US Chip Sanctions On China Appear To Be Failing Hard

Created
Wed, 06/09/2023 - 01:02
Updated
Wed, 06/09/2023 - 01:02
US Chip Sanctions On China Appear To Be Failing Hard

Huawei, the first company to be slapped with sanctions, has announced a phone with 5G capability with domestic 7nm chips.

Huawei Technologies and China’s top chipmaker SMIC have built an advanced 7-nanometer processor to power its latest smartphone, according to a teardown report by analysis firm TechInsights.

Huawei’s Mate 60 Pro is powered by a new Kirin 9000s chip that was made in China by Semiconductor Manufacturing International Corp (SMIC)…

…The processor is the first to utilize SMIC’s most advanced 7nm technology and suggests the Chinese government is making some headway in attempts to build a domestic chip ecosystem, the research firm said…

…Buyers of the phone in China have been posting tear-down videos and sharing speed tests on social media that suggest the Mate 60 Pro is capable of download speeds exceeding those of top line 5G phones.

When I talked to an expert a couple years ago, he told me it would take many years to really deal with the sanctions because of the difficulty in creating the “tech that creates the tech.”

But that appears to not be true. The West didn’t ban lithography machines until nowish (the Dutch will export them till the end of the year), but…

Shanghai Micro Electronics Equipment (SMEE) is expected to deliver by year-end its proprietary SSA/800-10W, a 28-nm lithography machine, according to a report last week by Chinese newspaper Securities Daily.

This is less advanced than what you can get from the West, and there’s a scaling issue, but the idea that the Chinese won’t catch up is absurd and always has been, and no country can scale faster than the Chinese.

The end result of the chip bans will be that China winds up with the largest chip industry in the world, and I’d bet that in ten to fifteen years (and perhaps sooner, as they keep coming in before forecast) they will be slightly in advance of the West.

Scale matters. The West sent the world’s manufacturing floor to China, and just as when it moved to the US the Americans took the overall tech lead (with Germany the only real competitor at the time), China will take the tech lead.

These sanctions should have been used only just prior to a war. (And a war with China would be horrific, and the West is not ready for one, especially right now with the massive equipment and munitions draw down for Ukraine.)

Chinese aren’t stupid, the West is no longer special, having sold its patrimony and the idea that the Chinese were somehow incapable of catching up in tech if sanctioned was always ludicrous.


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