Monthly Archives: July 2017

The Bloody Battle for Chip Hegemony

Intel chip. Image from wikipedia

China’s Tsinghua Unigroup Ltd., a state-owned firm is spending $24 billion to build the country’s first advanced memory-chip factories. It’s part of the Chinese government’s plan to become a major player in the global chip market and the move is setting off alarms in Washington.  When Unigroup tried to buy U.S. semiconductor firms in 2015 and 2016, Washington shot down the bids. It is considering other moves to counter Beijing’s push.

China is aiming “to take over more and more segments of the semiconductor market,” says White House trade adviser Peter Navarro, who fears Beijing will flood the market with inexpensive products and bankrupt U.S. companies.  Unigroup’s CEO Zhao Weiguo says he is only building his own factories due to Washington’s refusal to let him invest in the U.S. “Chinese companies have faced discrimination in many areas,” of technology, he says. “Abnormal discrimination.”

Semiconductors—the computer chips that enabled the digital age and power the international economy—have long been among the most globalized of industries, with design and manufacturing spread across dozens of countries.

Today, the industry is riven by a nationalist battle between China and the U.S., one that reflects broad currents reshaping the path of globalization. Washington accuses Beijing of using government financing and subsidies to try to dominate semiconductors as it did earlier with steel, aluminum, and solar power. China claims U.S. complaints are a poorly disguised attempt to hobble China’s development. Big U.S. players like Intel Corp. and Micron Technology Inc. find themselves in a bind—eager to expand in China but wary of losing out to state-sponsored rivals…

The new semiconductor battle marks a shift toward nationalism, trade battles and protected markets…The U.S. estimates China will eventually spend $150 billion [on developing s its indigenous semiconductor industry]  a figure equal to about half of global semiconductor sales annually.

Though Republicans and Democrats are at odds on many economic policy issues, they’re unified on this. An interagency working group on semiconductors, started by the Obama administration in 2015, has continued meeting under President Donald Trump. The group is weighing policies to make it more difficult for China to scoop up U.S. technology, according to people involved in the discussions.

One idea is tightening the rules covering U.S. approval of foreign investments to make it tougher for Chinese firms seen as security risks. Other options include trade sanctions, stricter export controls and added federal research spending

The U.S. views China as its biggest semiconductor challenge since Japan in the late 1980s. The U.S. triumphed then through trade sanctions and technological advances. Japanese firms couldn’t match U.S. microprocessor technology, which powered the personal computer revolution, and fell behind South Korea in low-margin memory chips.

China has advantages Japan didn’t. It is the world’s biggest chip market, consuming 58.5% of the global $354 billion semiconductor sales in 2015 according to PricewaterhouseCoopers LLP. That gives Beijing power to discriminate, if it wants, against overseas suppliers…Beijing’s semiconductor program shifted into high gear in 2012, when the value of its chip imports surged past its bill for crude oil for the first time…

Nearly 90% of the $190 billion worth of chips used in China are imported or produced in China by foreign-owned firms…The top 10 chip vendors in China by revenue are foreign.

“We cannot be reliant on foreign chips,” said China’s vice premier, Ma Kai in 2017…Beijing created a $20 billion national chip financing fund—dubbed the “Big Fund”— and set goals for China to become internationally competitive by 2030, with some companies becoming market leaders.  Local governments created at least 30 additional semiconductor funds, with announced financing of more than $100 billion. If all these projects are realized, the global supply of memory chips would outstrip demand by about 25% in 2020, estimates Bernstein Research, pushing prices down and battering profits of semiconductor companies globally… Beijing has been consolidating 600 small Chinese chip makers, many unprofitable, into a handful of larger companies China wants to compete internationally.

When the Big Fund financed an acquisition blitz, Unigroup was in the lead, bidding in 2015 for memory-chip maker Micron Technology, and then for a 15% stake in data storage firm Western Digital Corp.Some bids were so overvalued U.S. government officials joked the Chinese were willing to pay an “espionage premium.”  After a Chinese plan to buy a Royal Philips NV semiconductor-material unit fell apart, Phillips sold the unit to a U.S. private-equity group for about half the earlier price. Philips declined to comment.

The bids spooked Washington and the industry. In private meetings, Micron, Intel and others warned they faced an “existential threat” from China, say industry and government officials. The companies feared they were trapped in a prisoner’s dilemma. Each company was under pressure to sell to China for fear its competitors would sell if it didn’t.

In July 2017, Germany approved restrictions on foreign technology purchases, aimed at China, and the European Union also is considering barriers… The U.S. Committee on Foreign Investment in the U.S (CFIUS), an interagency review group, made clear most proposed acquisitions wouldn’t pass muster.

According to Rhodium Group, only about $4.4 billion in Chinese semiconductor acquisitions were completed since 2015. Unigroup’s bid for Micron fell apart. South Korea, Taiwan and Japan also blocked Chinese acquisition bids…

Mr. Trump proposed a 13% decrease in federal funding for basic research to $28.9 billion in fiscal year 2018, but semiconductor lobbyists say they hope to eke out an increase for chip-related research.

Chinese chip executives argue South Korea is a bigger threat to the U.S. chip industry due to its advanced technology.

After Unigroup’s plan to acquire Micron fell apart, it hired Charles Kau, the former head of Micron’s Taiwan joint-venture, and other experts from the island. It announced it would build its own memory chip facility—the mammoth Wuhan factories—at about the same price it would have paid for Micron.  Unigroup now has a new plan for Micron. It says it no longer wants to buy the firm, recognizing the chances of regulatory approval in the U.S. are nil, but says the two should work together to battle market leader Samsung Electronics Co. The combination of Micron technology and Chinese capital would help both companies take on the South Koreans, says Mr. Zhao, the Unigroup CEO.

Micron says the Federal Bureau of Investigation has begun investigating whether Micron employees in Taiwan who went to work for other firms, including Unigroup, have taken Micron technology with them.”

Excerpts from Bob Davis and Eva Dou. CHINA’S NEXT TARGET: U.S. MICROCHIP HEGEMONY, Wall Street Journal, July 28, 2017

Robots to the Rescue: Fukushima Japan

jorange on equipment probably melted nuclear fuel

A robot operating deep inside a failed reactor at the stricken Fukushima nuclear plant north of Tokyo has revealed what appears to be stalactites of melted nuclear fuel, the plant’s operator has said.
The discovery is considered a key development in the decommissioning process of the plant, which suffered a catastrophic meltdown in 2011 after a huge tsunami swamped the facility.
Operating remotely within submerged parts of the Fukushima Daiichi plant’s Unit 3 reactor, the robot sent back 16 hours worth of images of massive, lava-like fuel deposits on the floor of the pedestal, a part of the reactor that sits underneath and supports the core….

The discovery is key to determining how to further advance the cleanup of the plant, a process that is expected to take decades.  “This was the first time that we could confirm the status inside the pedestal,” TEPCO spokesperson Maki Murayama said. “This is a big step towards the decommission process.”..

Having entered the stricken Pressure Containment Vessel (PCV) through a pipe designed to prevent the escape of radioactive gas, the robot descended into the cooling water which accumulated following the accident.
The device was equipped with thrusters to navigate through the water, and featured front and rear cameras.  The small “radiation-hardened, screw-driven” submersible robot was designed to fit through the narrow, 14-centimeter (5.5-inch) diameter entrance of the pipe, according to the Tokyo-based International Research Institute for Nuclear Decommissioning (IRID), which developed the device alongside technology company Toshiba.

As the robot navigates through the ruined reactor, melted equipment and the fuel deposits can be seen.

The mission was launched after previous photographic inspection of the Unit 3 reactor suggested that, “during the accident, fuel assemblies melted from the excess heat, dropping from their original position down to the pedestal area,” according to a statement released by TEPCO.

Excerpt from Euan McKirdy and Yoko Wakatsuki, Fukushima robot reveals first sign of melted fuel in submerged reactor, CNN, July 24, 2017

The Near-Near Future of Nuclear Waste

Temelin Nuclear Power Plant, Czech Republic. Image from wikipedia

Czech plans for dealing with nuclear waste have been put under the spotlight once again thanks to a European Commission warning calling for the country to outline its plans for deal with nuclear waste. The Czech Republic was last week one of five states which the Commission said had failed to pass on their long-term nuclear waste plans by the original deadline of August 2015. The other countries include, somewhat ironically, largely non-nuclear Austria, Italy, Portugal, and Croatia.

The Czech Republic has around 10,000 tonnes of high radioactive nuclear waste, mostly stemming from the spent fuel of its nuclear power plants which begin operating in the mid-1980s, but also from other civil activities. The spent fuel is stored on site at nuclear power plants but the barrels containing it will wear out long before the contents become safe.

The Czech Republic set out a strategy to deal with high radioactive nuclear waste already in 2002 with the main focus on finding a deep storage site. The preliminary search has been focused on seven localities which are reckoned to be geologically suitable as well as near the Dukovany nuclear power plant. But there have been vociferous public protests at most of the sites causing the current government to back down and promise that no steps will be taken in the face of opposition. Even so, a timeline for choosing a deep repository has already been set with the selection of a site due to take place in 2025, construction started in 2050, and the final facility ready by 2065.

But the aged 2002 strategy is now being updated with public consultation part of the process. Environmentalists on one side argue that the existing framework focused primarily on the search for a deep repository should be overhauled and that the country should take its time and keep its options option with technological advancement likely offering other options for radioactive waste in the near future. 

Excerpts from BRUSSELS CALLS FOR CZECH STRATEGY FOR RADIOACTIVE WASTE, Radio Prague, July 24, 2017

A Certain Sort of Absurdity: the repatriation of corpses

Seven months after Libyan forces defeated Islamic State in Sirte, hundreds of bodies of foreign militants are still stored in freezers as authorities negotiate with other governments to decide what to do with them, local officials say.   The corpses have been shipped to Misrata, a city further to the west whose forces led the fight to defeat Islamic State in Sirte in December 2016.

Allowing the bodies to be shipped home to countries such as Tunisia, Sudan and Egypt would be sensitive for the governments involved, wary of acknowledging how many of their citizens left to fight as jihadists in Iraq, Syria and Libya.   “Our team removed hundreds of bodies,” a member of the Misrata organised crime unit dealing with the bodies told Reuters, his face masked to conceal his identity because of security concerns.

“This is the main operation which allows us to preserve the bodies, document and photograph them and collect DNA samples
At the height of its territorial control, [ISIS] attracted recruits from the Middle East, North Africa and Europe to its ranks.   In Tunisia, officials say more than 3,000 citizens left to fight in Syria, Iraq and Libya.

Excerpts from  Hundreds of IS corpses await repatriation from Libya, Reuters, July 24, 2017

Can’t See them but Can Feel them: data against fish poachers

Iceland ship versus UK ship at the third Cod War (image from Wikipedia)

Australia is at the forefront of efforts to combat poaching. Its patrol ships have chased illegal trawlers almost as far as South Africa, a distance of 4,600 miles, to stop the plunder of prized Patagonian toothfish—sold in the U.S. as Chilean sea bass.  Australian government scientists and Vulcan Inc., Mr. Allen’s private company, have developed a notification system that alerts authorities when suspected pirate vessels from West Africa arrive at ports on remote Pacific islands and South America.

The system relies on anticollision transponders installed on nearly all oceangoing craft as a requirement under maritime law. These devices are detectable by satellite.  A statistical model helps identify vessels whose transponders have been intentionally shut off. Other data identifies fishing boats that are loitering in risk areas, such as near national maritime boundaries…

“On one hand you can’t see them [if their transponder is switched off], but on the other it means they’ve just flagged themselves as avoiding surveillance, and as a risk indicator, that’s at the top of the list,” he said…

And a third of all fish sold in the U.S. is believed to be caught illegally. Seafood consumption in wealthy nations has soared in recent decades, increasing reliance on imports. Between 1980 and 2014, U.S. seafood consumption rose 60%, with imports now meeting 90% of the demand, according to Global Fishing Watch and the World Wildlife Fund….

Illegal fishing causes commercial losses of up to $23 billion a year world-wide, according to the U.N….

The researchers’ satellite-based tracking tool will begin operating in October 2017 and will be free to access. It was set up in response to a treaty aimed at eradicating illegal fishing that came into force on June 2016.The Agreement on Port State Measures…

China is the world’s largest seafood producer, followed by Indonesia, the U.S. and Russia. The most critical area for poaching is off the coast of West Africa, where illegal, unauthorized and unregulated fishing accounts an estimated 40% of fish caught, according to the World Ocean Review. Other areas of concern include the western and southern Pacific and the southwest Atlantic. Illegal trawlers contribute to overfishing that threatens marine ecosystems and food security in some of the poorest countries.

Last year, Argentina’s coast guard opened fire on and sank a Chinese trawler that was fishing illegally in its waters. South Korea’s coast guard fired on Chinese poachers several months later.  Australian authorities have said geopolitical tensions in the South China Sea, a rich fishing ground, may be driving more illegal fishing vessels into the South Pacific from China, Taiwan and Vietnam.

Excerpts from Trawling Scientists Find a Better Way to Reel In Illegal Fishing, Wall Street Journal, June 26, 2017

Privatization for Obfuscation: military training in Jordan

KASOTC facility. Image from wikipedia

US military aid to Washington’s key ally in the region –  Jordan – has risen to a staggering $463m in 2016 alone. But little is known about how this money is spent. Who benefits? And who or what is secured by US military funding?

The King Abdullah II Special Operations Training Centre (KASOTC) is the centrepiece of US-Jordanian counterterrorism and intelligence cooperation. It not only offers a base for the training of international Special Forces and Jordanian border guards, but also for military adventure holidays, corporate leadership programmes, and stunt training for actors. While war at KASOTC is an interactive and consumable event for affluent customers, it engenders deadly realities for others.

Following Jordanian approval of a political-military agreement concerning the use of the facility, the US provided $99m of military assistance for the construction of the centre, accounting for a third of the total US military aid to Jordan in 2005. While KASOTC was built by the Army Corps of Engineers Transatlantic Programs Center, it is owned by the Jordanian Armed Forces (JAF), and managed by the Maryland-based limited liability company ViaGlobal.

The ViaGlobal staff based at KASOTC have US military background. Also the board of the company almost exclusively consists of retired US military personnel. Although KASOTC thereby comes close to operating as a US army training centre, its business structure allows both the US and the Jordanian governments to insist that there are indeed no foreign military training centres in the country

According to one ViaGlobal employee, in 2013, 60 percent of the revenues earned at KASOTC came from the training of US soldiers and 20 percent from the training of Jordanian forces.  KASOTC offers its customers what its construction manager imagined to be an environment that is just like what soldiers might encounter with terrorists. Besides a fake Afghan village, a real Airbus 300, a mock city, and a sniper range, KASOTC also features its own artificial refugee camp. The simulation of a typical terrorist environment is further enhanced by the use of thousands of sound and smell effects, fog generators, and rooftop explosions…

As part of its Annual Warrior Competition, KASOTC for instance invitesSpecial Forces units from all over the world to what its business manager, a former US marine, in 2013 aptly called the Olympics of Special Forces.   The event itself primarily serves PR purposes and is sponsored by international weapons producers. In return for their sponsoring, the latter can directly showcase their products to the participating units.

Excerpts from Benjamin Schuetze, Jordan’s KASOTC: Privatising anti-terror training, AlJazeera, July 17, 2018

A Vacuum Cleaner for Space

Catching a rogue satellite. image European Space Agency (ESA)

A Singapore-based venture company aspiring to enter the space business unveiled a life-sized model of a satellite that would retrieve space debris, with which the company plans to conduct a test run in orbit in 2019 and to make commercially viable by 2020.  “Space is filled with trash, and if things continue as they have, space exploration will no longer be sustainable. …

Most orbital debris is old satellites and satellite components. Around 750,000 pieces of space debris at least 1 centimeter in diameter are said to be in near-Earth orbit, and are interfering with countries’ and companies’ efforts to place new satellites. Astroscale’s debris retrieval satellite closes in on dead satellites, and uses magnets to draw them in. The device then enters the atmosphere, bringing the out-of-commission satellite with it, and burns up on re-entry.

For example, in 2009 an out-of-commission Russian military satellite and a satellite launched by a U.S. corporation collided. The International Space Station (ISS) is frequently forced to change course or have its crew members evacuate from their posts. In 2007, China destroyed one of its own satellites with a missile, producing large volumes of orbital shrapnel and triggering international criticism.

Also in 2007, the United Nations Committee on the Peaceful Uses of Outer Space (COPUOS) drafted the Space Debris Mitigation Guidelines, which recommends that satellites that are past their usefulness promptly leave their orbits. However, satellites and satellite parts that have already become space debris have uncoordinated trajectories, and because there is no established method of retrieving such litter, various countries and companies have been searching for a solution.

The Japan Aerospace Exploration Agency (JAXA) is working on a plan to attach metallic string to space debris, through which it would pass electric currents and use the Earth’s magnetic field to slow down the debris, and then drop them into the atmosphere. Meanwhile, the RIKEN research institute announced in 2015 that it had devised a method of using high-intensity lasers to slow down “drifting” litter so that they would hurtle into the atmosphere.  Researchers both within and outside Japan have proposed various other ideas, including making space debris attach to operating satellites and catching space debris with nets.

Company to test space-debris-retrieval satellite in 2019, aim to commercialize by 2020, Mainichi Japan, July 15, 2017