Bloomberg: Huawei Teardown Shows Chip Breakthrough in Blow to US Sanctions

[ericlp]

Huawei’s Mate 60 Pro is powered by a new Kirin 9000s chip that was fabricated in China by Semiconductor Manufacturing International Corp., according to a teardown of the handset that TechInsights conducted for Bloomberg News. The processor is the first to utilize SMIC’s most advanced 7nm technology and suggests the Chinese government is making some headway in attempts to build a domestic chip ecosystem, according to the research firm.

Seeing how this is still a Tech forum. Would be interesting to see your take on this. As the US is restricting tech to get to China, now China it seems is making it's own in house chips. Supposedly, it using stacking technology on DUV -- Deep Ultraviolet (DUV) lithography processes carve electric circuits into semiconductor wafers with processes of > 7 nm.

The thing about China, it can move incredably fast and scale up work force as they still have a dedicated workforce that tirelessly works long hour days like 12 hour days 7 days a week. Unlike Americans that lucky to get 8 hours 5 days a week, and need all the union breaks that TSMC workers are overly frustrated with how incredibly slow the new TSMC plant is being built in Phoenix AZ. That and the lack of unskilled workers.

I'm wondering if we shooting ourselves in the foot by curbing tech to China, since, it hasn't been that long and now they are producing some pretty impresive hardware. Not only that but invida and other companies like AMD and Apple are losing out selling tech to 1.4 billion customers. If we are going to force them to build their own tech, not only will we lose out on money by selling our tech, but they will now be competitive and in the future selling tech to the world that we will be losing out on.

Yes, China still has a ways to go, but, don't underestimate the will of the nation. Soon withing the next 4 or so years they could be making 4 nm chips that is just as good as the rest of the world.

The Mate 60 Pro has evidently captured consumer interest; as per China Global Times, the phone was completely sold out within a minute of its online launch. In a bid to keep pace with the skyrocketing demand, Huawei is ramping up its production capabilities, with an estimated output of 15 to 17 million units in the pipeline.

Is it inevitable? If so, what we are doing now isn't working.... What should we be doing?

 

[manly]

To (not) answer the important last question, I'm not entirely sure what we should be doing.

IIRC this development was presaged months ago when it was discovered that SMIC's latest node is ahead of where we thought it should be. Perhaps industrial espionage helped them get to here? However, isn't it therefore critical that ASML is banned from selling advanced new machines to China? I'm not anti-China per se but they haven't been competing fairly with the rest of the world economically for a very long time. So if they are consistently 3-5 years behind state of the art, I'm fine with that. If and when China plays fair, export bans can certainly be eased.

There certainly is some risk that forcing China to be even more self-reliant is a long-term strategic failure, but they've always wanted to do that anyway. Our current stance may juice their efforts somewhat, but is offset if they can't purchase the latest technologies needed to be at the leading edge.

To give a simple example, years ago some Western firms decided to "partner" with China to build bullet trains. What ended up happening was technology transfer and ultimately China built out a massive HSR network on its own. The idea that China is a middle income nation with 1B consumers willing to buy Western goods hasn't really panned out that well.

 

[Saylick]

There's not much the US can do besides restrict China. If they develop advanced foundry tools completely domestically, the only thing left the US could do is restrict import of certain materials that are vital to semiconductor manufacturing, such as certain special gases.

The semiconductor manufacturing supply chain is complex and is comprised mostly of countries under Western influence. For example, ASML collaborates with a bunch of either companies to produce their EUV machines, such as the German company Zeiss, who makes the fancy optics. You then also have to develop EUV pellicles, which is yet another complicated piece of technology. At the end of the day, semiconductor manufacturing requires a metric ton of multi-disciplinary talent that cannot be sole sourced. China can lure away TSMC engineers, but even those engineers are only one part of the bigger equation and no one engineer possess knowledge of the entire operation.

As someone else mentioned on these forums, I am not sure that China can catch up in time before their aging population issue essentially kneecaps their economy. Their economy hasn't quite transitioned to a high-skill, service-based economy like Singapore's and likely won't do so even in 20 years. This population issue is reflected in the fact that the younger generation aren't exactly willing to take on the societal burden of supporting two generations above them: https://www.brookings.edu/articles/...anding-in-the-way-of-chinas-innovation-drive/

If you thought socioeconomic mobility was an issue for Gen Z, they got nothing on China:

China’s drive toward technological independence has raised alarm bells in the West, where a resurgent China powered by a leading technology industry is widely considered the key strategic challenge of the 21st century. But these fears all too often fail to consider the internal obstacles facing Beijing’s push toward tech supremacy. Among them is one very low-tech problem: a prevailing sense of social and professional stagnation.

The drive toward self-reliance has encountered an unlikely form of resistance in a generation of young Chinese who balk at the Party’s high-minded calls for “continued struggle” alongside an deeply engrained culture of overwork without the promise of real advancement. They opt instead for “lying flat,” or tangping (躺平). The “lying flat” movement calls on young workers and professionals, including the middle-class Chinese who are to be the engine of Xi Jinping’s domestic boom, to opt out of the struggle for workplace success, and to reject the promise of consumer fulfilment. For some, “lying flat” promises release from the crush of life and work in a fast-paced society and technology sector where competition is unrelenting. For China’s leadership, however, this movement of passive resistance to the national drive for development is a worrying trend—a threat to ambition at a time when Xi Jinping has made grand ambition the zeitgeist of his so-called “New Era.”

In contrast, TSMC is backed by major Western powers and is a BIG source of national pride for Taiwan. Taiwanese parents are very proud if their children go work for TSMC, sort of like if their kids become doctors. Taiwan also understands that a strong TSMC means more incentive for the West to defend it if China tries to do anything sketchy. Taiwanese TSMC employees are equally likely, if not more likely, willing to toil away at solving manufacturing problems as Chinese employees: https://www.wired.com/story/i-saw-the-face-of-god-in-a-tsmc-factory/

Employees at TSMC are paid well by Taiwan’s standards. A starting salary for an engineer is the equivalent of some $5,400 per month, where rent for a Hsinchu one-bedroom is about $450. But they don’t swan around in leather and overbuilt Bezos bodies like American tech hotshots. I ask Michael Kramer, a gracious member of the company’s public relations office whose pleasant slept-in style suggests an underpaid math teacher, about company perks. To recruit the world’s best engineering talent, huge companies typically lay it on thick. So what’s TSMC got? Sabbaticals for self-exploration, aromatherapy rooms? Kramer tells me that employees get a 10 percent discount at Burger King. Ten percent. Perhaps people come to work at TSMC just to work at TSMC.

This Taiwanese willingness to go above and beyond for TSMC is exactly why TSMC criticized American workers as being, for lack of a better word, subpar with respect to their Arizona fab:

Stamina, meanwhile, allows the TSMC scientists to push this game of atoms forward without flagging, without losing patience, through trial and error after error. How one stays interested, curious, consumed with an unrelaxed and breathless craving to know: This emerges as one of the central mysteries of the nano-engineering mind. Weaker minds shatter at the first touch of boredom. Distraction. Some in Taiwan call these American minds.

In spite of the fact that he himself trained as an engineer at MIT and Stanford, Morris Chang, who founded TSMC in 1987, has long maintained that American engineers are less curious and fierce than their counterparts in Taiwan. At a think-tank forum in Taipei in 2021, Chang shrugged off competition from Intel, declaring, "No one in the United States is as dedicated to their work as in Taiwan."

Hell, I'd argue one of the biggest strengths of TSMC is that a lot of their higher ups appear to be devout Christians, which gives them a true sense of purpose. In China, you don't have any of this, which is why when the CCP poured money into developing one of their fabs, it failed due to embezzlement and corruption.

The race in semiconductors is to the swift, and to the precise. Because velocity and precision are generally at odds in business—you move fast, you break things—TSMC’s workforce is legendary. If you see the manufacture of semiconductors as nothing but factory work, you might slag the project as monotonous or, more callously, “on the spectrum.” But the nanoscale work of chipmaking is monotone only if your ears aren’t sharp enough to hear the symphony. Two qualities, Mark Liu tells me, set the TSMC scientists apart: curiosity and stamina. Religion, to my surprise, is also common. “Every scientist must believe in God,” Liu says. I’m sitting across from the chairman in a conference room filled with trophies. A scale model of a full-rigged Japanese treasure ship, a gift from Yamaha, is magnificent. To our interview Liu has brought a model of his own: a Lego model of TSMC’s showstopping fin field-effect transistor, which controls the flow of current in a semiconductor using an electric field, a narrow fin, a system of gates, and very little voltage. “We are doing atomic constructions,” Liu tells me. “I tell my engineers, ‘Think like an atomic-sized person.’” He also cites a passage from Proverbs, the one sometimes used to ennoble mining: “It’s the glory of God to conceal matter. But to search out the matter is the glory of men.”

 

[sdifox]

It is certainly possible to achieve that with DUV but at what cost? Also that is likely the most you can get out of DUV so what's next. PRC does have a few EUV ordered before the embargo but it is in the single digits I think.

 

[cytg111]

Lizard brain tells me that if shit goes down in Taiwan in a couple of years, maybe it'll be a good idea to stock up on some current gen chips while the supply chain is fresh.

 

[JTsyo]

To (not) answer the important last question, I'm not entirely sure what we should be doing.

IIRC this development was presaged months ago when it was discovered that SMIC's latest node is ahead of where we thought it should be. Perhaps industrial espionage helped them get to here? However, isn't it therefore critical that ASML is banned from selling advanced new machines to China? I'm not anti-China per se but they haven't been competing fairly with the rest of the world economically for a very long time. So if they are consistently 3-5 years behind state of the art, I'm fine with that. If and when China plays fair, export bans can certainly be eased.

There certainly is some risk that forcing China to be even more self-reliant is a long-term strategic failure, but they've always wanted to do that anyway. Our current stance may juice their efforts somewhat, but is offset if they can't purchase the latest technologies needed to be at the leading edge.

To give a simple example, years ago some Western firms decided to "partner" with China to build bullet trains. What ended up happening was technology transfer and ultimately China built out a massive HSR network on its own. The idea that China is a middle income nation with 1B consumers willing to buy Western goods hasn't really panned out that well.

It's not a given that China will be behind as they gain more experience. Right now they might be following the same path as the West but afte 10 years of experience, they might diverge and have their own breakthroughs.

 

[ericlp]

Thank god (spoiler alert there isn't one) for the ignore button... What a Whack job! lol

Anyway....

I hear qualcomm stock is tanking because of this news. Darn it! If only god could do something...anything... lol

 

[Indus]

I hear qualcomm stock is tanking because of this news. Darn it! If only god could do something...anything... lol

Think we're already at peak smartphone that most people aren't enticed by flagship models anymore personally and the midrange is the way to go.. it's easily as good as a flagship from just 2 years ago and the upgrade cycle is becoming like computers (slowing down).

So that'll definitely hurt Qualcomm more than anything else but other than restricting access to new and upcoming techs.. what can you do?

Their espionage is quite good. That said what're the actual uses of high end mobile chips? Spy software and uplinks?

 

[sdifox]

All their upper echelon use Apple lol

 

[ericlp]

That said what're the actual uses of high end mobile chips?

I hear the quest 3 is still using qualcomm chips. Apple uses qualcomm modem parts, as should the pixel line. But google (pixel) is cheaping out using their own parts and they are not the best.

I guess when we are all buying high end chips from China (as we are anyway) ... Last time I bought thread ripper from AMD it stated it was made in China. As technically, unless it recently changed Taiwan is still stamping Made in China on their products. As over 90% of all chips are made in Taiwan.

 

[akugami]

For China, the Trump and Biden restrictions on fab technology is just another example of how the west has tried to suppress them. China will not rely on western fab technology. They cannot. Not if they want to be completely independent of Europe and the USA. Sure, they'll still want to buy ASML equipment, but more to ease the transition than as any long term solution.

China has used fab from companies like ASML simply because it is cheaper and more efficient to do so. There are home grown solutions, but they are not as cutting edge as what they can get from ASML. But now the sanctions have meant they cannot get such manufacturing technology. They must rely only on home grown solutions.

Make no mistake. The sanctions have hurt China very badly. China's home grown fab technology is probably 15 years behind the west. And the recent restrictions may even put them further behind temporarily. But even if the cost is higher, they will subsidize the cost for any military applications, or buy hardware by illegally importing it into China on the black market.

By hook or by crook, China will improve. They have no choice but to pour money into local fab technology manufacturers. And this time, companies in China will need to use local solutions because there is no other choice. This in turn spurs local development.

My own prediction is China will make up ground and in 20 years, will still only be a generation behind, but this time with fully home grown solutions.