I wonder if these actions will have the opposite effect. China will only more invest into producing their own. And I think we should not underestimate them. Could be good for competition though.
As other have said this is already happening with Huawei and SMIC. And this is DUV, not EUV. China has already poured billions into it, and will continue to do so until it is somewhat cost neutral. 98% of smartphone outside of Apple and Samsung are Chinese brand. Their domestic market will be the first to use some of these chips, to use the term HN may have heard of it, To eat its own dog food.
It isn't just Foundry or ASML either, it is across every single component sub sector. From NAND, DRAM, LCD Panel to OLED etc.
And Apple is behind it, "lifting" ( as they would like to call it ) every single one of these manufacture. Something no one likes to mention or continue to be ignored.
It is just a delaying tactic. ASML is 5-10 years ahead in their technology so it will take a while for China to catch up. Which will grant the USA some extra time to build its own chip industry and not be dependent on two or three other countries.
Yes, though it's not only about delaying China so the US can catch up in semiconductors, but also about trying to delay China so that they miss their window of opportunity to invade Taiwan.
Xi's aim is to reunify Taiwan with the mainland sometime in the 2020s. The US is trying to deter that using a comprehensive deterrence strategy - military, diplomatic, economic. Hence new US bases in northern Philippines, US supporting Japan in changing its constitution to enable more military buildup, US increasing arms sales to Taiwan, US SSBN publicly docking in Korea, AUKUS, Quad, improved diplomatic relations with India, general derisking/decoupling and relocating of supply chains to Vietnam, Mexico, India, etc.
The ASML and Nvidia bans are just a part of an overall comprehensive delay and deterrence strategy, primarily aimed at thwarting Chinese ability to deploy advanced AI in the near term that could be useful in an attack on Taiwan and potential war vs the US & allies in the next few years.
Yes it does incentivize the Chinese to more quickly develop indigenous advanced chip manufacturing capabilities, but that was happening anyway and everyone including the US knows it can't be stopped at this point. But it's about throwing as many wrenches into Xi's invasion plans and 2020s timeline as possible, and this is just one of many.
Xi Jinping's own words. He continues to say publicly that China and Taiwan will be reunified, most recently at his meeting with Biden in SF and then again in his new years speech a few days ago. https://news.ycombinator.com/item?id=38828960
He has been saying that for a decade without equivocation or ambiguity. If we take him at his word, then the optimal time for Xi to do it is in the 2020s, 1) while the US Navy is at its weakest since the Cold War, 2) China has the demographics and economic strength for a war, 3) while Xi Jinping is young and fit enough to handle a war, and 4) the US president is either aging Biden, chaotic Trump, or incompetent Kamala.
Xi has instructed the PLA/N/AF to be fully modernized and mission capable by its 100yr anniversary in 2027, and they are on the largest fastest military buildup since Germany in the 1930s. They're also acting belligerent and aggressive toward Taiwan, other neighbors in the South China Sea, and vs India on their border. We've seen this behavior and mentality in dictatorships before and know where it leads.
> Hardly relevant for the 20s.
The announcement is diplomatically relevant now, even if not militarily relevant till the 2030s. It's part of a package of reassuring US allies in the region that the US is committed to defense of its democratic friends and allies there. Without such clear reassurance, some may conclude they have no choice but to pre-emptively concede and capitulate to the CCP on Taiwan, SCS militarization, CCP stealing SCS resources in other countries' exclusive economic zones, etc. This is part of a comprehensive diplomatic/economic/military strategy of preventing that.
Xi himself, as recently as just last week, centering reunification in his New Year's speech [0]
Delaying China is absolutely critical for democracies to remain globally viable. The fundamental principle is that any person or country who wants to remain self-determining must be better armed, prepared, and able to fight than the local bully or global authoritarian; if not, they'll take your lunch and democracy every time. With Russia, supported by China [1], we are already far past a new Cold War and into a Hot War with the autocracies.
The better defense capabilities of the democracies rely on the concept of "Defense Offset", which is basically maintaining a technological advantage so that a numerically much smaller military can prevail against a numerically superior military (e.g., US mil 2019 total size 1.388MM [2], vs China 2.535MM [3]).
This military advantage, since at least the late 1960s, has relied on advantage in microchip technology.
When the first Cold War ended after the collapse of the Soviet Union, the Grand Experiment was tried. The idea was that free flow of economic benefits and information would inevitably lead to open and democratic societies. Sadly the generous experiment failed miserably — all it did was further empower the dictators. Now, Russia is attempting to regain all it's territory back to 1917, and China is continuing it's expansionist ways. This is because they now have significantly closed the technology gap to the point where even Iran is contributing significantly to Russia's war on Europe with the Shaheed drones, using a lot of off-the-shelf technology, and Ukraine is significantly bolstering it's defense with FPV drones.
So, even if China does eventually manage to catch up (which is unlikely considering how many insanely complex and globally-non-China-sourced technologies go into one $450MM ASML chip lithography machine), the key is to delay CCP sufficiently that we can extricate them from the democracies' supply chains and maintain a sufficient military offset to defend democracy around the world.
We are starting very late, so this is truly critical, unless we are OK with us and our descendants living under a regime like CCP or Putin.
Looking at the last 150 years, or even the most recent decades, it's us having a history of invading countries or conducting military operations to support different parties.
Yet, we are so blind of that. China has been mostly on the receiving stick (by European countries as well), not the offending one. Even when it comes to Vietnam or Korea it has been us who meddled in those internal conflicts first by sending troops.
Even when it comes to Taiwan, it's still us who have settled on a policy of ambiguity and defense of a country we legally recognize as a government of the same unique Chinese country, after avoiding to even recognize the PRC for 3 decades.
Even though we keep meddling and deciding the policies of half the world, we still keep demonizing any potential geopolitical entity and we keep pushing everyone in a vassal-attitude due to the unmatched economic, cultural and military power of the US.
Yet countries like China, Russia, and many others, will just never play fiddle to that.
This hawkish paranoia does nothing but further push China to defend its own geopolitical interests and further poke their aggression.
And where we needed a more hawkish paranoia, as in case of Russia, we failed and still keep failing to do so, because Russia has never really been in the economic and financial position to threaten our geopolitical interests to the extent that China can.
The way I see it, western countries and US should take a clear stand about Taiwanese statehood, and Taiwan needs to do it first on their own in order for the rest of the world to take a stand, as they legally still lay claim on the entirety of China (and beyond).
> The way I see it, western countries and US should take a clear stand about Taiwanese statehood, and Taiwan needs to do it first on their own in order for the rest of the world to take a stand, as they legally still lay claim on the entirety of China (and beyond).
Isn't it ironic that you're accusing others of warmongering, but then suggest an action which would almost certainly provoke a war? (China has been pretty explicit about declaration of sovereignty being their red line)
This doesn't change the fact that the Taiwanese status is de jure unresolved and will constitute a never ending basis for conflict and tension.
This tension can only be relieved by de jure integrating Taiwan in Chinese statehood under very huge degrees of autonomy, which no one, let alone Taiwanese people ever trust or by unilateral statehood declaration (which has no support internationally, least of all in US since Taiwan not declaring independent statehood is the entire basis of the US-Taiwan relations act).
> This tension can only be relieved by de jure integrating Taiwan in Chinese statehood under very huge degrees of autonomy
You mean like the huge degrees of autonomy Hong Kong enjoys? That seems like such a huge strategic blunder by Xi. Instead of making it a positive example for Taiwan to follow, they made it a strong deterrent to a peaceful integration.
> which has no support internationally
It has no support internationally, because to get that support, you first need to declare sovereignty.
HK is a bit different. It was a land lease and the Britons negotiated for a 50 year transition period before HK was fully assimilated.
I fully agree with your conclusion and spirit though which is why I said that Taiwan has no reason for any kind of trust for a peaceful integration with the PRC.
I don't want to abuse whataboutism, but you're aware that besides actively engaging in multiple wars and international military actions we also support Ukrainian war effort directly right?
You're suffering of the usual American exceptionalism, where US is allowed to overthrow governments at will, conduct military actions, decide to support whatever side (sometimes arming both), but other countries cannot.
Just to point out, I obviously condone the military actions in Ukraine (especially since I am a Pole of Ukrainian descent), but I obviously also condoned overthrowing Libyan government or the Iraqi military intervention too and many other despicable actions our governments have conducted in the last decades.
> I obviously condone the military actions in Ukraine (especially since I am a Pole of Ukrainian descent)
I don't want to be too adversarial, but don't you feel a bit hypocritical by supporting Ukraine to preserve its sovereignty in face of a larger, strongly authoritarian neighbor, but arguing for Taiwanese to simply give up their own?
> The way I see it, western countries and US should take a clear stand about Taiwanese statehood, and Taiwan needs to do it first on their own in order for the rest of the world to take a stand, as they legally still lay claim on the entirety of China (and beyond).
and this:
> This tension can only be relieved by de jure integrating Taiwan in Chinese statehood under very huge degrees of autonomy, which no one, let alone Taiwanese people ever trust or by unilateral statehood declaration.
I argue that at some point there is a need for a de jure resolution of the Taiwanese matter or this issue will come again and again.
And, the way I see it, it has been US starting from Bush but most importantly under the hawkish Trump presidency that has made the matter relevant again combined with the Russian invasion of Ukraine.
I'm not warmongering. I'm not calling for war. I'm just observing reality and describing it.
> Looking at the last 150 years, or even the most recent decades, it's us having a history of invading countries or conducting military operations to support different parties.
I'm aware of much that, from Smedly Butler's "War is a Racket", to the CIA's disastrous interventions in Iran, Chile, and other countries, to the more recent endless wars of pre-emptive regime change against rogue states aspiring to become nuclear powers. But conversely, defending existing democracies against being overrun by authoritarian dictatorships is not that. One can be against the former and for the latter.
>The way I see it, western countries and US should take a clear stand about Taiwanese statehood, and Taiwan needs to do it first on their own in order for the rest of the world to take a stand, as they legally still lay claim on the entirety of China (and beyond).
Both conceding Taiwan to the CCP, and supporting a Taiwanese declaration of independence, would lead to bad outcomes from the US point of view. Conceding could embolden the CCP to push further, toward the other small countries in ASEAN, or Mongolia, etc. Appeasement of dictatorships has been known to lead to that outcome, especially ones already acting belligerent and hostile to their other neighbors. Conversely, formal independence for Taiwan is the CCP's red line and would certainly result in war.
What the US chose instead was to publicly support the "One China" policy so as not to embarrass the CCP or cause loss of face, which is important over there, while also supporting Taiwan's defacto independence (and, I suspect, privately communicating that an attack on Taiwan would not be acceptable). After formally switching recognition to the CCP in 1971, this was the only realistic policy position for the US to take. One could argue against formally switching recognition, but after that was done, ambiguity over Taiwan was the only option.
Or would you like a 6 month all inclusive holiday in a Uyghur re-education camp?
Or would you prefer an island getaway? There’s a few brand new ones in South East Asia the Chinese are building on coral reefs in order to erect military bullying outposts and exert pressure on small SEA countries.
If you’re from a developing nation you can finance jyour corrupt infrastructure project with the Chinese and have some of your key infra under their control while you sink the country into unpayable debt.
Without these sanctions, China will likely soon develop chip design talent that's at the cutting edge, but they'll fab with TSMC (and thus use the entire Western-dependant supply chain). This means that China's chip manufacturing ecosystem will remain poor, unpopular and underdeveloped.
With these sanctions, China's chip design talent can't fab cutting edge chips. But China's manufacturing ecosystem suddenly gets the market incentive to develop. I don't think they will reach EUV any time soon, and that hurts. But dominating the mature chip manufacturing sector in the mid term is an achievable goal, and mature chips are still absolutely essential even if they're not "sexy". Whereas before sanctions, there was no way they could dominate in chip manufacturing (nobody wanted to fab with Chinese manufacturers or wanted to buy Chinese chip manufacturing equipment), only in chip design.
What these sanctions did was trading one thing (cutting-edge chip design) for the other (mature chip manufacturing). The short-term blow to China sounds sexy, but they've created a long-term problem. Is this trade worth it? I wonder whether policymakers even realize they're making this trade.
China doesn’t need to replicate EUV in order to make competitive chips. China can already produce very advanced chips today and is maybe 2 years behind in the ways that actually matter.
Unfortunately for the Chinese it's extremely tricky for even private capital to pick the winners in these spaces. I'd guess there is almost zero chance the Chinese government giving out free cash beat the market and even build the right stuff. Can they even build the light sources or optics for these devices. Don't Zeiss make the flattest mirrors ever made for this? There's probably hundreds of technologies that are as close to magic as you can get in the ASML lithography systems, I'm skeptical of even companies in the US being able to copy this for a long time.
By the time the Chinese catch up (if ever) the next generation of chip development will be coming online such as High NA and we are even starting to experiment with XRay lithography.
They have already proved time and time again to be able to make gigantic leaps, some of those, completely on their own in the sector.
Pouring billions in the sector highly increases the chances of breakthrough technologies.
I personally think more competition in the space is good for everyone, albeit I'm not a fan of those trade wars, they accomplish little at the end of the day and they are funded with a lot of our taxes, we talking hundreds of euros/dollars per citizen for many years to subsidize this trade war we have little to gain from.
China will still get ASML equipment eventually if they will really want to by buying it from intermediate sources that may hide the operation for the right amount of $. China will be further motivated to reverse engineer the solutions and not share their own advancements in the sector if accomplished.
>>They have already proved time and time again to be able to make gigantic leaps, some of those, completely on their own in the sector.
Yes, we shall see. An awful lot of those giant leaps were extremely dependent on technology that was either systematically forced to hand over from democratic countries, or outright stolen by espionage (see their fighter jet vs F35, and some sub technologies).
Have the Chinese managed to reach critical mass of knowledge to continue to advance? Time will tell. But, if Russia is an indicator, even leadership in some areas will slow, stagnate, then become dependent on outside sources [0]. Notice also that Russia is dependent on outside sources even for CNC machines, in which it used to lead, with China's exports increasing 10X after Ukraine invasion [1].
> Yes, we shall see. An awful lot of those giant leaps were extremely dependent on technology that was either systematically forced to hand over from democratic countries, or outright stolen by espionage (see their fighter jet vs F35, and some sub technologies).
Here we go again. A little bit of reading here[0] and here[1].
Nonsense. No one denies your list of pages of Chinese inventions from prehistoric, ancient and imperial periods. No one is saying that the Chinese are some kind of inferior race or incapable of invention.
The present question is what can their society do NOW? Especially considering 1) Mao murdered & starved millions, w/strong emphasis on killing of "elites" and "educated" people in the "Great Leap Forward", which impairs their technological ability 2) China suffer a lot from brain drain to the west, and 3) they are an authoritarian society which has some inherent advantages (e.g., they can put a massive budget on Project X within days, and they can provide consistent funding over decades, vs the constant sea-saw we get in congress so NASA, NSF, etc. don't know their budget from one year to the next) and many disadvantages inherent in authoritarianism.
With those factors, and the current state of their economy, can they go it alone and maintain their aggressive expansionist policies?
Ok. You went from industrial espionage to authoritarianism, killing, society, etc.
I was purely answering to your issue with Chinese industrial espionage. You only mentioned their inventions and simply ignored the other link which shows Chinese are no different than others in terms of industrial espionage and stealing.
No different? Indeed, other societies have used industrial espionage and stealing in the past. But the Chinese have refined, funded, systematized, and integrated it into their development far more extensively than any other society, even the Russians, whose entire approach to silicon microchip development was to steal it and build a 'factory town' to develop based on the theft [0]; didn't work out so well.
One could say that the Chinese are world-champion innovators in the area of industrial espionage, both in the effort they put into it and the results.
The question is: now that this source of knowledge is being restricted, have they reached a point where they can 'reach escape velocity' mostly on their own?
I think it is an open question. I hope not, because that will mean effectively another 'end of history'[1], except with authoritarian states dominating.
Okay only time will tell. Which technologies has Chinese capital (rather than American capital) been successful at funding, I think display technology and solar panels they are ahead on, anything else?
Steve Hsu has had guests on his podcasts saying exactly this. There was already a domestic semiconductor industry but big players almost never used them since the big semiconductor companies were such a safe bet.
Well, now they’re forced to use them, and they’re growing.
With the fabs available to them they can’t produce latest gen very few nanometer dies, but for a lot of use cases that doesn’t matter.
And of course, I’m sure they’ve got too people working on catching up. China graduates more engineers in a year than the United States has total.
Imagine if you banned Western countries from exporting cars to Japan in 1950.
That's what every Chinese fanboys on this forum keeps repeating: so many Chinese graduates! However, with unofficial 40% youth unemployment rate and 10k chip companies shutting down in 2023 https://www.tomshardware.com/tech-industry/manufacturing/chi..., where would these graduates actually work? realistic answer is that they're right now delivering food or driving didi. or laying flat doing nothing.
This is not a new problem, as they have been starved of high-end semiconductors for years already. However, catching up to the knowledge that ASML and Zeiss have regarding lithography machines is not an easy task to overcome.
Meh, from a strict game theory perspective restricting trade makes both sides poorer. You know, both parties in a trading contract only sign on the dotted line if both are advantaged by it.
It depends what the costs and benefits are - if in pure money then yes both sides poorer.
But if you take into account social and other freedoms boosting China (and Russia) does not help the average Westerner as their freedoms would tend to reduce to mach China.
Don’t underestimate the difficulty of semiconductor manufacturing. It’s not that they’re trying to implement a fixed target - the technology has been exponentially advancing for the last 50 years.
While I'd say so, I don't think in the medium future it would have made much difference.
China wants ensure control over strategic elements anyway. I suspect that the west has started betting on China intending to primarily rely on domestic production. Possibly to preempt the future, avoid companies getting entangled further, and slow China down even if just marginally, the west has settled this policy. I say west but this is more a US thing, Europe was more reluctant to follow it.
No need to bet on the intent. At least for software in financial services, starting from 2027 all Chinese companies are supposed to use 100% homegrown software. Any use of foreign-supplied software must be explicitly approved by the respective government body.
The mandated fraction of Chinese software vs. other software is already supposed to be >65%, and the floor is being raised every year.
Maybe they can develop their own high-tech fabrication technology to catch up, but I wonder how they will manage and accelerate the progress.
The West has IP laws to incentivise R&D by the free market. In China, IP law enforcement is hit-and-miss. Small entities risk having their research getting used by others for free so it would be up to big entities that are well-connected to the centers of power to do the R&D. Research done by a few big entities in a centralized manner may not foster much innovation.
So maybe it boils down to how well they can spy or poach talent or knowledgeable people from Western companies, or maybe reverse-engineer Western products.
> This is less and less the case. IP protection in China has been improving for years.
Not only are there persistent allegations of state-organized economic espionage and theft of intellectual property in violation of international trade agreements, it is not just limited to business. Academia and government also.
Chinese firms have been able to spend more on production, undercutting competitors, by skipping costly R&D because of IP theft.
These anomalous statistics give us a small and partial peek into how much China claims to be spending on R&D vs. actual. There could be multiple interpretations of the anomalous R&D statistics, but it would be consistent with the allegations that China's explicit strategy is to steal IP to bolster local companies so that they can compete on the global scale.
Russia is benefitting from the sanctions, China as well.
If these are so beneficial, why didn't China / Russia institute this kind of import/export restrictions on their own? It sounds like cheap propaganda ...
On the other hand, the very clear deadline on the now-revoked license caused Chinese chipmakers to panic-buy record levels of Dutch equipment and ASML's Chinese competitors now have the problem that their potential customers have smaller budgets left for them after those purchases...
If you think about how difficult invading Ukraine has been for Russia, add in 100 miles of water for the most inexperienced navy in the world and it would likely be a blood bath.
I've always wondered if sinking a super carrier (group?) off your coastline is a great idea. They all carry a massive nuclear reactor onboard, I'm assuming the US has some pretty good technologies to mitigate these new Chinese carrier destroyer missiles, but all in all it seems like a disaster for everyone, especially the Chinese.
It doesn't make much sense to compare Ukraine and Taiwan. Those are very different wars, with Taiwan / US having also huge challenges.
> I've always wondered if sinking a super carrier (group?) off your coastline is a great idea.
There are 9 sunken nuclear submarines lying on the sea floor. I have doubts about this being a big deterrent. The carrier group is also unlikely to be close to the coastline.
