Tag Archives: semiconductor technologies

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

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How Fast is Fast? Try 60 billion times per second

GLOBALFOUNDRIES manufacturing facility, Dresden, Germany

From the DARPA website

Competition for scarce electromagnetic (EM) spectrum is increasing, driven by a growing military and civilian demand for connected devices. As the spectrum becomes more congested, the Department of Defense (DoD) will need better tools for managing the EM environment and for avoiding interference from competing signals. One recent DARPA-funded advance, an exceptionally high-speed analog-to-digital converter (ADC), represents a major step forward. The ADC could help ensure the uninterrupted operation of spectrum-dependent military capabilities, including communications and radar, in contested EM environments. The advance was enabled by 32 nm silicon-on-insulator (SOI) semiconductor technologies available through DARPA’s ongoing partnership with GlobalFoundries, a manufacturer of highly-advanced semiconductor chips.

The EM spectrum, whose component energy waves include trillionth-of-a-meter-wavelength gamma rays to multi-kilometer-wavelength radio waves, is an inherently physical phenomenon. ADCs convert physical data—that is, analog data—on the spectrum into numbers that a digital computer can analyze and manipulate, an important capability for understanding and adapting to dynamic EM environments.  Today’s ADCs, however, only process data within a limited portion of the spectrum at a given time. As a result, they can temporarily overlook critical information about radar, jamming, communications, and other potentially problematic EM signals. DARPA’s Arrays at Commercial Timescales (ACT) program addressed this challenge by supporting the development of an ADC with a processing speed nearly ten times that of commercially available, state-of-the-art alternatives. By leveraging this increased speed, the resulting ADC can analyze data from across a much wider spectrum range, allowing DoD systems to better operate in congested spectrum bands and to more rapidly react to spectrum-based threats.

How fast is fast? The new ADC samples and digitizes spectrum signals at a rate of over 60 billion times per second (60 GigaSamples/sec). …The new ADC can provide a “one-stop shop” for processing radar, communications and electronic warfare signals.

Desirable as these blazing sampling speeds are, they also pose challenges. The amount of data generated is staggering, reaching nearly a terabyte per second. This high data rate requires on-chip data-management circuitry that allows signals to be processed locally on the ADC, reducing the amount of data that must be communicated to neighboring electronics. This on-board digital signal processing burns quite a bit of power and also demands state-of-the-art transistors. The 32 nm SOI technology offered by Global Foundries, the only certified DoD supplier of this circuit technology, provided ACT with the leading-edge transistors needed to sample and process the RF spectrum without exceeding power or data-transfer limitations.

Upcoming ACT designs will go further. By using GlobalFoundries’ even more advanced 14 nm technology, ACT’s next generation of ADCs aim to reduce power requirements by an additional 50 percent and enable yet smaller and lighter systems that can sample even greater swaths of the spectrum.

Excerpts from New Chips Ease Operations In Electromagnetic Environs, Jan. 11, 2016