Silicon is the New Oil


#1

This week Trump admin banned all American firms from supplying to ZTE, a huge Chinese telecom equipment maker second only to Huawei. That’s a catastrophic blow to ZTE because that means it can’t buy chips from American companies like Qualcomm or Intel.

There is speculation ZTE can’t even use the Android system because it comes from Google. That’s American tech dominance in full display and a rude wake up call for the Chinese. China doesn’t have the chips, literally, to wage trade war with US. Silicon is a key strategic weapon.

Chinese semiconductor stocks actually rose on the news, figuring the Chinese government will redouble its effort to catch up.

I read a big report on China’s semiconductor tech yesterday. They are nowhere close. SMIC, China’s biggest and most advanced fab, is still struggling with 28nm. That’s 3 generations behind. DRAM and NAND also way behind, NOR is OK, nothing on CPU and GPU. China needs to spend 10x more on R&D to even have a shot at catching up.


#2

Trump hell bent to screw China’s rise to power. Xi has to think hard, poor Xi. Calling all overseas Chinese semiconductor experts (looking at you, Jensen) to go back to their homeland to help.


#3

Poor Qualcomm ---- this couldn’t have come at a worse time. How much control does China have over taiwan and TSMC?


#4

None. No control at all.


#5

Deng Xiaopeng once said China should lie low and bid its time (韜光養晦). Xi had a different idea and keeps reminding people China is a big power on the rise. Maybe his timing is just off. Should have lied low for another 10 years or so.


#6

So you think the one belt one road initiative is 10 years too early?
It worries USA enough to take drastic action?
Somehow Trump current tariffs and bans seem to be signaling to Europe not to join in.


#7

The belt and road is fine. It reminds me of the Warrior period’s 合縱連橫。Maybe a bit lower profile? China has to seek out new allies and Central Asia and Africa are natural fits.

Trump admin complained about china’s push in Africa and its “Made in China 2025” campaign. It’s hell bent on suppressing China. That’s full on Thucydides trap that historically didn’t lead to good ending. Not sure what should Xi do now.

On semiconductors specifically what China should do is clear. Hire the best from SV with 2x or 3x salary and push as hard as it can. Many of these people came from China anyway so it should not be too hard. Just shower them with big money. Increase the subsidy and R&D budget by 100x. In 10 years’ time China can be shoulder to shoulder with US on semiconductor tech.


#8

Are you planning to help your homeland?


#9

No. Unlike you I don’t have an EE degree.


#10

Huh? How do you manage to work in Intel? What is your bachelor degree? Ofc, your Master of CS no count :slight_smile:


#11

A cable news segment from Hong Kong, in Cantonese. This is a huge shock in china but under reported in US. I think it can be inflection point for semiconductors industry in China.

Summary of the news report: some Chinese argued US sanction can be blessing in disguise as it forces China to develop its semi faster.


#12

Are there stocks of any Chinese semi companies that can be bought in USA or from Singapore?


#13

SMIC has ADR on NYSE: SMI. Research more first though. Its process is still way behind TSMC and Samsung.


#14

#15

Coming back to TSMC announcement of lower forecast, do not think AAPL has less demand even though AAPL would not have ordered on TSMC.

AAPL may plan in house or in USA in house manufacturing as a result of low corp taxation in USA that may result lower ordering through TSMC.

There are lot of changes will happen in US companies,next 12 -18 months, looking for manufacturing in USA and taking max tax benefits by using local productions.


#16

At present, INTC is the most loved semi after NVDA :slight_smile:
INTC made a new ATH before today decline.