from the home-blown dept.
Submitted via IRC for guy_
While the U.S. administration said on Friday it had reached a deal to put ZTE back in business after the company pays a $1.3 billion fine and makes management changes, the plan has run into resistance in Congress, indicating ZTE was still far from out of the woods. Also, ZTE is yet to confirm the deal.
"The recent ZTE incident made everyone more clearly realize that however advanced one may be in mobile payment, without the mobile, the chips and the operating system, you still cannot compete," Chinese media reports cited Tecent's Pony Ma as saying at a forum in Shenzhen on Saturday.
[...] Tencent is looking into ways it could help advance China's domestic chip industry, which could include leveraging its huge data demand to urge domestic chip suppliers to come up with better solutions, or using its WeChat platform to support application developments based on Chinese chips, Ma said.
"It would probably be better if we could get in to support semiconductor R&D, but that is perhaps admittedly not our strong suit and may need the help of others in the supply chain."
Chinese-designed "Dhyana" x86 processors based on AMD's Zen microarchitecture are beginning to surface from Chinese chip producer Hygon. The processors come as the fruit of AMD's x86 IP licensing agreements with its China-based partners and break the decades-long stranglehold on x86 held by the triumvirate of Intel, AMD and VIA Technologies. Details are also emerging that outline how AMD has managed to stay within the boundaries of the x86 licensing agreements but still allow Chinese-controlled interests to design and sell processors based on the Zen design.
AMD's official statements indicate the company does not sell its final chip designs to its China-based partners. Instead, AMD allows them to design their own processors tailored for the Chinese server market. But the China-produced Hygon "Dhyana" processors are so similar to AMD's EPYC processors that Linux kernel developers have listed vendor IDs and family series numbers as the only difference. In fact, Linux maintainers have simply ported over the EPYC support codes to the Dhyana processor and note that they have successfully run the same patches on AMD's EPYC processors, implying there is little to no differentiation between the chips.
The new chips are surfacing against the backdrop of the trade war between the US and China that could escalate quickly, likely reinforcing China's long-held opinion that a lack of native processor production could be a strategic liability. Today's wars are won with chips, and their strategic importance certainly isn't lost on those in the halls of power. In fact, the Obama administration blocked Intel from selling Xeon processors to China in 2015 over concerns the chips were fueling the country's nuclear programs, and subsequent actions by the US have largely prevented China from achieving the technical know-how and equipment to develop its own chips through acquisitions and mergers.
That makes it even more surprising that AMD has managed to establish a franchise that allows Chinese processor vendors to develop and sell x86 processors in spite of US regulations and the licensing restrictions with Intel, but now more information is coming to light about how AMD pulled off the feat.
Related: Intel Launches New Chips in China as US Bans Sales to Supercomputing Centers
Intel Hints at Patent Fight With Microsoft and Qualcomm Over x86 Emulation
Data Centers Consider Intel's Rivals
Tencent Chairman Pledges to Advance China Chip Industry After ZTE "Wake-Up" Call
Chinese companies are manufacturing chips nearly identical to AMD's Epyc server CPUs, using two joint ventures with AMD. This move comes after the US blacklisted certain Chinese supercomputing centers in 2015 in an attempt to prevent them from using Intel Xeon chips, and more recently, Chinese telecom equipment maker ZTE was banned from buying components from US companies. China's Sunway TaihuLight supercomputer (formerly #1 on the TOP500 list) also uses domestically designed Sunway SW26010 manycore chips.
China isn't eager to embrace another American chipmaker like AMD. In response, AMD established two joint ventures with Chinese holding company THATIC -- one with Chengdu Haiguang Microelectronics Technology (CHMT), and another with Haiguang IC Design, also known as Hygon.
AMD owns a majority stake in CHMT, which ensures that its IP isn't transferred to THATIC. THATIC owns a majority stake in Hygon, which licenses AMD's IP from CHMT. Hygon designs the chips, and CHMT produces the chips through a suitable foundry and then sends them back to Hygon for packaging, marketing, and sales.
This arrangement seemingly placates American and Chinese regulators -- AMD's IP isn't being passed to a Chinese company, and a Chinese chipmaker gains access to superior data center CPU designs. AMD generates less revenues through these JVs than it would through direct sales, but it still gains a foothold in China's massive data center market. But more importantly, this move could wound Intel.
Good luck maintaining control of your "IP". As for the pain?
Many big companies, including Microsoft and Baidu, started installing AMD's cheaper chips in their data centers. In a meeting with Nomura Instinet analyst Romit Shah in June, then-CEO Brian Krzanich admitted that AMD was gaining ground, and Intel was trying to prevent it from gaining a "15% to 20%" share of the data center market. That admission was stunning, since Intel traditionally controlled more than 99% of the data center market with its Xeon chips. Intel's data center group grew its revenues by 11% to $19.1 billion last year, and accounted for 30% of its top line. Epyc was already a thorn in Intel's side, but AMD's sponsorship of Chinese clones could throttle its sales in mainland China, which accounted for 24% of its sales last year. Its total sales in the region only rose 6% in 2017, compared to 20% growth in 2016.