The tech news from China have not been kind to the US recently.
The first shock came in August 2023, when a new Huawei device was quietly unveiled to the public: the Mate 60 series phone, powered by a Kirin 9000S chip, designed and produced in China. Despite the sanctions, the Kirin 9000S offers, according to various testing teams, performance comparable to one- or two-year-old chips from Qualcomm, the US leader in mobile phone chips. The chip includes 5G, to which Huawei has had no access since the sanctions started four years ago. The presentation of the new phone was timed so it coincided with the visit to China by the chief architect for the tech-sanctions, US Commerce Secretary Gina Raimondo. She was not pleased and later declared to Congress that Huawei’s new phone was ‘incredibly disturbing’, and vowed ‘strongest possible’ action.
US Commerce Secretary Gina Raimondo visited China in August 2023. The visit coincided with the presentation of Hauwei’s Mate 60 phone. She was not amused. Photo: Office of U.S. Commerce Secretary, Public domain, via Wikimedia Commons.
It was a shock because Huawei was not supposed to be able to make a 7 nanometre (nm) chip due to lack of access to the most advanced tools for chip making. It turns out that the chip was produced by the biggest Chinese chip-maker, SMIC, making clever use of older tools. Furthermore, almost all the other components used in the phone are also Chinese. Both companies are sanctioned by the US, so it is not clear which ‘strongest possible actions’ Raimondo is planning. She has since said that she doesn’t believe Huawei will be able to mass-produce this chip. I don’t know what she considers mass production, but Huawei expects to produce 20 million Mate 60 phones in 2023 and the plan is for production of 100 million phones in 2024. Sounds as mass production to me (even if it is less than the 240 million phones Huawei produced in 2019, before the sanctions). An improved chip-set is expected for the Mate 70 phone, planned to be released in 2024.
The second shock, also in August this year, was when it was reported that China was anticipating its first 28nm lithography machine by the end of 2023. Because of the sanctions, the lack of an own modern lithography machine has long been one of the main weaknesses of the Chinese chip-sector. The machine is made by Chinese company SMEE (also sanctioned), and was originally expected to be available in end 2021, but has been delayed. The machine was announced on December 21, but not presented to the public yet.
The third shock came in December this year, and it was again news from Huawei, the company the US loves to hate. Huawei announced a laptop with a 5nm chip, designed and produced in China. Not cutting edge, but close. It is interesting that this was foreseen already a month earlier by semiconductor veteran, former Vice-president for the world leading chip-maker, Taiwanese company TSMC, who declared that Huawei’s and SMIC’s chip advances could not be stopped by ‘futile’ US sanctions. Shortly after followed the news that Huawei (yes them again!) had launched an own chip for Artificial Intelligence (AI), again not cutting-edge but not much behind either. This is important for the Chinese as the US is trying to deprive them of advanced AI-chips.
Then news appeared about a Chinese produced memory-chip for smart-phones, new computer chips produced by Chinese Company Loongson built on its own instruction set (means no foreign patents involved) and with high performance, the world’s most advanced 3D NAND memory chip (the ones that solid harddrives are made from) produced by Chinese company YMTC (also sanctioned) and credible rumours that SMIC is already working seriously on 3nm chips. Furthermore, news about the Chinese constructing a creative solution to the lack of the most advanced lithography machines (called EUV), which, if successful, will leap-frog the Western tool makers.
China is planning to use The SSMB (Steady-State Micro-Bunching) EUV light source to leap frog the existing chip technology. This is a long shot so there is no guarantee it will be successful. The model on the photo shows a storage ring design for SSMB to generate EUV radiation. Photo: Tsinghua University.
Regarding the Loongson computer chips there is a funny twist. Loongson didn’t export its chips to Russia for fear of US secondary sanctions. But when the US put Loongson on their sanctions list, this didn’t make sense any more, and they are now exporting the chip to Russia, where the first Russian linux-based operation system, Basealt OS, has already been modified to be able to work with this chip (and the rest are sure to follow). Thank you, Mr. Biden (say the Russsians).
The whole sanctions story against Chinese tech is starting to look increasingly ridiculous. When sanctions on export of advanced chips to China were announced in 2022, many US observers smugly rejoiced that Biden had knee-capped China’s tech industry. But outside the US Government, few seem to believe seriously that the US will be successful in anything else than pushing their own and their allies’ tech companies out of the Chinese market. The Dutch company ASML, which is the world leader in lithography machines for chip-production, is one of the victims as the Dutch Government has accepted to follow the US sanctions. ASML is not happy. It has long been complaining that the sanctions would push China to create its own technology, and now says that the sanctions on Chinese companies has resulted in a resurgence of technical prowess by Huawei and SMIC. That is what we are seeing happening just now. More is to follow. Thank you again, Mr. Biden (say the Chinese).
US has the stated goal to keep China as far as possible behind US in chip technology, and at least 8-10 years behind. The alleged reason is that it should keep the latest chip technology away from China’s military. This is nonsense as the military generally doesn’t need and doesn’t use the latest generation of chips. The real goal is to hinder the development of Chinese high-tech industries and keep the US monopoly in this sector. This is a world leading power trying desperately to avoid its competitors catching up – or even surpassing it.
The chip-war against China looks like a rerun of former US President Reagan’s chip-war against Japan in the 80ties: “...Japanese firms began to produce chips of equivalent quality to American ones—and at much lower cost. Losing global market share, US companies turned to the government for help, complaining that Japanese firms were dumping excessively cheap chips on world markets. Trade hawks took up the cause in Washington, arguing that Japan’s chip capabilities were not only an economic dilemma but also a security threat.” Substitute Japan with China, and it sounds very much like the Trump-Biden chip-war against China. The word ‘security threat’ is the mantra for everybody that the US sees as adversaries, as it cuts off further discussion. An American who scoffs at something that has been deemed a ‘security threat’ is considered a potential traitor.
But China cannot be compared with Japan in the 80ties. The Japanese let themselves be bullied by the US, as Japan is a much smaller country, a US ally and with a heavy presence of the US military on their soil. China is a much bigger and more difficult pray. They will be much more difficult for the US to break.
I had my doubts a couple of years ago whether the Chinese would be able to cope with the tech sanctions. I think the picture is clearer today. The sanctions have done China a lot of harm, but they have also forced China to develop its own technologies. So they didn’t work as intended. The US is doomed to failure in the ‘futile sanctions policy’, but even so they are likely to double down on it. And the EU politicians will follow their lead.
Fools.
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I have discussed the US tech war against China here before. Click on the links if you want to read the earlier articles:
Can the US prevent China from developing? (2018)
Why does the US hate "China 2025"? (2018)
The US trade war against China will change history (1) (2019)
The US trade war against China will change history (2) (2019)
The great decoupling (2022)
