Access to chips is crucial to any tech company — and Huawei has admitted it is already running out. Without chips, “What products can we still make?,” a Huawei employee has asked. The answer: not much. Fearing further pressure from the United States and seeing little hope for the future, some of Huawei’s top employees have already left the company. Huawei insists that it will soldier on. But it is hard to see how the company’s main products — like 5G equipment, network gear, smartphones and cloud computing services — will survive without access to chips.
China’s leading chip manufacturer, SMIC, is scrambling to build chips as small as 40 nanometers — billionths of a meter — without American technology. This might sound small, but today’s cutting edge is five nanometers. Even if China’s race to “de-Americanize” production at 40 nanometers succeeds, it will have built a chip as cutting edge as a flip phone.
Much as Beijing would like to, hardly any industry analysts expect China to wean itself off American tech soon. There’s just no way to create an entire industry from scratch, especially one that requires producing at the scale of nanometers. Beijing has no choice but to buy an estimated $300 billion worth of chips from abroad this year, more than it spends on any other product.
Huawei’s digital decapitation is a shocking display of American power. At the whim of the American president, any other Chinese tech company could suffer such a fate. Imagine if a foreign power could do the same to Google or Amazon.
The "American" chips are actually made in Taiwan under license by the Taiwan Semiconductor Manufacturing Company. They are probably the largest chip maker in the world, and they make the chip used by most American electronics companies, like Apple.
ReplyDeleteIt is American control of the license that prevents TSMC from selling to Huawei. China has announced it will develop the equivalent manufacturing capability. There's no reason why they can't. TSMC has a huge chip market share because of economies of scale, so the Chinese chips will be more expensive.
Both Russia and China have policies that all critical technology should be manufactured at home. If China were to invade Taiwan, the US would lose most of its chip supply.
I've not read anything in months that has made me as happy as this artice.
ReplyDeletePresident Kamala Harris is outraged by this information, btw....
The last sentence sounds like a threat. Bring it.
ReplyDeleteYeah, well sykes.1 nailed it: the "American" technology is far from being American and a lot of the chip foundries are in China, which makes accessing he 10nm if not the 7nm or the 5nm technology pretty easy. What they are trying to achieve is a total independence from western technologies and "that pesky licensing problem". Generally speaking they could use open source architectures (like ARM) for their next generation of "western-free" products, but that would still be labeled as "western-bound" since the Chinese were never fans of anything open. Anyway, I think its much more convenient to bemoan "American power display" than to switch to new architectures - at least for now. But don't misunderstand the situation - they can switch on home-produced architectures pretty much anytime!
ReplyDeleteThe Harris/Biden ticket would reverse this to enable China...
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