
China wants to become a semiconductor superpower, budgeting $100B to achieve it - tristanj
http://www.economist.com/news/business/21688871-china-wants-become-superpower-semiconductors-and-plans-spend-colossal-sums
======
Cieplak
$100 billion is not unrealistic for typical defense budgets. Modern warfare is
transitioning from lead to silicon. It takes 6 lines of VHDL to backdoor a
CPU. Modern chips have billions of transistors. It would be irresponsible of
any modern superpower not to ensure their nation's machines are secure. I am a
US citizen, but if I were a Chinese national, I might be worried about things
like Intel Active Management Technology. Maybe mutual defense is a good thing
if it prevents escalation. I'm still outraged that members of my Congress
proposed violent conflict with China as an appropriate reaction to a data
breech, as if their own organization had never accessed Chinese systems
without authorization. It's probably just theatrics of elected officials from
states with large military presence, but how evil is it to propose killing
people for sneaking into your computers which you failed to secure properly?

~~~
amelius
> It takes 6 lines of VHDL to backdoor a CPU

Are they still using VHDL?

I wonder what hardware languages are being used by Intel and ARM.

~~~
trsohmers
VHDL is used primarily in Europe (and in some academic classes in the US),
while Verilog is used by the vast majority of businesses in the US, and most
of the top schools for VLSI. I know that the vast majority of chip designers I
know (which are 90% US based) much prefer Verilog.

As for Intel and ARM, both are primarily Verilog shops, but I know ARM
provides both Verilog and VHDL models for the licensed components.

~~~
amelius
Thanks. Looking at wikipedia, Verilog stems from 1984. I'm wondering why Intel
and ARM don't develop their own hardware compilers. I mean, if Mozilla can
decide to start a new language, then certainly can those big companies.

~~~
trsohmers
Like most languages, they evolve over time. The latest version of the IEEE
standard version of Verilog is Verilog 2005, but there are also offshoots,
such as SystemVerilog. While most things distributed for interoperability and
targeted for general understanding are written in Verilog, most actual
designers use SystemVerilog, which was eventually made into its own IEEE
standard. SystemVerilog adds a lot of object oriented features, and is a
pretty clean addition to Verilog.

As far as why Intel, ARM, and everyone else mostly sticks to these languages
is similar reason to why C is still used... it is because it works, and works
good enough. After 20 years of just having Verilog, enough people agreed that
it needed a update, and SystemVerilog developed. Another big reason is the
fact that Intel, ARM, etc. all rely heavily on scripts and design flows that
are common between pretty much every semiconductor company... all of the EDA
vendors have united around these standards, and in a world where
interoperability is required and very little innovation happens on the backend
tools, people stick to what works.

------
Cieplak
It will be interesting to watch this play out in the context of the Chinese
intellectual property policies and non-enforcement of US copyrights, patents
and trade secrets. That might be enough money to reverse engineer Intel's 14nm
chipsets. Will it accelerate humanity's technological progress, or will it
stifle progress by removing incentives for inventors?

~~~
chii
>will it stifle progress by removing incentives for inventors?

my guess is it will pressure companies who currently hold on to their secrets
without innovating (because they are the incumbent) to start innovating. If
your competitors are on an even playing field with you, the only way to
survive is to innovate.

~~~
tn13
Problem with copycats is that they remain copycats forever.

~~~
CamperBob2
Everything people say about China today, including your post, is familiar from
my childhood... except my old man was talking about Japan.

~~~
_nedR
and from my childhood too.. except people were talking about South Korea. I am
pretty sure most people/countries started off mimicking and copying, before
innovating.

Also the Chinese might catch up faster than people think. Two small examples:-
Xiaomi's MIUI has really been one of the most innovative android ROMS out
there balancing usability and functionality. Another one, we use multitouch
IR-based components. Right now the top 2 most innovative and competitive
providers are both founded by Chinese, although one is headquartered in the
US.

Basically, the whole "Chinese know only how to copy" argument is an excuse to
be complacent, made by people thinking their culture or genes or whatever will
protect them.

------
dba7dba
Heard about this few weeks ago. Supposedly there's a formula, 1:3:7, that
Chinese firms are using to recruit South Korean engineers.

It means if a S Korean semiconductor engineer joins a Chinese firm in China,
he's guaranteed to be paid 7 times of his current salary for 3 years.

So let's say you make $10,000 at current job in S Korea, you will be making
$70,000 a year, for 3 years. That's supposedly 'guaranteed'.

I may be off with the formula. It may have been 1:3:9. But I am sure it was
1:3:x, so pretty sure that it was supposed to be for 3 years.

A few dozen engineers did accept the offer so far. In the story I heard some S
Korean HR person commenting such poaching went on recently for Display
engineers who were recruited away from S Korea to Chinese firms. But he
claimed none achieved much success, which I took as their career in the
industry didn't last longer or they didn't make the money they expected to
make.

China also made massive investment in commercial airliner, resulting in Comac
C919. I read however that the C919 mostly had US/EU components though.

~~~
zhte415
The 3 in 1:3:x certainly sounds credible, as employment contracts in China
typically last 3 years (after which, renewable, of course).

The reason for 3 years per contract? Seems to be a sweet spot. After 2
contract renewals an employee is 'permanent' and essentially unfireable. 5
years per contract seems a bit long and a big buy-in by the employer, and 1
year way too short to expect someone to have the level of assurance and
employer buy-in.

So, the 7/9 sounds realistic because of the 3. But I honestly don't expect
much to get done, even in 3 years. Someone coming from outside a firmly
entrenched organisation has to be a management master to achieve anything.

------
nickpsecurity
I've been trying to encourage America and Europe to do this with EDA tooling
and I.P.. To no avail. Idea is that the whole flow gets good tools, cell
libraries, and info on processes that nearly guarantees first pass. Then, a
whole platform of I.P., esp I/O or accelerators, are built on several nodes
for easy integration and shrinking of third party designs. Multi-project
wafers are streamlined for each of those nodes. You get all that free (except
MPW's) if you use the host's tooling and fabs with local fabless getting a tax
deduction potentially.

Such a setup could make for a HW equivalent of what's happening in embedded
with Arduino's etc. A slower pace due to costs but still better than now.
Plus, an existing SOC platform at 45nm and 28nm would be great for cloud
datacenters that are investigating custom hardware for accelerators and cost
reduction. We'd see shit cranking out constantly for that market.

So, it's now up to China. They can have that blueprint of mine for free. I'd
also consult on the specifics since nobody here is doing it outside a few
academics and smaller firms. Gotta create the end result somehow.

Note to Chinese involved reading: Also, do a FPGA at 28nm and 28SLP with open
bitstream and free tooling at low cost. Make ASIC conversions easy with paid,
Chinese I.P. as an upsell. Probably sell the heck out of those FPGA's and
academics will do most of R&D on their EDA just for fun. Acquire Achronix
while you're at it to do the same with their asynchronous stuff. Acquire eASIC
and/or Triad for RAD hardware at a discount for Chinese firms. Same advice I
give here should help there.

~~~
nascentmind
Opening up bit streams would be really great. I am still hoping that someday
we have completely open source FPGA tools.

~~~
nickpsecurity
Here's some fun reading for you:

Open-source FPGA
[http://www.eecs.berkeley.edu/Pubs/TechRpts/2014/EECS-2014-43...](http://www.eecs.berkeley.edu/Pubs/TechRpts/2014/EECS-2014-43.pdf)

Open-source, bitstream generation for Xilinx
[http://drop.isi.edu/sites/default/files/users/nsteiner/soni-...](http://drop.isi.edu/sites/default/files/users/nsteiner/soni-2013-bitstream-
fccm13.pdf)

Open-source tooling for lattice
[http://www.clifford.at/icestorm/](http://www.clifford.at/icestorm/)

Open-source EDA flow
[http://opencircuitdesign.com/qflow/](http://opencircuitdesign.com/qflow/)

Older, academic tooling for FPGA's
[http://www.eecg.toronto.edu/~jayar/pubs/rose/rosefpga12.pdf](http://www.eecg.toronto.edu/~jayar/pubs/rose/rosefpga12.pdf)

------
cottonseed
Countries with cutting-edge semiconductor manufacturing capability ban export
of such technology to China. If I remember correctly, the Netherlands was the
main exception and China's manufacturing equipment came from there. I'm
surprised the article failed to mention this.

"[T]he home countries of major semicon­ductor companies ban the export of
leading-edge manufacturing technologies to China."

[http://www.mckinsey.com/client_service/semiconductors/latest...](http://www.mckinsey.com/client_service/semiconductors/latest_thinking/the_challenge_of_china)

------
johnloeber
China is budgeting this plan to catch up to the US' industry by about 2030. Is
there any chance that within the next 15 years, traditional semiconductor
chips will become replaced by something else (whatever that may be)?

~~~
bsder
Plastic

[https://semiaccurate.com/2015/11/18/arm-charts-path-
printed-...](https://semiaccurate.com/2015/11/18/arm-charts-path-printed-
plastic-chips/)

These aren't better than silicon, but they probably will be close enough
shortly.

After that, Moore's Law should go operational. And these have a _huge_
advantage in terms of non-recurring expense.

Think taking all of the "maker" stuff but creating a chip instead of a PCB.

~~~
typon
Sorry but that isn't a replacement for Silicon, not by a long shot. You are
not getting 14nm plastic transistors anytime soon.

~~~
bsder
> Sorry but that isn't a replacement for Silicon, not by a long shot. You are
> not getting 14nm plastic transistors anytime soon.

You missed the point. The point isn't to replace 14nm transistors.

The point is to allow engineers to do VLSI design like PCB design.

There are lots of interesting things that can even be done with 5um or 10um
transistors, but we can't get there because the non-recurring expense is too
high.

Here is an example: guitar pedals--specifically the analog delay ones. These
pedals all use an ancient MN3205 bucket brigade CCD chip. The chip is dead
simple to make, but since the volume is too low to offset the NRE, nobody is
willing to make it.

If, however, you could design that chip with an NRE of $1,000 instead of
$100,000, you could make a tidy profit. In addition, you would probably pull
all of the _other_ functions of the pedal into the chip as well.

There are also other nice benefits to using older and larger transistors. One
of them is voltage tolerance. Modern transistors can't take voltages at even
3.3V in many cases, while the old 10um transistors could go to 18V (old school
4000 series CMOS was specified from 3V-18V for most chips).

The point isn't to replace silicon transistors. It's to create a completely
separate market at a different volume point.

~~~
typon
You made an entirely different point.

> These aren't better than silicon, but they probably will be close enough
> shortly.

If you had said:

> The point isn't to replace silicon transistors. It's to create a completely
> separate market at a different volume point.

We would have no disagreement. You changed your initial entire statement.

------
kumarski
Blowing billions on getting to that 7nm PTM seems like a good move.

That being said, someone should re-invent the antiquated world of EDA,
electronic design automation software, the software that you can use to design
chips.

Several major problems of Cadence/Synopsis....

* No Forking of designs(not easily) * Min Cost is too high. --Should be browser based solution. * Version Control is lacking in chip design teams today.

It's hard to get single digit cost licenses for chip design.

~~~
TeMPOraL
> _\--Should be browser based solution._

Why, oh why? Browser is a crappy environment and its unsuitable for any kind
of bigger application. It's too bloated and too constrained. Google is barely
able to make WordPad equivalent run in the browser - I don't see any actually
usable EDA as a browser solution any time soon.

------
ktRolster
$100Billion seems a little small, to be honest

~~~
samcheng
Intel spends about $10 billion per year on R&D, and a single fab costs about
$10 billion (they build one every few years).

If they want to catch Intel, they will want to at least spend as much as them,
and also benefit from IP-leakage. So I guess it depends on how far you think
they are behind the state of the art?

~~~
1stop
But once you start making semi-conductors you start making money. The 100
billion is the seed capital. Semi-conductors pay for themselves once they're
rolling. See samsung's balance sheet.

~~~
revelation
If only. Intel is the only remaining company with own fabs, all others have
long exited that particular line of business.

Designing chips makes money, manufacturing them in $10B and rising fabs that
stop making profit after a few years not so much.

~~~
MagnumOpus
This is not a play against Intel, it is a play against TSMC which is the
backbone of the Taiwanese economy. They very much haven't exited the foundry
business and are very profitable ($7bn a year or so in net income), and are
stealing away even the iDevice SoC business from Samsung these days...

~~~
brobinson
Yup, my first thought when I saw the headline was "this is a non-military
attack on Taiwan due to the KMT (pro-Beijing party) getting annihilated in the
polls two weeks ago".

------
matt_wulfeck
This is one of the few types of arms races that I feel benefits the consumer.

------
rorykoehler
Was thinking about this whilst watching Marco Polo on Netflix the other day.
China gave the western world so much of it's tech, science and culture within
the last millennium. How the tables have turned. I'd put it down to karma.

In general I think it will accelerate humanity's technological progress.
Looking on an individual level the most impactful inventors weren't motivated
by monetary reward (e.g. Tesla). If you are a true inventor it is a tap you
cannot turn off. If you are a bro who is in it for the money chances are you
will not invent anything particularly ground breaking. The major concern here
is that it's the bros who control the capital.

~~~
dba7dba
And west is trying to return the favor a few centuries later by trying to
introduce basic human rights and/or democracy in China but so far, with not
much success...

~~~
50CNT
Kinda. The Chinese government has been trying to mix sitting on a powder keg
and rapid economic growth. They do not want to become a second USSR by opening
up all the floodgates at once. Also, considering how they got to their
position, I don't think that any of them have preconceptions of a gentle fall
if things go south.

What seems to be the case is that they're shooting for slow incremental
improvement, moving from less touchy areas to more touchy areas. They've gone
from not talking about corruption to cracking down on it higher and higher up
the ranks. It's a very slow sleigh of hand, with the distraction being
economic growth, and various distinctly communist tasting programs (the
current one should be 中国梦(Chinese Dream), if I recall correctly).

But their fear doesn't seem unjustified. There are still spontaneous uprisings
which are usually nipped in the bud before they can escalate by means of
information and communication monitoring. That's what they care about. Expats
in China using VPNs? They don't give one.

Whilst I'm all for democracy, introducing it to China right now would work
about as well as introducing it to the Middle East. Groups feeling under-
represented would fraction off, there would likely be civil war, widespread
devastation to one of the most populous countries of the world, and worst of
all, whilst Iran getting nuclear weapons seems like a looming threat, China
does have them. The sheer pandemonium would make Syria look like a backwater
stand-off. I may be exaggerating, but then look at the bloodshed of the
cultural revolution.

I grew up in Germany, so it's not like I'm opposed or unfamiliar with the idea
of democracy, it's an incredible system. But for China right now? Well meant,
but not practical. It'd be a less bloody affair to turn the US into a monarchy
(to make a comparison). In 20 years, maybe, though it might take longer.

Thinking China can be fixed with a fair heaping of democracy and human rights
ignores a lot of very significant details in a country that works contrary to
a lot of accepted wisdom in the west.

/rant

PS: There's lots of interesting things going on here, playing churned lover
with western ideals is literally the least interesting thing to talk about.
The day before yesterday they announced changes to the Visa regimen, coming
into effect in March. 72-hour visa free visit in 4 yangtze river cities, and
some streamlining of visa/green card programs for tech people and
entrepreneurs working in China. Maybe I should have chosen a less ironic user
name, because this is starting to sound like a sales pitch.

~~~
seanmcdirmid
Oh, I thought your user name meant the rapper :)

The new visa regimes are interesting, but it hasn't seem to trickle down yet
to us tech PhD people's. Really, China doesn't like foreigners, and they
merely tolerate us, making us register at police stations after every trip,
making us renew our visas yearly, not giving us access to the same services as
natives.

~~~
50CNT
Yes, the registration thing is a nuisance. They do seem to be working on
ironing out the bugs in the current visa laws though, and there's reason to
believe they'll become a lot more lenient, especially to y'all tech PhD
people's.

The regulation I'm referring to seems like a pilot program in scope. It allows
foreign students to work for and start tech businesses in the Zhongguancun
area, as well as allowing people that have worked for 4 years or more for a
technology company here to receive a residency permit. That's been exciting me
the last 3-4 days since I heard of it, since I've been playing with the
thought of doing exactly that.

It does feel like people well versed in technology are the bottleneck for
startups over here. Investment is plenty, people with ideas are a RMB a dozen,
but tech people knowing more than some PHP or how to set up Bootstrap? Not
nearly as many, at least where I'm hanging out.

It's certainly an interesting couple of years ahead, as long as they keep
tolerating us here.

------
throwaway300116
The American response will be funding more food delivery app startups and
playing more games empowering female CEOs of remaining real hardware companies
such as HP, IBM or GM instead.

------
fuck_dang
I will never purchase a chinese computer, or a computer with chinese
semiconductors, or chinese software.

~~~
typon
So I'm assuming you don't use graphics cards in your computer made by either
NVIDIA or AMD, both of which use TSMC to manufacture them?

~~~
brobinson
Taiwan != China, at least in terms of "not trusting ___China___".

~~~
typon
TSMC is building a massive foundry in mainland. If you think the government
doesn't have control over everything there you're fooling yourself.

~~~
brobinson
Interesting, didn't know about the mainland expansion!

If anyone else is curious: [http://appleinsider.com/articles/15/12/07/apple-
supplier-tsm...](http://appleinsider.com/articles/15/12/07/apple-supplier-
tsmc-to-set-up-3b-independent-factory-in-mainland-china)

