China fact of the day

China importing more than $300bn of chips last year famously more than it spent importing oil.

McKinsey, noting China’s modest progress in the field, points to the exponential growth in money and effort required as chips advance: it takes about 500 steps to create a 20nm chip, but 1,500 steps for a smaller 7nm chip.

That is from Louise Lucas at the FT.


Raise your hand if you first read this as potato chips - which tbf I couldnt blame them for, domestic chinese chips are weak tea.

Or as they in IC faulting and test automation: "let the chips fail where they may".

Bonus trivia: it's really hard to check for 'race conditions' in modern chips, which are transient errors that occur randomly and are difficult to replicate. For this reason, some think that in northwest Australia a certain high-power government communications system, with huge antennas (Google it, it's pretty famous) is responsible for a series of freak software errors that have caused no fewer than three Airbus jumbo jets to fail while flying past this station, causing the autopilot to take over the plane, Boeing 737 Max style, and nearly causing the planes to crash, fighting with the pilot trying to override them. Race to the bottom!

"it's really hard to check for 'race conditions' in modern chips, which are transient errors that occur randomly and are difficult to replicate."

Generally, race conditions don't occur randomly.. A race condition is when two different operations are performed at the same time in an otherwise synchronous system. Quite often they are just a rare edge case that wasn't accounted for.

On the other hand, if the "Race condition" is being caused by unexpected radiation from an outside source then that would certainly fit the description. However, most aircraft are designed and tested to withstand lightning strikes. It seems doubtful that any source miles away could generate more of an EM effect than a close lightning strike and not be on the scale of a nuclear detonation.

Well, yes, that's the conventional thinking, they have guard bands for timing of gate logic and so on, but my answer I think is the tinfoil hat but not unsound explanation. Is it a coincidence that three Airbus planes all failed when near this AU station?

Bonus trivia: a tinfoil hat is actually an effective Faraday Cage!

The station in question is: (see the section "Aircraft interference controversy").

And remember: "Once is happenstance, twice is coincidence, three times is enemy action" - Sean Connery as James Bond in Goldfinger (1964)

Bonus trivia: they're currently having personnel problems in the filming of the latest James Bond movie.

arteria blood is bright red in color, while venous blood is dark red in color. The issue is tunnel vision.

Hats don't usually enclose the entire head, like a cage. So, no, a tinfoil hat is not a Faraday cage (at least when structured as a hat; it might be folded to make a cage, ceasing to be a hat in the process).

@Derek Jones - once again, China is leading in innovation, though I have seen older US patents with the same idea, they're just not popular hits in Google Patents. ("A cap with tinfoil as radiation protection layers comprises a cap body, a top radiation protection composite layer and a side radiation protection composite layer. ") [Faraday cage, note the side protection layer]

A baseball cap lined with aluminum foil is not enough, i.e., those pesky electrons will leak in around the base.

You need a full body suit:

Knights wore full body armor so Wizards couldn't control their minds -- true fact!

Yep. I quickly realized it couldn't be, but I held out hope until the last sentence.

It mentioned chips and oil in the same sentence so it is understandable. The idea of Chinese chips sounds good though. Although something that's not prawn flavored.

Yep some Americans make some really good snack chips.

Psst ..... don't tell clockwork_prior that computer chips have anything to do with industrial automation.

Shhh - don't tell anyone that the Chinese are huge importers of industrial automation too.

And are we still confusing CPUs with all semiconductor chips? Because the Japanese pretty much import (or license in the case of Fujitsu) all the CPUs they use in creating the machines used for industrial automation that are made in Japan.

"And are we still confusing CPUs with all semiconductor chips? "

Well I wasn't but it's hard to tell what you were thinking.

" Because the Japanese pretty much import all the CPUs they use in creating the machines used for industrial automation that are made in Japan."

Sigh, no once again you don't have any idea what you are talking about. Mitsubishi and Hitachi both manufacture CPUs for industrial automation in Japan. They even export, and some Scheider PLCs have used Mitsubishi CPUs.

"Hitachi Ltd. and Mitsubishi Electric Corp. merged their chip operations to form Renesas, now the world's third-largest chip manufacturer."

The point of buying all those chips last year was fear of restrictions this year. Trump's trade war with China has put America's chip makers at risk, as China looks to more reliable sources for chips.

China does not believe in a static comparative advantage. It imports what it needs, while in the long term tries to produce it domestically, through investment and espionage. It also targets things that are very hard to make well, microprocessors, nuclear reactors, automobiles, etc. The US should move slightly in China's direction in that respect. Forget the cheerleaders for free trade and their naive models of optimality, try to build the difficult things domestically. Even if we can import from abroad indefinitely, pretend as if trade is coming to an end and we must produce it domestically. For I doubt the tractable free trade models incorporate geopolitical risk and the positive externalities of manufacturing and supply chain concentration.

Free trade models, of course, do not account for war, geopolitical competition, etc. They are not built to model human societies.

The last several decades have been a perfect storm of stupidity, at worst combining Free Trade naïveté with ignorant pacifist optimism.

Pacifism is not how I would describe the numerous, expensive wars the US found itself in.

Yeah there’s been a lot of warmongering and military interventions in the past few decades. I don’t know what you’re talking about there. The free traders however are mostly autistic freaks who can’t understand that some countries might use new wealth to build opposing military power.

Well, that observation certainly puts the EU in its place, which by offering free trade (within the EU) to former Warsaw Pact members is clearly going to be played for suckers by those countries who might use that new wealth to build opposing military power.

The EU is a bunch of suckers. Don’t disagree there.

Because Bulgaria poses a military threat to France?

Or was the fact that the EU does not engage in free trade (certainly not of the version endorsed by a certain style of American thinking) outside of its borders not clear enough?

You can only do that in a system where companies are beholden to government bureaucrats rather than to their shareholders.

China can try to produce things domestically, but that doesn’t mean it will succeed. Import substitution has a long track record of failure, as central planners cannot reliably know which industries will be successful in the future, nor how to achieve said success. Even China’s own trade surplus, including services, has been shrinking rapidly in recent years, showing that any purported import substitution is not working.

Geopolitical risk is entirely man-made. And there is no reason to privilege manufacturing over other industries. It is one possible route to wealth, but not necessarily appropriate for everyone. It worked for China because China’s largest comparative advantage is its huge population, which provides cheap and relatively high-quality labor and can be easily connected to infrastructure due to density. Many of the world’s most prosperous countries and regions have little or no manufacturing. Manufacturing also has many negative externalities such as pollution, capital-intensivity, and pro-cyclicality.

Actually if you read the book “How Asia Works” by Joe Studwell you will see that no country has transitioned from undeveloped to developed without manufacturing. The only exceptions are some entrepôts like Singapore which are pretty special cases. Manufacturing allows for mass employment for a low skilled workforce skill-building that services don’t give.

Manufacturing today is a very different beast than manufacturing 30-100 years ago. When people think of manufacturing, they think of the old ways, where laborers were a huge part of the output. Today this isn't always so, and we have no reason to believe that manufacturing will continue to be labor intensive in the future.

Well that is true and it means that this path to development is closing or closed. However I disagree that manufacturing is one of many paths to wealth. It is/was special and I don’t think other viable paths exist

"[China] also targets things that are very hard to make well, microprocessors, nuclear reactors, automobiles, etc. The US should move slightly in China's direction in that respect"

Last time I checked, all of those things are made in the US as well.

Keep in mind that China spent a long time making socks and such.

I can't get to the article. There's chip fabrication which requires a lot of capital and know-how at 7 nm and there is chip design for the 7 nm node. Quite a few countries can do chip design, very few can do chip fabrication at the frontier, so a lot of these "imported" chips may be designed in China but fabbed somewhere else.
China can use TSMC as a foundry. Is that a problem ?
At 7 nm, you only have Intel, TSMC, Samsung. I don't think Global Foundries can do it. So only 3 companies in 3 countries can fab this.

Fab costs continue to go up - a lot - as feature size goes down. Intel announced plans a couple of years ago for a $7 billion 7 nm fab. TSMC plans to spend $17 billion for a 5 nm fab.

The capex requirements, as well as the manufacturing process development costs, drive concentration toward a few very large high volume firms.

Among other things, this relates supply chains with a very small number of critical points of failure, for a large fraction of products - phones to cars to medical equipment.

That’s right.
There is, of course, the possibility that China annexes Taiwan.

If Taiwan doesn't want to be annexed what's China going to do? They don't have the navel craft necessary to invade Taiwan. Perhaps they could brute force it with a reverse Dunkirk, but the massive losses that would likely result would only make China look weak even if they win. And if the US supplies munitions to Taiwan China is likely to lose. While nothing is 100% certain in war, it seems to be almost all downside for China.

I remember that article. I don't recalling it touching on what China could do if it decided to invade Taiwan and actually prepared instead of just talking big while taking no practical steps. But such preparations would be impossible to hide and if they did try to hide them the personal wouldn't have adequate training and their war machines would be untested.

I see no realistic scenario in which China could invade Taiwan without Taiwan receiving outside support. As long as China is dependent on imported oil there will be no invasion and I'm pretty sure there will be none. Even if the US President promised to keep the US out of it in return for a nice set of golf clubs, there are other countries that would be concerned about the sudden and uncharacteristic Chinese aggression that would take action.

'As long as China is dependent on imported oil '

This applies to essentially every oil importing country that uses oil tankers, but for some reason, even though the American military has been thoroughly aware for generations of its overwhelming strategic advantage, most American remain (willfully?) blind to this fundamental reality of America's global power.

'there are other countries that would be concerned about the sudden and uncharacteristic Chinese aggression that would take action'

As can be seen by what Iran is doing - tankers are extremely easy targets to attack with sufficient plausible deniability, especially when one has a bit of awareness of how insurance plays a major role in where tankers actually sail. And the Chinese military is unlikely to be able to play the role of the U.S. military during the mid-80s Tanker War.

AI and machine learning are a key priority for China. Possibly the key priority, with the potential to leapfrog the West technologically. Especially if the West disarms unilaterally, with renewed calls for all sorts of restrictions to be placed on AI. China has no such qualms.

New kinds of chips are better suited to machine learning applications, for instance Google's tensor processing units (TPUs).

It's a near certainty that China will want to have its own world-beating chip fabrication capability. Looming trade war makes the issue all the more urgent. Capex is not going to be a problem.

Intel still has problem with 10 nm tech. Global Foundries seems to have abandon 7 nm tech. IBM now turns to Samsung away from Global Foundries for their Power10 chip. China has ordered the equipment for 7 nm tech but the critical suppliers to the manufacturer mysteriously burnt down before delivery.

You know what would help?

No, what? Strategically applied force?

A really quite submarine Captained by a Russian with a thick Scottish accent?

That, too, of course, but I think it would help if we had some dirt on Glenn Greenwald

Most of the value-add in iPhone manufacturing is from imported chips from the US, Japan, Korea, Taiwan and Europe. The Chinese components (assembly and battery) are only worth about $15 out of a $300 bill of materials. Those chips alone must represent a big chunk of that $300B

Impeach Mr. Mark Milley. Mr. Milley has said he supports Red China. The Law says, "Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal".
Moreover, the Constitution wisely says, "Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort."

As a Republican voter, I am shocked and outraged.

Are you sure General Mark Milley isn't Meatloaf in a costume?

They are different people.

Yes, they do look quite different. But in my defense, Meatloaf is about 15 years younger in my country.

Here's a video Meatloaf made with Cher when she was only 64.

State of Oregon is a net exporter--by a wide margin--of electronics to China. Hint why: The smartphones, PC's, laptops, and non-Mexican Flatscreens sold in Costcos, Fred Meyers, and everywhere else in Oregon are still all imported from China.

Another Hint: Beaverton Oregon is one of the largest and most intensive manufacturing towns in the world---and it's not at all because of Nike.

_____ inside of Beverton.

Actually, Hillsboro, not Beaverton.

I love it. And I've been thinking about just this problem. Scale makes a different, a big difference. We don't live in a scale-free world. If we did, a human being 1 mm tall would be exactly like a 2 meter human, just smaller. In fact, though, a 1 mm human is impossible. Scale matters.

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