How Huawei made a cutting-edge chip in China and surprised the US
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RickRoyLeonPrisZhoraRacha
Ars Centurion
Am I wrong to assume? I'd say TSMC was compromised and IP theft is China's number one tool. Plus there are some EU companies that will always want to sell "parts" and "toolings" that get past tariffs and sanctions. And just look at nVidia wanting to sell AI chips to China, even though its not permitted. Greed is the rope they'll hang you and others with.
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It's almost like the US sanctions allowed Huawei to jumpstart the Chinese semiconductor business. They had to spend the money somewhere and they capitalized on the opportunity.
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Greed and morals. China is a dictatorship (by a party or a person which is irrelevant) . Such countries should be banned from global commerce, except for food. But greed > morals.
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This shouldn't have surprised anyone (and probably didn't, privately). Sanctions were only ever going to delay a nation with China's resources. Next up, we'll all pretend to be surprised when they succeed in producing a home-grown alternative to ASML tooling that, while a few generations short of state-of-the-art, provides them with a stable platform to iterate on.
Sanctions aren't useless, but they aren't a magic wand either.
Sanctions aren't useless, but they aren't a magic wand either.
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tl;dr they didn't
China already had DUV machines (purchased in 2020) that were technically capable of 7nm (with horrible yields). SMIC even produced 7nm chips a couple years ago.
For anyone curious - some experts estimate SMIC's yield to be as low as 15% using DUV for 7nm. Going any lower will result in exponentially worse results.
China already had DUV machines (purchased in 2020) that were technically capable of 7nm (with horrible yields). SMIC even produced 7nm chips a couple years ago.
For anyone curious - some experts estimate SMIC's yield to be as low as 15% using DUV for 7nm. Going any lower will result in exponentially worse results.
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Money quote
"Industry insiders close to SMIC acknowledge it is possible some equipment was obtained in violation of export controls."
Also.... China graduates 5-10x more STEM degrees every year vs. the US. They may not have the most 'elite' institutions....but they make up for it in sheer numbers.
"Industry insiders close to SMIC acknowledge it is possible some equipment was obtained in violation of export controls."
Also.... China graduates 5-10x more STEM degrees every year vs. the US. They may not have the most 'elite' institutions....but they make up for it in sheer numbers.
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There's a proverb applicable here: necessity is the mother of invention.
All US sanctions did was stopped the export of products to China, but didn't stop the need for them. The only thing the sanctions achieved was jump starting a semiconductor manufacturing industry in China.
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Sanctions are not “jumpstarting” an industry if (1) the country was dead set on getting into that industry regardless and (2) they spent many billions of dollars on alternatives.
SMIC spent billions figuring out how to use older equipment to make chips uneconomically. That’s not “jumpstarting” jack shit.
SMIC spent billions figuring out how to use older equipment to make chips uneconomically. That’s not “jumpstarting” jack shit.
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If you make someone live without you, they find out that they can live without you.
I'm not saying that the US should put chips with backdoors in their equipment, so some embargos are simply defensive, but China isn't N.Korea. You cut them off from something, they will steal it and/or home grow it and all you've done in the long run is taken away your own power.
It was foolishly simplistic to think the result would be anything other than what it was.
I'm not saying that the US should put chips with backdoors in their equipment, so some embargos are simply defensive, but China isn't N.Korea. You cut them off from something, they will steal it and/or home grow it and all you've done in the long run is taken away your own power.
It was foolishly simplistic to think the result would be anything other than what it was.
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The DUV machines SMIC has are more advanced than the DUV machines TSMC used for N7.
The article massively overstates the downsides to DUV at 7nm.
Both Intel and TSMC managed to create extremely successful and high-yield 7nm process nodes without using EUV. The known feature sizes of SMIC's 7nm N+2 node are very comparable to Intel's and TSMC's, so while it is certainly impressive to have accomplished this without the assistance from ASML and others that foundries usually rely on, the process node still "only" replicates what others accomplished 4-5 years ago. And, if the sources in the article are to be believed, SMIC's yield is significantly lower than TSMC's and Intel's 7nm DUV process.
Additionally, the DUV method is a bit of a dead-end. ASML believes something like 5nm can be achieved, so SMIC should have a couple more years of updates in feature sizes - providing they can build up a supply chain to provide spare parts.
Advanced DUV has no path beyond 5nm, however, and there are few "lessons learned" that apply to EUV - the two method are completely different.
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I expect China is investing in alternative EUV sources. There are potential successors to ASML's EUV systems that can go to even shorter wavelengths. I know one of the founders of a US company working on a highly-viable next gen technology. China probably knows about this tech too and could look to jump directly to it, not only solving their near-term 5nm issues, but setting themselves us for even smaller process nodes too.
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The US has also sanctioned rocket and satellite tech. Doesn't seem to have halted the progression of the Chinese space industry.
My understanding is that France and India are also notorious for corporate espionage.
And how is it that you think TSMC became the global leader on semiconductors? Do you think Taiwan has some secret sauce that China doesn't? It's only a matter of time before China catches up.
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Sanctions only work when there is a disparity in power between the parties clearly in this case the disparity between China and the US is minimal and China will spend its way out of this. Its the same strategy that the US used against the Soviet Union during the Cold War out spend your enemy until they cannot compete. China has the capital to weather the storm of sanctions and will eventually be able to produce all of the components needed for the end to end supply chain. It might not be the cutting edge but 1 to 2 years off the pace is sufficient.
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It's not only the semiconductor manufacturing equipment. The US also blocked the sale of chip design tools from companies like Cadence. This has led to investment in Chinese domestic design tools, which reportedly are quite capable now.
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Crying Croc
Wise, Aged Ars Veteran
I am a traveler and I've been to dictatorships like Belarus, China, Cuba, Myanmar, Vietnam, Zimbabwe... I enjoyed my travels (both to dictatorships as well as prosperous democracies) but am always glad to come home too. Just my view:
1. Just like not all democracies are the same, not all dictatorships are the same either.
Some of the more egregious ones - like Myanmar - you don't see much investments / progress, even over decades. People are so dejected they just don't see the point. Plus even if they are determined to try, their government is just so much more hinder (i.e. arbitrary, confiscatory policies) than help.
But most dictatorships - while fundamentally different from our democracies - are actually a blend -- and in that limited way - not unlike our own democracy which is also a blend of sorts. A 100% ruthless dictatorship is unlikely to last. A 100% free democracy would lead to unsustainable chaos too.
2. China's dictatorship (which is what it is) is actually also a blend of sorts. It's almost impossible for outsiders (us) - or even the Chinese people themselves - to understand the dictatorship. It's simply too arbitrary / too opaque. Much depends on who's the strong man standing after countless rounds of power struggles. But look at the results - look at how the people actually live. Unlike Myanmar or Cuba or Zimbabwe... you don't see dejection/resignation/passiveness. What you see is a dynamic society where people KNOW they have no political say... but they are still "ruthlessly" competing with their neighbors to get their kids into the best schools, so they can get the best jobs (or study abroad in America). IOW, there is sufficient room in the Chinese society where people feel they can still make themselves a better future!
Reading this article (and others), I truly admire Huawei, etc.'s determination to win! Actually, no government or company can accomplish anything if the citizens/management/employees are not driven/determined. And that shows a lot what the hybrid Chinese social/economic/political system can deliver to the people - both good and bad. It's not just black and white.
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China has the most important resource needed to develop cutting edge chips, and that is talent. It will take them several years to fully catch up, but they will, by both fair means and foul. As the USA upgrades its internal chip making capacity by throwing government money at it (not a bad thing in my view) China is doing and will continue to do the same. It will be interesting to see who wins the race to have state of the art chipmaking completely in the home country first, and how much money it will cost each of the players.
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Yes and no. This goes back to the Intel 7nm issues. Intel was able to make 7nm for a long time. Just not in economically viable batches. But if you're a government and don't care about probability and waste. You can have 10% yield and bulldoze your way into having a supply. VS something like 90% yield. And those yield numbers are hypothetical.
So yes they might be compromised. But it's been widely know it is possible they can make parts. Just not in mass quantity. This is a dog and pony show to show the world. We don't need you. Take down sanctions! When the reality is they need someone else.
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I have absolutely no idea why people keep being surprised by China being able to do homegrown stuff. "Holy shit, they can do electric cars?" "Holy shit, they can build jets?" "Holy shit, they can build rockets?" "Holy shit, they can build advanced semiconductors?"
Is there something special about people in China being functionally incapable of learning stuff, improving stuff, or otherwise coming up with ideas themselves? Because if there isn't, why do I keep reading again and again about how shocking it is that China did something on their own?
I could understand it if we're talking about countries like Liechtenstein or Montenegro who have fewer people total than some of the companies involved in these industries. But why on God's green earth would a country of 1.5 billion people not be able to?
Is there something special about people in China being functionally incapable of learning stuff, improving stuff, or otherwise coming up with ideas themselves? Because if there isn't, why do I keep reading again and again about how shocking it is that China did something on their own?
I could understand it if we're talking about countries like Liechtenstein or Montenegro who have fewer people total than some of the companies involved in these industries. But why on God's green earth would a country of 1.5 billion people not be able to?
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The cold war got us half a century of terror where two superpowers pointed nuclear guns at each other's head and dared each other to pull the trigger.
Not going to sanction China's Uyghur genocide or hostage diplomacy, but we're all better off trading with the despots and getting rich than kicking off another global arms race.
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China has made one FIFA World Cup and didn’t score a single goal. ASML is based in a country with fewer people than Beijing. Population helps but who really knows.
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Let’s not forget that while companies are blocked from helping China, they could have gotten help from people returning to China. How much incentive would China provide to a technology leader to give up their citizenship or status elsewhere to return to China and help them in critical areas?
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In fact to me it makes it more black and white than ever if a regime that calmly efficiently genocides its minorities is still that strong. A dictatorship that works well is much much more dangerous amd more evil.
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Even before the sanctions China regularly recruited engineers from Taiwan. After the sanctions the salaries and bennies got even more generous.
It's quite helpful that Taiwanese engineers speak and read Chinese.
It's quite helpful that Taiwanese engineers speak and read Chinese.
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As someone from a country on the complete opposite of Moscow in an European map (if you are a good swimmer, NYC is just straight West) but that was still just this week mentioned and not for the first time as someone that should belong to the Russian Empire I would say your post is just plain ridiculous.
For all the USA faults I know which side I prefer and it's not even close.
Regarding sanctions than was to be expected, Russia also expected to cripple the EU with its gas curtailments.
Well, they are almost literally Chinese just not PRC Chinese.
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You don't generally halt with sanctions, you just make it harder, slower and more expensive.
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What was the point of the sanctions, again? Cutting off your nose to spite your face?
U.S. policy makers must be trying to set a world record for epic blunders. If this is what we call "winning" the trade war, then I don't want to see what it looks like to be "losing".
U.S. policy makers must be trying to set a world record for epic blunders. If this is what we call "winning" the trade war, then I don't want to see what it looks like to be "losing".
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The biggest threat is once China is able to break thru US tech monopoly, US "allies" will have option to not bark on command. 
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Crying Croc
Wise, Aged Ars Veteran
As a naturalized American citizen... one of the best thing about our own political system is the insertion of the "Bill of Rights" - a big 'thank you' to Thomas Jefferson! No matter how small your group, there are certain rights listed out in black and white that no majority or even super majority can take away from you! No need to fear the "tyranny of the majority" even if you hold an unpopular opinion about almost anything!
No such thing in China. There, the Han people make up something like 92% of the population, with the remaining paltry 8% comprising Tibetans, Uighurs, etc., etc. - all of them a super minority by definition. And if the Han people believe their system is so superior that they need to "civilize" the minorities even to the extent of forcibly taking minority children away from their parents and into boarding schools... so be it... for the good of the country (and ostensibly for the eventual "good" of the minority peoples themselves)!
As horrible as the above, is it even more horrible to hobble (as much as we could) the betterment of 1.398 B people, as collective punishment for the 0.02 B persecuted? Particularly in a dictatorship where the former have no say in the matter?
Then there is the practical matter of how effective sanctions really are? Just reading the hoops Huawei and SMIC had to jump through, I believe sanctions are effective in the short term - but when applied to a society with sufficient size, wealth and brain power - sanctions also have the effect of spurring them on - which ends up counter productive to our objectives.
Finally, food for thought: When America itself was developing, it was also deemed acceptable, even desirable, that savage Indian children needed to be given a Christian, progressive education! And we all knew the aftermath of that!?! Today, the thought of snatching children away from specific minority groups to be remolded into the ways of the majority is unthinkable! A change for the better, certainly. But I am not sure what drove the change? That we are now a better, more decent people? Or because most all Indian children today are already in our public school system anyway (for better and for worse)? IOW, if circumstances change, and we are back into developing-country mode with a large minority that are just so different from our own... will we (or future Americans) repeat the same... again? I am not 100% sure that we can assume we will never repeat this mistake again. Just look at the number of people insisting on 'English Only' today?? The majority seems 'perpetually' tempted to remode minorities who behave differently?
But thank Heavens we have the Bill of Rights. That's at least some protection.
[Edit to Add]: I want to emphasize past doing's by us or anyone else in no way justifies anyone else repeating the same today. My bringing all this up is (1) wondering out loud whether this form of persecution is actually inherent in our human nature (cause Britain, Australia, Canada, etc., etc. also did resort to forced education of minority children in their past)... and (2) expressing thankfulness that in our country (but not many others), we have the Bill of Rights that (if enforced properly) can provide adquate protection for minorities.
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Before blaming China for "theft" of everything, remember, laws of physics work all the same in every corner of the known universe. Whatever can be developed in the West can and will be developed in China or anywhere else in the world as well, given sufficient resources like money and talents, which China doesn't lack at present.
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