Technological iced tea

The US-China technology war escalates, where will Beijing rely to rise up?

In early August, US President Joe Biden signed the “Chips and Science Act 2022” (Chips and Science Act 2022, commonly known as the “Chip Law”); Accordingly, the US will spend a total of 280 billion USD to attract the chip manufacturing industry back to the US; then the US Department of Commerce announced chip giants AMD and Nvidia would be banned from exporting high-end GPU chips to China. This will directly affect the development of China’s cloud computing, quantum computers, artificial intelligence, self-driving electric vehicles, and may also affect the development of high-end weapons and aerospace industry.

Some have described that America’s technology war is a repeat of President Ronald Reagan’s “Star Wars Plan” play against the Soviet Union in the last century. It could collapse the Chinese economy and government, but the US market will also lose hundreds of billions of dollars, and whether it will work or not is yet to be determined.

Those who have pro-China views believe that the US political actions that violate the rules of the market economy will stimulate China’s own research and development, and sooner or later they will achieve breakthrough achievements. such as “Two Bombs, One Satellite” (ie China’s construction of atomic bombs, intercontinental missiles and satellite launches formerly chaired by late Premier Zhou Enlai). China’s Tiangong (Tiangong) space station is considered an achievement under such stimulation. The US blocks Chinese chips, but China’s policy is similar to the “great steel” method of Mr. Mao Zedong before; If successful, the US will regret it in time.

The “Chip 4” alliance was created by the US to block chips for China (Photo: Koreatimes).

The two views are completely opposite, each with a different form of consciousness and politics. China’s economy is now really facing an unprecedented crisis, reform and opening up has been going smoothly for more than 40 years, but the exchange of capital, technology and markets with the West has now reached a stalemate. If China can’t break through, technology will drag the economy down, it could fall into the middle-income trap and will never catch up with the US and Europe.

America’s containment measures to contain China include:

The firstDuring the presidency of Donald Trump, about 600 Chinese companies were placed under export control and the US pressured the Dutch company ASML not to sell lithography (lithography) printers. important to produce chips for China, destroy enterprises such as Huawei, SMIC.

MondayThe Joe Biden administration pushed for the Chip Act, in which $52 billion would be directly subsidized for chip manufacturing, assembly and packaging facilities, and subsidized manufacturers were not allowed to invest in the product. chip production higher than 28nm (nanometer) in China within 10 years.

Tuesdaythe Joe Biden administration used its technological superiority to bring together Japan, Taiwan, and South Korea to form a “quadruple chip alliance” (“CHIP 4”), which has been described as akin to the Chain of Islands The first technology blockade, intended to remove China from the global semiconductor supply chain.

The US China technology war escalates where will Beijing rely to rise up | Technological iced tea

The chip war between the US and China is increasingly fierce (Photo: Sohu).

Wednesday, the US banned the sale of EDA, chip design software to China, global EDA is in the hands of 3 companies Synopsys, Cadence and Siemens, directly attacking China’s autonomous chip research and development field. Washington has announced a ban on Nvidia and AMD from exporting high-end H100 GPUs (graphics central processing devices) to China. This is the heart of high-tech applications, used not only in weather forecasting, oil and gas exploration, aerospace, etc., but also used for facial and image recognition, aerial aircraft driver and autonomous driving, etc. Once the supply is cut off, China’s cloud Bigdata center and R&D will be forced to downgrade.

To break away from dependence on the US, Taiwan and South Korea, China established a large National Fund in 2014, investing at least 342.8 billion yuan, and the “Made in China 2025” Program. will invest $1.4 trillion to develop semiconductors. Leader Xi Jinping requires a self-sufficiency rate of 70%, so that he is no longer “stuck in the neck”. In addition to direct investment, the National Great Fund also uses nearly 2 trillion yuan in funding, known as the “Great Leap Forward Movement in Chipmaking”. 142,900 semiconductor companies have been established locally to receive government subsidies.

The US China technology war escalates where will Beijing rely to rise up | Technological iced tea

Dinh Van Vu, General Director of China’s National Large Fund for Chip Development, was notified of investigation on July 30 (Photo: Zhihu).

However, the country’s chip production fever has caused “three nos” companies (no experience, no technology, no talent) to rush to invest in the chip manufacturing industry, in more than a dozen provinces, In the city, the autonomous region has built large-scale chip factories. But from 2019 up to now, hundreds of billion-dollar factories such as Tsinghua Unigroup (Tzu Quang), Wuhan Hongxin Semiconductor (Wuhan Hongxin, HSMC), Chengdu Gexin (Chengdu Globalfoundries) have all declared failures. , chip factories in many places largely stalled, vacated and closed; hundreds of talents managing Taiwan’s chip industry, after “going out” to mainland China, hastily resigned and returned to Taiwan. The Chinese government on July 30 announced the investigation and handling of 5 high-ranking officials, including Ding Wenwu (Ding Wenwu), general director of the National Large Fund, and sought to investigate and handle companies. fraudulently obtaining state subsidies, showing the failure of the “Great Chip” movement.

The chip development process consists of four main processes: design, manufacturing, packaging, and testing. It requires lithography (lithography) and years of accumulated experience to process processes accurate to 1/10,000 (one hundredth of a thousand) the diameter of a human hair. SMIC recently announced the production of 7 nanometer chips, but SMIC engineers said that domestic DUV (Deep Ultraviolet Engraving) chips have low efficiency and are not competitive; The outside world thinks China is bragging and exaggerating reality. After Huawei was sanctioned, its advanced mobile phones plummeted, showing this clearly.

Annual global chip exports are $320 billion, 54% of which is sold to China. The US inhibits the development of Chinese chips, but its own losses also amount to hundreds of billions of dollars, “If I kill a thousand enemies, I will also die eight hundred“. Shares of Nvidia and ADM fell sharply, leading to Wall Street’s disapproval, the White House immediately announced the plan would be postponed for a year, allowing China to import large amounts of GPUs and spare chips; The White House is different from time to time, like opening the back door.

The US China technology war escalates where will Beijing rely to rise up | Technological iced tea

Mr. Moris Chang, founder of Taiwan TSMC Group (Photo: UDN).

The US has lured TSMC, Samsung, … to the US to set up factories, but the technical level of labor, working conditions, experience and cost in all aspects are inferior to Taiwan and Korea. Mr. Morris Chang (Truong Trong Mau), the founder of TSMC, has publicly expressed that he does not attach importance to TSMC’s investment in the US.

The US-China technology war has entered a Cold War-style pattern, and Washington wants to force Beijing into submission, and even wants to use it to bring down the Chinese economy and government. However, China still has strong countermeasures that have not been used such as banning the export of rare earths, under the rising national flag, it is more difficult for the Chinese leadership to bow and compromise before the US. .

The US-China technology war could become the watershed of the Chinese economy. If future technologies such as artificial intelligence, cloud computing and self-driving electric vehicles are all limited, on what basis will China continue to rise? That will be the biggest headache for China coming here.


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