Wednesday, March 23, 2022

Russia Sanctions: Taiwan's TSMC Joins Western Ban on Technology For Moscow

Taiwan Semiconductor Manufacturing Company (TSMC) will no longer fabricate computer chips for Russia, according to media reports. The ban will particularly affect Russia's Elbrus and Baikal processors, unless China agrees to step in to manufacture these chips, and risk additional US sanctions itself. Both Russian processors use mature 28 nm technology. The world's most advanced TSMC fabrication technology today is 5 nanometers. The best US-based Intel can do today is 7nm technology. China's SMIC (Semiconductor Manufacturing International Corporation) has the capability to produce chips using 14 nm technology.  Semiconductor chips form the core of all modern systems from automobiles to airplanes to smartphones, computers, home appliances, toys, telecommunications and advanced weapons systems.  

Top 10 Semiconductor Chip Producing Countries. Source: Comtrade Database

China is the world's biggest producer of semiconductor chips, according to data from the United Nations. The electronics value chain, which includes consumer electronics and ICT, has been regionalized over the years, and China has become a major global production center for microelectronics, according to a report in Opportimes. Other major producers include South Korea, Singapore, Malaysia, the United States, Japan, Germany, the Philippines, the Netherlands, and Thailand. In particular, the statistics for China add up the production of Hong Kong and Macao. 

Russia's Semiconductor Imports. Source: WSJ

While China is the  biggest volume producer of semiconductor components in the world,  the Chinese design centers and fabs rely on tools and equipment supplied by the West to deliver products. Western companies dominate all the key steps in this critical and highly complex industry, from chip design (led by U.S.-based Nvidia, Intel, Qualcomm and AMD and Britain’s ARM) to the fabrication of advanced chips (led by Intel, Taiwan’s TSMC and South Korea’s Samsung ) and the sophisticated machines that etch chip designs onto wafers (produced by Applied Materials and Lam Research in the U.S., the Netherlands’ ASML Holding and Japan’s Tokyo Electron ), according to the Wall Street Journal

East vs West Economic Output. Source: Wall Street Journal


There is no question that the current western technology sanctions can seriously squeeze Russia. However, overusing such sanctions could backfire in the long run if the US rivals, particularly China and Russia, decide to invest billions of dollars to build their own capacity. This would seriously erode western technology domination and result in major market share losses for the US tech companies, particularly those in Silicon Valley. 

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35 comments:

Justin said...

Do you think Russia has built a big enough war chest to sustain these sanctions?

Teja said...

Justin: "Do you think Russia has built a big enough war chest to sustain these sanctions?"


It is not the money but lack of technology that will hurt Russia and China.

US, Taiwan and South Korea dominate the Electronic Chip manufacturing.

Riaz Haq said...

TSMC says Nanjing wafer fab expansion plans on track as second quarter revenue surges 28 per cent

https://www.scmp.com/tech/tech-trends/article/3141240/tsmc-says-nanjing-wafer-fab-expansion-plans-track-second-quarter

Volume production of 28-nm wafers in Nanjing will begin in the second half of 2022, reaching 40,000 wafers per month by mid-2023, said TSMC
Apart from Nanjing, the Taiwan foundry said its new plant in Arizona is proceeding and it is also in talks to build a new fab in Japan

Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract producer of advanced chips, said on Thursday it will press ahead with its 28-nanometre fab expansion in Nanjing, defying speculation that the project could be affected by US-China tech rivalry.
“We are further expanding our presence in Nanjing with 28-nm technology to support our customers’ urgent needs,” Mark Liu, chairman of TSMC, said during a conference call with analysts on Thursday. “The volume production will begin in the second half of 2022, reaching 40,000 wafers per month capacity by mid-2023.”
Liu said the 28-nm line will be “the sweet spot for our embedded memory applications” and he expects structural demand for 28-nm to be strong.

Riaz Haq said...

Justin: "Do you think Russia has built a big enough war chest to sustain these sanctions?"


US and its allies have frozen Russian forex reserves in their banks, leaving China as the only source of funds (about 13.8%) held in Chinese Yuan.

https://www.riazhaq.com/2022/03/pakistani-american-banker-heads-swift.html

Riaz Haq said...

#Chinese Foreign Ministry: ‘#Pakistan, #China concerned over sanctions on Russia’. Both share concern about “spill-over effects of unilateral sanctions” on #Russia over its war against #Ukraine, called for a ceasefire & diplomatic resolution of the crisis. https://www.thenews.com.pk/print/943818-pakistan-china-concerned-over-sanctions-on-russia

Old allies China and Pakistan have refrained from condemning Russia over its Feb 24 attack on Ukraine, unlike Western countries that have imposed unprecedented financial and corporate sanctions in response to what Russian President Vladimir Putin calls a “special military operation”, a British wire service reported.

“Both expressed concerns about the spill-over effects of unilateral sanctions,” the Chinese foreign ministry said in a statement following a meeting on Monday in Pakistan between the neighbours’ foreign ministers. “Both called for a ceasefire through diplomatic dialogue and hope that based on the principle of indivisible security, a fundamental solution to the Ukraine problem can be found,” the Chinese ministry said.

Teja said...

The trick is for China to take control of Taiwan without the TMSC factories getting destroyed by the US.

US is already moving Electronic Chip plants from Taiwan to Arizona in US as they know that when the war starts US will destroy all those factories in Taiwan to prevent them falling into the Chinese hands.

samir sardana said...

The Backfire has started

Putin has decided to sell GAS only in ROUBLES !

This is STEP 1 to the Yuan Float,and Reserve currency

The Putin game is that,importers will have to BUY Roubles !

That will APPRECIATE THE ROUBLE,to offset the recent crash !

Roubles can come only,by exports to Russia !

That will obviate the EXPORT BAN,ON RUSSIA !

Alternatively,foreign banks will borrow Roubles, from the Russian Central Bank (which will mint them), & lend it to the importers - buying from Russia.

Then Russia will import from the world,also in Roubles - thereby closing out the above debt.

Ultimately,one fine day,it will be swapped by the Chinese Yuan.BUT THAT WILL STRENGTHEN THE YUAN,AND COLLAPSE THE USD

SO BEFORE THAT,EMPEROR XI HAS TO START OFFLOADING USD DEBT - AND ONCE IT IS LIQUIDATED SUFFICIENTLY, PUTIN WILL SWITCH OUT TO THE YUAN.

IT IS NOT BEYOND THE REALM OF SPECULATION,FOR CHINA & RUSSIA TO MINT A NEW CURRENCY & FOR MANY OTHER NATIONS TO ACCEPT THIS NEW CURRENCY - PREDICATED ON THE CHINESE AND RUSSIAN GDP &MINERAL RESERVES.

EU SANCTIONS ARE COMING ON RUSSIAN OIL

EU sanctions on Russian Oil,are required by NATO - as else, the ilk of Indians,will keep buying Russian discounted oil

The Indians claim, that EU is buying and so,we also have a right - as we have been traditional buyers (like the EU) - and there is no replacement supplier.

In essence,the Indians are PROFITING from the war - as Indian Steel,Sugar ,Alumunimand Copper companies will mint profits, due to the ban on Russian Steel,Alumunium,Copper and Sugar and the fact that UKR steel mills have been blown up.

Like the Indian weasels use the EU as a cover - other nations will use India as cover to buy Russian Discounted oil.dindooohindoo

samir sardana said...

Zelinksy has to note the following :

- NATO DID NOT STEP INTO CRIMEA
- NATO DID NOT STEP INTO GEORGIA
- NATO WILL NOT STEP INTO UKRAINE

THAT IS Y UKRAINE AND GEORGIA ,ARE NOT PART OF EU !

THE EU AND NATO HAVE KEPT OUT THOSE NATIONS, WITH WHOM THE RUSSIANS HAVE SERIOUS ISSUES -
AS A MATTER OF STRATEGY - AS THEY DO NOT WANT A WAR,WITH THE RUSSIANS !

THEY WANT TO USE UKRAINE AND GEORGIA ,TO BAIT RUSSIA , AND THEN USE SANCTIONS, TO FINANCIALLY RUIN RUSSIA - AND STAGE A COUP OR REVOLUTION, IN RUSSIA !

EU WANTS TO USE TRADE AND FINANCE TO KILL RUSSIA - AS THAT IS MORE POWERFUL ,THAN NUKES !

As far as US/EU sanctions on Russia are concerned,Uncle Joe is using Russia,to send a message,to PRC

PRC will have to evaluate financial sanctions,and a naval blockade,in the Taiwan annexation.

EU cannot sanction PRC

EU will collapse

Even the Americans cannot survive Chinese sanctions

The Key will be a naval blockade of Chinese ports and shipping lanes and Malacca !

And that is Y the US is using UKR,to send a message to PRC-Russia,and especially to PRC, to see the plight of Russia,and the capacity of PRC to aid Russia,to bypass sanctions

It will make the PRC carefully plan an attack on Taiwan,or a Naval Blockade on Taiwan.

In the case of PRC,there is also the angle of a naval blockade on Chinese ports and Malacca (which is not possible for Russia).Once wars breaks out in SCS - there will be a defacto naval blockade - as no ship will sail in !

What is the US doing by sanctioning Russia ?

It will make the PRC-Russia-Persia-Africa axis,a permanent bloc

It will push PRC to buy oil in Yuan,and denominate oil trade in Yuan - and many nations will buy in - especially Africa and LATAM and even South America.UAE also might agree.

It will also push an alliance with Iran and massive investments in Iran by PRC for Oil - to secure Oil supplies

The entire supply chain of US manufacturing,and many US consumer items, are made in China.Then we have the rare earth exports,by PRC

What sanctions can US impose on PRC,and what will be the US/EU counter to a PRC retaliation

Lastly,it will create the impetus to roll out the CIPS - as many nations will have to make
a "long term and strategic choice".dindooohindoo

samir sardana said...

EU sanctions will not work now - unless EU sanctions Chinese and other companies,who are trading with PRC.

That is the NEXT LEVEL of the sanctions

That is the CRUX and the TEST.If Chinese companies are sanctioned - then Emperor Xi ,will take note !

As of today,the Russia sanctions are pushing up prices in the market and thus BUILDING THE CASE FOR CHINESE TO BUY FROM RUSSIA AS 60-70% OF MARKET RATES - AS A WAY TO REDUCE COSTS and also get an edge in the markets, as the competitors of Chinese companies,are buying the materials, at market rates.

There is no need for SWIFT or CIPS as PRC and Russia can do BARTER TRADES - as barter is the best way to bypass SWIFT and sanctions.

In fact,Russian companies can get equity swaps in Chinese rare earths and Chinese can take equity in Nickel,Coal,Steel and Oil and Gas in Russia

And then,Russia can choke the rare earth exports to US and EU - as a sanction response by Russia !

TAKE THE US BAN ON RUSSIAN OIL EXPORTS

What is the impact of this ban ?

It will push up NYMEX crude -unless Iranian crude flows (which will not as they are in the Russia/China camp)

WILL THE SAUDIS PUMP MORE ? IN LIGHT OF BIDEN VIEWS ON MBS AND THE KHASOGGI DISASTER !
What is the impact of this OIL SPIKE,on PRC ?

It will push PRC to buy Russian discounted Oil

Russia needs only the Marginal Cost of Oil to be paid cash down - which will be 15% -20% of Oil prices, and the rest the Chinese can pay on barter or CIPS mode.

So long as there is food,oil and gas for Russians and incomes - Putin is safe.So manufacturing should keep rolling and PRC should keep buying

If there is an equity swap between Russian and PRC companies to make Russian mineral and Oil - Chinese owned in part - then that will insulate Russia from all UN Sanctions and allow use of SWIFT and CIPS - legally - with no risk of EU sanctions ! dindooohindoo

If all the above goes as per Putin plan - he Will seal off NORD 1 - as once spring comes, EU might stop buying Russian Gas - in any case,and so Putin might give a SHOCK to EU.- to push UP LNG rates - and then,if some disaster happens in the Persian Gulf or Qatar .....

samir sardana said...

Some in NATO think that,with PRC bypassing Russian sanctions - some pressure will be applied on China !

What pressure can be applied on PRC and who will do it ?

One view is that PRC is a export driven economy,and thus,has a huge trade surplus, especially with the USA.

The thesis is that banning PRC exports,will collapse the Yuan and the Chinese economy.
COVID proved that there was no substitute, to the PRC supply chain

If the US sanctions PRC exports,who is the Alt supplier ? No other nation can replace,the Chinese supply chain.If the US were to "make in the USA",it will take time,and will cost many times more.Will the Americans pay this tax - to save UKR ?

Besides, until the US sets up the supply chain of PRC in the USA,the downstream users of PRC exports - will just shut down - with the cascade impact on the banks,and the DOW.
TRUTH is that NO ONE CAN APPLY ANY ECONOMIC PRESSURE, on PRC

Also,economic turmoil in PRC ,due to export sanctions - will not cause a Coup in China - it might push China to war - as a diversion.

Hence,no sanctions on PRC will work.

US SANCTIONS ON RUSSIA = STRATEGIC PARTNERSHIP BETWEEN PRC AND RUSSIA

It is a straight swap between PRC and Russia

China moves its commercial ships to Russian ports,and loads up on agri and metals (Alumunium/Copper etc.),and in lieu,gets to import sanctioned materials from PRC

Also,it will be start of Gold/Yuan denominated trade and banking

IT IS A METAL LEASE TRANSACTION - WHEREIN THE OUTPUT IS STOCKED IN CHINA AND RUSSIA IS PAID A LEASE FOR THE USE OF THE METAL - paid in Gold or Yuan

Alumunium and Copper rates are spiking,and PRC saves billions in import costs.PRC cannot export the Russian Alumunium (as it can be traced by metallurgy and trade data),but it can be converted into end product and exported (as China trade data on end products is opaque)

WHEN METAL AND OIL IS AT PEAK - WHAT WILL PUTIN DO ?

MAXIMISE PRODUCTION - AND SHIP IT TO PRC !

THE SIMPLEST WAY TO MAKE THE NORTH AFRICANS AND THE GCC TO CHANGE THEIR VOTE IS ITO - SELL THEM "WHEAT"

VLAD AND XI ARE PLAYING PING PONG !dindooohindoo

samir sardana said...

What can India learn from the Russian gambit in Ukraine ?

India's friend Russia !

Indians have to see the plight of the Russian army in UKR !

Indians uses Russian Tech.Pakistan uses US tech and PLA and PLAF is notches higher than Russia !

The dreams of the Indians to liberate Balochistan &AJK should END now. The pansy fantasies of Indian Generals w.r.t 2 front wars - should END.

Russia does NOT impose end user clauses on the Indians on defense purchases - as they sell Indians - JUNK ! PAF and PLAF face NO THREAT from Indian MIGs and Sukhois (as Putin has already sold them the antodote !). Similarly,Putin sold S-400 to PLA BEFORE he sold it to India.PLA has ALREADY GAMED THE S-400.

The JF series stealth fighters of PLAF,were IDEATED from Russian technology - and are NOT ONLY SUPERIOR to Russian jets - BUT ARE AN UNKNOWN MONSTER,TO NATO AND THE INDIANS !

Chaiwala went BEGGING TO PUTIN in Galwan - and he will need Putin''s help again.

Indians are a slave race.Those who think the Indians will oppose Putin are drinking cow piss cola with vodka = poison.

The Russian success in UKR is due to missiles launched from Russia - and not mobile launchers in UKR.THEY HAVE A 50% SUCCESS RATE.PUTIN MIGHT BE USING CHEAP AND LOW COST COSY MISSILES - BUT THE INDIAN WEASELS HAVE TO KEEP THAT IN MIND - WHILE WAR GAMING - 50% STRIEK RATE

The best missile tech is with Putin,and NOT shared with India.Putin knows the Indian MOD leaks and reeks of corruption.India was sold for a bottle of scotch - so long as the Indian in the PMO,could drink a peg,with a whiteman

https://www.nytimes.com/1985/04/16/world/19-are-charged-in-indian-espionage-scandal.html

That whiteman was a Pole.dindooohindoo

samir sardana said...

There is another angle of the UKR war missed out by media

WATER !

1st thing Putin did when he went in was to blow up the dam,which stopped the water flow to CRIMEA ! Russia spent millions of USD to ferry water to Crimea by land,as UKR had blocked the water after the takeover of CRIMEA - although the rivers flowing into UKR are European rivers - NOT origined in UKR

What did UKR do ? They opened the gates of 3 dams near Kiev to STOP Russian armor.They should have waited for the armor to come near - AND THEN FLOODED THE REGION - that way they would have POW and armor

What is the moral of the story for Pakistan

These are the dams in Kashmir

Baglihar Dam
Dulhasti Dam
Kishenganga Dam
Nimoo Bazgo Dam
Niu Karewa Storage Yusmarg Dam
Pakal Dul Dam
Salal
Sewa St II Dam
Uri-II Dam

There are a million Indian troops in Kashmir ! If a war breaks out and the dams are taken out - that will bury the Indian troops,armor and airforce for many years.All military logistics by land and air will be cut off for years.

The war will be over and Kashmir will be free of all Indians

There will be flooding in Pakistan also,but in time, the water flow will be damed or diverted.

AND THAT IS THE STRATEGY BEHIND PAKISTAN ALLOWING INDIA TO MAKE DAMS IN KASHMIR.

SO THE TIMING IS KEY - TAKE OUT THE DAMS IN THE PERIOD OF SNOW MELT OR OTHERWISE.

AND SO IS DAM SELECTION - TO FLOOD ONLY IOK AND REDUCE THE FLOW OF WATER AS IT ENTERS AJK - WHERE IT WILL COLLECT IN VALLEYS AND TROUGHS

INDIANS ARE EXPERTS AT BURYING THEMSELVES AND PAKISTAN SHOULD OBLIGE.dindooohindoo

Riaz Haq said...

Economic Weapons of Mass Destruction

https://www.project-syndicate.org/commentary/economic-wmds-and-the-risk-of-deglobalization-by-raghuram-rajan-2022-03

By RAGHURAM G. RAJAN


Because Russia's war against Ukraine could not go unpunished, the use of painful, sweeping economic sanctions is clearly justified. In the future, though, these powerful new tools will need to be subject to proper controls; otherwise, they could trigger a reversal of globalization – and of the prosperity that it has made possible.

CHICAGO – War is horrific, no matter how it is waged. Nevertheless, Russia’s unprovoked attack on Ukraine, with its scenes of Ukrainian civilians being murdered or driven from their homes, undoubtedly had to be opposed. In addition to supplying Ukraine with military weapons, governments around the world have deployed economic weapons against Russia. While Russia, an economic midget relative to its military power, may still lash out by expanding the range of military weapons it uses and the territories it targets, it is a risk the world had to take.

Compared to Russia’s indiscriminate bombing, economic weapons will not kill people as quickly, create as much visible destruction, or inspire as much fear. Nonetheless, the unprecedented economic weapons that have been deployed against Russia will be unquestionably painful.

The strictures on Russia’s central bank have already contributed to the ruble’s collapse, and new limitations on cross-border payments and financing have had an immediate impact, weakening confidence in Russian banks. Though trade sanctions (restricting exports of key inputs such as airplane parts to Russia, as well as purchases from Russia) and the exodus of multinational corporations from Russia will have a less immediate effect, they will reduce economic growth and increase unemployment significantly over time. If these measures are not reversed, they will eventually translate into lower living standards, poorer health, and more deaths in Russia.

That we have come to this point reflects a widespread political breakdown. Too many powerful countries are now being led by authoritarian rulers whose reliance on nationalism makes them less willing to compromise internationally and who face few domestic constraints on their behavior. If Russian President Vladimir Putin’s aggression were to go unpunished, more international provocations like his war in Ukraine would become inevitable.



https://youtu.be/yFCpMOCVdAw


Equally problematic is the breakdown of the international order. The United Nations Security Council cannot legitimately act against any of its permanent veto-wielding members (China, France, Russia, the United Kingdom, and the United States). The organization’s impotence translates into impunity for strongmen who flout international norms. Moreover, even if the UN could approve a military response, the will to confront a determined nuclear power militarily would probably be lacking.

Economic weapons, made possible by global integration, offer a way to bypass a paralyzed global governance system. They allow other powers an effective (that is, painful) but civilized way to respond to aggression and barbarity.



But the risks that these weapons can create must not be underplayed. When fully unleashed, sanctions, too, are weapons of mass destruction. They may not topple buildings or collapse bridges, but they destroy firms, financial institutions, livelihoods, and even lives. Like military WMDs, they inflict pain indiscriminately, striking both the culpable and the innocent. And if they are used too widely, they could reverse the process of globalization that has allowed the modern world to prosper.


Riaz Haq said...

In 2020, #Russia was the world's 11th-largest #economy, according to the World Bank. But by the end of this year (2022), it (#Russian #GDP) may rank no higher than No. 15, based on the end-February rouble exchange rate. #UkraineUnderAttack #Sanctions https://www.reuters.com/world/europe/four-weeks-war-scar-russias-economy-2022-03-24/

Russia's invasion of Ukraine on Feb. 24 sparked sweeping sanctions that ripped the country out of the global financial fabric and sent its economy reeling.

A month on, Russia's currency has lost a large part of its value and its bonds and stocks have been ejected from indexes. Its people are experiencing economic pain that is likely to last for years to come.

Below are five charts showing how the past month has changed Russia's economy and its global standing:


In 2020, Russia was the world's 11th-largest economy, according to the World Bank. But by the end of this year, it may rank no higher than No. 15, based on the end-February rouble exchange rate, according to Jim O'Neill, the former Goldman Sachs economist who coined the BRIC acronym to describe the four big emerging economies Brazil, Russia, India and China.

Recession looks inevitable. Economists polled by the central bank predicted an 8% contraction this year and for inflation to reach 20%.


Forecasts from economists outside Russia are even gloomier. The Institute of International Finance predicts a 15% contraction in 2022, followed by a 3% contraction in 2023.

"Altogether, our projections mean that current developments are set to wipe out the economic gains of roughly fifteen years," the IIF said in a note.

Riaz Haq said...

The #Hindu Right is turning against the #US. Until a few years ago, #Modi Bhakts were largely pro-US. Now, Joe #Biden is seen as antagonistic — if not to #India, then to the sort of India that Modi’s supporters want to create. #Hindutva #Islamophobia https://theprint.in/opinion/the-hindu-right-is-turning-against-the-us-but-india-needs-to-see-reality-over-rhetoric/895977/


By VIR SANGHVI


Even while the war in Ukraine rages, however, we should be asking ourselves deeper questions. A few days ago, at the ABP Ideas of India Summit in Mumbai, I interviewed Fareed Zakaria. Fareed’s view was that over the last decade or so, India has become so inward-looking and obsessed with its own issues and divisions that it has not spent enough time thinking about its place in the world, going forward.

While we have been obsessed with headscarves and caste arithmetic, the world has rearranged itself. No matter what happens in Ukraine, Russia will come out of the war damaged. If it makes peace, then some of the sanctions imposed on it by the West may be moderated but it seems unlikely that Putin’s Russia will become a full-fledged member of the global economy for a long time.

In that case, it will have no choice but to move into the Chinese sphere of influence. One scenario sees Russia as a classic vassal state of the Chinese, supplying energy and raw materials to feed the Chinese military machine and its industrial complex. Pakistan and China are longstanding allies, so we will probably see the emergence of a Russia-China-Pakistan alliance.

India will then have two choices. Either we agree to accept China’s suzerainty over the East. Or we look for other options.

Should we choose the second path (and I imagine we will have to), then there really is nowhere to go but the West. At present, the West understands how India is constrained by its dependence on Russian weaponry. But in the long run, it will expect a greater measure of alignment. Is that something we have considered? Or are we too blinded by the rhetoric about anti-Hindu America and hypocritical Washington?

Sooner, rather than later, we will have to rescue reality from the rhetoric.

Riaz Haq said...

Chip consortium ISMC (joint venture between #AbuDhabi-based Next Orbit Ventures and #Israel's Tower Semiconductor) to set up $3 billion plant in India's Karnataka. It will be #India's first #Semiconductor #fabrication plant. #technology https://finance.yahoo.com/news/chip-consortium-ismc-plans-3-080237787.html?soc_src=social-sh&soc_trk=tw&tsrc=twtr via @Yahoo

ISMC and Indian conglomerate Vedanta Ltd have applied for Prime Minister Narendra Modi's $10 billion incentive plan to push companies to set up semiconductor and display operations in India, the government's next big bet on electronics manufacturing.

-----------

BENGALURU (Reuters) - International semiconductor consortium ISMC will invest $3 billion in India's southern Karnataka state to set up a chip-making plant, the state government said on Sunday.

ISMC is a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel's Tower Semiconductor. U.S. chip giant Intel Corp has announced plans to acquire Tower.

India’s first semiconductor fabrication unit is expected to generate more than 1,500 direct jobs and 10,000 indirect jobs, the state's investment promotion division said in a tweet.

ISMC and Indian conglomerate Vedanta Ltd have applied for Prime Minister Narendra Modi's $10 billion incentive plan to push companies to set up semiconductor and display operations in India, the government's next big bet on electronics manufacturing.

Munsif Vengattil
Sun, May 1, 2022, 1:02 AM·1 min read

A silicone semiconductor is seen at the offices of Tower Semiconductor in northern Israel
By Munsif Vengattil

BENGALURU (Reuters) - International semiconductor consortium ISMC will invest $3 billion in India's southern Karnataka state to set up a chip-making plant, the state government said on Sunday.

ISMC is a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel's Tower Semiconductor. U.S. chip giant Intel Corp has announced plans to acquire Tower.

India’s first semiconductor fabrication unit is expected to generate more than 1,500 direct jobs and 10,000 indirect jobs, the state's investment promotion division said in a tweet.

ISMC and Indian conglomerate Vedanta Ltd have applied for Prime Minister Narendra Modi's $10 billion incentive plan to push companies to set up semiconductor and display operations in India, the government's next big bet on electronics manufacturing.

- ADVERTISEMENT -

Vedanta told Reuters on Saturday it was in "advanced talks" with Gujarat and Maharashtra in west India and Telangana in the south to choose a site by mid-May. It has a planned investment outlay of $20 billion for its semiconductor and display push.

Modi and his IT ministers outlined plans on Friday for investment incentives in the sector, saying they want India to become a key player in a global chip market dominated by manufacturers in Taiwan and a few other countries.

India's semiconductor market is forecast to grow to $63 billion by 2026 from $15 billion in 2020, the government says.

(Reporting by Munsif Vengattil and Aditya Kalra in New Delhi; Editing by Clarence Fernandez and William Mallard)

Riaz Haq said...

Semiconductor Fabrication by country:

USA 44%

South Korea 24%

Japan 9%

EU 9%

Taiwan 6%

China 5%

In 2018, about 44 percent of U.S.-headquartered firms’ front-end semiconductor wafer capacity was located in the United States. Other
leading locations for U.S. headquartered front-end semiconductor wafer fab capacity were Singapore, Taiwan, Europe, and Japan.


In 2018, roughly 81 percent of all semiconductor wafer fabrication capacity in the United States was accounted for by U.S.-headquartered
firms. Semiconductor firms headquartered in the Asia Pacific region accounted for most of the balance of capacity in the United States at
around 10 percent.

https://www.semiconductors.org/wp-content/uploads/2019/05/2019-SIA-Factbook-FINAL.pdf

Riaz Haq said...

Opinion Biden’s sanctions against Russia are a double-edged sword
Image without a caption
By Fareed Zakaria

https://www.washingtonpost.com/opinions/2022/05/12/biden-sanctions-russia-could-erode-dollar-power-financial-economic/

...the unprecedented nature of these measures (US sanctions against Russia) is producing concerns around the world that the United States has “weaponized” its financial power and could lead, over time, to the decline of the dollar’s dominance, which is what gives America its financial superpowers in the first place.

I’ve been hearing about this firsthand from three sources I trust. The first, in New Delhi, recently told me about a conversation that took place at the highest levels of India’s government. The topic: how to make sure that the United States could never do to India what it has just done to Russia. The second, from Brussels, where staff at the European Commission has been tasked — even while working with Washington on the sanctions — with finding ways to reduce the role of the dollar in its energy imports. The third, an Asian observer of China, speculated that the overly severe lockdowns in Shanghai — which involved the rationing of food and basic supplies — might be part of an effort by Beijing to experiment with a scenario in which it faced economic sanctions from Washington (perhaps after an invasion of Taiwan).

A debate is raging around the world about whether the dollar’s total dominance of the international financial system is waning. Even Goldman Sachs and the IMF have warned that that might well happen. I tend toward the opposite view: Namely, that you can only beat the dollar if you have an effective alternative, which so far does not exist.

But it’s clear that many countries — from hostile powers such as China and Russia to friendly nations such as India and Brazil — are working hard on ways to reduce their vulnerability to Washington’s whims. None of these efforts has so far gained much traction, though it is worth noting that the share of global foreign exchange reserves held in dollars has declined from 72 percent to 59 percent over the past two decades.

Partly this is because the United States appears less stable and predictable in the use of its extraordinary privilege. In the two decades preceding Russia’s invasion, Washington massively ramped up sanctions for all kinds of reasons — by more than 900 percent. Many of these measures were overreactions and should be rolled back. After 9/11, Washington put in place highly intrusive measures aimed at tracking money going to terrorists. It has inflicted harsh punishments on banks that did not adhere to all U.S. sanctions. It has imposed sanctions on Iran, Venezuela, North Korea, Cuba and other countries often simply to satisfy domestic critics who wanted to “do something” without paying much of a price. This type of economic warfare has failed to change the regimes in these countries but has caused widespread misery for ordinary people in them. Sanctions against Russia are aimed at policy change, not regime change, and therefore could be more effective.

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The dollar maintains its crucial role in the international system because the United States has the world’s largest economy. It also has the most liquid debt markets, its currency floats freely, and, crucially, it is regarded as a country based on the rule of law and not one prone to arbitrary and unilateral actions. That last criterion is not one that Washington has lived up to in recent years. Biden should make sure that, in fighting this battle against Russia, he does not erode America’s unique financial superpower.

Riaz Haq said...

Chinese Views of the US and Russia After the Russian Invasion of Ukraine
A new survey taken after the Russian invasion of Ukraine finds that the Chinese are very negative about the U.S., very positive about Russia – and very confident about China.



By Richard Q. Turcsanyi
May 14, 2022
https://thediplomat.com/2022/05/chinese-views-of-the-us-and-russia-after-the-russian-invasion-of-ukraine/



Among the 25 countries respondents were asked about (Figure 1), Russia was the most positively perceived country with 80 percent of respondents saying they viewed Russia in a positive light while only 12 percent held negative views. The United States, on the other hand, was the most negatively viewed country in China with slightly more than 60 percent of respondents perceiving it negatively and 31 percent holding positive attitudes.

The other very positively perceived countries among Chinese respondents were Pakistan (73 percent), Singapore (66 percent), North Korea (62 percent), and Germany (61 percent). In turn, other very negatively perceived countries included India (56 percent), Japan (54 percent), Vietnam (48 percent), South Korea (47 percent), and Ukraine (46 percent).

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To get a more nuanced picture of the perceptions of the United States and Russia, we asked two open-ended questions in which the respondents provided their first associations with the respective country, and also a reason for why their image of the U.S. or Russia got better or worse.

In terms of the U.S. (see Figure 2), the most common association was “hegemon,” while other frequent expressions were “advanced,” “developed,” and “powerful,” but also “bossy,” “war,” “bandit,” and “sowing discord.”

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In the Russian case, the most common association was “warrior nation,” followed by words such as “Putin,” “vodka,” “vast,” “bears,” “powerful,” “war with Ukraine,” and “Sino-Russian friendship.”

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The picture we are getting is that both the United States and Russia are seen as powerful, but American power is seen mostly in negative terms, while Russia’s is almost exclusively positive. It may be noteworthy, however, that perceptions of Russia among the Chinese seem to be somewhat stereotypical and linked to the current leader, and might be lacking deeper social roots. Hence, these perceptions may be easily open to change.

When asked about how positively or negatively the respondents assess the foreign policy of major powers (Figure 4), only Russia (besides China) was seen positively, while the U.S. topped the negative ranking, ahead of India, Japan, and the European Union.



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Another major finding of the survey is Chinese people’s confidence in China. When asked about how militarily and economically powerful they perceive relevant major powers, China was seen as the most powerful one, while China’s culture was also perceived as the most attractive and Chinese universities were the most recommended ones.

We also asked how willing the respondents would be to get a COVID-19 vaccine produced by various countries. Again, Chinese vaccines were far more trusted than any other. This seems to be a result of two-plus years of propaganda painting the Western response to the pandemic in negative colors, presenting Western vaccines as ineffective, and even suggesting theories about the virus originating as a U.S. bioweapon. This may be a problem now, however, as Chinese vaccines don’t seem to be working as efficiently against the newer variants of COVID-19 as some Western ones.

Riaz Haq said...

US says China’s support for Russia over Ukraine puts it on ‘wrong side of history’
‘China claims to be neutral, but its behavior makes clear that it is still investing in close ties to Russia,’ state department says

https://www.theguardian.com/us-news/2022/jun/15/us-china-russia-ukraine-wrong-side-history

Xi Jinping has assured Vladimir Putin of China’s support on Russian “sovereignty and security” prompting Washington to warn Beijing it risked ending up “on the wrong side of history”.

China has refused to condemn Moscow’s invasion of Ukraine and has been accused of providing diplomatic cover for Russia by blasting western sanctions and arms sales to Kyiv.

China is “willing to continue to offer mutual support [to Russia] on issues concerning core interests and major concerns such as sovereignty and security,” state broadcaster CCTV reported Xi as saying during a call with Putin.


It was the second reported call between the two leaders since Putin launched his invasion of Ukraine on 24 February.

According to CCTV, Xi praised the “good momentum of development” in bilateral relations since the start of the year “in the face of global turmoil and changes”.

Beijing was willing to “intensify strategic coordination between the two countries”, Xi reportedly said.

The Kremlin said the two leaders had agreed to ramp up economic cooperation in the face of “unlawful” western sanctions.

“It was agreed to expand cooperation in the energy, financial, industrial, transport and other areas, taking into account the situation in the global economy that has become more complicated due to the unlawful sanctions policy of the west,” the Kremlin said following the phone call.

But the United States swiftly weighed in with a frosty retort to Beijing’s expressed alignment with Moscow.

“China claims to be neutral, but its behavior makes clear that it is still investing in close ties to Russia,” a US state department spokesperson said.

Washington was “monitoring China’s activity closely”, including how, nearly four months into Russia’s war in Ukraine, the Asian giant was “still echoing Russian propaganda around the world” and suggesting Moscow’s atrocities in Ukraine were “staged,” the official said.

“Nations that side with Vladimir Putin will inevitably find themselves on the wrong side of history.”

The west has adopted unprecedented sanctions against Russia in retaliation for its invasion of Ukraine, and Moscow considers that Europe and the United States have thus caused a global economic slowdown.

Moscow is also looking for new markets and suppliers to replace the major foreign firms that left Russia following the invasion.

The European Union and the US have warned that any backing from Beijing for Russia’s war, or help for Moscow to dodge western sanctions, would damage ties.

Once bitter cold war enemies, Beijing and Moscow have stepped up cooperation in recent years as a counterbalance to what they see as US global dominance.

The pair have drawn closer in the political, trade and military spheres as part of what they call a “no limits” relationship.

Last week they unveiled the first road bridge linking the two countries, connecting the far eastern Russian city of Blagoveshchensk with the northern Chinese city of Heihe.

The leaders’ call on Wednesday fell on Xi’s 69th birthday and was their first reported communication since the day after Russia launched its Ukraine invasion.

Beijing is Moscow’s largest trading partner, with trade volumes last year hitting $147bn, according to Chinese customs data.

Riaz Haq said...

SMIC's 7-nm chip process a wake-up call for US - Asia Times

https://asiatimes.com/2022/07/smics-7-nm-chip-process-a-wake-up-call-for-us/

But SMIC has no choice. It must use DUV because the US Commerce Department put in on its Entity List in December 2020, stating at the time that “Items uniquely required to produce semiconductors at advanced technology nodes – 10 nanometers or below – will be subject to a presumption of denial to prevent such key enabling technology from supporting China’s military-civil fusion efforts.”


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Reports of a China chip-making breakthrough are behind the curve but US sanctions are increasingly too little, too late and out of date
By SCOTT FOSTER
JULY 25, 2022


A TechInsights report stating that a bitcoin mining integrated circuit (IC) sold by MinerVa “appears to be manufactured in SMIC 7-nm technology node” has triggered an outburst of commentary about the failure of American sanctions to stop the advance of Chinese semiconductor technology.

TechInsights is a Canadian provider of semiconductor-related analysis and intellectual property services to technology companies and other subscribers. It is known for its reverse engineering capability.

Referred to as “China-based” by Bloomberg, MinerVa Semiconductor is registered in Canada. But the three directors listed in its registration are Chinese and the address given for one of them is in China’s Henan province. The “About Us” section on the company’s website is blank.

MinerVA Semiconductor claims that its MinerVa7 is “one of the best-valued chips” for mining Bitcoin and that it “utilizes mature foundry technology to ensure chip yield, quality and reliability.”

Semiconductor Manufacturing International Corp, or SMIC, is China’s largest semiconductor foundry (contract manufacturer) and a prominent target of US technology sanctions aimed at curbing China’s access to advanced chips and the capacity to produce them.

The report describes SMIC’s efforts to put 7-nm process technology into production as a qualified success. After noting similarities with Taiwan Semiconductor Manufacturing Company’s (TSMC) 7-nm process, it goes on to say that SMIC’s System-on-Chip (SoC) device seems to be a low-volume “steppingstone” that has the logic but not the memory aspects of a standard TSMC or Samsung product.

This is possible because “bitcoin miners have limited RAM [random access memory] requirements,” the report said. For reference, an SoC is an IC that incorporates a processing unit (logic), memory and other components, creating a specialized computer or other type of electronic system in a single device.

TechInsights also points out that SMIC’s use of Deep Ultra-Violet (DUV) lithography has resulted in a more complex and costly process that probably has lower yields than the Extreme Ultra-Violet (EUV) lithography-based processes now used by TSMC and Samsung.

Riaz Haq said...

Samsung says it is manufacturing 3nm chips in global first
South Korean tech company seizes lead over TSMC in advanced semiconductor race

https://asia.nikkei.com/Business/Tech/Semiconductors/Samsung-says-it-is-manufacturing-3nm-chips-in-global-first

SEOUL -- Samsung Electronics said on Thursday that it has started mass producing 3-nm chips at its semiconductor plant in Hwaseong, south of Seoul, becoming the first to reach the milestone.

The latest advance in a relentless race to cut the size and increase the power of semiconductors gives Samsung an edge over its archrival Taiwan Semiconductor Manufacturing Co. for now, though competition is only set to intensify.

The South Korean tech giant said the new advanced chip allows a 16% decrease in surface area, 23% higher performance and 45% lower power consumption compared with current 5-nm chips. Samsung has been competing with TSMC to develop cutting-edge chips.

Smaller, more advanced chips are harder to make because they squeeze more transistors onto the same space. The ability to mass produce them is an indication of a manufacturer's technological prowess.

"Samsung has grown rapidly as we continue to demonstrate leadership in applying next-generation technologies to manufacturing," Choi Si-young, head of the company's chip foundry business, said in a news release. "We seek to continue this leadership with the world's first 3-nm process."

The company also said: "Samsung is starting the first application of the nanosheet transistor with semiconductor chips for high performance, low power computing application and plans to expand to mobile processors."

It declined to say which customers will be buying the new chips, citing confidentiality.

Analysts said that while the development is a technological advance, the initial impact will likely be limited.

"While 3nm will be the most available leading-edge technology, in our estimates, the total capacity would account for less than 10% of [the] global foundry industry in leading-edge nodes (16-nanometer and below) in 2023, not a significant factor yet for industrywide demand/supply outlook," Dale Gai, an analyst at Counterpoint Research, told Nikkei Asia in an email. He added that capacity constraints could limit output going forward.

Analysts also say that while the start of the 3-nm chip production is positive for Samsung in reaching the milestone ahead of TSMC, it will take time until the advanced technology creates new revenue for the company.

"It's meaningful that Samsung is mass producing 3-nm chips based on new architecture technology for the first time," said SK Kim, an analyst at Daiwa Captial Markets. "However, it will not automatically lead to attracting new customers and improving earnings because it is not yet ready to produce main stream chips such as mobile CPUs." CPU stands for central processing unit.

The announcement comes amid a global shortage of semiconductors due to bottlenecks caused by the coronavirus pandemic. Manufacturers are still struggling to raise production.

Despite its latest improvement, Samsung will not be able to rest on its laurels.

C.C. Wei, CEO of TSMC, said during an earnings call in April that his company's 3-nm technology will be entering mass production in the second half of this year, adding he believes it will be the world's most advanced in terms of performance, power, and size as well as transistor technology.

TSMC also said in June that it would begin production of ultra-advanced 2-nm chips by 2025. The Taiwanese chipmaking titan is gearing up to introduce 3-nm chip production technology in the second half of this year. Its key manufacturing site is in the city of Tainan in southern Taiwan.

Riaz Haq said...

Semiconductor Manufacturing International Corp. has likely advanced its production technology by two generations, defying US sanctions intended to halt the rise of China’s largest chipmaker.

https://www.bloomberg.com/news/articles/2022-07-21/china-s-top-chipmaker-makes-big-tech-advances-despite-us-curbs


The Shanghai-based manufacturer is shipping Bitcoin-mining semiconductors built using 7-nanometer technology, industry watcher TechInsights wrote in a blog post on Tuesday. That’s well ahead of SMIC’s established 14nm technology, a measure of fabrication complexity in which narrower transistor widths help produce faster and more efficient chips. Since late 2020, the US has barred the unlicensed sale to the Chinese firm of equipment that can be used to fabricate semiconductors of 10nm and beyond, infuriating Beijing.

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Semiconductor Manufacturing International Corp has likely advanced its production technology by two generations, defying US sanctions intended to halt the rise of China's largest chipmaker. From a report:
The Shanghai-based manufacturer is shipping Bitcoin-mining semiconductors built using 7-nanometer technology, industry watcher TechInsights wrote in a blog post on Tuesday. That's well ahead of SMIC's established 14nm technology, a measure of fabrication complexity in which narrower transistor widths help produce faster and more efficient chips. Since late 2020, the US has barred the unlicensed sale to the Chinese firm of equipment that can be used to fabricate semiconductors of 10nm and beyond, infuriating Beijing.

A person familiar with the developments confirmed the report, asking not to be named as they were not authorized to discuss it publicly. SMIC's surprising progress raises questions about how effective export controls have been and whether Washington can indeed thwart China's ambition to foster a world-class chip industry at home and reduce reliance on foreign technologies. It also comes at a time American lawmakers have urged Washington to close loopholes in its Chinese-oriented curbs and ensure Beijing isn't supplying crucial technology to Russia. The restrictions effectively derailed Huawei Technologies's smartphone business by cutting it off from the tools to compete at the cutting edge -- but that company is now quietly staffing up a renewed effort to develop its in-house chipmaking acumen.

https://tech.slashdot.org/story/22/07/22/1328251/chinas-top-chipmaker-achieves-breakthrough-despite-us-curbs

Riaz Haq said...

Christopher Clary
@clary_co
“sanctions have hit the Russian military industrial complex as key spare parts… can no longer be sourced... Russia will increasingly become dependent on China for outsourcing hardware manufacturing &in turn weapon supplies to India will be hit.”

https://twitter.com/clary_co/status/1560943134292443139?s=20&t=jLh43O4wiO4EoekdV6IsYA


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India exercises strategic autonomy, worried at Russia’s ‘no limit’ China tilt
India News
Published on Aug 19, 2022 08:14 AM IST
National Security Advisor Ajit Doval made it clear to his Russian counterpart that India only takes decisions based on its national interests and questioned Russia’s “no limits” partnership with China as this directly impacted New Delhi’s security concerns.

https://www.hindustantimes.com/india-news/india-exercises-strategic-autonomy-worried-at-russia-s-china-tilt-101660874108079-amp.html

National Security Advisor Ajit Doval had a heart-to-heart conversation with his Russian counterpart Nikolai Patrushev in Moscow this week with both sides discussing developments in Indo-Pacific, Ukraine and addressing each other’s concerns in the unfolding security scenario in Asia. Doval also met the newly appointed Russian Deputy Prime Minister in-charge of weapon industries Denis Manturov.

During his Moscow visit, NSA Doval dispelled any Russian notion that India had distanced itself from its strategic partner of the past and moved closer to the western camp. He made it clear to his interlocutors that India only takes decisions based on its self-interests and national security concerns and is not bound to any camp.

However, NSA Doval also conveyed that India was concerned about Russia leaning toward China, which had a long-standing boundary dispute with India and had recently flared up by PLA’s unilateral actions in the East Ladakh sector in May 2020. He said to date the boundary issue has been hanging fire with China still to restore April 2020 status quo ante in the East Ladakh sector.

The two sides discussed the Chinese power projection post House Speaker Nancy Pelosi's August 2 Taiwan visit with Russia expressing concern over the rapid militarization of the Indo-Pacific. With Russian energy exports from Vladivostok being impacted by the growing China-US tussle in the Indo-Pacific, Moscow is concerned about the military response by Japan, Taiwan and US over the Chinese missile firing around Taiwan post Pelosi’s visit.

While the two NSAs exchanged notes over the developments in the Ukraine war, it is quite evident that the western sanctions have hit the Russian military industrial complex as key spare parts from Europe can no longer be sourced due to American sanctions. In this context, Russia will increasingly become dependent on China for outsourcing hardware manufacturing and in turn weapon supplies to India will be hit. The Ukraine war is now into its sixth month with neither the Russian nor the Ukrainian forces being able to make a decisive move towards its objectives and the conflict bleeding both the economies.

At the NSA level dialogue, the two sides discussed cooperation in atomic energy, space, trade, and investment with both countries worried about the developments in Afghanistan. Despite the Taliban being in power for an year, Afghanistan continues to be restive with no space for minorities, women and children. The Central Asian Republics are seeing increasing economic penetration by Beijing much to the chagrin of Russia with countries bordering restive Xinjiang already in the Chinese debt trap through the enticing Belt Road Initiative (BRI).

Riaz Haq said...

Russia’s long-time chips failure coming home to roost
Russia will never be a first-rate power without a capable, innovative and commercially-oriented semiconductor industry

https://asiatimes.com/2022/08/russias-chips-failure-coming-home-to-roost/

In 1962, two Americans who spied for Russia and defected, Alfred Sarant and Joel Barr, proposed to turn the new Russian city of Zelenograd (“green city”) into a microelectronics and computer development and manufacturing center.

Zelenograd thus became the heart and soul of Russia’s effort to build modern electronics for its military. But it soon failed in its mission and the legacy of failure continues to this day.

Sarant and Barr, engineers who worked on classified US defense projects, mainly involving radar, had been part of the Rosenberg spy ring in the United States. Someone tipped them off that the arrests of Julius and Ethel Rosenberg were imminent.

Around the same time, British scientist and spy Klaus Fuchs was arrested in the United Kingdom. During World War II, he played a major scientific role at the US nuclear bomb-making site in Los Alamos.

Nikita Khrushchev took up Sarant and Barr’s proposal and turned Zelenograd into the heart of Soviet efforts to catch up with the US in electronics, including small computers and integrated circuits. Barr, who was a brilliant engineer, designed the first digital computers for Russia’s nuclear submarines and spearheaded the drive to build integrated circuits.

During the 1980s, the US launched a program of export controls and law enforcement efforts against Russian-backed “techno-bandits” who were supplying Russia with sophisticated equipment for their new electronics industry. Russian spying also went into high gear, going after US semiconductor designs needed to make Russian weapons more capable and “smart.”

There is a huge contrast in how the US dealt with Russia and its other emerging strategic rival, China. Russian development was stymied by strong controls while the US openly aided China in developing its now huge electronics industry.

One of the reasons Russian equipment destroyed in the Ukraine war is chock full of microchips made in the US, Europe and Asia is the plain fact that Russia cannot make them on its own. The export controls of the 1980s set the stage for Russia’s great microelectronics failure, which continues to afflict Zelenograd even today.

Russia’s two important semiconductor companies, Mikron and Angstrem, are located in Zelenograd. Angstrem was last reported in bankruptcy and there are also legal claims against former directors of its Angstrem-T division concerning “missing” equipment.

Mikron, the last great semiconductor hope for Russia, is working to develop technology that is already more than 2o years old, perhaps as out of date as 30 years. But the company is promising, not delivering.

It badly needs investments for a new foundry and for etching and laser equipment. Whether it will get the needed funding, or even if it could develop the requisite skill base, are open questions.

Bottom line: Russia cannot be a first-rate power without a capable electronics sector.

A good example is the lack of modern equipment in its aircraft and ground equipment. Russian tanks are operating without active protection systems, making them vulnerable to relatively cheap anti-tank weapons in Ukraine. Russian aircraft are flying without GPS mapping systems and some of them even lack ground targeting systems.

Riaz Haq said...

Russia’s long-time chips failure coming home to roost
Russia will never be a first-rate power without a capable, innovative and commercially-oriented semiconductor industry

https://asiatimes.com/2022/08/russias-chips-failure-coming-home-to-roost/



To be sure, these shortcomings do not mean that Russia will lose its war in Ukraine. However, Russia’s indigenous deficiencies in advanced electronics certainly does mean that it is suffering huge losses in equipment and manpower.

Russia’s high-tech industry is mostly focused on military requirements. That is far different from the US, China, South Korea, Japan, Taiwan or European producers, all of which have strong commercial sectors.

In the 1980s, the Pentagon wanted very high-speed integrated circuits. The Department of Defense thus started the Very High-Speed Integrated Circuit program (VHSIC) and invested in excess of $2 billion in the effort (about $5.5 billion in 2022 dollars).

It never succeeded in making any VHSIC integrated circuits, mostly because commercial processors far outperformed what the Pentagon aimed at producing. However, it did manage to subsidize US semiconductor equipment manufacturing, stimulating an industry that shipped much of its product abroad, mainly to Asia.

The VHSIC program illustrated, if a demonstration was needed, that a competitive commercial sector is vital to progress in electronics, as it is in many other industries.

The Russian approach, on the other hand, was to do everything in secret. During the Cold War, Zelenograd was a closed city and its work was classified.

Zelenograd increasingly fell into bad habits, mainly stealing others’ designs rather than developing them indigenously. A prominent example was the “Texas chip,” an important medium-scale integrated circuit the US was using in its aircraft radars and other hardware in the 1980s.

When Zelenograd’s engineers pushed for the development of their own home design, they were told by their superiors to copy the Texas chip and drop any independent design work.


Early on, a second disease infected Zelenograd. Joel Barr was Jewish and he was able to attract a lot of Jewish scientific and engineering talent to Zelenograd, even though it was a classified area where Jews in the USSR had trouble finding employment.

That was fine with Khrushchev but he was pushed out in 1964, two years after Zelenograd got started. Barr and the Jews were purged by Khrushchev’s successor Leonid Brezhnev, who considered all Jews agents of the West and unreliable. Similar anti-Jewish purges took place in all Russian defense industries and in universities and research organizations.

This was the period where the Soviet Jewry movement gained momentum in Russia, and where Jews and dissidents were demanding, among other things, the right to emigrate. The loss of a large component of Zelenograd’s creative sector, and its leader Barr, represented a significant setback for Moscow’s microelectronics program.

In the 1980s, the US had initially estimated that Russia was within a few years of catching up with it. But as a result of Russian secrecy, purges and a lack of access to Western know-how, Russia slipped irretrievably backward and behind.

By the late 1980s, Russia was seven to 10 years behind the US. Russia’s electronics technology slide was not reversed by the end of the Cold War – in fact, things got considerably worse.

The implications for Russian military power have been huge. Without advanced semiconductors, Russia will lose out on the next generation of smart weapons that will rely on very high-speed intelligent systems powered by artificial intelligence (AI).

AI requires specialized processors built to exacting specifications. China, for example, has just announced it now has a new advanced chip (a MinerVA Bitcoin mining chip) that can potentially compete with even better ones made by the world’s top chip maker, Taiwan Semiconductor Manufacturing Company (TSMC).


Riaz Haq said...

Russia’s long-time chips failure coming home to roost
Russia will never be a first-rate power without a capable, innovative and commercially-oriented semiconductor industry

https://asiatimes.com/2022/08/russias-chips-failure-coming-home-to-roost/


AI requires specialized processors built to exacting specifications. China, for example, has just announced it now has a new advanced chip (a MinerVA Bitcoin mining chip) that can potentially compete with even better ones made by the world’s top chip maker, Taiwan Semiconductor Manufacturing Company (TSMC).

While the Chinese chip is designed for Bitcoin applications, China is working toward advanced AI chips that can process massive amounts of information. China still has a way to go and lacks crucial extreme ultraviolet laser etching equipment, which it is being blocked access to by the US.

Russia may already be turning to China at least for lower-grade chips, but there is no evidence China is yet sharing any manufacturing know-how with Zelenograd. China has little to gain in helping Russia since supporting it would potentially result in broader sanctions against China’s electronics industry.

Today, Russia still lacks a credible and relevant domestic commercial electronics industry and is unlikely under current conditions to grow one in the near future. That would require significant foreign investment and access to the global electronics industry. Russia has shut itself out and what it hasn’t done to self-inflict harm, Western sanctions have done the rest.

Back in 1985, Mikhail Gorbachev visited Paris and met with then-president Francois Mitterand. Seeking a relaxation of the Cold War and better relations with the West, Gorbachev told Mitterand that Russia was merely a third-world country with nuclear weapons. Nearly 40 years later, that blunt assessment still rings true.

Riaz Haq said...

China chipmaker SMIC to build $7.5bn plant in Tianjin
Key producer ramps up capacity as Beijing pushes for stronger semiconductor industry


https://asia.nikkei.com/Business/Tech/Semiconductors/China-chipmaker-SMIC-to-build-7.5bn-plant-in-Tianjin

CHENGDU, China -- Semiconductor Manufacturing International Corp. will invest $7.5 billion to construct a new factory in the city of Tianjin, the Chinese chipmaker announced Friday, as China and the U.S. race to bolster their domestic chip supplies.

SMIC, China's largest contract chipmaker, has reached an agreement to set up a new subsidiary based in an economic development zone in Tianjin. It will have the capacity to produce 100,000 12-inch wafers a month, though SMIC did not say when operations are expected to begin.

The facility will specialize in production processes of 28 nanometers or larger. U.S. authorities appear to be restricting companies there from supplying SMIC with chipmaking equipment capable of handling 10 nm or more advanced process tech, which are required for cutting-edge semiconductors.

Amid tensions with the U.S., Chinese President Xi Jinping has been working to strengthen domestic industries in order to minimize the impact of American sanctions. The semiconductor industry has been at the heart of this push. SMIC, which counts a Chinese state-owned fund among its investors, plans to double its output from 2021 levels by 2025.

In Washington, U.S. President Joe Biden signed Thursday an executive order to create an interagency council to coordinate the implementation of the recently signed CHIPS and Science Act. He aims to swiftly distribute $52.7 billion in subsidies to the industry and to rebuild domestic supply chains.

SMIC has faced headwinds recently as cooling demand for smartphones and appliances squeeze the chip market. Combined with lockdowns and other strict restrictions under China's zero-COVID policy, the company logged its first year-on-year decline in net profit in three years last quarter.

SMIC has received financing from government funds and investment companies to build plants in Shanghai and elsewhere. It could receive similar assistance this time around.

Riaz Haq said...

#US Orders #Nvidia to Halt Sales of Top #AI Chips to #China. Nvidea says ban on its A100 & H100 chips designed to speed up machine learning could interfere with completion of developing the H100, its flagship chip it announced this year. #geopolitics

https://www.usnews.com/news/technology/articles/2022-08-31/nvidia-says-u-s-has-imposed-new-license-requirement-for-future-exports-to-china


By Stephen Nellis and Jane Lanhee Lee

(Reuters) -Chip designer Nvidia Corp said on Wednesday that U.S. officials told it to stop exporting two top computing chips for artificial intelligence work to China, a move that could cripple Chinese firms' ability to carry out advanced work like image recognition and hamper Nvidia's business in the country.

The announcement signals a major escalation of the U.S. crackdown on China's technological capabilities as tensions bubble over the fate of Taiwan, where chips for Nvidia and almost every other major chip firm are manufactured.

Nvidia shares fell 6.6% after hours. The company said the ban, which affects its A100 and H100 chips designed to speed up machine learning tasks, could interfere with completion of developing the H100, the flagship chip it announced this year.

Shares of rival Advanced Micro Devices Inc fell 3.7% after hours. An AMD spokesman told Reuters it had received new license requirements that will stop its MI250 artificial intelligence chips from being exported to China but it believes its MI100 chips will not be affected. AMD said it does not believe the new rules will have a material impact on its business.

Nvidia said U.S. officials told it the new rule "will address the risk that products may be used in, or diverted to, a 'military end use' or 'military end user' in China."

The U.S. Department of Commerce would not say what new criteria it has laid out for AI chips that can no longer be shipped to China but said it is reviewing its China-related policies and practices to "keep advanced technologies out of the wrong hands.

"While we are not in a position to outline specific policy changes at this time, we are taking a comprehensive approach to implement additional actions necessary related to technologies, end-uses, and end-users to protect U.S. national security and foreign policy interests," a spokesperson told Reuters.

The Chinese foreign ministry responded on Thursday by accusing the United States of attempting to impose a "tech blockade" on China, while its commerce ministry said such actions would undermine the stability of global supply chains.

"The U.S. continues to abuse export control measures to restrict exports of semiconductor-related items to China, which China firmly opposes," commerce ministry spokesperson Shu Jieting said at a news conference.

This is not the first time the U.S. has moved to choke off Chinese firms' supply of chips. In 2020, former president Donald Trump's administration banned suppliers from selling chips made using U.S. technology to tech giant Huawei without a special license.

Without American chips from companies like Nvidia and AMD, Chinese organizations will be unable to cost-effectively carry out the kind of advanced computing used for image and speech recognition, among many other tasks.

Image recognition and natural language processing are common in consumer applications like smartphones that can answer queries and tag photos. They also have military uses such as scouring satellite imagery for weapons or bases and filtering digital communications for intelligence-gathering purposes.

Nvidia said it had booked $400 million in sales of the affected chips this quarter to China that could be lost if firms decide not to buy alternative Nvidia products. It said it plans to apply for exemptions to the rule.

Stacy Rasgon, a financial analyst with Bernstein, said the disclosure signaled that about 10% of Nvidia's data center sales were coming from China and that the hit to sales was likely "manageable" for Nvidia.

Riaz Haq said...

#Intel says it has no current plans to start #manufacturing #semiconductor #chips in #India. The comments came after India's transport minister said earlier in the day that the #chipmaker will set up a #semiconductor manufacturing plant in the country.

https://www.reuters.com/technology/intel-says-it-has-no-current-plans-start-manufacturing-india-2022-09-07/


Riaz Haq said...

#Apple to use #TSMC’s next 3-nm #semiconductor chip #technology in iPhones, Macs next year. There is a cost increase of at least 40% for the same area of silicon when moving to 3-nm chips from the 5-nm family, which includes 4-nm chips. #computers #phones https://asia.nikkei.com/Business/Tech/Semiconductors/Apple-to-use-TSMC-s-next-3-nm-chip-tech-in-iPhones-Macs-next-year

TAIPEI -- Apple aims to be the first company to use an updated version of Taiwan Semiconductor Manufacturing Co.'s latest chipmaking technology next year, with plans to adopt it for some of its iPhones and Mac computers, sources briefed on the matter told Nikkei Asia.

The A17 mobile processor currently under development will be mass-produced using TSMC's N3E chipmaking tech, expected to be available in the second half of next year, according to three people familiar with the matter. The A17 will be used in the premium entry in the iPhone lineup slated for release in 2023, they said.

N3E is an upgraded version of TSMC's current 3-nanometer production tech, which is only starting to go into use this year. The next generation of Apple's M3 chip for its Mac offerings is also set to use the upgraded 3-nm tech, two sources added.

Nanometer size refers to the width between transistors on a chip. The smaller the number, the more transistors can be squeezed onto a chip, making them more powerful but also more challenging and costly to produce.

N3E will offer better performance and energy efficiency than the first version of the tech, TSMC said in a recent technology symposium in Hsinchu. Industry sources said the upgraded production tech is also designed to be more cost-effective than its predecessor.

As TSMC's largest customer and the biggest driver for new semiconductor technologies, Apple is still its most loyal partner when it comes to adopting the latest chip technology. The U.S. tech giant will be the first to use TSMC's first generation of 3-nm technology, using it for some of its upcoming iPads, Nikkei Asia reported earlier.

Previously, Intel told TSMC that it would like to secure 3-nm production by this year or early next year to be among the first wave of adopters like Apple, but it has since delayed its orders to at least 2024, three people told Nikkei Asia.

However, 2023 could mark the second year in a row that Apple uses TSMC's most advanced chipmaking technology for only a part of its iPhone lineup. In 2022, only the premium iPhone 14 Pro range has adopted the latest A16 core processor, which is produced by TSMC's 4-nm process technologies, the most advanced currently available. The standard iPhone 14 range uses the older A15, which was used in the iPhone 13 and iPhone 13 Pro models released in the second half of 2021.

Meanwhile, the race is on among chipmakers to roll out ever more advanced production tech. TSMC and Samsung each hopes to be the first to put 3-nm tech into mass production this year. This technology is suitable for all types of central and graphics processors for smartphones, computers and servers, as well as those used in artificial intelligence computing.

Apple, meanwhile, is likely to use the different levels of production tech to introduce greater differences between its premium and nonpremium models, according to Dylan Patel, chief analyst with Semianalysis. Previously the biggest differences have been in screens and cameras, but this could be expanded to include processors and memory chips, he said.

According to the analyst's estimate, there is a cost increase of at least 40% for the same area of silicon when moving to 3-nm chips from the 5-nm family, which includes 4-nm chips.

TSMC, Intel and Apple declined to comment.

Riaz Haq said...

Foxconn and Vedanta to build $19bn India chip factory

https://www.bbc.com/news/62873520


Foxconn and Vedanta have announced $19.5bn (£16.9) to build one of the first chipmaking factories in India.

The Taiwanese firm and the Indian mining giant are tying up as the government pushes to boost chip manufacturing in the country.

Prime Minister Narendra Modi's government announced a $10bn package last year to attract investors.

The facility, which will be built in Mr Modi's home state of Gujarat, has been promised incentives.

Vedanta's chairman Anil Agarwal said they were still on the lookout for a site - about 400 acres of land - close to Gujarat's capital, Ahmedabad.

But both Indian and foreign firms have struggled in the past to acquire large tracts of land for projects. And experts say that despite Mr Modi's signature 'Make in India' policy - designed to attract global manufacturers - challenges remain when it comes to navigating the country's red tape.

Gujarat Chief Minister Bhupendrabhai Patel, however, said the project "will be met with red carpet... instead of any red tapism".

The project is expected to create 100,000 jobs in the state, which is headed for elections in December, where the BJP is facing stiff competition from oppositions parties.

According to the Memorandum of Understanding, the facility is expected to start manufacturing chips within two years.

"India's own Silicon Valley is a step closer now," Mr Agarwal said in a tweet.

India has vowed to spend $30bn to overhaul its tech industry. The government said it will also expand incentives beyond the initial $10 billion for chipmakers in order to become less reliant on chip producers in places like Taiwan, the US and China.

"Gujarat has been recognized for its industrial development, green energy, and smart cities. The improving infrastructure and the government's active and strong support increases confidence in setting up a semiconductor factory," according to Brian Ho, a vice president of Foxconn Semiconductor Group.

Foxconn is the technical partner. Vedanta is financing the project as it looks to diversify its investments into the tech sector.

Vedanta is the third company to announce plans to build a chip plant in India. A partnership between ISMC and Singapore-based IGSS Ventures also said it had signed deals to build semiconductor plants in the country over the next five years.

Riaz Haq said...

Wisconsin Is Coming to India and Not in a Good Way
Analysis by Tim Culpan | Bloomberg

https://www.washingtonpost.com/business/wisconsin-is-coming-to-india-and-not-in-a-good-way/2022/09/15/cba3a702-3531-11ed-a0d6-415299bfebd5_story.html


The project is fantastical: A $19 billion investment into semiconductor and display-panel sectors, with the creation of 100,000 jobs in a state with little experience in technology manufacturing.

If voters and taxpayers in India’s northwestern Gujarat state are excited about this “ landmark investment” they ought to read up on recent Wisconsin history. The US state bought into a similar pipe dream in 2017 when then-President Donald Trump teamed up with then-Governor Scott Walker to lure Foxconn Technology Group, whose Taipei-listed flagship is Hon Hai Precision Industry Co. The Taiwanese company said it’d invest $10 billion and hire 13,000 workers.

Wisconsin never hit its targets. And neither will Gujarat.

What’s playing out today in India is eerily similar to what happened in the US Midwest five years ago, but this time the people and government of Gujarat have no excuse for not being aware of what’s likely to unravel. Americans were told clearly that the project in Mount Pleasant didn’t make sense. But still, they went ahead.

It’s inconceivable that Foxconn truly thought it would spend as much as $10 billion to build a high-tech manufacturing plant in the middle of US farm country. But, as founder and Chairman Terry Gou said early on in the planning phase: “There is such a plan, but it is not a promise. It is a wish.”

So when Vedanta Ltd. chairman Anil Agarwal says his company will invest 1.54 trillion rupees ($19.4 billion), we ought to take it as wishful thinking, rather than a promise. And we can also pause to bathe in the sweet irony of his chosen venture partner: Foxconn, the same name behind the Wisconsin project. Though, to be fair, the Taiwanese are less a driving force behind this India project and more a consulting partner. The numbers, choice of location, and project scope are mostly decided by Vedanta, which is bearing most of the financial burden.

Foxconn made various pledges in Wisconsin that never came to fruition, with a promise for a state-of-the-art 10G liquid-crystal-display panel factory being the most egregious. At least it never committed to assembling iPhones, the product for which Foxconn is most famous.

The Taiwanese company’s perfidiousness was in some respects spurred by local and national governments intent on selling to their voters (and taxpayers) the assurance that a $3 billion incentives package — the largest in US history — would be worth the expense. It will be the “Eighth Wonder of the The World,” Trump proclaimed at the groundbreaking ceremony in 2018.

Governments from Washington to New Delhi don’t want to offer corporate welfare to lure hum-drum projects like chip-testing and assembly. They want to send press releases and tweets that hail their territory’s move into the upper echelons of industrial society. To meet that PR goal, they often tie incentives not to reasonable evolutionary steps in economic development, but to extravagant plans that people never dreamed of.

And the recipients of such sweeteners are more than happy to oblige, safe in the knowledge that there’s almost no downside in overpromising and under-delivering. And those who doled them out — either long gone from office, or safely entrenched — won’t be required to foot the bill either. Scott Walker lost his re-election bid, in large part because of the failure of the Foxconn deal; however, he didn’t lose his home like dozens of Wisconsinites who were displaced to make way for the “wonder” that never was.

Riaz Haq said...

Wisconsin Is Coming to India and Not in a Good Way
Analysis by Tim Culpan | Bloomberg

https://www.washingtonpost.com/business/wisconsin-is-coming-to-india-and-not-in-a-good-way/2022/09/15/cba3a702-3531-11ed-a0d6-415299bfebd5_story.html

Now it’s India’s turn to dream, until such time comes that it must face reality.

Perhaps it’s a coincidence that the project went to the home state of Prime Minister Narendra Modi. Neighboring Maharashtra state thought it was a shoe-in for the deal, going so far as to issue a statement two months ago announcing that the Vedanta-Foxconn venture would invest there.

Accusations and rancor were flying thick and fast in Maharashtra after Agarwal and Modi took to the stage to celebrate the winner. But in reality, the people of India’s second most-populous state may end up celebrating not that they lost the project, but that they dodged a bullet.

Indians — in Gujarat and Maharashtra in particular — can take this as a warning: You don’t want to be another Wisconsin.

Riaz Haq said...

#Japan's #Toyota to stop #automobile #production in #Russia due to #supplychain disruption amid #UkraineWar & western #sanctions. "After 6 months, we have not been able to resume normal activities and see no indication that we can restart in the future". https://asia.nikkei.com/Politics/Ukraine-war/Toyota-to-terminate-auto-production-in-Russia

NAGOYA, Japan -- Toyota Motor said Friday it will exit from automobile production in Russia, citing difficulties supplying key materials and parts in the country amid the war in Ukraine.

The automaker suspended operations at its plant in St. Petersburg on March 4, after the Russian invasion began.

"After six months, we have not been able to resume normal activities and see no indication that we can restart in the future," Japan's top automaker said.

A protracted disruption would hurt Toyota's ability to support its employees, leaving it no choice but to end production in the country, it said. Mounting geopolitical risks in the region are believed to have contributed to the decision as well.

Toyota had continued to pay its factory workers after suspending production, reassigning them to maintenance and other tasks instead. Details regarding the termination process and treatment of employees at the St. Petersburg plant will be ironed out at a later time.

Toyota holds a larger market share in Russia than any other Japanese automaker. It produced 80,000 vehicles and sold 110,000 in the country in 2021.

It began locally producing vehicles in 2007 at St. Petersburg. The plant's lineup included the RAV4 sport utility vehicle and the Camry sedan in 2021.

Nissan Motor, another Japanese automaker, has extended its production freeze at its St. Petersburg plant to the end of December from the end of September.