
China's Tsinghua Unigroup to invest $47B to build chip empire - JumpCrisscross
http://www.reuters.com/article/idUSKCN0T50DU20151116
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Analemma_
Raise your hand if you saw this coming when the US government blocked Intel
from supplying chips for China's supercomputing initiative. Way to go, ITAR:
once again you've successfully spurred a country to move away from its
dependence on American technology, while doing nothing to meaningfully improve
our security.

~~~
mahranch
> once again you've successfully spurred a country to move away from its
> dependence on American technology, while doing nothing to meaningfully
> improve our security.

That's only if they are successful. And success, especially in that industry,
is far from guaranteed. There are some critical breakthroughs they would need
to make just to compete with the likes of Intel on even their low-mid range
processors. Most of their designs are propriety which means China's computer
initiative is going to be starting from scratch. That means they're starting
at a point which puts them behind everyone else by _at least_ 10-13 years or
more. And still, there's no guarantee they'll ever come close to catching up.
It's a huge $47B gamble on their part, which is almost certainly why they
haven't done it sooner. That's a lot of money to lose, even for China, if they
bust.

And I know some of you are thinking, "Well, they'll just steal the tech!
Espionage baby!" Sorry, but that too, is unlikely. Due to China's recent
aggressive tech grabs over the last decade or two, companies have "wised up"
to IP theft and go to extreme measures to protect their assets. Some of those
protections rival or even exceed the U.S governments. China's wild west days
of stealing everyone else's IPs are winding down.

~~~
mangeletti
China has near clones of the F-35 Lightning, the Comanche stealth helicopter,
the best of Russia's newest generation of tanks, etc.

I purchased a Trijicon ACOG clone from China for $136. It's just as good as,
if not better than (doesn't require a battery for the chevron, and a battery
powered chevron is, IMHO, not a good feature), the real thing, which costs
civilians $1,400, and our military something like $800 each.

I can't speak for the highest of the high tech, in terms of a "wind down", but
I can assure you that $47B in China will get you a LOT more than $47B will in
the US, and the lack of R&D costs is a big part of that.

~~~
mahranch
> China has near clones of the F-35 Lightning, the Comanche stealth
> helicopter, the best of Russia's newest generation of tanks, etc.

So they say. There's no way I'm taking China at their word. They're only
slightly less full of it than North Korea.

And according to the wikipedia page on the Shenyang J-31, it (at best) matches
up with 4th generation fighters. Not the F35. They tried to copy it but their
copy is only (maybe) as good as the previous 4th generation. Which is of
little to no concern.

Which is kinda that point. Their knock-offs are just that. Knock-offs. And
none of those IP theft acquisitions have been recent. Their F35 theft
supposedly happened nearly a decade ago.

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mtgx
It was easy to predict this would happen when the US gov made this silly and
very pointless move of blocking Intel Xeon chips in China, with an even
sillier excuse that China is using its supercomputers to do nuclear research
(shocking!):

[http://www.pcworld.com/article/2908692/us-blocks-intel-
from-...](http://www.pcworld.com/article/2908692/us-blocks-intel-from-selling-
xeon-chips-to-chinese-supercomputer-projects.html)

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ericd
Wow, they're investing 300 billion yuan over 5 years, and they only have ~12
billion yuan in annual revenue. There must be some monster loans being made
available...

~~~
pavlov
It seems clear who's footing the bill:

 _China 's Tsinghua Unigroup Ltd plans to invest 300 billion yuan ($47
billion) over the next five years in a bid to become the world's third-biggest
chipmaker, the chairman of the state-backed technology conglomerate said on
Monday._

Chinese government wants to be in CPUs. (Edit: Oops, the article talks about
NAND. Well, they want to be in memory chips then, I guess.)

~~~
simonh
I'm sure they do want to be in CPUs, and getting into NAND is a stepping stone
towards that by building up a skills base in semiconductor manufacturing
processes.

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nickpsecurity
I proposed doing it differently by investing billions in I.P. development for
standardized interfaces and constructions at every half of the process node.
As in, most of the work is already done with process shrinks easy too. On top
of that, platform ASIC's or S-ASIC's with mapping to FPGA's. Anyone that used
the fabs would get the I.P. free or dirt cheap with that used to make more.
All the stuff that isn't a competitive advantage is gratis.

The other one that would kick ass is heavy investment into EDA tooling. China
itself may or may not need it with the rampant piracy. However, driving the
prices of EDA synthesis, verification, etc tools down to four to five digits
might make the market really interesting. Especially with lots of reference
I.P. and flows. That plus inexpensive, maskless prototyping like eASIC does.

Someone might steal my idea with me posting it all over the place but I don't
have the capital to pull it off. So, steal away and get me EDA that's as cheap
as Windows. :)

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mappu
gEDA and KiCad are pretty low-cost!

~~~
kevinchen
Correct me if I'm wrong, but I don't think you can design silicon in kicad.

~~~
jacquesm
You're not wrong. Neither gEDA, they're both schematic capture and layout
tools. Maybe the OP thinks they can output masks from schematics or something
like that but that has absolutely nothing to do with each other.

Fabmasks have about as much to do with schematics as architecture has to do
with city utility planning.

~~~
nickpsecurity
Lol well said...

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api
I'm waiting for China to do for the US chip industry what Japan did to the US
auto industry: come in and eat it from the bottom up with cheaper products
that are initially dismissed as inferior toys until they move up the chain and
eat the entire market.

[https://en.wikipedia.org/wiki/Loongson](https://en.wikipedia.org/wiki/Loongson)

~~~
bsder
Unlike GM, Ford, Chrysler, the current big semiconductor producers, Intel,
Samsung, and TSMC are already _excessively_ cost sensitive. There isn't a lot
of extra overhead to suck out.

China can subsidize things at a loss (look at the solar cell manufacturers)
until the volumes get big, but they can't maintain that too long once things
take off.

~~~
api
That's a good point, but I wonder if coming up from below with a cleaner
architecture might be able to accomplish something similar. Is MIPS64 cleaner
than X86, and could this let them create lower power higher performance chips
or manufacture equivalent performance chips at a lower cost?

[http://blog.imgtec.com/mips-processors/loongson-
mips64-proce...](http://blog.imgtec.com/mips-processors/loongson-
mips64-processors-performance-barrier)

~~~
nordsieck
The benefit of a lack of a decode step (for arm vs x86, but I assume the
analysis is roughly correct for mips) was estimated at RealWorldTech as about
5% of a core's energy. Given that the amount of energy the cores take up as a
portion of the total energy budget, I doubt it would matter for high
performance chips - particularly in the face of Intel's 1-2 process generation
lead over everyone else.

Admittedly, phone chips are a bit lower power than desktop CPUs, but they are
pretty beefy these days.

~~~
api
Dunno... 5% at data center scale could make a difference in the highly
competitive cloud services market where margins are already fairly small.

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harigov
It's incredible how they can plan to create an entire industry by investing so
much. It's slightly different from how India approaches such problems by
forcing companies to manufacture stuff locally. I wonder what approach will
work out best in the long run.

~~~
fpp
"They" can get these almost unlimited monies basically for free from the
Chinese banking system while similar funding in the US and Europe ends up with
so called investment banking or similar where it will never arrive with new
entrants or is allotted to a small group of established players and special
interest groups.

China is acting similar to what successful (new) raising economies have been
doing in the past when they disrupted established (industry) players - my best
historic comparison on this would be the transition of Germany from a farm
based economy to one of the key industrial nations after the first industrial
revolution. While the leading industrial player - the UK - was blocked from
progress by overstretched copyright / patent / other protection mechanism of
the established special interest groups, Germany provided top down support and
access to all necessary means to forward technological progress.

Then - while most people in Germany still gained only limited benefits and
just a few became very influential / rich, Germany as an overall entity /
nation gained massively. At the same time the situation / influence of the UK
overall deteriorated - these are of course all longer term developments often
spanning more than one generation (30 years).

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mmanfrin
Anyone familiar with the industry know what companies might be targets for
acquisition?

~~~
jacquesm
ARM would seem to me to be an obvious target. ASML another.

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test001only
But ARM is UK based. The article seems to suggest a US based company.

