American State Funding Continues, Probably

[OhOh]

Another Biden Blunder on the horizon?

US chip-making revival off to a slow start

US politicians talk excitedly about making American semiconductors great again, but that's proving easier said than done

by Scott Foster September 1, 2021

"TOKYO – From the third quarter of 2019 to the first quarter of 2021, Huawei’s share of the global smartphone market dropped from 18% to 4%. American politicians who have demonized and sanctioned Huawei must be pleased.

However, in the second quarter of 2021, the world’s top five smartphone vendors were Samsung (19%), Xiaomi (17%), Apple (14%), Oppo (10%) and Vivo (10%). The three Chinese companies had a combined market share of 37%. Xiaomi overtook Apple for the first time.

America is playing leveraged Whack-a-Mole with China. Hammer one down, three pop up.

But Xiaomi, Oppo and Vivo all use Qualcomm processors, which are designed in America and manufactured by TSMC in Taiwan or Samsung in South Korea. America and its allies are making more money.

In its July 28 earnings call, Qualcomm CFO Akash Palkhiwala said “ … we did see some weakness within the quarter [three months to June] relative to our expectations in China and in India. A lot of the weakness we saw was at the low tier.

“So the phenomena we saw is really kind of weaker low tier, but then mix shift towards the high end in these markets. And so that’s a key trend that we’re monitoring, which, obviously, net-net, the mix shift is a very positive thing for us.”

In other words, Qualcomm is doing very well in China thanks to other customers picking up the opportunity taken away from Huawei.

But hey, wasn’t the idea to deny China access to these advanced chips? Aren’t Chinese 5G smartphones an existential threat to our national security and very way of life?
Maybe not.

Separately, an analysis conducted by Nikkei Asia found that 51 of Apple’s top 200 suppliers in 2020 were based in China, 48 in Taiwan, 34 in Japan and 32 in the US. A total of 21 Apple suppliers were located in Vietnam, but seven of those were Chinese-owned.

The number of Apple suppliers based in China, Vietnam, Thailand and India is growing, while the number based in Taiwan, Japan and the US is in decline.

This is not the trend hoped for by America’s China-bashers, but given the relative wage and other cost structures, it can hardly be a surprise.

One Apple supply chain manager told Nikkei Asia on June 2 this year: “Most Chinese suppliers have very similar approaches. They are willing to take low-margin businesses that other suppliers are reluctant to pick up. This way, they could gradually level up by working with Apple and can later bid for more business the next time.”

Meanwhile, in the three months to June, Tokyo Electron – Japan’s largest manufacturer of semiconductor production equipment – made 35% of its sales in China versus 10% in America.

In the same period, LAM Research – one of Tokyo Electron’s major American competitors – made 37% of its sales in China against 5% in America.

Even the Netherlands’ ASML, which produces the advanced EUV lithography equipment that the US government is so anxious to keep out of Chinese hands, made 17% of its sales in China versus 6% in America.

As usual, South Korea and Taiwan were ASML’s best markets, accounting for 39% and 36% of its June quarter revenues, respectively.

American politicians, commentators and industry executives have been talking excitedly about reversing the decline of semiconductor production in the US for more than a year now. But what is needed is less talk and more action.

In September 2020, the US Semiconductor Industry Association published a report stating that:

A strong domestic semiconductor manufacturing presence is critical to America’s economic competitiveness, national security and supply chain resilience.

Robust federal incentives for semiconductor manufacturing are needed to strengthen national security, attract substantial chip manufacturing to the US and create tens of thousands of American jobs.

It concluded that:

With a US$50 billion federal investment, the US is projected to capture nearly a quarter of new global capacity that is not yet in development, compared with only 6% with no government action.

However, in a blog published on August 24 this year, SEMI, the global semiconductor equipment and materials industry association, pointed out that:

“One of the first orders of business for Congress when it returns in September should be to fund the CHIPS for America Act programs, which were authorized earlier this year in the fiscal year 2021 National Defense Authorization Act (NDAA).

“In April, the White House Supply Chain Report called for $52 billion in semiconductor incentives and research funding. In June, the Senate passed the United States Innovation and Competition Act (USICA), which included emergency appropriations of $39 billion to fund the incentive grant program at the Commerce Department, $12 billion for semiconductor research programs and $2 billion for the CHIPS for America Defense Fund.

“The House has yet to act, and the programs remain unfunded …

“Additionally, SEMI strongly supports and encourages Congress to pass the Facilitating American-Built Semiconductors (FABS) Act. The legislation would create a permanent and effectively refundable 25% tax credit for equipment and facilities to produce semiconductors and semiconductor tools …

“A globally competitive corporate tax code is a key driver of innovation and economic growth.”

Foreign subsidies and tax breaks are major whining points for American politicians anxious to “level the playing field,” so why the delay?

Now that US troops have departed Afghanistan, perhaps they will get back to work. But it is not clear whether or not politicians can override American corporate and financial interests.

One of former president Donald Trump’s last initiatives was to pressure Taiwanese semiconductor foundry (contract manufacturer) TSMC into fabricating semiconductors for military use in the US instead of Taiwan.

President Joe Biden and many other politicians carried this policy forward and in June TSMC announced that the proposed subsidies had convinced it to start construction of a new factory in Arizona.

Speaking to Bloomberg, TSMC Chairman Mark Liu said:

“Subsidies will be a key factor in TSMC’s decision to set up a fab in the US … Our request is that the state and federal governments together make up for the cost gap between the US and Taiwan.”

Intel, the largest American semiconductor maker, doesn’t like this at all. In an article entitled “More than manufacturing: Investments in chip production must support U.S. priorities” in Politico on June 24, 2021, CEO Pat Gelsinger wrote:

“The federal government should invest in American intellectual property and capabilities. It should invest US tax dollars in companies that are based here and house their most critical assets ― including patents and people ― domestically …

“… foreign chipmakers vying for US subsidies will keep their valuable intellectual property on their own shores, ensuring that the most lucrative and cutting-edge manufacturing stays there and requiring the US to make the difficult choice between forgoing the advanced chips necessary for critical national security applications or relying on insecure, foreign supply chains for them …

“We must look beyond short-term capacity issues and think seriously about what US chip leadership really looks like.”

Gelsinger has a point. TSMC plans to begin volume production using 5-nanometer process technology in Arizona in 2024, but will move from 5-nanometer to 3-nanometer technology in Taiwan by the end of 2022.

On top of that, in late July, the Taiwanese government granted TSMC approval to build a new factory in Taiwan that will use 2-nanometer technology. It is expected to be equipped starting in 2023.
In the meantime, Intel and Apple have signed up to be the first users of TSMC’s 3-nanometer process technology. Intel is still working on a 7-nanometer.

So, in terms of miniaturization, TSMC is about two generations ahead of Intel and rapidly moving ahead.

Under the banner “Intel Accelerated,” Gelsinger is leading an effort to catch up with, overtake and compete with TSMC.

On March 23, Intel announced an increase in its 2021 capital spending budget from about $14 billion to $20 billion to upgrade and expand its production capacity.

How did financial markets react?

On April 9, Intel’s share price peaked at $68.49. Since then, it had dropped by 21% to $54.09 as of August 31.

The American government wants American semiconductor companies to expand their production capacity and Intel’s top management wants to do so. But Wall Street does not like the idea because outsourcing to Taiwan is more immediately profitable.

And Intel itself is of two minds. In June, The Wall Street Journal reported that Intel was “exploring a deal” to buy GlobalFoundries, one of TSMC’s competitors, for about $30 billion.

M&A is a CEO thing. This deal, if it gets done, would cost Intel one and a half times its current record-high capital spending budget, but would not add one silicon wafer to US semiconductor production."

US chip-making revival off to a slow start - Asia Times

[harrybarracuda]

America is playing leveraged Whack-a-Mole with China.

No it's not, it's playing Whack-a-Huawei and their spying shit, and it's doing it very well.

[OhOh]

A video and an article illustrating the following points to ponder:

(Quotes 1. to 6. are from the video)

(Except for "Na-Gstan". Which due to recent losses in Asia, has required an update to replace "ameristan", as requested by some respected TD members. The colour is taken from the Department of State website.)

1. Understand Chinese, financial laws and commercial practises.

2. The greed of the "Na-Gstan". corporate elite is making you more poor and vulnerable.

3. The Chinese understand us much better than we understand ourselves.

4. In fact, they're much smarter than us.

5. Our strategic technology, which we spent US$1,000, 000, 000, 000 on developing, should be probably handled with care.

The video:

The article:

The Semiconductor Heist Of The Century

Arm China Has Gone Completely Rogue, Operating As An Independent Company With Inhouse IP/R&D

Dylan Patel Aug 27

"Arm is widely regarded as the most important semiconductor IP firm. Their IP ships in billions of new chips every year from phones, cars, microcontrollers, Amazon servers, and even Intel's latest IPU. Originally it was a British owned and headquartered company, but SoftBank acquired the firm in 2016. They proceeded to plow money into Arm Limited to develop deep pushes into the internet of things, automotive, and server. Part of their push was also to go hard into China and become the dominant CPU supplier in all segments of the market.

As part of the emphasis on the Chinese market, SoftBank succumbed to pressure and formed a joint venture. In the new joint venture, Arm Limited, the SoftBank subsidiary sold a 51% stake of the company to a consortium of Chinese investors for paltry $775M. This venture has the exclusive right to distribute Arm’s IP within China. Within 2 years, the venture went rogue. Technically it has always been legally independent, but Arm still maintained control. Recently, Arm China gave a presentation to the industry about rebranding their own IP, extending it by developing more, and emphasizing that they are striking their own independently operated path.

This firm is called “安谋科技”, but it is not part of Arm Limited.
This is the tech heist of the century.

Before we get to the event they held and the significance of it, let’s do a recap. In 2020, Arm and a handful of the investors agreed to oust Allen Wu, the CEO of Arm China. He was ousted for using his position as the CEO of Arm to attract investments in his own firm, Alphatecture. Examples such as the following and more can be found here.

Mr Wu had offered discounts to Arm China customers in exchange for their investment in Alphatecture

Removing Allen Wu has proven to be very difficult. Despite a 7-1 vote by the Arm China board, the company seal was still held by Allen Wu. In China, the seal/chop is a stamp which authorizes the person in possession to bind a company and its representatives with rights and obligations. Retrieving this seal and the business license would be a multiyear drawn-out legal process. Furthermore, it would mean at least some investors besides Arm must be along for the ride. Currently other investors still agree with ousting Allen Wu. The Chinese court system would also need to agree with ousting an executive in favor of one that was hand selected by western influencers.

Despite formally being fired, Allen Wu has remained in power. He ousted executives that were loyal to Arm. He has even hired security paid for by Arm China that reports to him. This security has kept Arm out of the Arm China offices. Allen Wu has aggressively taken over the firm and is operating it how he sees fit. One interesting tidbit is that Allen Wu sued Arm China in order to declare his dismissal illegal. He essentially sued himself as he represented both sides in that specific court case.

Arm has halted the transfer of any IP to entities on export control list. According to Arm, no IP has been stolen. Simultaneously, Arm has also tried to appeal to the government stating that this is bad for the Chinese semiconductor industry.

This leads us to the present day, where Arm China held an event at which they formally declared their independence. They proclaimed that 安谋科技 is China’s largest CPU IP supplier. It was born from Arm, but is an independently operate, Chinese owned company.

The event comprised of cheering on 安谋科技 business. Some of the fanfare was emphasizing that 安谋科技 had a cumulative 20B shipments since formation. It has over 90 partners, 29 of which have achieved mass production of chips using the IP. These shipments range from mobile, network infrastructure, 5G and IoT. They were developed by the company’s 400+ person R&D team that is based entirely in China.

Besides standing out and calling themselves an independent entity, they also announced and rebranded IP which was independently developed. It is called the Power Core line and it goes under the XPU title. The IP blocks include NPUs, SPUs, ISPs, and VPUs, but they made it clear they will extend beyond this.
The NPU, neural processing unit, is especially interesting because Arm itself has also developed a range of AI geared IP. 安谋科技 is forging ahead to have an inhouse source of IP and reduce reliance on Arm Limited. This is just the beginning, and who knows where 安谋科技 goes from here. Perhaps they even begin working on their own CPU cores, GPU, and server designs.

Most of this IP is targeted at mobile or IoT type use cases. The SPU, security processing unit, is specifically geared to creating secure enclaves and being a management engine. The ISP, image signal processor, is meant to take inputs from cameras and process them into a digital form. It applies various techniques and operations to enhance the raw images. The ISP is geared to work with the NPU to analyze images and videos in order to identify people, objects, and events. These IP blocks are critical for emerging applications which will deploy billions of cameras in China over the next decade. Lastly, there is the video processing unit which is meant to encode and decode videos in common formats such as H264, VP9, and soon AV1.

Arm China, 安谋科技, is asserting their independence. It is the most publicized instance of a joint venture in China going rogue, but also the most dangerous one. The Arm China board is not in agreeance with Allen Wu, but he still holds power despite his formal removal. Minority stake joint ventures have had control wrestled away from the parent company, but this may be the most brazen attempt yet.

Arm has been shaken to its core with the 2nd largest market snatched from underneath it. According to Arm, no IP has been stolen, but Arm cannot license directly license to any firm in China. They must go through 安谋科技.

Only the rouge Arm China entity controlled by Allen Wu can create agreements for licensing Arm IP in china. While Arm is the largest individual owner in this firm, they have no control or power over the operations. 安谋科技 has set out on its own path with its own IP. The base of Arm’s IP is not the end of their line. There are many questions swirling about what this means for a potential Nvidia takeover or IPO, but it is clear that SoftBank’s short sighted profit driven behavior has caused a massive conundrum.

Update 8/31/21: Emphasizing that IP has not been stolen or stopped according to Arm, SemiAnalysis maintains that a heist has occurred regarding control of the Arm China entity. "

https://semianalysis.substack.com/p/...of-the-century

[Listerman]

One Apple supply chain manager told Nikkei Asia on June 2 this year: “Most Chinese suppliers have very similar approaches. They are willing to take low-margin businesses that other suppliers are reluctant to pick up. This way, they could gradually level up by working with Apple and can later bid for more business the next time.”

That's the key point from this article! The greedy American capitalists cannot resist going for the cheapest price, so they can maximise their shareholder profits. Whilst on the other hand the Chinese companies have the economy of scale thus, allowing them to take on low profit margin contracts, whilst slowly increasing their ability to take on ever more business. Because instead of making shareholders richer, they invest the bulk of the profit back into the business.

[OhOh]

whilst slowly increasing their ability to take on ever more business

Both in quantity and complexity, after displaying proven quality and deliverability, successes.

[harrybarracuda]

The moral of the story: It's OK buying cheap chinky shit, as long as it's not chinky Huawei spying shit.

[Klondyke]

^Wondering whether the good English speaking lawyer did not advised 'arry not to speak about the "chinkies" while living in Thailand - might be that the lawyer was of "chinkies" origin? Or was it an Indian? They speak good English, better than the "chinkies".

And if 'arry will express his liking for Indians over the "chinkies" in front of his wifey (she might have some "chinkies" roots), I am afraid it could end up tragically.

Obviously, 'arry does not know what the Thai people do first when they suddenly see a snake and an Indian at one moment. I recommend, better not to ask the wifey...

[aging one]

And if 'arry will express his liking for Indians over the "chinkies" in front of his wifey (she might have some "chinkies" roots), I am afraid it could end up tragically.

He is not married to my knowledge. But why bring family into it? Pretty cheap and crass thing to do as well as being a jailing offence.

[bsnub]

But why bring family into it? Pretty cheap and crass thing to do as well as being a jailing offence.

They always resort to it, and it is beyond pathetic. Next come the pedo shit.

[sabang]

American state funding- chinky shit- pedo shit- Jeffrey Epstein. A'hh yes, the sweet smell of Doghouse.

[harrybarracuda]

But why bring family into it? Pretty cheap and crass thing to do as well as being a jailing offence.

Because he's a fucking retard?

[Klondyke]

He is not married to my knowledge. But why bring family into it? Pretty cheap and crass thing to do as well as being a jailing offence.

They always resort to it, and it is beyond pathetic. Next come the pedo shit.

Because he's a fucking retard?

What a surprise to read something like this it from you. It seems that with your hatred you lost any sense of humour:

It's not about family, it's not about pedo, it's just about 'arry's "chinkies" and the Indians preferred by him over his "chinkies"...

[aging one]

It's not about family, it's not about pedo, it's just about 'arry's "chinkies" and the Indians preferred by him over his "chinkies"...

Talk about a "lair", liar, you top the bill. You specifically stated Harry would have problems with his "probably" Chinese wife. Its out there and was seen, so deal with it and stop lying.

[Klondyke]

^You got me...

[OhOh]

as well as being a jailing offence.

Selectively applied.


"Forum: Speakers Corner

"A forum for civil discussion and exchange of ideas. No flaming or abuse allowed. All posts should include your opinion on the subject, not your opinion of the member posting."

https://teakdoor.com/speakers-corner/

Next come the pedo shit.

Because he's a fucking retard?

[harrybarracuda]

It's good that hoohoo is sticking up for his little puppy.

Especially as sabang is showing signs of abandoning the three stooges.

[sabang]

Well then let me get back into the Little Red Book. Chinese political leadership so far this century has been much more enlightened than American political leadership.

I would have thought that is as obvious as the lines on ones palm.

[harrybarracuda]

Well then let me get back into the Little Red Book. Chinese political leadership so far this century has been much more enlightened than American political leadership.

I would have thought that is as obvious as the lines on ones palm.

Sabang fires back to show his level of "re-education".

[panama hat]

And if 'arry will express his liking for Indians over the "chinkies" in front of his wifey (she might have some "chinkies" roots)

Crossing the line by brining family into it, arsehole

[harrybarracuda]

Crossing the line by brining family into it, arsehole

Awww it's OK. He's a fucking retard.