Huawei 5G new machine Mate 60 Pro went on the market without warning, under the US sanctions, its 7nm chip process technology breakthrough, caused Western public opinion shock, around the high-end chip manufacturing of the Sino-US science and technology war, once again become the focus of the world's attention. Taiwan's former economic minister Yin Qiming published a new book "Chip Showdown", in which he put forward the "Taiwan view", believing that the two roads of the US semiconductor industry "resisting China" and "preserving the United States" may end up in both ends of the void, especially China's comprehensive blockade by the United States, will increase efforts to promote technological breakthrough development.
For the semiconductor industry, there is currently only one sentence to represent in the United States, that is, "anti-China and protect the United States". "Anti-China" refers to the further development of anti-blocking mainland semiconductors and freezing the mainland semiconductor industry. "Bumei" is to revitalize the US semiconductor industry, especially cutting-edge manufacturing. But from a macro and long-term perspective, both paths will eventually lead to a dead end.
Can the lost industrial power of the United States be recovered?
Industrial development has some reason. The United States has given birth to many outstanding economists and developed Xuwang economic theory, but the current policy thinking of the US government is contrary to these theories and principles; The United States, once a promoter of the free-market economy and globalization, is suddenly moving in the opposite direction. How far can such a U.S. government go? The United States used to be the birthplace of many traditional industries and technology industries, but now it has either declined or disappeared, can it be recovered?
Yin Qiming (pictured) pointed out in the new book "Chip Showdown" that the United States' comprehensive blockade of the development of the Chinese mainland semiconductor industry will only prompt the mainland to increase its efforts to promote technological breakthroughs. (Courtesy of Visionary World Culture)
The development of the industry is endlessly moving in the direction of upgrading. Former industries have declined, freeing up resources for more productive industries, and no country has infinite resources to dominate all industries. The semiconductor manufacturing industry in the United States has moved uncompetitive back-end assembly packaging testing overseas, and the resources freed up are transferred to front-end wafer processing and manufacturing; Front-end wafer fabrication and manufacturing gradually lose competitiveness and move out, freeing up resources to higher value-added design activities. The design and development of abundant resources has driven the accelerated innovation of semiconductors and downstream applications in the United States, and promoted the sustainable growth of the US economy, which is the process of industrial evolution and the driving force of economic development. The United States has lost the competitiveness of semiconductor manufacturing for a long time, losing the talents, ecosystem, and development environment required for semiconductor manufacturing, and how many resources do it need to invest to get back the lost industry?
Perhaps what the US government wants is not a complete semiconductor industry, but as long as it has a few cutting-edge process companies, so in the short term, generous subsidies are used to encourage existing industry leaders to invest in the United States and transplant foreign leading manufacturers, and in the long term, it will accelerate the development of a new generation of process technology in an attempt to return to the leadership position in next-generation semiconductor manufacturing. But is this possible? Enterprises are dependent on industrial development, and industries are competitive by relying on the ecosystem and development environment. Enterprises are demanding sustainable development, even if they invest, lack a sound ecosystem, no competitive development environment, how far can these enterprises go?
Can the power of locking China's throat last?
As for the development of the semiconductor industry Chinese mainland blockage, on the one hand, the United States is at the expense of globalization, the global economy, the interests of allies, the progress of the semiconductor industry, and the interests of its own enterprises, and on the other hand, the US government may not be able to achieve its wishes.
Taiwan's former economic minister Yin Qiming published a new book "Chip Showdown", which analyzes global semiconductor competition and trade war from Taiwan's point of view. (Courtesy of Visionary World Culture)
The strength of the chain determines the weakest link, and the longer the chain, the more fragile it is. The semiconductor supply chain is intertwined and interconnected. Under globalization, the semiconductor industry has a delicate division of labor, and across continents, in addition to the upstream and downstream of semiconductor manufacturing and the supply chain composed of software technology, equipment and materials, equipment and materials also have different long supply chains. With the advancement of process technology, the supply chain is getting longer and longer. The United States can pinch the neck of the mainland and let the mainland semiconductor industry freeze at the moment, but the mainland does not need to rush to thaw, as long as the mainland masters several supply chain links, it can lock the operation of the entire semiconductor industry, does the United States need to negotiate a compromise at that time?
In addition, the United States needs allies to join the ranks of anti-blocking against China, and the United States does not directly control all aspects of the lock throat, such as the EUV (extreme ultraviolet light) equipment of ASML in the Netherlands. But the United States not only fails to create a large profit to share allies, but only sacrifices the interests of allies, how long can this containment last?
On December 2022, 12, the Dutch Minister of Economic Affairs and Climate Micky Adriaanssens said in an interview with the Financial Times that it is impossible to prevent China from obtaining cutting-edge technology, the Netherlands will not excessively restrict exports to Chinese mainland, and will make its own decisions and defend its interests in the sale of lithography machines to Chinese mainland by Esmoore. Showing that the U.S. comprehensive anti-containment policy is problematic.
On September 2023, 9, local time, Ottawa, Ontario, Canada, the Kirin 3S chip manufactured by SMIC was taken from Huawei Technologies Co., Ltd.'s Mate 9000 Pro smartphone. Huawei and SMIC, China's largest chipmaker, have built an advanced 60-nanometer processor for its latest smartphone. （VCG）
Secondly, the United States' anti-blocking can only delay the development of mainland semiconductors, and cannot stop the progress of the mainland. The United States exports and controls chips, equipment, technology, personnel, etc. to the mainland, but in the final analysis, it is technology that is controlled. Technology is generally attached to people, equipment and software, and people-centered, but can the U.S. government manage it?
In the face of a comprehensive blockade by the US government, the mainland will definitely increase its efforts to promote the breakthrough and development of technology, and will also find ways to obtain technology from outside. The mainland has the largest market in the world and is the livelihood of many multinational enterprises. Under the pressure of survival and development, can the United States prevent these enterprises from releasing relevant technologies to the mainland? Can you prevent people from privately bringing technology to the mainland under the temptation of usury?
The history of global industrial development tells us that industrial technology will spill over bit by bit through as many channels as possible, so that latecomers can gradually narrow the gap in technology. In the early days, when neighboring country A was developing the video camera industry, some companies secretly hired engineers from neighboring country B to carry suitcases to the company on weekends for guidance, accelerating the improvement of product manufacturing technology, and similar cases abounded. Some mainland semiconductor companies have hired executives who have served TSMC, Intel, Samsung and other services, greatly improving their management and system integration capabilities, showing that blindly blocking is not the most effective method.
In other words, the United States' "anti-China and protective America" in the semiconductor industry may end up at both ends.
This article is excerpted from Yin Qiming's book "Chip Showdown: Taiwan's Economy and Destiny Survival Battle", published by Taiwan Vision World Culture in March 2023 and reprinted with permission.
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