Has Intel's Indian-American Techie Risked America's Global Technology Leadership?

Intel has recently fired its Indian-American chief engineer Venkata Murthy Renduchintala, who also served as Group President of the Technology, Systems Architecture and Client Group (TSCG), for failure to deliver 7 nanometer semiconductor technology on schedule, according to Reuters.  The news has knocked the market value of Intel by tens of billions dollars. The American company, the biggest global chip manufacturer with in-house fabrication plants, has also decided to outsource manufacturing. This could deal a serious blow to America's global leadership in chip manufacturing which is fundamental to all other computer and communications related technologies.


Intel's Global Leadership:

Intel Corp. (INTC), founded in 1968 in Silicon Valley, is the world's largest and the most advanced semiconductor company, larger than the second-ranked Samsung Semiconductors, and more than triple the size of the next-largest domestic producer, Qualcomm Inc. (QCOM).

What distinguishes Intel from most other semiconductor companies is that it manufactures its products in-house. The bulk of semiconductor “manufacturers” outsource the actual work of building their products out to foundries in China and Taiwan.

Last week, the company revealed that its smaller, faster 7-nanometer chipmaking technology was at least six months behind schedule and it would have to outsource manufacturing to keep its products competitive.

Taiwan Semiconductor Manufacturing Company (TSMC):

Taiwan-based TSMC has 6 nanometer technology in production already. There is widespread speculation that Intel will turn to it to manufacture its most advanced microprocessors.

TSMC manufactures chips for the vast majority of the leading fabless semiconductor companies including Advanced Micro Devices (AMD), Apple Inc., Broadcom Inc., Marvell, Nvidia, and Qualcomm.

US Technology Leadership Under Threat:

Semiconductor manufacturing technology is fundamental to all other computer and communications technologies. While the U.S. still has most of the leading chip design companies, there are very few leading semiconductor manufacturing facilities in the country. In fact, the US, which invented the chip technology,  has slipped from being first in semiconductor manufacturing at the dawn of the industry to fifth in the world.

Recognizing the issue of foreign sourcing of critical technologies, the US has forced TSMC to start a fab in Arizona.  But TSMC’s proposed fab in Arizona will have relatively small capacity, sufficient to meet only a fraction of the manufacturing demand of top companies like Apple, AMD, Marvell, Nvidia, etc.  The US Congress is in the process of legislation that will provide greater incentives to companies to manufacture chips in the United States.

US-China Tech War:

TSMC is caught in the cross-fire of US-China technology war.  Almost all major semiconductor manufacturers, including TSMC, rely on equipment made by US companies. The US government is attempting to leverage the dominance of US chipmaking equipment industry to shut out the Chinese technology companies.

US Commerce Department has recently announced that henceforth, any semiconductor chips made with equipment built by American companies cannot be sold to Huawei without prior approval and license from the DOC.

Summary:

Silicon Valley tech giant has revealed that its smaller, faster 7-nanometer chipmaking technology is at least six months behind schedule and it would have to outsource manufacturing to keep its products competitive. The company has blamed the failure on its Indian-American chief engineer who has since been fired. What is at stake here is the US technology leadership because semiconductors are fundamental to all computers and communications products. Taiwan-based TSMC appears to be the biggest beneficiary of Intel's failure.

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Comments

Sabahat A. said…
My short and very low-level experience with said semiconductor behemoth pointed to the rot being much deeper.
Terry A. said…
My understanding is that Intel is behind the curve
Or lagging behind AMD in 7 nm Production
Technology by 1.5 to 2 years ( Not 6 months )
Intel has publicly stated that they expect to
Release 7 nm products in volume production
By the end of 2021 or even going into 2022.....
Some reports also say that could drag into
Later in 2022 ( which is 2 years from now )

I worked at AMD for almost 3 decades on pioneering
Teams for Test Engr & Worldwide Testing Production
Operations Management for 8 Generations of Microprocessors -
( 80186 to the Opteron families ) and was among
Many who clearly saw how Intel played and used
Unethical & Dirty Tactics ( Lawsuits , threatening
Customers etc etc ) to keep their competitors
DOWN !!!! ......... Just because they had plenty of
Money to keep cases tied up in court for over
A decade....... Ultimately ALL the final Court
Arbitration & Judgements came out in AMD,s
Favor ( proving that Intel had no leg to stand on
And all their lawsuits were filed without Merit )

The failure to deliver 7 nm products was NOT
This Indian Executives fault as he was barely at
The company for less that 2 years I understand
He had a lot of successes at Qualcomm his previous
Employer before joining Intel....... so just became
Another Scapegoat to assign the blame for
Their dismal performances over the past few
Years........ Both Executive Management Scandals
As well as Fabrication & Process Engineering
Screw ups over the past 3 years Are the real
Causes for Intels downfall ........ Period !!

Sure they will figure out how to come back
( sometime or someday in the next few years ) by using
TSMC or other more advanced companies
And selling some of their sub micron USA
Fabs to other Companies to minimize their
Losses....... BUT they will need to cut at
Least 15-20 % of their current workforce
In the meantime to remain competitive ??

Intel has been the ( Goliath ) of the Semiconductor
Industry for about 2 decades........ however
They became too arrogant & sloppy , let their guard
Down ........ & are now learning that AMD &
Nvidia That were the ( David’s ) of Microprocessors & Graphics chips can come back and WIN ?

Sometimes those who laugh LAST........ laugh the
BEST !!!
Riaz Haq said…
Nikkei reported earlier today that TSMC has moved to stop new orders from Huawei following the US government’s announcement last week. The rules are specifically designed to target Huawei and its chip subsidiary HiSilicon, requiring a license for any shipments from manufacturers that use US technology or equipment. TSMC didn’t deny the reports but called them “purely market rumor,” according to Reuters.


https://www.theverge.com/2020/5/18/21262042/huawei-us-export-tsmc-chip-manufacture


Huawei has in the past suggested that it could switch its chip supply to Samsung in this eventuality. The company has also recently been exploring domestic chip production through China’s Semiconductor Manufacturing International Corporation (SMIC), which just received a $2.2 billion investment from the Chinese government.

SMIC is a relatively tiny competitor to TSMC, however, and it would take a long time to scale up to Huawei’s cutting-edge demands. Last week SMIC started mass production of HiSilicon’s Kirin 710A processor on its 14nm node, but TSMC is expected to move onto a more advanced 5nm process this year. Even the original Kirin 710 was manufactured by TSMC at 12nm, and that was a mid-range chip in 2018.

“This decision by the US government does not just affect Huawei. It will have a serious impact on a wide number of global industries,” Huawei says in its statement. “In the long run, this will damage the trust and collaboration within the global semiconductor industry which many industries depend on, increasing conflict and loss within these industries. The US is leveraging its own technological strengths to crush companies outside its own borders. This will only serve to undermine the trust international companies place in US technology and supply chains. Ultimately, this will harm US interests.”

Richard Yu, CEO of Huawei’s consumer division, also spoke out against the US government today. “The so-called cybersecurity reasons are merely an excuse,” he wrote in a WeChat post reported on by Bloomberg. “The key is the threat to the technology hegemony of the US.”
Riaz Haq said…
#US squeeze on #China’s apps, #digital infrastructure could upend global internet. Over 20 of 100 top-grossing apps on #Google Play are #Chinese, while 10 of the 100 highest grossing apps on #Apple’s App Store are from China. #CleanNetwork https://www.scmp.com/tech/big-tech/article/3096323/us-squeeze-chinas-apps-digital-infrastructure-could-upend-global?utm_source=Twitter&utm_medium=share_widget&utm_campaign=3096323 via @scmpnews

“Many of the Chinese companies currently under unilateral US sanctions are innocent, and their technology and products are safe,” said Wang Wenbin, China’s Foreign Ministry spokesman, in a statement on Thursday. “It is absurd for the US to talk of a ‘Clean Network’ when it is covered in its own filth”, referencing the Edward Snowden incident and Prism surveillance.

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The Trump administration’s “Clean Network” programme threatens to further disrupt China’s technology industry, as the campaign seeks to restrict the international expansion of Chinese apps, cloud services and undersea cable networks.
US Secretary of State Mike Pompeo on Wednesday made sweeping remarks that – “to keep Americans’ data safe from untrusted vendors” – he will aim to remove Chinese-owned apps in the market as well as cut off links with China’s digital infrastructure.
The initiative, which the State Department said includes the commitment of more than 30 countries and territories, is likely to escalate the complex tech war between the world’s two largest economies, according to analysts.
“The negative effect of this programme is that it’s becoming harder to see a truly global vision of the internet and access without borders surviving this tech war,” said Paul Haswell, a partner who advises technology companies at international law firm Pinsent Masons. “It would seem that the object of the campaign is to remove Chinese technology from all aspects of US data transmission and processes. We’ll have to see if that is even possible in practice.”

-----------

“This latest ramp-up in US-China tensions poses a potential barrier for the Chinese cloud companies to expand globally,” said Mathew Ball, Canalys’ chief analyst for global infrastructure, cloud and cybersecurity. He added, however, that this campaign “will be challenging to enforce outside the US”.
Pompeo said the US campaign is also focused on keeping the undersea cables that links the country to the global internet safe from intelligence-gathering by China.
In June, the US government blocked a major undersea cable network from linking Hong Kong to the US West Coast because it “would expose US communications traffic to collection” by China.
Riaz Haq said…
#US #CleanNetwork aims to restrict #international growth of #Chinese apps, cloud services and undersea cable networks. 20+ of 100 top-grossing apps on #Google Play are #Chinese, while 10 of the 100 highest grossing apps on #Apple’s App Store are from China https://www.scmp.com/tech/big-tech/article/3096323/us-squeeze-chinas-apps-digital-infrastructure-could-upend-global

The Clean Network campaign also aims to prevent sensitive personal information of US citizens and businesses’ most valuable intellectual property – including Covid-19 vaccine research – from being stored and processed on cloud computing platforms run by the likes of

Alibaba Group Holding
, telecommunications network operators

China Mobile
and

China Telecom
,

Baidu
and Tencent.

Tencent and Alibaba, the parent company of the South China Morning Post, declined to comment on the US programme on Thursday. Baidu did not immediately reply to a request for comment.

Alibaba Cloud
was the world’s fourth-largest cloud services provider in the second quarter, behind Amazon Web Services, Microsoft Azure and Google Cloud, according to research firm Canalys.
“This latest ramp-up in US-China tensions poses a potential barrier for the Chinese cloud companies to expand globally,” said Mathew Ball, Canalys’ chief analyst for global infrastructure, cloud and cybersecurity. He added, however, that this campaign “will be challenging to enforce outside the US”.

Riaz Haq said…
Alibaba vs. Amazon

https://www.nasdaq.com/articles/better-buy%3A-alibaba-vs.-amazon-2020-04-02


With just about everyone who is still working doing so from home due to the COVID-19 outbreak, there has been a huge increase in the use of cloud services and online grocery orders. Alibaba (NYSE: BABA) and Amazon.com (NASDAQ: AMZN) are two of the top e-commerce and cloud service providers in the world.

Alibaba dominates China's e-commerce market, with 824 million users on mobile. The Chinese tech giant is also the leading cloud service provider in China with Alibaba Cloud.

Amazon is increasing its share of e-commerce in the U.S., as it becomes the go-to online store for people relatively new to buying things online. The company has over 150 million Amazon Prime members who enjoy free shipping and other services as part of a yearly subscription. Most of the company's profit, however, is generated from Amazon Web Services, which is helping organizations migrate their data systems from on-premise servers to the cloud.

Both companies were growing fast going into the coronavirus crisis, but the practice of social distancing will only make these companies stronger as more people adopt online shopping. We'll compare Alibaba and Amazon on financial fortitude, growth, and valuation to determine which stock is the better buy.

In hard times, companies that have plenty of cash can weather the storm, while companies that are swamped with debt add an additional element of risk that you can avoid by investing in cash-rich companies like Alibaba and Amazon.

The main difference between the two is that Alibaba generates more free cash flow relative to revenue than Amazon. Free cash flow is an important profitability metric to watch, as it shows the actual cash that is left over for value-creating moves like dividends, share repurchases, and acquisitions after paying all expenses and reinvesting in the business for growth.

Overall, Alibaba has the advantage here.

Which company is growing faster?
While Alibaba and Amazon have both been around for more than 20 years, both companies are still growing very fast, especially for companies of their size.
Riaz Haq said…
Lack of #Computer Chips Disrupts #Automobile Factories Worldwide. #Semiconductor chips are used in touch screens, engine controls & transmissions, communications, suspensions, anti-lock brakes & collision avoidance systems with cameras and other sensors https://www.nytimes.com/2021/01/13/business/auto-factories-semiconductor-chips.html

Geopolitics also played a role. The Trump administration in September placed restrictions on Semiconductor Manufacturing International Corporation, China’s main foundry, which produces chips for cars and many other applications. The company’s customers began looking for alternatives, generating additional competition for chip supplies from other foundries, said Gaurav Gupta, a vice president at the research firm Gartner.

------

The chip crisis is an example of how the pandemic has shaken the global economy in unpredictable ways. Carmakers expected to face supply chain shortages, and plants closed early in 2020 because of fear that workers would infect one another, or because trucking firms had stopped delivering. Most U.S. auto factories ceased production for roughly two months last spring.

Automakers braced for turmoil when the pandemic hit. They expected supply chain disruptions and plummeting sales. But they never figured that a year later one of their biggest problems would be PlayStations.

Strong demand for gaming systems, personal computers and other electronics by a world stuck indoors has sucked up supplies of semiconductors, forcing carmakers around the world to scramble for the chips that have become as essential to mobility as gasoline or steel.

Virtually no carmaker has been spared. Toyota Motor has shut down production lines in China. Fiat Chrysler Automobiles temporarily stopped production at plants in Ontario and Mexico. Volkswagen has warned of production problems at factories in China, Europe and the United States. Ford Motor said last week that it was idling a Louisville, Ky., factory for a week because of the shortage.

When Covid-19 hit, automakers slashed orders for chips in anticipation of plunging sales. At the same time, semiconductor makers shifted their production lines to meet surging orders for chips used in products like laptop computers, webcams, tablets and 5G smartphones.

-----------

Businesses also upgraded their digital infrastructure to handle online meetings and employees working from home, while telecommunications companies invested in broadband infrastructure, further fueling demand for semiconductors.

Then auto sales bounced back faster than expected at the end of 2020, catching everyone off guard. The shortages of chips that ensued are expected to last well into 2021, because it can take semiconductor makers six to nine months to realign production.

“Consumer electronics exploded,” said Dan Hearsch, a managing director at the consulting firm AlixPartners. “Everybody and their brother wanted to buy an Xbox and PlayStation and laptops, while automotive shut down. Then automotive came back faster than expected, and that’s where you get into this problem.”

While the shortage is not expected to cause auto prices to rise very much, buyers might have to wait longer to get the vehicles they want.

The chip shortage has its roots in long-term forces reshaping the auto and semiconductor industries, as well as short-term confusion from the pandemic.

-------------


“Future investment in these foundries will therefore be critical so that the automotive industry can avoid such supply chain upheavals in the future,” Continental said in a statement.

Infineon, based in Munich, said it was stepping up investment in new production capacity in 2021 to as much as 1.5 billion euros, or $1.8 billion, from €1.1 billion in 2020. The company is also ramping up production at a new chip factory in Villach, Austria, that will produce 12-inch wafers.

Riaz Haq said…
#Superpower status will depend on #semiconductor chips. #TSMC building world's largest $20 billion fab in #Taiwan to manufacture chips at dimensions of just 3 nanometers that'll power everything from latest iPhones to medical equipment to F-35 fighters. https://www.ft.com/content/44e28cad-55b7-4995-a5c5-6de6f9733747


This vast capital expenditure highlights the near-insatiable demand for computer chips, the dominance of Taiwanese chipmakers and the sophistication of modern manufacturing. TSMC’s chips power everything from Apple’s latest iPhones to medical equipment to F-35 warplanes, accounting for about 55 per cent of global semiconductor sales.

But the manufacture of semiconductors is becoming a geopolitical imperative, too. As part of its squeeze on China’s tech industry, the US has pressured TSMC to stop supplying Huawei, previously one of its biggest customers. China, which spends more on importing computer chips than oil, is developing a semiconductor industry to reduce dependence on overseas suppliers.

Sensing their own vulnerability, the US, Japan and the EU are also stepping up their efforts to develop indigenous semiconductor industries, as their carmakers and computer games companies wail about the lack of supply. Computer chips currently vie with vaccines as must-have resources for any nation state.

If military capability in previous centuries was built on breech-loading rifles, warships or atomic bombs, it may well depend in the 21st century on the smartest use of advanced chips. The centrality of TSMC to the global semiconductor industry is sometimes given as a reason why mainland China might yet invade Taiwan. But far bigger military and political considerations will determine Beijing’s course of action.

By any measure, TSMC is an extraordinary company which is reaping the benefits of out-investing its rivals. It has just announced that its capital spending will further increase to between $25bn and $28bn this year as it struggles to add capacity fast enough to match demand. During an earnings call last month, CC Wei, TSMC’s chief executive, said that surging sales of smartphones and high-performance computers and the adoption of 5G mobile technology were fuelling demand for the company’s leading-edge logic chips. “We believe that 5G is a multiyear megatrend that will enable a world where digital computation is increasingly ubiquitous,” he said.

Most other semiconductor companies have dropped out of the race to manufacture 3nm chips due to the stratospheric costs. It will now be hard for any rival to catch up with TSMC because of its vast capital spending, its technological expertise, its network of suppliers and its support from the Taiwanese government. Only Samsung of South Korea is visible in its rear-view mirror.

“What separates TSMC from other foundries is its appetite to take risks and its ability to execute. It is an incredible business model,” says Brett Simpson, a tech analyst at Arete, an independent research firm. “The market is heading for one dominant player and one subscale player that is hanging in there and executing very well.”

The bigger concern for TSMC is the geopolitical tension between the US and China. With two fabrication plants in China, one in the US state of Washington and another planned in Arizona, TSMC has been hedging its bets. But like many other companies in a fast-polarising world, it is being forced to choose.

Shelley Rigger, a professor at Davidson College in North Carolina and author of Why Taiwan Matters, says that US pressure on China is only reinforcing Beijing’s determination to become self-sufficient in semiconductor manufacturing: “China has infinite money to throw at a problem like this and no scruples about doing what needs to be done.”

Taiwan has long feared that the world could divide into Chinese-dominated red supply chains and US-focused blue supply chains, jeopardising relations with either its biggest trading partner or its main strategic ally. The island’s room for manoeuvre is becoming as thin as TSMC’s wafers.

Riaz Haq said…
Is There a War Coming Between China and the U.S.?

https://www.nytimes.com/2021/04/27/opinion/china-us-2034.html

If you’re looking for a compelling beach read this summer, I recommend the novel “2034,” by James Stavridis, a retired admiral, and Elliot Ackerman, a former Marine and intelligence officer. The book is about how China and America go to war in 2034, beginning with a naval battle near Taiwan and with China acting in a tacit alliance with Iran and Russia.

I’m not giving it all away to say China and the U.S. end up in a nuclear shootout and incinerate a few of each other’s cities, and the result is that neutral India becomes the dominant world power. (Hey, it’s a novel!)

--------------

Are we up to the challenge? I’m pretty sure we can keep a more aggressive, nationalistic Russia and Iran deterred at a reasonable cost, and with the help of our traditional allies.

But China is another question. So we’d better understand where our strengths and weaknesses lie, as well as China’s.

China is now a true peer competitor in the military, technological and economic realms, except — except in one critical field: designing and manufacturing the most advanced microprocessors and logic and memory chips that are the base layer for artificial intelligence, machine learning, high-performance computing, electric vehicles, telecommunications — i.e., the whole digital economy that we’re moving into.

China’s massive, state-led effort to develop its own vertically integrated microchip industry has so far largely failed to master the physics and hardware to manipulate matter at the nano-scale, a skill required to mass produce super-sophisticated microprocessors.

However, just a few miles away from China sits the largest and most sophisticated contract chip maker in the world: Taiwan Semiconductor Manufacturing Company. According to the Congressional Research Service, TSMC is one of only three manufacturers in the world that fabricate the most advanced semiconductor chips — and by far the biggest. The second and third are Samsung and Intel.

Most chip designers, like IBM, Qualcomm, Nvidia, AMD (and even Intel to some extent) now use TSMC and Samsung to make the microprocessors they design.

But, just as important, three of the five companies that make the super-sophisticated lithography machines, tools and software used by TSMC and others to actually make the microchips — Applied Materials, Lam Research Corporation and KLA Corporation — are based in the United States. (The other two are Dutch and Japanese.) China largely lacks this expertise.

As such, the American government has the leverage to restrict TSMC from making advanced chips for Chinese companies. Indeed, just two weeks ago, the U.S. made TSMC suspend new orders from seven Chinese supercomputing centers suspected of assisting in the country’s weapons development.

The South China Morning Post quoted Francis Lau, a University of Hong Kong computer scientist, as saying: “The sanctions would definitely affect China’s ability to keep to its leading position in supercomputing,” because all of its current supercomputers mostly use processors from Intel or designed by AMD and IBM and manufactured by TSMC. Although there are Korean and Japanese alternatives, Lau added, they are not as powerful.

China, though, is doubling down on research in the physics, nanotechnology and material sciences that will drive the next generation of chips and chip-making equipment. But it could take China a decade or more to reach the cutting edge.

That’s why — today — as much as China wants Taiwan for reasons of ideology, it wants TSMC in the pocket of Chinese military industries for reasons of strategy. And as much as U.S. strategists are committed to preserving Taiwan’s democracy, they are even more committed to ensuring that TSMC doesn’t fall into China’s hands for reasons of strategy. (TSMC is now building a new semiconductor factory in Phoenix.) Because, in a digitizing world, he who controls the best chip maker will control … a lot.
Riaz Haq said…
Elliot Ackerman & James Stavridis, 2034: A Novel of the Next World War


https://americanwritersmuseum.org/program-calendar/elliot-ackerman-james-stavridis-2034-a-novel-of-the-next-world-war/

On March 12, 2034, US Navy Commodore Sarah Hunt is on the bridge of her flagship, the guided missile destroyer USS John Paul Jones, conducting a routine freedom of navigation patrol in the South China Sea when her ship detects an unflagged trawler in clear distress, smoke billowing from its bridge. On that same day, US Marine aviator Major Chris “Wedge” Mitchell is flying an F35E Lightning over the Strait of Hormuz, testing a new stealth technology as he flirts with Iranian airspace. By the end of that day, Wedge will be an Iranian prisoner, and Sarah Hunt’s destroyer will lie at the bottom of the sea, sunk by the Chinese Navy. Iran and China have clearly coordinated their moves, which involve the use of powerful new forms of cyber weaponry that render US ships and planes defenseless. In a single day, America’s faith in its military’s strategic pre-eminence is in tatters. A new, terrifying era is at hand.

So begins a disturbingly plausible work of speculative fiction, co-authored by an award-winning novelist and decorated Marine veteran and the former commander of NATO, a legendary admiral who has spent much of his career strategically outmaneuvering America’s most tenacious adversaries. Written with a powerful blend of geopolitical sophistication and human empathy, 2034 takes us inside the minds of a global cast of characters—Americans, Chinese, Iranians, Russians, Indians—as a series of arrogant miscalculations on all sides leads the world into an intensifying international storm. In the end, China and the United States will have paid a staggering cost, one that forever alters the global balance of power.

Everything in 2034 is an imaginative extrapolation from present-day facts on the ground combined with the authors’ years working at the highest and most classified levels of national security. Sometimes it takes a brilliant work of fiction to illuminate the most dire of warnings: 2034 is all too close at hand, and this cautionary tale presents the reader a dark yet possible future that we must do all we can to avoid.
Riaz Haq said…
2034: A Novel of the Next World War
What a US nuclear war with China would look like

World Socialist Website

https://www.wsws.org/en/articles/2021/03/25/nuke-m25.html

2034 is co-written by a man who would be a leading architect of such a war. Stavridis was one of the Pentagon’s most prominent political commanders, having been vetted as a potential running mate by the Clinton campaign and a possible secretary of state by President-elect Donald Trump in the fall of 2016.



----------

Finally, the military dynamics are themselves totally unrealistic. The central assumption of the book is that there exists such a thing as a “tactical” nuclear war. Military actions are calmly and rationally discussed and deliberated.

Even so, it is only through an absurd and unbelievable plot twist that a strategic nuclear exchange is avoided. In a ridiculous deus ex machina, India attacks both Chinese and US vessels, bringing about an end to the war.

There is no such thing as a “tactical” nuclear world war. There has never been a full-scale war between two countries armed with nuclear weapons. More importantly, there has never been a full-scale war between “great powers” armed with 21st century technology.

The range, cheapness, and speed of offensive weapons, including drones and high-speed missiles, will mean that a third world war will be conducted everywhere at once, at dizzying speed and complexity. The logic of these phenomena—the complexity of global relations and domestic opposition, the expansion of the battlefield to the entire globe, the delegation of warfare to artificial intelligence—makes nuclear war impossible to control and limit to the “tit-for-tat” military exchanges depicted in the book.

A normal person, that is, one for whom moral derangement is not a professional requirement, would read Stavridis’ book with horror and do everything to avoid the massive level of death it depicts. But the fact is that, for its intended audience within the Beltway and the Pentagon, the tactical nuclear exchanges depicted in the book, constitute, in the words of Dr. Strangelove’s Gen. Buck Turgidson, “getting our hair mussed”—an entirely acceptable consequence of the use of nuclear weapons.

Stanley Kubrick’s masterful Dr. Strangelove, Sidney Lumet’s Fail Safe, and, more obliquely, John Frankenheimer’s Seven Days in May (all released in 1964) were scathing critiques of the military and of nuclear war. No such critical works are being written and produced today, and ground has been ceded to Stavridis’ sanitized depiction of nuclear war from the standpoint of a practitioner.

2034 is a wake-up call. The US military is actively planning and discussing a nuclear war, based on the false claim that such wars can be managed and contained. No, they cannot. Nuclear war threatens the annihilation of humanity. These well-advanced war plans must be opposed and stopped before it is too late.
Riaz Haq said…
Chip shortage highlights U.S. dependence on fragile supply chain - 60 Minutes - CBS News

https://www.cbsnews.com/news/semiconductor-chip-shortage-60-minutes-2021-05-02/


Lesley Stahl: Should Americans be concerned that most chips are being manufactured in Asia today?

Mark Liu: I understand their concern, first of all. But this is not about Asia or not Asia I mean, the shortage will happen no matter where the production is located because it's due to the COVID.

Lesley Stahl: But Pat Gelsinger at Intel talks about a need to rebalance the supply chain issue because so much, so many of the chips in the world now are made in Asia.

Mark Liu: I think U.S. ought to pursue to run faster, to invest in R&D, to produce more Ph.D., master, bachelor students to get into this manufacturing field instead of trying to move the supply chain, which is very costly and really non productive. That will slow down the innovation because-- people trying to hold on their technology to their own and forsake the global collaboration.

Within the world of global collaboration there's intense competition. Days after Intel announced spending $20 billion on two new fabs, TSMC announced it would spend $100 billion over three years on R&D, upgrades, and a new fab in Phoenix, Arizona, Intel's backyard, where the Taiwanese company will produce the chips Apple needs but the Americans can't make.

Mark Liu: That was a big investment.

But there's a looming shadow over TSMC, which supplies chips for our cars, iPhones, and the supercomputer managing our nuclear stockpile: China's President Xi Jinping, who has intensified his long-time threat to seize Taiwan.

China's attempts to develop its own advanced chip industry have failed and so it's been forced to import chips. But last year, Washington imposed restrictions on chipmakers from exporting certain semiconductors to china. Both Liu and Gelsinger fear the escalating trade war with China may backfire, and in Intel's case: could hurt business.

Lesley Stahl: Are they your biggest customer?

Pat Gelsinger: China is one of our largest markets today. You know, over 25% of our revenue is to Chinese customers. We expect that this will remain an area of tension, and one that needs to be navigated carefully. Because if there's any points that people can't keep running their countries or running their businesses because of supply of one critical component like semiconductors, boy, that leads them to take very extreme postures on things because they have to.

The most extreme would be China invading Taiwan and in the process gaining control of TSMC. That could force the U.S. to defend Taiwan as we did Kuwait from the Iraqis 30 years ago. Then it was oil. Now it's chips.

Lesley Stahl: The chip industry in Taiwan has been called the Silicon Shield.

Mark Liu: Yes.

Lesley Stahl: What does that mean?

Mark Liu: That means the world all needs Taiwan's high-tech industry support. So they will not let the war happen in this region because it goes against interest of every country in the world.

Lesley Stahl: Do you think that in any way your industry is keeping Taiwan safe?

Mark Liu: I cannot comment on the safety. I mean, this is a changing world. Nobody want these things to happen. And I hope-- I hope not too-- either.

Riaz Haq said…
On CBS 60 Minutes show aired May 2, 2021, Intel CEO Pat Gelsinger speculated about unilateral US technology sanctions against China triggering "extreme postures". CBS reporter expanded on it by talking about "China invading Taiwan and in the process gaining control of TSMC", She said, "The most extreme would be China invading Taiwan and in the process gaining control of TSMC. That could force the U.S. to defend Taiwan as we did Kuwait from the Iraqis 30 years ago. Then it was oil. Now it's chips".

https://www.cbsnews.com/news/semiconductor-chip-shortage-60-minutes-2021-05-02/


Why has US fallen behind? It can mainly be attributed to Intel's failure to stay ahead s a result.

Intel has recently fired its Indian-American chief engineer Venkata Murthy Renduchintala, who also served as Group President of the Technology, Systems Architecture and Client Group (TSCG), for failure to deliver 7 nanometer semiconductor technology on schedule, according to Reuters. The news has knocked the market value of Intel by tens of billions dollars. The American company, the biggest global chip manufacturer with in-house fabrication plants, has also decided to outsource manufacturing. This could deal a serious blow to America's global leadership in chip manufacturing which is fundamental to all other computer and communications related technologies.

https://www.riazhaq.com/2020/07/has-intels-indian-american-techie.html
Riaz Haq said…
Shortage of #semiconductors, dubbed the 'new oil,' could dent #GDP growth, boost #inflation. "While semiconductors account for only 0.3% of US output, they are an important production input to 12% of GDP” #technology #SiliconValley #Intel #TSMC #Samsung https://cnb.cx/2RVCitw


KEY POINTS
A variety of factors have converged to make coveted semiconductors scarce.
Goldman Sachs says the GDP hit from the shortage could be 0.5% this year while price increases could hit 3% for affected goods.
TS Lombard economist Rory Green calls semis the “new oil” for the global impact that disruptions can cause.

Economic growth could slow and inflation is likely to see at least a momentary bump higher as the semiconductor shortage worsens, economists say.

A variety of factors have converged to make the coveted computer chips scarce. Soaring demand coupled with supply bottlenecks have led to a situation in which orders for everything from cars to televisions to touch-screen computers and more are on backup for six months or more.

With semis at the core of so much U.S. economic activity, the ongoing supply problems are likely to have ripples.

Goldman Sachs economists say that for the bulk of 2021, the shortage will translate into an inflationary tax that could result in prices rising as much as 3% for affected goods. That would boost inflation as much as 0.4 percentage points through the rest of the year, the firm said.

“Taken together, while we see relatively modest implications of the semiconductor shortage for GDP growth and the industrial sector, it represents another reason to expect core goods inflation to remain firm this year,” Goldman economist Spencer Hill said in a note.

Even though the hit won’t cause a dramatic slowdown to an economy expected to roar in 2021, the impact could still be noticeable. Goldman said the impact could reach as high as a 1% subtraction from activity, but likely will be closer to 0.5%.

Disruptions to the ‘new oil’
“While semiconductors account for only 0.3% of US output, they are an important production input to 12% of GDP,” Hill said, nothing that the shortage could cut auto production by 2% to 6% this year.

Indeed, multiple automakers have curtailed production due to lack of chips vital to their vehicles.

Stellantis NV said it will be temporarily laying off workers at its Detroit Jeep plant, while Volvo also has said the chip issues will cause it to shut some plants until the situation is resolved.

The knock-on impacts of any disruptions in the semiconductor industry are becoming increasingly apparent.

“As the world becomes more interconnected, more automated and greener, each unit of GDP growth will contain a higher content of semiconductors. Integrated circuits are becoming the key commodity input for economic activity,” wrote TS Lombard economist Rory Green.

Green calls semis the “new oil” for the global impact that disruptions can cause.

“The current severe shortage of semiconductors, which is halting automotive production worldwide, underscores the speed and scale of the changes under way,” he said. “Chips have always been an important part for manufacturing and consumer electronics, but their use will broaden to transport and digital services.”

Still, Goldman’s Hill said the inflationary impact likely won’t last far as supply increases later this year and into 2022. But the shortage now “represents another reason to expect core goods inflation to remain firm this year,” he said.
Riaz Haq said…
#China appoints Harvard-educated chip czar to accelerate domestic #semiconductor #manufacturing #technology. Vice Premier Liu will be in charge of industrial policy to catch up with #US, #Taiwan and #SouthKorea in advanced #semiconductors. https://asiatimes.com/2021/06/is-the-us-chip-wall-starting-to-crumble/

The Harvard-educated career bureaucrat is not an engineer, but more of an expert in economics and industrial policy.

That means the 69-year old Liu will have to rely on experts when it comes to decisions in his remit: semiconductor materials, equipment and processes.

But rather than merely catch-up, Liu’s chip strategy will likely be to explore areas rivals have yet to master in the hope that China can colonize these technologies.

It’s the kind of moonshot approach that the People’s Republic already practices. China last week released the first images taken on Mars as part of its Tianwen-1 interplanetary mission.

That success, according to Beijing-based consultancy Trivium, “validates the focus on pursuing leapfrog development,” focusing on next-generation technologies where no country has a clear advantage.

-------------

“Failure is not an option” is an epic phrase associated with Gene Kranz and the Apollo 13 Moon landing mission, which went terribly wrong, but ended happily thanks to some Mission Control heroics.

Likewise, with a newly-appointed vice premier at the microchip helm, China is leaving itself no more excuses to fail.

The nation’s decision to anoint a “chip czar” is the latest step to advance its semiconductor industry in the face of harsh US sanctions.

While China still has a ways to go in catching up to the US, Taiwan and South Korea, Vice Premier Liu He is a worthy choice to spearhead the development of future semiconductor technologies, Business Standard reported.

He’s headed China’s technology reform since at least 2018, acted as chief negotiator in US-China trade talks and his position within leader Xi Jinping’s inner circle ensures his recommendations get heard.

----------


Beijing is right to trumpet this success in space, and the results ought to boost morale within its struggling chip sector.

According to the South China Morning Post, China’s output of integrated circuits (IC) in May reached an all-time, single month high, as the country pulled out all stops to produce chips, according to central government data.

China’s chip output in May surged 37.6% from a year ago, to 29.9 billion units, the National Bureau of Statistics date showed.

While China’s chip makers are not able to produce high volumes of advanced 14-nm node chips — the type needed to power the latest iPhones — the country’s chip designers and manufacturers can produce mature technology ICs for home appliances and automobiles, SCMP reported.

In the first five months of this year, China produced 139.9 billion IC units, a 48.3% surge compared to the same period last year, data showed.

The latest data confirms that China is sparing no effort in its pursuit of self-sufficiency in semiconductors, SCMP reported.

In March, Beijing moved to waive levies on imported semiconductor parts and materials until 2030, SCMP reported. The Chinese government has declared its ambition to cultivate a US$237 billion domestic component market by 2023.

Meanwhile, Huawei Technologies is adamant in its pursuit of developing world-beating semiconductors, despite toughened US sanctions, according to Catherine Chen, a Huawei director and senior vice-president, Nikkei Asia reported.

Chen said the company has no intention of restructuring chip design subsidiary HiSilicon, despite the fact it has more than 7,000 workers on its payroll and is expected to go years without contributing to earnings.

But Huawei is privately held and unaffected by external forces, and its management has clearly shown it intends to retain HiSilicon, Chen said.

Riaz Haq said…
Xi Jinping Picks Top Lieutenant to Lead China’s Chip Battle Against U.S.


https://www.bloomberg.com/news/articles/2021-06-17/xi-taps-top-lieutenant-to-lead-china-s-chip-battle-against-u-s


Liu He, Xi’s economic czar whose sprawling portfolio spans trade to finance and technology, has been tapped to spearhead the development of so-called third-generation chip development and capabilities and is leading the formulation of a series of financial and policy supports for the technology, according to people with knowledge of the matter.

It’s a nascent field that relies on newer materials and gear beyond traditional silicon and is currently an arena where no company or nation yet dominates, offering Beijing one of its best chances to sidestep the hurdles slapped on its chipmaking industry by the U.S. and its allies. The sanctions, which emerged during Donald Trump’s presidency, have already smothered Huawei Technologies Co.’s smartphone business and will impede longer-term efforts by chipmakers from Huawei’s HiSilicon to Semiconductor Manufacturing International Corp. to migrate toward more advanced wafer fabrication technologies, threatening China’s technological ambitions.

“China is the world’s largest user of chips, so supply chain security is of high priority,” said Gu Wenjun, chief analyst at research firm ICwise. “It’s not possible for any country to control the entire supply chain, but a country’s effort is definitely stronger than a single company.”

The involvement of one of Xi’s most-trusted lieutenants in China’s chip efforts highlights the importance accorded by Beijing to the initiative, which is gaining urgency as rivals from the U.S. to Japan and South Korea scramble to shore up their own industries. The Chinese president has long called upon his Harvard-educated adviser to tackle matters of top national priority, making him the chief representative in trade negotiations with the U.S. as well as chairman of the Financial Stability and Development Committee, where Liu leads the charge to curb risks in the nation’s $5-trillion-plus financial sector.

In May, Liu spearheaded a meeting of the technology task force that discussed ways to grow next-generation semiconductor technologies, according to a government statement. The 69-year-old vice premier, who has led the country’s technology reform task force since 2018, is also overseeing projects that could lead to breakthroughs in traditional chipmaking, including the development of China’s own chip design software and extreme ultraviolet lithography machines, one of the people said, asking not to be identified as they weren’t authorized to speak to media.

The State Council and the Ministry of Industry and Information Technology didn’t respond to faxed requests for comment.

During trade negotiations with the Trump administration, Liu emerged as one of the most visible advocates of Beijing’s agenda. He’s known Xi since childhood -- both are sons of veteran Communist Party leaders and were among masses of young people dispatched to work in impoverished rural areas during the Cultural Revolution. Now, Liu is leading the charge to reform the tech sector, which was identified in China’s latest five-year economic plan as a key strategic area in which the “whole nation system” should be used to mobilize any necessary resources.

First introduced under Mao Zedong to help the then-fledgling Communist China industrialize, the approach was crucial to helping Beijing attain a number of top national priorities, from developing its first atomic bomb in the early 1960s to achieving Olympic sporting success. After that it was largely set aside as officials shifted to focus on economic growth. But following a series of U.S. sanctions that exposed the vulnerabilities of China’s chip capabilities, Xi is once again reactivating the mechanism to achieve breakthroughs in advanced chip development and manufacturing.

About a trillion dollars of government funding have been set aside under the technology initiative,
Riaz Haq said…
The White House released a report on Tuesday that offers a solemn assessment of American companies prioritizing profits over national security and long-term sustainability. “A focus on maximizing short-term capital returns has led to the private sector’s underinvestment in long-term resilience,” the 250-page report states. The United States has a competitive advantage over China in the production of semiconductor manufacturing equipment (SME), which provides a chokepoint that can limit “advanced semiconductor capabilities in countries of concern.”

https://www.forbes.com/sites/roslynlayton/2021/06/10/white-house-report-on-china-short-term-profits-undermine-long-term-resilience/?sh=4725be6a2c19

The report details the findings and recommendations of the Administration’s 100-day supply chain review required by President Biden’s executive order from February that directed the review of four key industries: semiconductors, large capacity batteries, critical minerals and pharmaceuticals. The report states that the Chinese government’s “massive subsidy campaign [as much as $200 billion over the past eight years] to develop its domestic semiconductor capability” has exploited “gray areas” in international trade rules and avoided World Trade Organization (WTO) oversight. The Chinese government has propped up key tech industries, including semiconductors manufacturing and SME production, through a “novel subsidy strategy” meant to avoid “transparency requirements of the WTO subsidy regime.” Essentially, government subsidies are booked as “investments” to avoid WTO disclosure rules.

This one of many “innovation mercantilist” tactics that Chinese state has practiced for years, according to a recent report and event by the Information Technology & Innovation Foundation which details China’s deleterious impact on competitive international ecosystems for semiconductors, telecommunications equipment, biopharmaceuticals, solar photovoltaics, and high-speed rail. Co-author Stephen Ezell estimates that the US loses out on some 5000 semiconductors patents annually because of this predation.


The Chinese Communist Party has made a concerted effort to dominate the semiconductor market. The Made in China 2025 plan aims to produce 70 percent of China’s chip demand indigenously and pledges as much as $1.4 trillion of investment into China’s semiconductor industries.

Memory chips are the “most mature” of these efforts. Yangtze Memory Technologies (YMTC), which has received $24 billion in state subsidies, has emerged as a “national champion memory chip producer.” A report by James Mulvenon this year identifies ties between YMTC and the People’s Liberation Army.

“It’s not just YMTC,” cautioned Emily de La Bruy√®re, senior fellow at the Foundation for the Defense of Democracies, during a China Tech Threat roundtable forum this week. “Changxin Memory Technologies [CXMT] is equally propped up and potentially equally connected to the [People’s Liberation Army].” The roundtable titled "Let the Chips Fall?" explored the theme of how the next Undersecretary for the Department of Commerce’s Bureau of Industry and Security (BIS) should address semiconductor policy.


The White House report appears to be a de facto roadmap for the next BIS chief and is notable for naming leading Chinese fabs with military connections which have yet to be designated as Military End Users or on the Entity List. In no uncertain words, the bipartisan United State China Commission issued a report earlier this month, Unfinished Business: Export Control and Foreign Investment Reforms which critiqued BIS for failing to issue the lists of foundational and emerging technologies as required by the 2018 Export Reform and Control Act. Such a publication would likely trigger action against the Chinese fabs.

“While the United States no longer leads the world in semiconductor manufacturing capabilities,” it has a competitive advantage over China in semiconductor manufacturing equipment (SME), the White House report adds.
Riaz Haq said…
#China wants to buy advanced #chip machine from #Netherlands. #US says NO. It's an ASML machine called an extreme ultraviolet (EUV) lithography system that is essential to making advanced #semiconductor #microprocessors. #silicon #technology https://www.wsj.com/articles/china-wants-a-chip-machine-from-the-dutch-the-u-s-said-no-11626514513?st=lhp86rcfoink017&reflink=desktopwebshare_twitter via @WSJ


Beijing has been pressuring the Dutch government to allow its companies to buy ASML Holding ASML -2.35% NV’s marquee product: a machine called an extreme ultraviolet lithography system that is essential to making advanced microprocessors.

The one-of-a-kind, 180-ton machines are used by companies including Intel Corp. INTC -1.51% , South Korea’s Samsung Electronics Co. and leading Apple Inc. supplier Taiwan Semiconductor Manufacturing Co. TSM -1.52% to make the chips in everything from cutting-edge smartphones and 5G cellular equipment to computers used for artificial intelligence.

China wants the $150-million machines for domestic chip makers, so smartphone giant Huawei Technologies Co. and other Chinese tech companies can be less reliant on foreign suppliers. But ASML hasn’t sent a single one because the Netherlands—under pressure from the U.S.—is withholding an export license to China.

The Biden administration has asked the government to restrict sales because of national-security concerns, according to U.S. officials. The stance is a holdover from the Trump White House, which first identified the strategic value of the machine and reached out to Dutch officials.

Washington has taken direct aim at Chinese companies like Huawei and has also tried to convince foreign allies to restrict the use of Huawei gear, over spying concerns that Huawei says are unfounded. The pressure aimed at ASML and the Netherlands is different, representing a form of collateral damage in a broader U.S.-China tech Cold War.


ASML Chief Executive Peter Wennink has said that export restrictions could backfire.

“When it comes to targeted, specific, national security issues, export controls are a valid tool,” he said in a statement. “However, as part of a broader national strategy on semiconductor leadership, governments need to think through how these tools, if overused, could slow down innovation in the medium term by reducing R&D.” He said in the short to medium term, it is possible that widespread use of export controls “could reduce the amount of global chip manufacturing capacity, exacerbating supply chain issues.”

---

That currently isn’t on the table inside the Biden White House, people familiar with the matter say. The U.S. is trying to put together alliances of Western countries to work jointly on export controls, people familiar with the matter said. The move could also have ramifications beyond ASML, further roiling semiconductor supply lines already under strain around the world.

ASML spun out of Dutch conglomerate Royal Philips NV in the 1990s. It is based in bucolic Veldhoven, near the Belgian border. It specializes in photolithography, the process of using light to print on photosensitive surfaces.

Photolithography is key to chip makers, which use light to draw a checkerboard of lines on a silicon wafer. Then they etch away those lines, like a knife carving into wood, but with chemicals. The remaining silicon squares become transistors.

The more transistors on a piece of silicon, the more powerful the chip. One of the best ways to pack more transistors into silicon is to draw thinner lines. That is ASML’s specialty: Its machines print the world’s thinnest lines.

The machines, which require three Boeing 747s to ship, use a laser and mirrors to draw lines five nanometers wide. Within a few years, that is expected to shrink to less than a nanometer wide. By comparison, a strand of human hair is 75,000 nanometers wide.

Riaz Haq said…
#TSMC eyes expansion in #US & #Japan to meet high chip demand. Expansion plans come amid concern over the concentration of chipmaking capability in #Taiwan. #China does not rule out the use of force for Taiwan's most advanced #semiconductor #technology. https://www.reuters.com/technology/taiwans-tsmc-posts-11-jump-q2-profit-global-chip-demand-2021-07-15/

Taiwan Semiconductor Manufacturing Co Ltd (TSMC) (2330.TW) signalled on Thursday plans to build new factories in the United States and Japan, riding on a pandemic-led surge in demand for chips that power smartphones, laptops and cars.

TSMC, which posted record quarterly sales and forecast higher revenue for the current quarter, said it will expand production capacity in China and does not rule out the possibility of a "second phase" expansion at its $12 billion factory in the U.S. state of Arizona.

The world's largest contract chipmaker and a major Apple Inc (AAPL.O) supplier also said it is currently reviewing a plan to set up a speciality technology wafer fabrication plant, or fab, in Japan.

TSMC's overseas expansion plans come amid concern over the concentration of chipmaking capability in Taiwan, which produces the majority of the world's most advanced chips and is geographically close to political rival China, which does not rule out the use of force to bring the democratic island under its control.

Taiwan and TSMC have also become central in efforts to resolve a pandemic-induced global chip shortage that has forced automakers to cut production and hurt manufacturers of smartphones, laptops and even appliances. read more

"We are expanding our global manufacturing footprint to sustain and enhance our competitive advantages and to better serve our customers in the new geopolitical environment," TSMC chairman Mark Liu told an analyst call.

"While our overseas fabs are not initially able to match the costs of our manufacturing operations in Taiwan, we will work with governments to minimise the cost gap," Liu said.

He did not give details of its plans in America and Japan, adding the company was working to "firm up" wafer prices to reflect cost increases.

Reuters reported in May TSMC was eyeing expansion in Arizona beyond the one currently planned. read more

Liu said TSMC was also planning a capacity expansion in China's Nanjing due to the "urgent need" of clients, using the mature 28 nanometre semiconductor manufacturing technology.

It is scheduled to enter production next year and will eventually reach a production of 40,000 wafers per month by mid-2023, he said.

Revenue for April-June at TSMC , Asia's most valuable manufacturing company, climbed 28% to a record $13.29 billion.

For the quarter ending in September, TSMC forecast revenue of $14.6 billion to $14.9 billion, compared with $12.1 billion in the same period a year earlier.

TSMC said the auto chip shortage will gradually reduce for its customers from this quarter but expects overall semiconductor capacity tightness to extend possibly into next year.

The Taiwanese firm, which also makes chips for Qualcomm Inc (QCOM.O), had previously flagged a $100 billion expansion plan over the next three years, as fifth-generation telecommunications (5G) technology and artificial intelligence applications drive global demand for advanced chips. read more

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