's Cyberspace Administration of China (CAC) opened a cybersecurity investigation into the US company Micron Technology.

Micron, based in the US state of Idaho, produces computer memory including flash memory, USB flash drives and NAND flash memory.

Memblaze, which makes enterprise-class SSDs, was said to have also spent tens of millions of US dollars to stock up on Micron memory chips under “no-refund” terms, according to people familiar with the situation.

Those moves by Memblaze reflect how Beijing’s actions against Micron, including the de facto ban on the domestic sale of its products, could impact local companies.

Sure enough, China's top producers of computer servers including the Inspur Group and Lenovo Group asked suppliers to suspend shipments of modules containing the chips made by Micron.

On the other side of the tit-for-tat responses to the ever-tightening noose around technology is a dire picture of China's efforts to develop its own integrated circuit (IC) industry, an effort that has been frustrated by the lack of intellectual property and locally created instruction set architecture despite trillions of yuan thrown at it.

A purportedly new homegrown chip turned out to be nothing more than a rebadged Intel chip, according to a report by the Tom's Hardware news site, citing tests done by the utility Geekbench.

The scandal mirrored the 2006 fraud by the Hanxin series of chips, which engaged in "falsification and fraud" in announcing breakthroughs in its Shanghai-made chip.

Shenzhen-based Powerleader did disclose later that its Powestar P3-01105 CPU was produced "with the support of Intel."   

 . . .

Eugene Tang
Managing Editor