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US To Stop TSMC, Intel From Adding Advanced Chip Fabs in China (bloomberg.com) 87

Posted by msmash from the how-about-that dept.
As the US Congress passed an historic $52 billion federal program to boost domestic chipmaking capabilities, it included one significant caveat: Companies that receive the funding have to promise not to increase their production of advanced chips in China. From a report: It's a condition that will certainly add to escalating tensions between Washington and Beijing. The curbs will hit companies like Intel Corp. and Taiwan Semiconductor Manufacturing Co., leading chipmakers that have tried to build their businesses in China. TSMC won't be able to substantially upgrade or expand its existing facilities, effectively losing some growth opportunities in the world's biggest semiconductor market.

Specifically, the Chips and Science Act bars companies that get federal funding from materially expanding production of chips more advanced than 28-nanometers in China -- or a country of concern like Russia -- for 10 years. While 28-nanometer chips are several generations behind the most cutting-edge semiconductors available now, they are still used in a wide range of products including cars and smartphones. The ban covers both logic and memory chips.
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US To Stop TSMC, Intel From Adding Advanced Chip Fabs in China More

US To Stop TSMC, Intel From Adding Advanced Chip Fabs in China

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  • also add if China takes over Taiwan then must get out.

    • I'm pretty sure engineers would leave Taiwan for the USA and destroy all the equipment as well..

      • Re: (Score:3)

        by drnb ( 2434720 )

        I'm pretty sure engineers would leave Taiwan for the USA and destroy all the equipment as well..

        I'm pretty sure the US military would "assist" in destroying all the fab plants.

        • Re: also add if China takes over Taiwan then must (Score:4, Interesting)

          by mattaw2001 ( 9712110 ) on Tuesday August 02, 2022 @11:36AM (#62756148)
          In the past, when the UK stood to be invaded by the Germans, many buildings and facilities had their basements filled with explosives with a remote detonator some miles away. The intention was to pre-trap facilities the Germans might benefit from.

          In the now, I think it is reasonable to assume that the TSMC fabs and several other important facilities are genuinely pre-mined already, and I would not be surprised to hear that Taiwan has told China about them.

          The fact that this might be reasonable is a terrifying thought, but I never thought I would see an actual land war with mechanized infantry and tanks in my lifetime either.

        • Re: (Score:2)

          by Agripa ( 139780 )

          I'm pretty sure engineers would leave Taiwan for the USA and destroy all the equipment as well..

          I'm pretty sure the US military would "assist" in destroying all the fab plants.

          The equipment in the fabrication plants will be useless without the support contracts from companies like ASML.

          • Re: (Score:2)

            by drnb ( 2434720 )

            I'm pretty sure engineers would leave Taiwan for the USA and destroy all the equipment as well..

            I'm pretty sure the US military would "assist" in destroying all the fab plants.

            The equipment in the fabrication plants will be useless without the support contracts from companies like ASML.

            In theory. Does ASML have contacts in mainland China? Any ventures with mainland partners? Are these ventures effectively training the future competition (the CCP required various ventures to do so)? Any employees from the mainland who will dutifully and patriotically transfer trade secrets to the mainland (the CCP has a program for doing so)?

            In any case, why leave things to theory or chance when a sufficient charge of high explosives can resolve a potential problem?

      • LOL. You haven't read how SMIC heads hunted the best minds from TSMC? Money talks, most would happily relocate to mainland. Especially since US now has pretty bad reputation among non-mainland Chinese even in Singapore and Malaysia. There is constant reports of racists attacks on Asians.
    • That's a good one there.

    • Re:also add if China takes over Taiwan then must g (Score:5, Interesting)

      by dgatwood ( 11270 ) on Tuesday August 02, 2022 @11:35AM (#62756146) Homepage Journal

      also add if China takes over Taiwan then must get out.

      I think it's safe to say that this is intended for just that purpose. The U.S. has inadequate chip manufacturing, so any trade embargo against China would be catastrophic for the U.S. and most of the rest of the world. But if the U.S. builds back up its manufacturing capacity, then the U.S. would at least have the theoretical ability to force all U.S. companies to leave China if they cross that line, and to make it illegal to import any product with components made in China.

      • Every word of this post is misleading and false.

        • Re: (Score:2)

          by dgatwood ( 11270 )

          Every word of this post is misleading and false.

          Citation? I mean, one of the main stated purposes for the CHIPS act was because the lack of U.S. chip manufacturing is a threat to national security. It doesn't get much more clear than that. Relying on China is risky, and the main reason it is risky is because China is an authoritarian regime that has repeatedly stated that it considers Taiwan to be part of China, which supplies a large percentage of the silicon chips bound for the United States (26% of world microchip revenue).

          And in light of China's r

          • Re: (Score:2)

            by dgatwood ( 11270 )

            Sorry, accidentally clicked submit (network problems) before I could preview it. I meant to say:

            And in light of China's recent posturing with respect to Taiwan, that provision was added.

  • Sounds like Intel's lobbyist have done their job (Score:5, Interesting)

    by UnknowingFool ( 672806 ) on Tuesday August 02, 2022 @10:38AM (#62755982)
    Intel has no fabs in China currently (they sold their only one in 2021) and no plans to build one. Intel had to make sure their competitors were hindered as TSMC and Samsung have fabs in China.

    • It wasn't exactly a hard sell for most congress critters:

      Lobbyist: "US taxpayer dollars should stay right here in the US, for US jobs and US exports. Let's make sure that happens by putting a clause in the bill."

      Every single member of Congress who would like to remain in Congress: "Okay!"

  • Meanwhile in China (Score:5, Informative)

    by RobinH ( 124750 ) on Tuesday August 02, 2022 @10:39AM (#62755990) Homepage
    China's SMIC has already copied [theregister.com] TSMC's 7nm process from 4 years ago.
    • Which is just another example of why a Taiwanese company in particular (or any company generally) would have to be insane to do business inside Communist China. They are definitely going to rob and rape you, and if you're Taiwanese, they've said their plan is to invade you as well.

      Why help someone who has openly stated their plan is to hurt you? I just don't get it.

    • China's SMIC has already copied [theregister.com] TSMC's 7nm process from 4 years ago.

      Chinese industry has proven very capable of copying ANY technology out there...even technology that they have stolen (industrial espionage).

      Example: China can launch sections of a space station into space using their own variation on SpaceX BFR concept, but they drop their boosters wherever they want according to recent news.

      At least Leon Musk can bring his boosters and even his Starship back to ground (or a ship on the ocean, for the boosters) in an area not much bigger than a football pitch.

      Leon is even r

      • Uhm, the rocket you mention isn't based on SpaceX BFR, but is based on russian designs, which they didn't steal. It's not like US companies aren't stealing tech from others, even from Chinese companies. The Chinese are very capable of inventing or progressing their own technology without stealing.

        • Re: (Score:1)

          by RobinH ( 124750 )
          Sorry, but there's very little evidence of that. Yes, there's some greenfield research going on in China, but almost all their growth is tech acquisition sponsored by the government itself and handed out to local companies and other organizations. They're a Hoover when it comes to IP.

          • Re: (Score:1)

            by Anonymous Coward
            Of course it's pointlessly stupid to reinvent the wheel. But the areas they have caught up in they are forging ahead. AI, 5G, Highspeed rail, fintech

            • Re: (Score:2)

              by RobinH ( 124750 )

              I admit I don't know much about high speed rail, but AI hasn't had any significant advances since the "deep learning" breakthrough, 5G is only an incremental improvement over 4G (ability to handle more concurrent connections, not much improved speed) and fintech is a ponzi scheme. If China's got so much fintech dominance, why are they going through a financial crisis right now?

              The reality is that China is years behind TSMC on semiconductor state-of-the-art. China's industry is also horribly dependent on i

  • Good. (Score:5, Insightful)

    by sabbede ( 2678435 ) on Tuesday August 02, 2022 @11:02AM (#62756060)
    I say we expand upon that idea and ban any corporation from opening or expanding operations in China if they want to get any sort of tax break, subsidy, or Federal contract. Actually, strengthen that for contracts - no operations in China and no Chinese "partners" if you want to do ANY business with ANY level of American government. And every other nation on the planet would do well to join in.

    • Re:Good. (Score:5, Insightful)

      by LuckyPee ( 8777991 ) on Tuesday August 02, 2022 @11:15AM (#62756088)

      I say we expand upon that idea and ban any corporation from opening or expanding operations in China if they want to get any sort of tax break, subsidy, or Federal contract. Actually, strengthen that for contracts - no operations in China and no Chinese "partners" if you want to do ANY business with ANY level of American government. And every other nation on the planet would do well to join in.

      What a good reason for China to go all in on Russia instead of sitting on the fence.

      Why even expect China to want to join the current rules based order if there aren't going to be any consistent rules?

      They may as well just set up their own.
      Do you want another cold war? Because that's how you get one.

      • What a good reason for China to go all in on Russia instead of sitting on the fence.

        What does "all in" mean to you?

        Why even expect China to want to join the current rules based order if there aren't going to be any consistent rules?

        What makes you imagine China is interested in playing by any one else's rules?

        • Why even expect China to want to join the current rules based order if there aren't going to be any consistent rules?

          What makes you imagine China is interested in playing by any one else's rules?

          Because it's much more profitable for them.
          As long as the rules are somewhat fair and China gets a seat at the table. They will do far better than flipping over that table and hoping they can gain something in the chaos.

          Seems to be everyone else wants to change the rules to stop China winning the game. They are afraid if we keep the rules we have, they may no longer be the sole player on top.

          30 years of growing their economy and influence under the current system.
          What makes you imagine China isn't intere

          • 30 years of growing their economy and influence under the current system.
            What makes you imagine China isn't interested in continuing some version of that?

            You mean the system where they just ignore everyone else's laws, but insist everyone follow theirs? Thanks for making my point for me.

            • 30 years of growing their economy and influence under the current system. What makes you imagine China isn't interested in continuing some version of that?

              You mean the system where they just ignore everyone else's laws, but insist everyone follow theirs? Thanks for making my point for me.

              If that's the depth of your understanding then there isn't much else to say.

              • If that's the depth of your understanding then there isn't much else to say.

                I have yet to see you ever say anything worth saying.

                China has historically done whatever the fuck they wanted, while still being allowed to come to all the parties, and play all the games. China's a member of the WTO, yet WTO rules prohibit the games China plays with requiring corporations to partner with Chinese corporations in order to have a presence there. China's a member of the UN, but also carves up prisoners for organs for transplant. China willfully and flagrantly violated everyone's IP forever an

        • What a good reason for China to go all in on Russia instead of sitting on the fence.

          What does "all in" mean to you?

          I wouldn't expect China to do it unless faced with absolutely no other options.
          It would be a very bad move for them, and they know it. Everybody knows it.

          I guess they would supply Russia with all the things Russia is being sanctioned from
          Use their very considerable manufacturing base to provide more modern weapons to Russia.
          Sanctions, countersanctions, shooting war, may as well try for Taiwan because they aren't getting another chance, WWIII.

          It's not a very sensible choice.
          Back people into a corner th

    • Re: (Score:3)

      by AmiMoJo ( 196126 )

      The Chinese government will just pay them the same money or more, while putting policies in place to screw the US in retaliation. In fact the Chinese government has been marketing this sort of thing as an advantage of investing in China for years already. The CCP doesn't put these kinds of restrictions on your exports, so put your fabs here. Stable government, doesn't change policy every 4 years depending on how this term's big bad is.

      Taiwan is probably not best pleased either, given that it increases the r

      • I'm sure they would, but it seems that it is becoming ever harder for companies to ignore how most of China's selling points are lies. Intel is pulling out, iRobot pulled out, and those are just two from off the top of my head. The saber-rattling about Taiwan probably isn't helping the CCP attract foreign investment either. An attack on Taiwan would mean a war with the US, we are bound.

        I just don't see that as likely unless whoever happens to be leading China at the time thinks its the only way to per

        • Re: (Score:3)

          by AmiMoJo ( 196126 )

          China is a difficult opponent. Democracies regularly change leaders and key people. The CCP can plan long term and see it through, without worrying too much about results in time for the next election, and without the next guy wanting to look tough on the US every four years.

    • Re: (Score:2)

      by MobyDisk ( 75490 )

      It is viable to require that US government products must be made in the US. There's good reason to do so. But taking that so far as to say that the companies also may not have a presence in China does not sound workable. Are there any phone or computer manufacturers that do not have operations in China? Medical companies do clinical trials in China, even if they make their products elsewhere. Pretty much and major company has some operations in China.

      • Not any given company, only those receiving some financial benefit from US taxpayers; and with the exception of government contractors they can keep existing operations. I'm not trying to say Apple can't try to sell more iPhones there or can't continue to make them there (though I wish they wouldn't), just that they can't open a new factory if they're also getting my tax dollars to open one here. Lockheed, on the other hand, shouldn't get any closer than Taiwan, and I don't want to hear about a municipali

        • You said " opening or expanding operations in China "
          So China can't open anymore Apple stores in China. Can't even build the next version of any of their products there.

          " no operations in China and no Chinese "partners" if you want to do ANY business with ANY level of American government."
          Means Apple can no longer bid on any government contracts at any level of government.
          Neither can Microsoft, Google, Amazon, etc. Good luck getting anything technology related.

  • Of course, then again, China has told Taiwan that it better make those chips in China if it doesn't want to be invaded.

    • Re:Of course,... (Score:4, Informative)

      by MBGMorden ( 803437 ) on Tuesday August 02, 2022 @12:17PM (#62756248)

      China has been threatening invasion of Taiwan for 70+ years. It isn't happening anytime soon because it doesn't just mean a war with Taiwan - it means a war with the US and likely Japan, Australia, and other local allies.

      Unless and until that's a war that they think they can win, they won't move. The job of opposing countries is to make sure that China never is in a position that they could expect to win such a war.

        • Purchasing power parity.

          China might have been evil under Mao but it was impotent and could only cause misery for the Chinese.

          Then Mao finally died and Deng Xiaoping managed to reform China. Things looked good for the world.

          But then Xi climbed to the top. We are in a very different, and dangerous place. And China now has economic power to support military power.

          Taiwan is defend-able. But any such war would be catastrophic. And nobody within China could stop Xi if he decides to do it.

      • China has been threatening invasion of Taiwan for 70+ years. It isn't happening anytime soon because it doesn't just mean a war with Taiwan - it means a war with the US and likely Japan, Australia, and other local allies.

        Unless and until that's a war that they think they can win, they won't move. The job of opposing countries is to make sure that China never is in a position that they could expect to win such a war.

        The United States is not going to war over Taiwan. We'll make a big show of carrier battle groups and bombers in the straits, but if China invades Taiwan, the US won't fire a shot. We'll make outraged noises, file diplomatic protests, etc, but will not join the war. Nor will Japan. And if the US doesn't fight, then neither will Australia.

    • You do know that an invasion of Taiwan would result in the destruction of the things that China would want from Taiwan, right?

      Do you really anticipate that a very visible amphibious invasion of Taiwan wouldn't result in a mass-casualty event for China on the order of D-day losses due to the billions of dollars of weapons the US has sold them over the last several decades? Russia thought they would be done with Ukraine months ago, and that was with easy rolling across a land border and less US weapons sales

      • You do know that an invasion of Taiwan would result in the destruction of the things that China would want from Taiwan, right?

        Do you really anticipate that a very visible amphibious invasion of Taiwan wouldn't result in a mass-casualty event for China on the order of D-day losses due to the billions of dollars of weapons the US has sold them over the last several decades? Russia thought they would be done with Ukraine months ago, and that was with easy rolling across a land border and less US weapons sales in the past.

        Taiwan would fight like hell with modern weapons from the start. And if it looks like they were going to lose, you bet your ass that the chip fabs and other strategic assets would be the first things blown to hell by sabotage or cruise missiles on the way out.

        Those fabs make stuff for the western world anyway, so it's no loss for China if they get blown up, and a major loss to the west. I guarantee to you that if they *knew* the west wouldn't take military action they'd be attacking already, even nuking Taiwan into glass pool if they couldn't get it any other way, fabs be damned.

      • Re: (Score:1)

        by Anonymous Coward

        Do you really think Russian supply and logistics is in any way comparable to China's? China has been shrinking its number of soldiers and modernizing and focusing on hardware.
        Russia has been doing what exactly? Stealing all the maintenance money while also relying on USSR stockpiles of weapons and munitions.

        You're putting a lot of faith in "China is just as stupid as Russia"
        Russia can't do X. So a much bigger much more focused and competent China can't do X.

        It would be a mess and a disaster. But China i

        • No, I don't. There's certain physical realities, such as that it takes some time to build up all the equipment and people on one side of a border in order to properly advance to the other side, unless you want to fuck it up really badly. Those movements are very clear to spy satellites, and informers.

          How would you figure that China would perform an amphibious assault of Taiwan without anyone seeing it coming? Did they invent invisibility for a couple hundred thousand troops and associated equipment?

          Pleas

      • Do you realize that Chinas policy towards Taiwan predates TSMC or even discovery of the transistor? Taiwan is like a giant unsinkable aircraft carrier parked next to their shores, and it's just one of them stretching from Okinawa. They want national security not some chip factories.

  • US to bribe/strong arm TSMC/Intel into not building plants in China.

    The US can't actually stop TSMC from doing whatever it wants. I suppose Congress could probably pass a law prohibiting Intel from building in China (although I'd be hard pressed to figure out what authority Congress has to do that, not that anyone cares about that sort of thing any more).

    • US to bribe/strong arm TSMC/Intel into not building plants in China.

      The US can't actually stop TSMC from doing whatever it wants. I suppose Congress could probably pass a law prohibiting Intel from building in China (although I'd be hard pressed to figure out what authority Congress has to do that, not that anyone cares about that sort of thing any more).

      They don't need the authority. They only need the Supreme Court to not do anything to stop them.

      When the Republicans get back in. In a landslide. The game will be won. They will own all 3 branches of government and will be able to do absolutely anything they want.

  • What exactly us the us worried about re China getting advanced chips? Is it really a problem if the latest huwaei phone or TCL TV or Geely car (or even that 737 knockoff they built) has advanced chips in it?

    Or is the US concerned about the chips ending up in a Chinese F-35 knockoff or a North Korean ICBM?

  • This bill also blocks companies from using the money for stock buybacks. That's what happened with the Republican T****p tax cut bill. Government funded corporate buyback are a way for the C-suite to line their pockets at taxpayer expense. They acquire stock at a huge discount, so the multiplier effect is enormous. Manipulation of stock prices, even if legal, has no impact on innovation, it just transfers wealth to the top 1%.

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