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posted by hubie on Sunday December 24, @03:43PM   Printer-friendly
from the precious-ICs-flood-my-soul dept.

Arthur T Knackerbracket has processed the following story:

Although China cannot flood the global market with chips produced with cutting-edge fabrication technologies, strong subsidies for the semiconductor sector in China make it possible for the country to flood the market with chips made on legacy process technologies, thus undercutting much-needed sales that generate revenue that is vital for R&D at Western firms. This tactic could spur the U.S. government to impose tariffs on products using mature processing nodes, reports Bloomberg.

[...] China is known for providing hefty funds to its chipmakers. For example, China-based SMIC invested $24 billion in capital expenditures from 2020 to 2023 with support from banks, local governments, and state-controlled funds, far exceeding its earnings in the period, according to Nikkei. Other semiconductor companies also have generous support from the government, which is how they can quickly expand production capacity using tools that they can procure without any limitations and start producing chips like display driver ICs (DDICs) or power management ICs (PMICs) that are sold in billions of units every year.

[...] The survey's findings are set to guide the U.S. in formulating responses that could include the imposition of tariffs or the use of other trade tools to counteract China's aggressive expansion in the semiconductor industry. Commerce Secretary Gina Raimondo has already indicated that the U.S. is ready to use every tool it has to stop China from flooding the market with low-cost legacy chips. However, she clarified that the most stringent export controls would remain reserved for more advanced process technologies and not for these older generation nodes, so Chinese companies will still be able to procure legacy chipmaking tools.


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  • (Score: 3, Insightful) by Rosco P. Coltrane on Sunday December 24, @03:54PM (4 children)

    by Rosco P. Coltrane (4757) on Sunday December 24, @03:54PM (#1337618)

    The US can compete on technological superiority, of they could also flood the market with cheap chips made with older process.

    Or they can't, and they apply tarriffs.

    • (Score: 3, Insightful) by takyon on Sunday December 24, @06:45PM (1 child)

      by takyon (881) <reversethis-{gro ... s} {ta} {noykat}> on Sunday December 24, @06:45PM (#1337631) Journal

      Or China is desperate to push out cheap, subsidized products with low/no profit margins, just to destroy the industry in other markets. If they need to take environmental shortcuts [harvard.edu] or use slave labor [archive.is] to dominate, so be it. Just compete harder, bro.

      --
      [SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
      • (Score: 3, Touché) by Anonymous Coward on Sunday December 24, @07:38PM

        by Anonymous Coward on Sunday December 24, @07:38PM (#1337635)

        China has not made it a secret they have the long term goal of dominating the semiconductor market, and short-term profit seekers in the US
        have played right into their hands.

    • (Score: 0) by Anonymous Coward on Sunday December 24, @07:41PM

      by Anonymous Coward on Sunday December 24, @07:41PM (#1337636)

      They could also flood the market with cheap chips made with older process.

      No, they can't. The fabs have been dismantled.

    • (Score: 2) by driverless on Monday December 25, @06:45AM

      by driverless (4770) on Monday December 25, @06:45AM (#1337685)

      At this point the US seems to be like Hollywood with its endless-sequel machine, the only thing they seem to be able to come up with is more tariffs. Next they'll be doing it for discrete transistors, and then vacuum tubes.

      In the meantime, anyone who isn't the US gets cheap chips from China.

  • (Score: 3, Touché) by Anonymous Coward on Sunday December 24, @05:06PM (9 children)

    by Anonymous Coward on Sunday December 24, @05:06PM (#1337622)
    OMG China is selling stuff cheap using mature long proven technology! We need to find a way to make that illegal! It's evil Communism doing anti-competitive dumping!

    Meanwhile, it was fine for Uber to lose billions every quarter to "outcompete" taxi companies. That's Capitalism at work after all...

    I remember the taxi companies complaining and tons of people effectively saying "get better and compete". It's hard to compete vs companies that can afford to keep losing billions.
    • (Score: 2) by canopic jug on Sunday December 24, @05:23PM (5 children)

      by canopic jug (3949) Subscriber Badge on Sunday December 24, @05:23PM (#1337623) Journal

      That's the thing. Uber can't afford to keep losing money indefinitely, it is kept afloat by venture capital as long as it takes to destroy the lower end of the labor market completely, first the taxis and the via spillover the rest of the hourly wage market.

      --
      Money is not free speech. Elections should not be auctions.
      • (Score: 0, Disagree) by khallow on Monday December 25, @05:13PM (4 children)

        by khallow (3766) Subscriber Badge on Monday December 25, @05:13PM (#1337713) Journal

        That's the thing. Uber can't afford to keep losing money indefinitely, it is kept afloat by venture capital as long as it takes to destroy the lower end of the labor market completely, first the taxis and the via spillover the rest of the hourly wage market.

        Consider this. When Uber and fellow ride hailing services entered the New York City market, they blew past taxis in a mere four years [statista.com], greatly increasing the total number of pick ups in the process from ~175 million in 2013 to ~285 million in 2017. This indicates two factors completely missing from your complaint. First, that there are more rides overall now than there were in the days of the stagnant NYC taxi cartel. Second, that there was huge demand for ride hailing services that was unmet by the taxi cartel.

        This means that we have two big ways by which Uber and company promotes the lower end of the labor market - first, creating more jobs (and more flexible jobs!) for ride hailing and second, through a combination of lower prices and better availability of ride hailing, enabling better transportation for lower end labor in NYC. I bet that's the case anywhere that any of these ride hailing services operate - that they both increase the number of lower end jobs and lower the cost of living for those in lower end jobs.

        Ask yourself why those considerations are completely missing from these narratives of labor market destruction.

        • (Score: 4, Informative) by canopic jug on Monday December 25, @05:30PM (3 children)

          by canopic jug (3949) Subscriber Badge on Monday December 25, @05:30PM (#1337714) Journal

          That's easily explained by the VC subsidization, the shafting of the drivers on pay and benefits, and the avoidance of paying into retirement funds. The combination of which allows Uber to fatally undercut real taxi service where drivers have closer to a livable wage, have health insurance, retirement funds, and so on. Lowering the price below the point of profitability is going to increase ridership in proportion to the drop in price. However, note that Uber has lost over $31.5 billion USD to-date [forbes.com]. If their business model cannot survive without ripping off their drivers then maybe they ought not stay in operation. Consider that.

          --
          Money is not free speech. Elections should not be auctions.
          • (Score: 1) by khallow on Monday December 25, @06:25PM (2 children)

            by khallow (3766) Subscriber Badge on Monday December 25, @06:25PM (#1337716) Journal

            That's easily explained by the VC subsidization, the shafting of the drivers on pay and benefits, and the avoidance of paying into retirement funds.

            In other words, always an excuse. Keep in mind that gig work is by choice. Here, either the driver already has all those things: benefits, retirement funds, etc through wages and benefits from another, or they're so desperate that ride hailing is better than their alternatives. Either way, these jobs improve their situation and better their lives. Personally, I'd rather have wages than benefits of dubious value.

            Meanwhile taxi companies, especially in places like NYC, have their own considerable abuses [soylentnews.org] (paying $3000 per month for renting a medallion and labor unions/city government sponsoring anti-gig economy protests and laws). One shouldn't be required to take out a loan for hundreds of thousands of dollars just to drive a taxi.

            However, note that Uber has lost over $31.5 billion USD to-date. If their business model cannot survive without ripping off their drivers then maybe they ought not stay in operation. Consider that.

            If their operation really genuinely can't survive, then I'm fine with them going out of business - and taking their VC down with them. But I'm not fine with government-assisted special interest destruction of their business model. Government isn't here to protect taxi cartels' or labor unions' business models.

            • (Score: 2) by canopic jug on Monday December 25, @07:00PM (1 child)

              by canopic jug (3949) Subscriber Badge on Monday December 25, @07:00PM (#1337719) Journal

              Yeah, the medallions are a nearly complete ripoff.

              The desperation is exacerbated by the "gig economy". It's all about lowering wages way below livable levels and that appears to be the goal of the VCs pumping money into Uber and the others. Uber is not about profit. It's about killing the labor market: There is no way they can turn such a losing business model into something viable by continuing to do more of the same. Again, it has been losing money since 2014 through price dumping so it's basically impossible for them to make a profit with the way things stand. You and I know that, they know that, there are enough people fooled for them to keep going.

              --
              Money is not free speech. Elections should not be auctions.
              • (Score: 1) by khallow on Monday December 25, @07:23PM

                by khallow (3766) Subscriber Badge on Monday December 25, @07:23PM (#1337724) Journal

                The desperation is exacerbated by the "gig economy". It's all about lowering wages way below livable levels and that appears to be the goal of the VCs pumping money into Uber and the others.

                Nonsense. All you have to do is change your perception and then it no longer "appears" to be that way. Here, it's ridiculous to suppose that anyone remotely competent with money will squander over $30 billion just to make someone's life tough.

                It's about killing the labor market: There is no way they can turn such a losing business model into something viable by continuing to do more of the same.

                Not even wrong. You can't "kill" the labor market by doing that (and I already noted how they're doing the opposite!). And following that with an assertion about losing business models as if the two concepts were related is some bizarre frankenstein logic. Let's sew these parts together and pretend they're a real argument!

                All this can be fixed by resolving the PEBKAC error on your end.

    • (Score: 3, Interesting) by krishnoid on Sunday December 24, @06:30PM

      by krishnoid (1156) on Sunday December 24, @06:30PM (#1337630)

      Don't forget the automotive chip shortage [ieee.org] during COVID-19 too.

    • (Score: 3, Interesting) by quietus on Sunday December 24, @09:57PM

      by quietus (6328) on Sunday December 24, @09:57PM (#1337646) Journal

      Quick question: is it only the United States which is applying tariffs, or is China doing the same?c

    • (Score: 3, Interesting) by khallow on Monday December 25, @08:02PM

      by khallow (3766) Subscriber Badge on Monday December 25, @08:02PM (#1337730) Journal

      OMG China is selling stuff cheap using mature long proven technology! We need to find a way to make that illegal! It's evil Communism doing anti-competitive dumping!

      On this, it's interesting that the story doesn't even establish that there's dumping going on. If their costs are low enough, this may be routine competition.

  • (Score: 5, Funny) by RamiK on Sunday December 24, @07:30PM

    by RamiK (1813) on Sunday December 24, @07:30PM (#1337632)

    How can flooding the market with old PMIC-ADCs adversely affects capital investments in AI chips? Are they expecting the AVRs and PICs money that comes at the expense of z80s, 6502s and MCS51s* to be invested into GPUs and AI accelerators? Like, would ARM develop a better NPU if more STM32s were selling or something?

    Maybe they should ask the VCs why they're pulling back from the market. Hint: It has a little something to do with the CHIPS act bailing out Intel and turning the AI startups from fabless competitors to exit-seekers...

    * There's an 8051 on the https://milkv.io/duo [soylentnews.org] so be sure to vote for it in the SDCC survey if you don't want to write assembly (pirate / pay $400 for Keil) just to blink some LEDs off a linux board: https://terminplaner4.dfn.de/eqgimiykqafcqltr [terminplaner4.dfn.de]

    --
    compiling...
  • (Score: 0) by Anonymous Coward on Sunday December 24, @07:33PM

    by Anonymous Coward on Sunday December 24, @07:33PM (#1337633)

    Industry consolidation, as we gave the semiconductor and passive component market away.

    Who do they think is going to make low-tech products now? Only one US company, Rochester
    Electronics, who has been gobbling up the tech the idiots running places like TI have been
    giving away, and it isn't sold at jelly-bean prices.

    I'm hoping someone in China starts making 5v compatible FPGAs again.

  • (Score: 2, Disagree) by RedGreen on Sunday December 24, @08:06PM

    by RedGreen (888) on Sunday December 24, @08:06PM (#1337637)

    And as soon as you start treating it like that the better off the world will be in dealing with the underhanded dirty dealing Chinese and their like around the world, they have been at for the last fifty years. While you fools were taking your victory lap at having defeated Communism they were quietly working to undermine democracies all over this planet. Until you see the rise of their authoritarian neo-nazi brothers they have nurtured in our midst who are complicit in their attempt to overthrow our system and install the dictators they want for the threat that it is. It is only going to get worse until they truly start the next shooting world war, not the silent undermining public opinion and economic one they fight against us now, they do it slowly one country at a time for the fighting now. But the breaking point for it is just around the corner. May you live in interesting times, indeed....

    --
    "I modded down, down, down, and the flames went higher." -- Sven Olsen
  • (Score: 2, Informative) by Anonymous Coward on Sunday December 24, @08:13PM (1 child)

    by Anonymous Coward on Sunday December 24, @08:13PM (#1337638)

    because 99% of the needs of electronic devices can be met using them.

    • (Score: 3, Interesting) by takyon on Sunday December 24, @09:44PM

      by takyon (881) <reversethis-{gro ... s} {ta} {noykat}> on Sunday December 24, @09:44PM (#1337644) Journal

      It's certainly true on desktop. Quad-core Skylake is very fast, but plenty of people are still satisfied by the likes of Sandy Bridge or Phenom II. Moving on to the new stuff you're looking at relatively cheap and absurdly fast 8-cores. A Chinese Rockchip RK3588 (Samsung "8nm") would be satisfactory for most people if it was well supported.

      It's expected that the SMIC nodes aren't going to have much of an effect on the smartphone/mobile market, where even small power efficiency gains can make a huge difference. And if you want cheap, there's a flood of perfectly good stuff already on the used market because consumers are pushed to upgrade phones so often, with service plans subsidizing new phones.

      I'm most interested to see what China does to the memory and storage markets. These are commodities and the industry is involved in price fixing scandals every few years. We've seen DRAM prices approach $1-2/GB and then retreat. $0.1/GB would be very satisfying to see in my lifetime.

      Finally, microcontrollers and things can get away with using older nodes because cost is king and they aren't using much power either way.

      --
      [SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
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