China’s Chip Industry Is Doomed www.battleswarmblog.com/?p=52684
The US Department of Commerce intends to publish new regulations based on restrictions communicated in letters earlier this year to three US companies — KLA Corp, Lam Research Corp and Applied Materials Inc, the people said, speaking on the condition of anonymity.
Every wafer fabrication plant in the world uses equipment from one of those three companies. Applied Materials and LAM Research (along with Tokyo Electron) have their fingers in almost all areas of chipmaking equipment (PVD, CVD, Etch, etc.), while KLA (formerly KLA-Tencor) dominates the wafer inspection equipment segment. Add ASML in the Netherlands, and those five absolutely dominate the semiconductor equipment market…
Without a continued stream of machines, spare parts and technical know-how from those five semiconductor giants, China’s semiconductor industry is doomed. China’s domestic semiconductor equipment industry is essentially garbage, and they’re so far behind in so many areas that they can’t even steal their way to parity.
The link is from a bizarre and to me untrustworthy newsletter, but the article therein seemed to me solidly researched, fascinating and illuminating, focused on how the intense push by Xi and the CCP to master microchips was consumed by commurruptism (;-), politico obtuseness, economic blindness and stupidity, and is now almost inevitably failing as the West torques down on any of “our” corporations (Taiwanese, Japanese, Korean, USAian, European) helping them out on mastering a tech crucial to the next level of modernity.
That article linked to an excellent Peter Zeihan talk that was short and penetrating summarizing the geopoliticaleconomic dance now being done by China with the world and especially with Russia.
Great video from Peter. The more I read and hear from him the more I like him.
Fortunately we don’t rely on China much for semiconductors. Much of that is Taiwan and South Korea. But that also makes Taiwan enticing for the Chinese to reclaim. And why we passed the CHIPS act here.
I worry some for my ex-employer, Arm, and their Chinese joint venture. That was already in some shaky situations before all this. I have no idea what is going on now, but it cannot be smooth sailing for them.
That article linked to an excellent Peter Zeihan talk that was short and penetrating summarizing the geopoliticaleconomic dance now being done by China with the world and especially with Russia.
In the last few years it has been suggested that we are entering a new Cold War era, this time with China. The question has been, how does that occur when your economies are entangled? We are watching the disentanglement.
What I found very interesting about the Zeihan video is that he says US corporate assets in China are toast & worthless. Where does that leave Tesla? Perhaps Tesla is a special case as China can continue to steal technology from them. But what if the US government decides on a complete break? Tesla has millions in that Shanghai factory.