If you consider that China is unable to get ASML equipment, they have strong incentive to improve on this technology immediately. If Chinese companies start this path, then the issue is not if ASML will have improved, but if they will be able to withstand the competition.
Regardless of the immediate ban on ASML, China has made a geopolitical and strategic decision to obtain advanced chip manufacturing capabilities be it in 5, 10 or 20 years. Would be timely if Western politicians showed same concern for national manufacturing capabilities instead of continuously relying on outsourcing.
The CHIPS act is a big mistake, they decided to give billions of dollars to companies like Intel that decided to layoff thousands of people a few months later. Like always, the US decided to give more money to unaccountable companies that will put this money into their management and shareholder's pockets.
It’s remarkable that China even manages to do subsidies better than us. Blanket incentives to an industry would be far better than the regulatory capture we get here… Same story for EVs.
Chinese also have their fare share of subsidy fraud.[0][1][2][3] The most notable of these is probably Wuhan Hongxin Semiconductor Manufacturing, which essentially wasted billions of dollars, a lot of which was funded by the local government.[1][3] FWIW, I suspect China will create EUV machines anyway. While there has been a lot of fraud, there is also a lot of talent in China. And solving an already solved problem is much easier than solving it the first time.
No, like all schemes created by the US, companies will only accept the money if they know they won't have to repay it back. They just need to show "intention" of investing that money; for example, trying to start a new factory, even if knowing that it will never be operational.
I’m actually excited to see these projects come into fruition. If USA can pull it off, and become competitive in global markets, it’ll a proof that we can still build big projects when we want to. If things go sideways with nothing coming online by the end of 2020s, it won’t look good especially knowing how China just keeps outbuilding us.
Same. I'm pretty confident we can, though. Not to take too much away from ASML who has done a good job in the time since, but don't forget that the US invented EUV with taxpayer money and basically only allowed ASML(and a company they bought) access. And the rest, as they say, is history.
EUV the concept is obvious. You want higher resolution, you need shorter wavelengths. But there are many devils in many details, and the relatively tiny US EUV program didn't do a whole lot about them. So no, EUV is not mainly a US development.
I'm not sure how true that is. The EUV concept was drawn up in the 90s, and the program was designed specifically to do further research to overcome technical hurdles. Multiple companies were interested in licensing this research, but all but ASML were blocked. Is it no coincidence that they are the only ones who achieved it?
In fairness, I don't know all the inner workings of what was already in place and how much more they had to do initially, it just feels peculiar that the denied interested parties(large Japanese companies) never achieved it.
You mean , like Asml , Zeiss and Jenoptics aren't national manufacturing capabilities?
Or ist just your head national = American, western = American and not German , Dutch, European not Western?
I haven't seen any success on the Trump/Biden tariffs. They only managed to weaken US companies by cutting access to Asian markets. China is doing just fine.
tariffs/sanctions are meant to be long term, 15-30 years before showing effectiveness. they are meant to not stop progress but stop 'compounding' progress. if they show effectiveness sooner even better! but effects are better seen after 10 years.
if A has $500 and B has $500 (and each put money away at the end of the year), tariffs on A are meant to 'eliminate' the compounding interest of the market. so over long horizons B ends up ahead. A still makes progress (but substantially further behind from where it could have been).
my example is more true of sanctions than tariffs. i've noticed many misguided tariffs from countries with less noble aims recently.
That's laughable, China will spend 15-30 expanding on all kinds of technologies while cut from the US by design. I cannot see any long term benefit for the US when it lost access to the largest foreign market and suffers from fierce competition across the world. See the debacle of EV, where Chinese companies are already dominating sales on 3rd world countries and inside China.
if China invades Taiwan (Xi explicitly says he plans too) I don't think anyone will want to buy from China.
the US chip sanctions are viewed happily by the entire industry - except China. This means other countries have a chance to further displace China in the sector. Not agreeing with a certain sanction is fine but my point stands: they are meant to hobble countries long term.
The only country that is hobbled by these sanctions is the US. China will not invade Taiwan because they don't need it, and even if they do nobody will stop buying from them for this reason, since Taiwan is considered to be part of the China by most of the world (even formally by the US). It is funny that the US continues to deceive itself on this issue.
It's kind of obvious isn't it? High-tech is human-made and humans are not in short in China and elsewhere. Tech embargoes are a huge favor for the receiving side, enforcing a creation of a market for competitors where your companies can't compete and tariffs make sure that your companies don't have to innovate much when your people are suffering.
Yes, tariffs may work for small countries, Cuba being the classical example (even though it only worked in the sense of keeping Cuba poor). But using tariffs against a country the size of China is a complete non-sense that could only come from the minds of stupid US politicians. The fact that it didn't work at all for Russia, which has an economy many times smaller, should be an early warning.
Eh, we've got time. When NATO allies stopped selling China engines for their fighter jets, it took China more than 15 years to bootstrap an aerospace industry that could design engines on-par with Russia. There are a lot of things that China has every incentive to invest in, but literally cannot as a result of sanctions.
On top of that - an underappreciated aspect of lithography is yield. It's likely China can already beat ASML in a lab setting with <5% yield rates, but that's not a competitive process. What makes TSMC so valuable is their relatively high yield on cutting-edge node technology, alongside their fairly large capacity to supply multiple businesses at once. China has to design a scalable EUV alternative, bring it up to acceptable/profitable yield and quality control, and then scale it to replace the demand for most of the domestic chip clients. It's a lot of work, and it would not surprise me if we saw a lot of China's chip efforts echo their confident-but-slowed progress in engine design.
Enormous PRC indigenous turbo jet efforts progress exploded in last 10-15 years coincides with results of tertiary education reforms producing roughly OECD STEM talent combined. The problem post sanctions was there was a lot of work with not a lot of talent, it took time to build up talent generation engines, now PRC on trend to becoming the only country with enough semi talent for entire domestic semi supply chain - every other semi player projected to have 10k-100k+ talent shortage in short/medium term in the segments they specialize in. The real competition is whether a fragmented "western" semi ecosystem can ultimately compete with an integrated PRC one.
That's one way of framing it, but China has worked this way for a while now. China has great jet engines now, but it took them decades to get there once they were deprived of foreign assistance. It's not hard to see the new chip sanctions having an identical chilling effect, deterring a land invasion of Taiwan until China's lithography is self-reliant and competitive. Right now, they are arguably forced to import foreign technology if they want cutting-edge or competitive AI hardware, similar to where they were with engine design.
Maybe they do turn things around, in the long-run. But the US can invest just as hard, and they haven't burned their bridges with ASML/TSMC. On top of that, the US can license IP from companies like ARM that previously weren't even shared with China to avoid unlicensed clones. The US wants their IP and global industry to prop them up here, and I don't think it's crazy to suggest they've got the upper-hand right now.
Important to contextualize "a while" is really last 10 years - post Tianamen weapons sanctions catchup was still in era where PRC tertiary production was fraction of current talent production with massive brain drain. Turbojet catchup was contingent on 10 years of generational tertiary catchup, 10 years of integrating talent into workforce, which semi is benefitting from out of gate/not as cripplingly bottlenecked on. Hence catchup gap/rate likely lessened under current conditions where there's increasingly less talent shortage, with trend of outright talent advantage, i.e. PRC IC white paper from 2018 targetted pumping 30k IC talent per year, now likely around ~550k/700k they think needed for entire domestic IC supply chain (was at ~400k in 2018). Meanwhile everyone else is projecting talent shortfall, so the ultimate catchup is post 2030s when PRC has 700k+/700k semi with likely surplus while western semi try to maintain lead with talent shortage, all the while PRC indigenous semi will chip away at the 300B+ IC imports currently being paid to western semi to support their R&D towards maintaining lead.
> forced to import foreign technology
Question is how long / at which point will PRC be fine with with relying indigenous, rumored indigenous 12nm production line coming online soon. Industrial policy can spam that... then what are the incentives? I argue they would be MORE incentivized to disrupt/degrade TSMC responsible for ~90% of high end nodes even with after CHIPS that disproportionately support the west. The fastest way for PRC to close gap then is to deny west advanced nodes, already largely denied to it. Some PRC planner is crunching the math that if everyone forced to make do with mostly 12nm chips, then PRC is going to have advantage in cost/scale in production AND renewable energy for operation costs. The flip side of the competitive coin and TSMC delimma is to make adversaries less competitive via denial. US can maintain peacetime advantage with lawfare, PRC can erode that advantage with warfare.
> US can invest just as hard, and they haven't burned their bridges with ASML/TSMC
But will it be as effective? Developments around Intel not promising. Even with CHIPs there's no sign US is going to plug talent shortage gap. US can buy the machines, build the fabs, the current bottle neck is still US talent production with respect to semi. Are they going to figure out how to get US fab workers to work as hard as TWnese even with proper compensation?
Also PRC hasn't burnt bridges with ASML/TSMC, US export controls attempted to burn that bridge against their wishes. But current ASML net sales to PRC due to stockpiling ~50% of their global total. They'd be happy to sell kitchen sink to PRC absent export controls.
> they've got the upper-hand right now
I don't think anyone's disputing that. I'm pointing out the contraints to catch timeframe for PRC is likely smaller than vs aviation, and ability for western semi to keep gap less due to current projected talent shortfalls. And once PRC establishes comprehensive semi supply chain, one that does not require multinational coordination, it will have certain competitive advantages. Also the entire point is to pivot away from western tech stack to avoid the ip/licensing fees and chip away US dominance in computing in general. PRC getting their semi up = starting condition for PRC eventually competing against trillions of value of US SaaS. PRC not just unhappy US control semi hardware, it's also unhappy US controls global software/appstore ecosystems. But that IMO much harder and broader battle, but one that is coming.
Sure, China said that about their engines too. When Pakistan came to them looking to buy an F-16 replacement under contract, China couldn't provide competitive designs without using Russian powerplants. They would build the JF-17 for export, and that jet (built in 2003) wouldn't receive domestic engines until a 2019 overhaul. By that time they were competing with a ~45 year old USSR-designed engine, the Klimov RD-33.
I full well expect that China is interested in producing silicon at-cost for the defense industry. It remains to be seen if they even have competitive designs though. Their premier domestic ISA, LoongArch, is based on 40-year-old MIPS architecture design. Cut off from international designs, it's not really clear how strong China's engineering chops are.
> Cut off from international designs, it's not really clear how strong China's engineering chops are.
CATL, DJI, Douyin & post-grad engineering programs all over the US suggest the answer is "very strong." Underestimating China is not good for anyone wishing to remain competitive
I don't underestimate China, but I also don't take them at their word. They have a vested interest in appearing competitive even if they're not, same as the US does. I've acknowledged that both are nearly equals in terms of being importer-states reliant on foreign trade for competitive silicon.
To my knowledge, China's most advanced domestic lithography is a dubious 7nm chip with unknown yields made entirely with DUV, not EUV. This is really quite poor and I invite you to share more updated sources if you think that I'm underestimating them here.
You don't need to take their word, just look at the products they're releasing, especially in the EV segment. It is now above everybody else, even with the head start western companies had. They're at the top of telecom tech as well, and Huawei had to be cancelled in the West to stop its total dominance. Even in chips, where they have closed the gap in many ways in a matter of a few years.
> just look at the products they're releasing, especially in the EV segment.
Since when have EVs required high-density silicon? China's EVs are impressive, but it's 100% more of an endorsement of their lithium supply chain than their silicon one.
> They're at the top of telecom tech as well
That's a funny rendering of events. Didn't Huawei get forcibly removed from the market after they refused to let governments audit their security? I don't think that's an industry-leading attitude compared to Cisco. The only thing Huawei can win on is low prices, which really isn't a priority of telecoms when you're trying to sell backdoored hardware.
Additionally - telecom tech doesn't require advanced silicon either. Most WiFi routers and Ethernet switches are made with the same silicon the US already manufactures in GlobalFoundries and Intel fabs. The fact that China has 24nm DUV is not at all impressive when half the world was already exporting similar density silicon for cars and routers.
So... yeah, I do need to look at better examples if I want to trust their word. From both the examples you've given me it seems like China is focusing on cheap low-density hardware that anyone can make, but China can make cheaper thanks to their political prisoners and labor camps. Not only is it unimpressive, it's not even a slight example of how China can put modern silicon nodes into mass-production.
You are describing 2010-era fab technology, when talking about EV and telecom chips. I just hope you know that's what you're bragging about here.
