China To Funnel $29 Billion Towards its Chip Ambitions (bloomberg.com) 68
China has formally created a $29 billion state-backed fund to invest in the semiconductor industry, advancing its goal of reducing a dependency on U.S. technology. From a report: China is the world's biggest chip importer, and the long-awaited 204 billion yuan ($28.9 billion) fund will fuel Beijing's efforts to forge its own semiconductor supply chain from chip design to manufacturing. It will play a key role in steering overall strategy and investment in the integrated circuit sector, which includes processors and storage chips used in smartphones and datacenters. Beijing's effort to reduce its reliance on American chips is taking on greater urgency as the Trump administration adds more Chinese names to its export blacklist, cutting off the flow of chips to targeted companies from Huawei to SenseTime. The fund's registered capital comes mainly from state organizations, according to company registration information, which was posted online on Oct. 22.
Meanwhile, in the USA... (Score:1, Insightful)
All the money is being funneled into the military machine.
Re:Meanwhile, in the USA... (Score:5, Informative)
All the money is being funneled into the military machine.
60% of federal spending goes toward mandatory items like Social Security, Medicare, and Medicaid.
30% goes toward discretionary spending which includes things like veteran's benefits, education programs, and the military. Military spending makes up about half of the discretionary spending.
In other words, the military is about 15% of total fiscal budget. That's no where close to all the money.
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Not to mention, large pieces of that military spend is on new tech.
Half of discretionary spending (Score:2, Insightful)
Social Security "taxes" don't even go in a general fund, they specifically fun social security.
We're wasting billions on it. It's something like 30-40% higher than the height of the Iraq War. We've raised it enough in the last two years to easily cover free college. But for some reason we can't build an electrical system in California safe enough to keep turned on.
So nice job countering the "all our money"... congrats, it's not literally all our money. It's just ~500 billion dollars more than needed.
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The Defense bill is approx. $700 Billion per year. Of that, a little under half is salaries and the sorts of people expenses any company has. After that, at least $100 Bill and probably north of that go to physical plant upkeep. A bit get siphoned off for research. DoD is lucky if they $150 Billion to spend on new stuff. Most of their "stuff" expenditure goes for bullets and guns and mundane stuff like that.
140$ billion in pay (Score:1)
that's not "a little under half" of $715 billion.
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The Defense bill is approx. $700 Billion per year.
Another $220B is spent on veterans' benefits. That is also a military expense. It can't be cut directly, but if we reduce the size of the military, the cost of veterans' benefits will fall in the future.
imagine (Score:1)
even if we didn't lesson the defense budget (we should, but hypothetically) and we just brought 700 bases home and 150,000 out of the 200,000 or so that are off shore.
We could build bases along their precious border, for example, and have one every ten miles or so including the border with canada... and be pumping all that money into rurual local economies, basicall flowing right into the local hardward and gas and restaurant and etc stores.
it's mind boggling how rich this country is and the richest company
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maybe you don't have the internet (Score:1)
"From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."
from https://www.ssa.gov/history/In... [ssa.gov]
And it has never been "raided" either. Hey, just curious, where do you think you pick up these myths?
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However, I agree with you about the military. It does not come close. In fact, America's real issues is our tax structure which is total BS.
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Meanwhile the rest of the world spends about 3% on military.
Most developed nations are spending 1%-2.5% of GDP on military spending.
The USA is spending about 3.4% of GDP, with a total federal budget around 20% of GDP. So it's around twice many other nations, but that shouldn't be such a big surprise. The USA has strong treaty commitments both in Asia and in Europe, and in either case needs to be able to deploy troops and supplies across some very big oceans.
Creating and maintaining that sort of capability is enormously expensive. Logistics have always been import
Wow (Score:3, Insightful)
State funded IP theft. I wonder what percentage of the fund is allocated for commercial espionage.
Re:Wow (Score:5, Insightful)
You call it IP theft, I call it "what the fuck did you expect"?
Companies had to send their specifications to China to have their products manufactured at low cost, now they're reaping the rewards of that short-sighted, short-term profits decision.
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Companies had to send their specifications to China to have their products manufactured at low cost, now they're reaping the rewards of that short-sighted, short-term profits decision.
I wish I had mod points
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You guys have it spot on.
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they're reaping the rewards of that short-sighted, short-term profits decision.
It was not short-sighted. They were in a Prisoner's Dilemma and had no choice.
If several companies compete in an industry, it may benefit them to cooperate and collectively refuse to share their IP with China.
But China is an enormous market, so if one company "defects" and signs an IP sharing agreement, they can reap big profits for a decade or so until China's domestic companies catch up.
As soon as one company defects, the other companies have nothing to lose since China is going to end up competing with
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So collectively it was dumb and short-sighted. But it was still the most rational decision for each individual company.
Sounds like an excellent argument for why there should have been tariffs and restrictions placed on China-US trade all along, and now there is some catching up to do.
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When China joined the WTO, the assumption was that as China opened to trade and liberalized its economy, it would concomitantly liberalize politically as well, and become a "normal" country. After all, that is what happened with Germany and Japan after WW2, and with South Korea and Taiwan in the 1970s.
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Your IP is not the same mine. It was simply foolish because all of the western companies could have easily automated more and lowered their costs.
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State funded IP theft. I wonder what percentage of the fund is allocated for commercial espionage.
[Bold mine]
You forgot to ask whether their aim is anything similar to USA's PRISM [surveillance program], in which some 3-letter American government agencies feature quite a bit.
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XiChip 2025: A knockoff of an ARM Cortex from 2015, lol.
Re:Wow (Score:5, Interesting)
Several "fabless" Chinese companies produce current licensed ARM cores today and even sell them in the west (Allwinner and RockChip come to mind). No reason they would suddenly revert to older stolen IP that would be uncompetative.
The real answer is how China expects to build competitive new fabs (notice the plural) that cheaply when TSMC is expecting to spend over $19B just building one fairly low volume 3nm production line.
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Or china could just reign that 'rebel province' and nationalize TSMC.
They'd never do that though, would they?
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They don't ask need to compete at the top end.
Look at Chinese ARM CPUs and SoCs. They aren't always the best performers but they sell well enough because most phones aren't high price flagships either. They could switch to RISC V or a home grown architecture and take the license fees they pay to ARM for themselves.
Take the FPGA market. Mostly European and American products. Mostly not the latest fab technology, they instead compete on features, engineering support and price.
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State funded IP theft. I wonder what percentage of the fund is allocated for commercial espionage.
A non-zero amount since $29B isn't going to cover it for this industry.
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State funded IP theft. I wonder what percentage of the fund is allocated for commercial espionage.
A non-zero amount since $29B isn't going to cover it for this industry.
Either negative or most of it.
29Bn will not be enough to build a top-of-the line foundry and keep upgrading it for the next let's say 5 years to keep it top of the line. If you have to add to this number the costs of manufacturing lithographic equipment and design you might as well forget it.
Compared to that, this is a more than sufficient budget to continue stealing and copying everything for the next 5 years.
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China has a lot of home grown IP and licensed Western stuff like ARM cores.
Interesting, we'll see where it goes (Score:2)
The next few decades are going to be very interesting. One huge advantage China has over the US, besides sheer population, is way more direct control over their economy and resource allocation. If they want something done, it's done with zero debate, so they're effectively able to pick winner and loser industries. They also have much greater influence and control over private companies and decide who gets funding and who doesn't at a country level. An example would be the 2008 infrastructure boom...rather t
Re:Interesting, we'll see where it goes (Score:5, Insightful)
One huge advantage China has over the US, besides sheer population, is way more direct control over their economy and resource allocation. If they want something done, it's done with zero debate, so they're effectively able to pick winner and loser industries.
The same was true of the Soviet Union and their economy was a mess because the results are only as good as the person picking the winners. If you get someone like Nicholas Maduro in charge of doing it, things go completely to hell in a hand basket in really short order.
It's really the same argument about whether or not a monarchy is better than a democracy. Possibly if you get some good kings, but not when you get a tyrant and sooner or later you end up with that.
It's certainly true that China can get whatever it wants done completed a hell of a lot faster because of the control they possess, but that doesn't necessarily mean that the things which they can accomplish more quickly were worth doing at all or better choices than other alternatives.
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- Lynette Ong, University of Toronto
The private sector corresponds to 60% of the economy and it employs 80% of Chinese workers. That said, the Chinese government runs a lot of companies.
Um.. the USSR economy was a mess (Score:3)
People massively over estimate the USSR's capabilities because the United States built them up into the image of a global super power so the Military Industrial Complex could run a for profit cold war.
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Being "smart" has limits. For one, predicting the future accurately has proven very difficult. Japan spent boatloads subsidizing the improvement of analog TV, only to watch digital technologies rise up and slaughter all their work and money.
Second, you have to understand people because your society is made up of people, not robots, and if you piss off too many, they will revolt. Those good at symbol diddling and logic are often not so good at "social math".
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second, you have to understand people because your society is made up of people, not robots
Duly noted, but we are talking about chinese society
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Tug-of-war politics creates waste everywhere humans are involved; gov't and private sector.
China had empty cities for a while because they mis-estimated need and mis-planned. [richardvanhooijdonk.com]
And why select CA for examples? Fox happens to be on? NASA has wasted tons caused by every administration changing their goals, for example. And then there's the F-35.
Re:Interesting, we'll see where it goes (Score:5, Informative)
The same was true of the Soviet Union and their economy was a mess because the results are only as good as the person picking the winners.
To speak on that. At first, the Soviet Union experienced rapid economic growth. While the lack of open markets providing price signals and incentives to direct economic activity led to waste and economic inefficiencies, the Soviet economy posted an estimated average annual growth rate in gross national product of 5.8% from 1928 to 1940, 5.7% from 1950 to 1960, and 5.2% from 1960 to 1970. The impressive performance was largely due to the fact that, as an underdeveloped economy, the Soviet Union could adopt Western technology while forcibly mobilizing resources to implement and utilize such technology. An intense focus on industrialization and urbanization at the expense of personal consumption gave the Soviet Union a period of rapid modernization. However, once the country began to catch up with the West, its ability to borrow ever-newer technologies, and the productivity effects that came with it, soon diminished. The Soviet economy became increasingly complex just as it began running out of development models to imitate. With average GNP growth slowing to an annual 3.7% rate between 1970 and 1975, and further to 2.6% between 1975 and 1980, the command economy's stagnation became obvious to Soviet leaders.
Bottom line. The early strength of the Soviet command economy was its ability to rapidly mobilize resources and direct them in productive activities that emulated those of advanced economies. Yet by adopting existing technologies rather than developing their own, the Soviet Union failed to foster the type of environment that leads to further technological innovation. I would definitely argue that China is attempting hoist innovation be it domestically grown, less likely, or exported, which seems more to be the case with Chinese nationals obtaining educational visas in first world nations.
I would argue that it isn't just simply a problem of centralize command but a lack of looking for optimization. So long as any nation is looking to continually improve their current industries, they'll be able to stay afloat in the International market to varying degrees (and tossing up some major finger quotes here because rampant poverty in nations is the criteria I would argue as failure, but some would indicate that political failure is the actual signal of failure which I would argue it isn't). In a Capitalism system you have price indicators and yes, that quantification indeed makes it much easier to have "many eyes" on the control of innovation. I would say that by being on the world market and having the trade that China has, they have multiple pathways to see that price signalling and target innovation. It's just not a domestic price control as we are more accustom to here in the US.
It's certainly true that China can get whatever it wants done completed a hell of a lot faster because of the control they possess, but that doesn't necessarily mean that the things which they can accomplish more quickly were worth doing at all or better choices than other alternatives.
But I would say that China is perhaps one of the more conservative markets out there. While there are true attempts to implement domestic innovations, they really are just looking at what the international markets wants and looking for means to do price reduction on those desires. They've been less about "what to do" as you argue and more about "how we do the thing that someone else is doing and sell it back to everyone." I would point their their rapacious IP theft as evidence of such. They are acutely aware that amassing innovative technologies is a key to market dominance. Not only that they're delegations into international markets is second to none. China aggressively markets themselves not only in an attempt to get customers, but to obtain market conditions. Their access to international markets keeps them afloat way mo
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Their economy did remarkably well considering the fact that they were under heavy sanctions and unable to trade with many other developed economies.
New Economic Policy (Score:2)
Lenin introduced the NEP very early because the command economy did not work well. And Stalin did not care whether the economy was working or not as long as the purges continued.
China is capitalist. Just like any western country, they direct funds sometimes to industries they want to grow. There is some natural selection among Chinese companies, which is what keeps them strong.
But what will happen if the middle class starts to reject Xi's oppressive government? Interesting times.
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Well said man ...
I see a significant number of people saying that democracy takes too long and elects idiots (Trump being a case in point), and that the better model is the Benevolent Dictator.
Well, that model works only for open source software (a different problem space, and different community), but it never s
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Who defines the characteristics that makes "smart people"?
What is the mechanism to "put them in charge"?
Who says that a single global world government is inevitable?
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It is more interesting to those in Asia.
America will be fine economically, even if we fall to *gasp* California's GDP. Tons of natural resources, land, and totally separated geographically.
But for sure China has ambitions in Asia, the people are fueled with a passion and chip on their shoulder that is straight up terrifying. And after years of everyone shit talking America - I for one will advocate for isolationism against Chinese expansion.
You reap what you sow, HongKong, Philippines, SE Asia, etc. Amer
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Yeah.. an american hegemony has been for the most part good for the world. (yeah yeah, there's a few notable exceptions; but those are absolutely nothing compared to the 18th and 19th centuries)
A Chinese hegemony will be Orwellian nightmare fuel.
this is quoted in USD (Score:5, Insightful)
The amount listed is in USD.
However, this is in *China*. With Chinese labour, Chinese market pricing, non-profit government shops, and all raw materials sourced in China -- the list goes on.
$29B USD in China, buys a LOT more than $29B USD in the US, for example. I'd consider it 10x the amount, realistically. Hell, even more maybe.
The same thing goes for military spending. There are two types, domestic and foreign purchases. There's a low of stuff that China builds, deploys, trains domestically now. Any military spending in that category, should be considered MUCH more compared to a Western nation.
Frankly, I think China now has a much, much larger military budget in terms of 'what their money buys' than the US does now. If they do completely break dependencies on external parts and what not?
Well.. anyhow...
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Not ten times. Purchasing Power Parity 2.5 yuan/USD, cash about 7 yuan/USD. So about two to one.
https://data.oecd.org/conversi... [oecd.org]
Inviting retalization (Score:1)
If they subsidize an industry, it gives US an excuse to tariff or ban their chips or other products, since that practice is generally considered trade cheating.
(correction) Re:Inviting retalization (Score:1)
Re: Inviting retalization
Correction: "retaliation"
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The USA is a LONG way from being an open market.
RISC-V (Score:2)
Excellent, this should be a huge boost to the RISC-V [wikipedia.org] open-source CPU instruction set architecture. Assuming China does not want to pay ARM licensing fees.
Unlike the feel-good open source chip designs like OpenRISC [wikipedia.org], which never really went anywhere, RISC-V is a real thing with commercial products ramping up now, see SiFive's [sifive.com] offerings.
SiFive's CPU's are comparable to ARM at the same feature size but more expensive at the same performance. The only thing keeping RISC-V down is ARM's relatively larger econo
Greatest gift to China? (Score:2)
Trumps embargo must be the greatest gift ever made to China - it speeds up their own development and technological independence dramatically.