CHIP SHORTAGES? BLAME TRUMP BIDEN AND OBAMA

China makes mistakes but they Usually don’t repeat them. After the Qualcomm fine and fiasco, global semiconductor firms refused to move to China. Instead, they opted for expansion in Malaysia, Singapore and Taiwan. Malicious fines, arbitrary and capricious government action is bad for attracting smart companies. 

China now finds itself in the unhappy position of no Fab Companies except in Taiwan and the US has sanctions on Taiwan Semiconductor so Chinese Companies have limited access. 

This wasn’t any grand play by the USA 10D Chess players. This was just dumb luck in which China never believed the US would stoop so low as to attempt to block access to Semiconductor Fab operations. After all, the brains behind semiconductors are the chip designs and China has good semiconductor designers. They fall short because Chinese Fab is far behind Chinese semiconductor designs. For sub-7nm Fab China has two Choices. Samsung in Korea and Taiwan Semiconductor in Taiwan. 

The US is in the same dilemma except it has access to Samsung and Taiwan Semiconductor foundry facilities. 

Since the US sanctions began, Chinese firms have been stockpiling chips. This consequently created a global shortage. Chinese firms did this to be able to continue to bring their smartphone products to market until China could get a Mainland Fab operation going. 

That too has been delayed as the US has put sanctions against the ASML Dutch Lithography company that makes the optical devices necessary to screen the semiconductor layers. If you think the US is cleaver, you’re wrong.

“Export controls against China will not only fail to halt its technological progress but also hurt the US economy, ASML Holding NV chief executive officer Peter Wennink said, after trade tensions between Washington and Beijing led to restrictions on the sale of the Dutch company’s advanced chip equipment to Chinese firms.”

“I believe that export controls are not the right way to manage your economic risks if you have determined that there is an economic risk,” Wennink said during an online industry event on Wednesday, arguing that if “you close China from access to technology, that will also cost non-Chinese economies a lot of jobs and a lot of income.”

Wennink stated that China will develop its own tool eventually. 

Huawei already has a solution for 5G:

Instead of pushing for the 7 and 5 nm chip-scale, Huawei can use parallel processing arrays with 14-28 nm chips that are as fast as you want, and the end-user device becomes a dumb terminal for this central processor.

“The importance of the superfast, narrow gateway chips is exaggerated. China can now or soon will be able to produce all the 14-28nm chips it needs and that’s 98-99% of the total market.”

Peter Wennink is spot on. Chip blocking has only harmed the US supply chain and caused industry-wide chip shortages in non-Chinese firms. The US political strategy will fail. It is not even working in the short term. 

The first tipping point arose when former U.S. President Donald Trump began imposing sanctions on chip exports to key Chinese manufacturers such as Huawei, causing disruptions in the entire semiconductor industry worldwide. Not smart. This backfired and harmed the US Supply Chain with shortages. 

“China’s move toward self-sufficiency in semiconductors raises new questions on the future of existing global players.” Peter Wennink, CEO of ASML, said that Europe should not restrain exports to China, like the U.S. has done. Beyond exports, foreign players also need to integrate with China’s ecosystems, with a local presence. The USA is shooting itself in the head. 

The push for self-sufficiency by China, the world’s largest buyer of chips, is driving further advancements in new technologies. China is making progress in technology and innovation.

The Suzhou Institute of Nano-Tech and Nano-Bionics reported a breakthrough in laser lithography technology last year, which is expected to lead to the domestic production of advanced lithography machines.

Last year, Semiconductor Manufacturing International Corp. began mass production of Kirin 710A chips for Huawei.  For the first time, Huawei builds hardware with a foundry other than Taiwan Semiconductor Manufacturing Co.

In October, SMIC said it would soon produce 7-nanometer wafers for the Chinese market. In addition, China Electronics Technology Group Corp. has developed a series of homegrown ion implanters. Thus enabling the production of 28-nanometer wafers, a crucial industry component.

China’s moves in the semiconductor industry are reshaping the industry’s global dynamics. Major U.S. suppliers including Qualcomm have reported lower revenues and are lobbying against sanctions on exports to China.

Industry experts are expecting the U.S. share in the global semiconductor market to drop about 10%. And revenue to decline more than 20% in the next three to five years.

As an attempt to address such issues, the China Semiconductor Industry Association and the U.S.-based Semiconductor Industry Association have formed a working group to discuss how to resolve issues such as intellectual property, trade policy and encryption.

The rise of Chinese players as well as the actions of the United States, the European Union and other governments, will make competition in the industry more intense. China’s semiconductor industry has clearly entered a new era, as its competitiveness is sharpening and its structure is changing. Supply and value chains in the rest of the world are changing accordingly.

Every time the USA has pulled this moronic stunt of trying to block technology, China has developed core competency. Then they become the lower-cost competitor and dominate the marketplace.

What was Obama and then Trump and Biden now thinking? What is it about technology and the division of global labour that these fools can’t understand? The take-home message is simple. Industry experts are expecting the U.S. share in the global semiconductor market to drop about 10% and revenue to decline more than 20% over the next three to five years.

 

For those interested in the chip scale technology here is information on the Kerin 710a. It is a 14nm FinFET made at SMIC in China. The Kirin 710 was made for Huawei at  Taiwan Semiconductor at 12nm. The 12nm Kirin 710 has 1% more processing power than the 710a. 

The HiSilicon Kirin 710A is a ARM-based mid-range Octa-Core-SoC for Android based smartphones and tablets. It is based on the Kirin 710, but manufactured in 14nm FinFET at SMIC (China) versus the TSMC in 12nm. It was announced mid 2020 and contains 8 processor cores (4x Cortex-A73 at up to 2 GHz, 4x Cortex-A53 at up to 1.7 GHz, BigLITTLE), an ARM Mali G51 MP4, a dual-channel LPDDR4 memory controller and a LTE radio (600 Mbps down, 150 Mbps up). Therefore, the CPU part is similar to the Kirin 960 and 970 (both higher clocked), but the graphics card is a lot slower.

To understand the royal stupidity of Obama, Trump and Biden, is they meddle and then smoke an exploding Cigar. 

Obama thought it was a good idea to block intel xenon and X-86 chips so China could not build their proposed Supercomputers. In April 2015, the administration of President Barack Obama blocked a sale of Intel Xeon processors for China’s Tianhe-2 supercomputer. A few months later Chengdu Haiguang IC Design Co. was producing their own X-86 chips. By June Chinese had their own fast 64 bit RISC chips and built the world’s fastest supercomputer. 

Today, China is the world leader in producing RISC-V chips which are open source and have less instruction sets than ARM chips. Way to go Obama. Way to go! Is it possible to invent people this tech-illiterate?

Then along comes Trump. What end of the semiconductor business does Trump attack? The dumb end, of course, the wafer foundries. First understand that Intel got into the foundry business in 2010. But met with a huge failure in 10nm scale and left the business and dropped out of 5G in 2018, losing billions.

The leading foundry is Taiwan Semiconductor. This is the focus of Trump’s aggressive conduct toward Taiwan which has destabilized the entire world of fabrication. Coupled with Trump trying to block China from buying fab machinery and wafer materials, China started stockpiling and global shortages ensued. 

Trump was trying to stop the 7nm fab but that’s not where there were any shortages. The shortages developed in the 200nm range. But the blowhard could only scream Huawei and blocked Huawei 5G setting the US behind virtually everyone in 5G. This guy was a dope. 

Now the US is hyped up about building Fab foundaries in the USA. 

Even Intel wants to get in on some of that good ole US Government Crony Handout money. So they are planning to build two fab plants in Arizona for $20 billion each. Grasp the moment. This is the same INTEL that failed in the foundry business and dropped out in 2018! There are zero reasons to suspect that Intel will succeed. No independent will ever contract with INTEL for foundry business. INTEL is a Competitor! 

And with all the Fab plants springing up around the world, margins will be low and there will be another shakeout of this unprofitable commodity operations. It makes no sense at all until you recognize that the US is losing semiconductor market share. This will assure the market share continues to fall. 

CHINA, not the US. is the largest buyer of semiconductors: They want no dependence on US products that can be interrupted by mindless politicians.

China also has over twice the number of Supercomputers as the US. So where is the US going to sell US-made chips? China is expected to be 80% self-sufficient by 2025, about the time the first GOV funded chip foundry in the US starts production of some kind. This is a paranoid BUST. How could a smart semiconductor industry let a moron like Trump essentially destroy it?

Now low tech Biden is following Trump and Obama into the abyss. How is this even possible to examine the prior outcomes and not see the utter insanity of this blocking technology lunacy?

Yes Joe Biden, China is already eating your lunch and dinner too. 

Let me explain for the Walnut brained in the lifted pickup trucks why this blocking US technology only destroyed the US economy. 

Tump in his blowhard tried to block Android from China smartphones.

Trump was so stupid he never knew that Android was open source software and the only proprietary bit was the Google store and sync. 

Within months the Chinese and Korean smartphone makers had built their own Android platforms and their own app stores to be completely independent of Google’s proprietary software. After the Asians built their own platforms Trump had to reverse but it was too late. Google had already lost market share. And for the Asian smartphone makers, they had lost their dependence on the US supplier, Google. 

Blowhard then tried to block Microsoft from the use by the Chinese Military:

This was one of Microsoft’s largest valued customers. The Chinese had anticipated this and had already begun converting their operating system to Linux. Microsoft lost a big customer. BTW, Windows is not used in any Supercomputer in the world. 

Trump’s attack on Huawei now means the US has no 5G:

This means the US will not be designing and making products for the 5G network capacity such as driverless cars and delivery drones which China already makes. No products means you are not part of the future. Nobody is going to use US designs that could be blocked by some moron politicians in the future so you are not a player. 

What company wants to use Qualcomm chips that could be blocked by a dumb politician in the USA? Who is going to build their products around such a chipset?

Qualcomm earnings and market share are down. China and Korea have designed around all US chipmakers. The US is not a part of the ecosystem. The Asians are dumping US technology. Not only that which Trump and Biden are banning but EVERYTHING. Panasonic and Hitachi have removed all US components from Boards going to Chinese purchasers to avoid US Sanctions. The US is out in the cold because of Trump and Biden. 

It won’t matter what chip factories get built, the US won’t be selling into Asia. Look at INTEL, they missed the entire handheld revolution because of stupid mindless pea-brained low tech politicians that blocked their products and scared away Asian customers. 

 

Listen to the genius LIFER Politician. He has all the answers… the stumblebum speech on “CHIPS!” Asbestos-free schools… And More UNIONS… How inspiring. 

Thanks to Trump and now Biden and the many Xenophobes in Congress, The USA can never be trusted. Dealing with any US Company runs the risk of having sales blocked, technology blocked and even spare parts blocked. Why would any Asian company or any Country in the world, buy Boeing Aircraft if the US Government could stop the flow of parts, claiming the chewed dog bone of National Security? It’s over. 

Obama weaponized the US Dollar Reserve with sanctions. Trump liked that so much he put sanctions on 40% of the global population and became Tariff Man. And Biden continues the disaster with more of the same. It’s over. 

The Wood has been made into a boat and the boat is sinking.

Should Taiwan be worried? Yes as a matter of fact but not worried about Mainland China. Once the Mainland achieves chip self-sufficiency in terms of foundry production, the usefulness of Taiwan Semiconductor will be over. The US will no longer have any interest in using Taiwan as a pawn against Mainland China. Both Mainland China and the US will withdraw foundry work from Taiwan Semiconductor. By playing the sanctions card, Taiwan Semiconductor will lose at both ends. China may eventually sanction their products putting them out of business.

In fact, the US plan appears to be a decoupling from Taiwan foundries. Over 90% of all US chipmakers use Taiwan Semiconductor as their foundry. The US and China are both presently dependent on Taiwan Semiconductor and that short term monopoly advantage will be broken by both the USA and China. Taiwan Semiconductor should have maintained its complete neutrality.

 

 

 

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