Wednesday, April 13, 2022

The West's Technological Edge in Geopolitical Competition

The US and its allies enjoy a significant technological advantage over China and Russia.  The Chinese are working hard to catch up but the West is not standing still. It is making huge investments in research and development to maintain this edge as it becomes increasingly clear that the outcome of the ongoing international geopolitical competition will largely be determined by technology. 

East-West Comparison of GDP, R&D. Source: IMF (GDP), OECD (R&D) via WSJ

In 2019, the United States and its allies invested $1.5 trillion in research and development, far outpacing the combined Chinese and Russian R&D investment of half a trillion USD.  This gap will likely narrow if the East's GDP continues to grow faster than the West's, allowing for higher investment in technology. 

After the Russian invasion of Ukraine, the US, EU, Japan, South Korea and Taiwan have made it clear that the Western allies can and will use technology sanctions to control the behavior of China and Russia. 

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.  

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

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. 

Related Links:

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Pakistani-American Banker Heads SWIFT, the World's Largest Interbank Payment System

Pakistani-Ukrainian Billionaire Zahoor Sees "Ukraine as Russia's Afghanistan"

Ukraine Resists Russia Alone: A Tale of West's Broken Promises

Ukraine's Lesson For Pakistan: Never Give Up Nuclear Weapons

Has Intel's Indian Techie Risked US Lead in Semiconductor Technology?

US-China Tech Competition

Can Pakistan Benefit From US-China Tech War?

Ukraine's Muslims Oppose Russia



64 comments:

Riaz Haq said...

Renewed Great Power Competition:
Implications for Defense—Issues for
Congress
Updated March 10, 2022


https://sgp.fas.org/crs/natsec/R43838.pdf

National Defense Strategy (NDS),
5 which formally reoriented U.S. national security strategy and
U.S. defense strategy toward an explicit primary focus on great power competition with China
and Russia.
The Biden Administration’s March 2021 Interim National Security Strategy Guidance states that
“we face a world of rising nationalism, receding democracy, growing rivalry with China, Russia,
and other authoritarian states, and a technological revolution that is reshaping every aspect of our
lives,” and that protecting the security of the American people “requires us to meet challenges not
only from great powers and regional adversaries, but also from violent and criminal non-state
actors and extremists, and from threats like climate change, infectious disease, cyberattacks, and
disinformation that respect no national borders.”
6 The document further states (emphasis as in
original)
We must also contend with the reality that the distribution of power across the world is
changing, creating new threats. China, in particular, has rapidly become more assertive.
It is the only competitor potentially capable of combining its economic, diplomatic,
military, and technological power to mount a sustained challenge to a stable and open
international system. Russia remains determined to enhance its global influence and play a
disruptive role on the world stage. Both Beijing and Moscow have invested heavily in
efforts meant to check U.S. strengths and prevent us from defending our interests and allies
around the world. Regional actors like Iran and North Korea continue to pursue gamechanging capabilities and technologies, while threatening U.S. allies and partners and
challenging regional stability. We also face challenges within countries whose governance
is fragile, and from influential non-state actors that have the ability to disrupt American
interests. Terrorism and violent extremism, both domestic and international, remain
significant threats. But, despite these steep challenges, the United States’ enduring
advantages—across all forms and dimensions of our power—enable us to shape the future
of international politics to advance our interests and values, and create a freer, safer, and
more prosperous world….
Defending America also means setting clear priorities within our defense budget. First and
foremost, we will continue to invest in the people who serve in our all-volunteer force and
their families. We will sustain readiness and ensure that the U.S. Armed Forces remain the
best trained and equipped force in the world. In the face of strategic challenges from an
increasingly assertive China and destabilizing Russia, we will assess the appropriate
structure, capabilities, and sizing of the force, and, working with the Congress, shift our
emphasis from unneeded legacy platforms and weapons systems to free up resources for
investments in the cutting-edge technologies and capabilities that will determine our
military and national security advantage in the future. We will streamline the processes for
developing, testing, acquiring, deploying, and securing these technologies. We will ensure
that we have the skilled workforce to acquire, integrate, and operate them. And we will
shape ethical and normative frameworks to ensure these technologies are used responsibly.
We will maintain the proficiency of special operations forces to focus on crisis response
and priority counterterrorism and unconventional warfare missions. And we will develop
capabilities to better compete and deter gray zone actions. We will prioritize defense
investments in climate resiliency and clean energy. And we will work to ensure that the
Department of Defense is a place of truly equal opportunity where our service members do
not face discrimination or the scourge of sexual harassment and assault….

Tang said...

Chinas great disadvantage is that the US already has all the rich and advanced nations on its side while China is all alone in that front. Russia has some tech and industry but it’s not significant in most industries.

Riaz Haq said...

Unpacking the geopolitics of technology


https://www.atlanticcouncil.org/in-depth-research-reports/report/unpacking-the-geopolitics-of-technology/

How second- and third-order implications of emerging tech are changing the world
Developing new technologies used to be primarily an economic and commercial issue, but it is increasingly also about foreign and security policy. Emerging technologies in particular have become both an object and a driver of international cooperation and competition, shaping the global landscape in different and sometimes unexpected ways. To put it simple, high tech has come to signify high politics, too. Today, digital and tech advancements are geopolitical issues of the highest order, even more so with the second wave of digital innovations, which are more systemic in reach and will determine future economic and technological supremacy as well as respective security environments.

The development of cutting-edge artificial intelligence (AI) capabilities, for instance, has become the new playing field for great power competition between the United States and China, both striving for digital supremacy and spheres of economic influence. Such increasing bipolarity in the international system comes with a price tag for many countries around the globe. European states in particular are torn between their alignment in terms of values with the United States and their dependency on close economic ties with China for the sake of their own economic health. In worrying about an escalating rivalry, many countries and state conglomerates have started to pursue their own digital sovereignty, yet lag behind in the global race of tech development, innovation, and cyber capabilities.

On technology-induced societal changes
The international debate concerning technological change also includes many ethical, social, and legal questions in fields such as human rights and individual freedoms, competition and market structure, consumer protection, or public health. Furthermore, the COVID-19 pandemic has raised significant questions about the role of technology in crisis management. Conversations around technological advances, new forms of work, and the change in skills needed have dominated the employment policy debate in many countries around the world. The platform economy, technological advances, and artificial intelligence are irrevocably changing economic structures, tasks, and ways of working, and even what we understand by “work.”

Europe, for example, is already a patchwork of highly varied local economies and markets. McKinsey Global Institute claims that by 2030, more than half of Europe’s workforce will face significant transitions. Automation will most likely require almost all workers to gain new skills. About ninety-four million employees may not need to change occupations altogether, but will need retraining, as technology already handles 20 percent of their current activities. While some workers in declining occupations might be able to find similar types of work, estimates indicate that some 21 million will need to change occupations by the end of this decade. Newly created jobs are going to require more sophisticated skills, which are already scarce today, and the potential social implications cannot be underestimated in scale.

Similar trends are becoming obvious in the United States, too. Having studied 702 occupational groupings, Oxford University researchers Carl Frey and Michael Osborne asserted already in 2013 that technology will inevitably transform many sectors of life: there is high probability, they estimated, that 47 percent of US workers will see their jobs automated within two decades. These fears have subsequently been echoed by similar studies inter alia from the European think tank Bruegel, the McKinsey Global Institute, and the Organisation for Economic Co-operation and Development (OECD), showing automation affecting between 14 and 54 percent of jobs in the “near future.”

Ben said...

Yes, that is why China is developing it's own tooling and software to etch transistors onto wafers.

It can get by with it's current fab process till it can independently go down to sub-10nm processes.

By 2030 it should have caught up with the Western companies, Korea and Japan in this field. It just needs a lot of money and brainpower which China has in abundance.

Riaz Haq said...

Ivy League Professor Amy Wax joins Tucker Carlson to go on a wildly racist rant that will make you wince. Adrienne Lawrence breaks it down on Rebel HQ.

https://youtu.be/xU-MAVo1GVU

Riaz Haq said...

#US Professor Calls #India "Sh*****E". "They're taught that they are better than everybody else because they are Brahmin elites and yet, on some level, their country is a sh*thole,” UPennProfessor Amy Wax said. #Caste #Brahmin #Xenophobia #Hindu https://www.ndtv.com/indians-abroad/us-professor-calls-india-sh-e-indian-americans-slam-remarks-2892529 via @ndtv

Leading Indian-Americans, including US Congressman Raja Krishnamoorthi, have slammed a law professor from University of Pennsylvania for her disparaging comments about the Asian American community, with a specific disdain for Indian-Americans.
In a recent interview to Fox News, Prof Amy Wax from the University of Pennsylvania alleged that “Blacks” and “non-Western” groups have “a tremendous amount of resentment and shame against western people for [their] outsized achievements and contributions.” “Here's the problem. They're taught that they are better than everybody else because they are Brahmin elites and yet, on some level, their country is a sh*thole,” Wax, who has a long history of inflammatory remarks, said.

She also said that the westerners have outgunned and outclassed the Asian Americans in every way.

“They've realised that we've outgunned and outclassed them in every way… They feel anger. They feel envy. They feel shame. It creates ingratitude of the most monstrous kind,” she said.

Wax then targeted the influential Indian-American doctors' community as well. “They are on the ramparts for the antiracism initiative for ‘dump on America,'” she alleged.

The comment was condemned by the Indian-Americans across the US.

“After President Trump left office, I thought the days of calling others “shithole” countries were over,” Krishnamoorthi said in a tweet.

“As an Indian-American immigrant, I'm disgusted to hear this UPenn Professor define Indian-American immigrants, and all non-white Americans, in such insulting terms,” he said.

Stating that such comments are borne of hatred and fear, he emphasised that such talks make it much harder to accomplish common-sense immigration reform.

“Comments like these are borne of hatred and fear, and they lead to real harm for my constituents and our minority communities. They fuel hate crimes against minorities, and they make it much harder to accomplish common-sense immigration reform,” Krishnamoorthi said.

Indian-American Law professor Neil Makhija also slammed Wax for her comments.

“It's irresponsible to use your position to lend credibility to these overtly racist sentiments that don't recognise Indian-Americans for who we are," he told Axios.

Indian-American Impact is slated to hold a summit next month in DC Makjiha told Axios he's planning to adjust programming to discuss the incident and create solutions against anti-Asian and South Asian hate in educational settings.

“The most unfortunate thing is that we have a lot of brilliant and incredible students at the law school,” he told NBC News.

“It makes you question whether she can fairly grade or educate,” he said.

This is not the first time Wax's controversial comments about race have gone viral, the US media reported.

Her appearance on Carlson's show is not the first time Wax has made anti-Asian remarks. In an interview in December, she said that Indians Americans should be more “grateful” to be in the US and that the country would be “better off with fewer Asians.” Penn has confirmed that the school is in the middle of disciplinary proceedings against Wax, NBC News reported.

“The University of Pennsylvania Carey Law School has previously made clear that Professor Wax's views do not reflect our values or practices,” it quoted a representative as saying.

“In January 2022, Dean Ruger announced that he would move forward with a University Faculty Senate process to address Professor Wax's escalating conduct, and that process is underway,” the report quoted the Penn representative as saying.

Anonymous said...

this must confuse the hell out of Hindu Brahmin right wingers who thought that their relatively lighter skin color and "Indo Aryan" stuff makes them brothers with far right/alt right. Meanwhile, WIRED mag latest issue is smelling cow dung in silicon valley

https://www.wired.com/story/trapped-in-silicon-valleys-hidden-caste-system/

Riaz Haq said...


Christopher Clary
@clary_co
·
11m
Hmm. Wouldn't have guessed that rank ordering. "The Microsystems Technology Office’s core mission is to develop high-performance intelligent microsystems & next-generation components to ensure U.S. dominance in the areas of C4ISR, Electronic Warfare (EW), & Directed Energy (DE)."
Quote Tweet
Lee Hudson
@LeeHudson_
· 17m
JUST IN: @DARPA Director Stefanie Tompkins outlines FY23 budget investment areas:
$896M microelectronics
$414M biotech
$412M AI
$184M cyber
$143M hypersonics
$90M quantum
$82M space

https://twitter.com/clary_co/status/1516778943713529865?s=20&t=TlrTGXh6jWRz4vxonckPmA


Ahmed said...

Dear Sir

I hope you remember this is Ahmed , I was intouch with you on this blog some times ago.
Sir I hope you remember that I gave you suggestion about how we can work together in taking Pakistan forward in the field of quantum computing , I read some articles online and was surprised to know that few authors in Pakistan have written articles about future of quantum computing and they want to take Pakistan forward in this field , very few universities in Pakistan eg LUMS and NUST have started working on quantum computing but I don’t think other Universities in Pakistan have setup labs or research centres for quantum computing .

Sir I would deeply appreciate if you could do something about it .

Regards
Ahmed

Riaz Haq said...

World military expenditure passes $2 trillion for first time

https://sipri.org/media/press-release/2022/world-military-expenditure-passes-2-trillion-first-time


Total global military expenditure increased by 0.7 per cent in real terms in 2021, to reach $2113 billion. The five largest spenders in 2021 were the United States, China, India, the United Kingdom and Russia, together accounting for 62 per cent of expenditure, according to new data on global military spending published today by the Stockholm International Peace Research Institute (SIPRI).

Military expenditure reaches record level in the second year of the pandemic
World military spending continued to grow in 2021, reaching an all-time high of $2.1 trillion. This was the seventh consecutive year that spending increased.

‘Even amid the economic fallout of the Covid-19 pandemic, world military spending hit record levels,’ said Dr Diego Lopes da Silva, Senior Researcher with SIPRI’s Military Expenditure and Arms Production Programme. ‘There was a slowdown in the rate of real-terms growth due to inflation. In nominal terms, however, military spending grew by 6.1 per cent.’

As a result of a sharp economic recovery in 2021, the global military burden—world military expenditure as a share of world gross domestic product (GDP)—fell by 0.1 percentage points, from 2.3 per cent in 2020 to 2.2 per cent in 2021.

United States focuses on military research and development
US military spending amounted to $801 billion in 2021, a drop of 1.4 per cent from 2020. The US military burden decreased slightly from 3.7 per cent of GDP in 2020 to 3.5 per cent in 2021.

US funding for military research and development (R&D) rose by 24 per cent between 2012 and 2021, while arms procurement funding fell by 6.4 per cent over the same period. In 2021 spending on both decreased. However, the drop in R&D spending (–1.2 per cent) was smaller than that in arms procurement spending (–5.4 per cent).

‘The increase in R&D spending over the decade 2012–21 suggests that the United States is focusing more on next-generation technologies,’ said Alexandra Marksteiner, Researcher with SIPRI’s Military Expenditure and Arms Production Programme. ‘The US Government has repeatedly stressed the need to preserve the US military’s technological edge over strategic competitors.’

Russia increases military budget in run-up to war
Russia increased its military expenditure by 2.9 per cent in 2021, to $65.9 billion, at a time when it was building up its forces along the Ukrainian border. This was the third consecutive year of growth and Russia’s military spending reached 4.1 per cent of GDP in 2021.

‘High oil and gas revenues helped Russia to boost its military spending in 2021. Russian military expenditure had been in decline between 2016 and 2019 as a result of low energy prices combined with sanctions in response to Russia’s annexation of Crimea in 2014,’ said Lucie BĂ©raud-Sudreau, Director of SIPRI’s Military Expenditure and Arms Production Programme.

The ‘national defence’ budget line, which accounts for around three-quarters of Russia’s total military spending and includes funding for operational costs as well as arms procurement, was revised upwards over the course of the year. The final figure was $48.4 billion, 14 per cent higher than had been budgeted at the end of 2020.

As it has strengthened its defences against Russia, Ukraine’s military spending has risen by 72 per cent since the annexation of Crimea in 2014. Spending fell in 2021, to $5.9 billion, but still accounted for 3.2 per cent of the country’s GDP.

Continued increases by major spenders in Asia and Oceania
China, the world’s second largest spender, allocated an estimated $293 billion to its military in 2021, an increase of 4.7 per cent compared with 2020. China’s military spending has grown for 27 consecutive years. The 2021 Chinese budget was the first under the 14th Five-Year Plan, which runs until 2025.


Ahmed said...

Dear Sir

Thanks for your post about military expenditures by different countries especially by America . I think the reason why American government spends so much on military and defence is because America has a large and complex industry of military and it has to compete with the military and defence of China in the future . American government understands the threat which it can face from China in the future .

Riaz Haq said...

Scientists urge China to replace its faltering Covid vaccines | Financial Times

https://www.ft.com/content/729f1dc0-32d1-42c9-bb62-63a41f1e8de2

Scientists are urging China to look for alternatives to its two homegrown Covid-19 vaccines to tackle its Omicron outbreak, amid mounting concerns about the jabs’ efficacy against the variant. The country is struggling with two problems as it faces its worst Covid-19 surge since the start of the pandemic: the sluggish take-up of booster doses — authorities said this week that only 57 per cent of people over 60 have been fully vaccinated with three jabs — and homegrown vaccines that are much less effective than foreign-produced jabs. Studies have recommended that China’s Sinovac jab be boosted with a more effective shot, such as one of the mRNA vaccines produced by Germany’s BioNTech and Moderna of the US. With little data on China’s Sinopharm jab, many researchers believe it will also struggle against Omicron.

Eric Topol, director of the Scripps Research Translational Institute, said the data was “limited” but the inactivated vaccines, which are made using a dead part of the virus, were less effective than their rivals and declined further with time. “The vaccines were at 60 per cent efficacy, it was never rosy, but Omicron really exposed the problem,” he said. China may have to overcome its reluctance to approve a foreign-made vaccine to tackle the latest outbreak, as well as rapidly rolling out boosters of its domestic shots. Otherwise, it will probably have to impose stricter — and costly — lockdowns to prevent a potentially huge death toll.

Sinovac matches Pfizer’s effectiveness only after three doses
Risk of mortality for people aged 60 and over relative to an unvaccinated peer by vaccination status (%)

A study from the University of Hong Kong published last month found that people over 60 who had received two doses of Sinovac’s vaccine CoronaVac were three times more likely to die from Covid compared with people who received two doses of the BioNTech/Pfizer vaccine. The paper, which has yet to be peer-reviewed, concluded a third dose of either vaccine provided high levels of protection against severe disease. Sinovac did not respond to a request for comment.

Riaz Haq said...

#Russia Can’t Depend on #India Either. #NewDelhi may be frustratingly tolerant of #Putin, but it isn’t likely to help him substantively in #UkraineWar. #Modi @dhume https://www.wsj.com/articles/putin-cant-depend-on-india-either-russia-ukraine-moscow-energy-exports-oil-new-delhi-11651173078 via @WSJOpinion

Russian oil makes up a small fraction of Indian oil imports—only around 2% in 2021. Despite its recent purchases, India isn’t among the top 10 importers of Russian energy. As Foreign Minister Subrahmanyam Jaishankar pointed out last month, this is unlikely to change. Most of Indian energy comes from Gulf nations that are friendly to America. As of 2020, its top three oil suppliers were Iraq, Saudi Arabia and the United Arab Emirates, while its top gas suppliers were Qatar and the U.S. With access to reliable energy supplies from the Gulf, Indian refiners don’t need to turn to faraway Russia.

------

India’s reliance on Russian arms has been declining—down from 69% of Indian arms purchases in 2012-16 to 46% in 2017-21. Western sanctions on Russia could accelerate this decline by undermining Russia’s ability to maintain a sophisticated defense-industrial base. Russia’s battlefield losses may also force its arms producers to focus on replenishing its own stocks over expanding exports. And though Moscow has been a reliable strategic partner to New Delhi in the past, its growing closeness to Beijing makes it less dependable. Mr. Tellis predicts a continued “gentle decline” in Indian arms imports from Russia, at least compared with India’s imports from other nations such as the U.S., Israel and France.

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

Ahmed said...

Dear Sir

Question is where does Pakistan stands in the field of IT ? What work is being done in this field in Pakistan ? What has PTI and previous governments of Pakistan done to promote IT related products to be produced in Pakistan ?

Isn’t it embarrassing to see that in India now they are setting up manufacturing units for semi-conductors ?

Riaz Haq said...

India Semiconductor Ambitions Are a Heavy Lift
Governments everywhere see both a threat and an opportunity from the current chip shortage. India is no exception.

https://www.wsj.com/articles/india-semiconductor-ambitions-are-a-heavy-lift-11652269561?mod=business_major_pos11


Indian Prime Minister Narendra Modi isn’t known for keeping his head down and working silently on a goal. Fanfare and zealous speeches are more on brand. The latest case in point: his speech at the Semicon India 2022 conference in late April, pitching India as a potential semiconductor manufacturing hub.

This goal, however, may require some humility and patience, particularly when leading economies like the U.S., Germany and Japan have already attracted large investments from top chip makers. And unlike manufacturing powerhouse China, which is also vying to be a serious global chip-making player, India lacks a robust domestic market for chips.

So far, the country has received proposals worth $20.5 billion from five companies. These include Indian oil-and-gas major Vedanta in joint venture with Foxconn, Singapore-based IGSS Ventures Pte, and the ISMC—a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel’s Tower Semiconductor. Noticeably absent are many of the top global chip makers such as Taiwan Semiconductor Manufacturing Co. and Samsung —although Intel is in the process of acquiring Tower Semiconductor.

India has proven itself in smartphone assembly and is now the second-largest smartphone assembler after China. It understandably wants to move up the value chain—but cheap labor won’t be nearly enough. Chip making is a technology- and capital-intensive industry and needs, at a minimum, reliable access to power and water, things that Indian governments have often struggled to supply in the past.

Mr. Modi’s grandiloquence aside, getting on the map in the next 10 years and partly supplying India’s own domestic requirements looks like a reasonable goal to shoot for—in addition to focusing on the chip design and assembling, testing, and packaging aspects of the value chain. It isn’t surprising that the Indian government wants to seize the moment. But here, the adage about walking before running seems apt.

Anonymous said...

Sorry . Didn’t see the later posts . You are doing an amazing job .

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

By his own account, Ilias Sabirov, a Moscow businessman, had supplied Russia's military with high-performance computer chips made in the United States for years.
Then, in 2014, Russia seized the Ukrainian peninsula of Crimea, and the U.S. government began imposing a series of new sanctions and export controls on Russia, including severely restricting sales of such chips.
But that didn't stop Sabirov from obtaining more, according to U.S. authorities and a Reuters review of Russian customs records.

In the spring of 2015, a parcel containing more than 100 memory chips specially hardened to resist radiation and extreme temperatures – critical components in missiles and military satellites – arrived at Sabirov's business address in Moscow, according to the Russian customs records and a U.S. federal indictment. American prosecutors allege that the "rad-hard"chips were sourced from a company in Austin, Texas, called Silicon Space Technology Corp, or SST, but shipped to Russia via a firm in Bulgaria to evade U.S. export law.

After Russia launched a full-scale invasion of Ukraine in February, the United States and more than 30 other nations responded with an unprecedented barrage of additional sanctions and export restrictions. But the story of how the American chips made it from Texas to Moscow back in 2015 shows how sensitive Western technology can still end up in Russia despite strict U.S. export controls.
This account of the criminal case against Sabirov and two Bulgarian businessmen, which remains open, contains new details from interviews with U.S. officials and several of the main actors, including two fugitives. And it points to the challenges of imposing a rigorous export-control regime, especially on so-called dual-use components that can serve both civilian and military purposes.
The Texas scheme and other U.S. criminal cases involving sensitive technology that ended up in Russia, reviewed by Reuters, reveal a chain of willing suppliers, front and shell companies and false claims on export forms that specialized Western components were intended for civilian rather than military use. Sought-after parts have included microelectronics and precision tooling for the Russian military.
During war, said U.S. Department of Defense spokeswoman Sue Gough, rad-hard chips play an essential role for communications, intelligence and surveillance.

The Texas company, which had been repeatedly warned by its own lawyers that it couldn't ship rad-hard chips to Russia without a license, admitted that from 2014 to 2019, it had conspired with the three men to do just that. Reuters couldn't determine whether the chips ultimately were used for a military purpose. The U.S. attorney's office in the western district of Texas declined to comment.
In a statement, Vorago said it "is, and always has been, committed to zero tolerance compliance with all U.S. laws, including export controls." It said it "has been fully cooperative" in the U.S. investigations and "has implemented strengthened compliance procedures and training to prevent a recurrence."

The company also said it was "deliberately misled into believing that shipments were going to Bulgaria for use in Europe - a legal export. These customers provided a seemingly valid end-user certificate to Vorago certifying that the end user of Vorago's products was not in Russia

Sabirov denied any wrongdoing in an interview with Reuters and said the rad-hard chips never went from Bulgaria to Moscow, contradicting evidence gathered by U.S. prosecutors and customs records reviewed by Reuters. He said he always complied with U.S. export rules and never laundered money. "The sanctions they applied on myself, on my companies and on my friends are absolutely unfair, absolutely fake and absolutely wrong," he said.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/


Milan Dimitrov also denied any wrongdoing. The accusations of export violations are "nonsensical," he told Reuters. "The whole thing is a misunderstanding. "His father, Dimitar Dimitrov, couldn't be reached for comment.
Sabirov, who is in Russia, and the two Bulgarians remain fugitives in the criminal case.


A review by Reuters of U.S. court and other federal records shows that the Texas case isn't unique.
Between 2008 and 2014, a father-and-son team smuggled more than $65 million worth of sensitive microchips from New Jersey to Moscow-area companies directly associated with Russian military, intelligence and nuclear-warhead design programs, according to U.S. authorities.
Alexander Brazhnikov Jr. of New Jersey, a naturalized U.S. citizen born in Russia, pleaded guilty in federal court in 2015 to purchasing microelectronics inside the United States, repackaging and relabeling them, and then shipping the goods to Moscow apartments and vacant storefronts linked to his father, a Russian national. There were 1,923 shipments in all, and the son admitted that the money to pay for it was laundered from Russia through 50 foreign shell companies, registered in countries stretching from the Marshall Islands in the Pacific to Panama and Belize in Central America, court records show.
"We believe that the microchips were all going to the military-industrial complex because Russia doesn't produce anything else that would have required that level of chips," said Peter Gaeta, one of the prosecutors on the case, which remains open.
The son, whose field of study was listed as "nuclear physics" in court records, was sentenced to 70 months in prison and was released in December 2018. His father, Alexander Brazhnikov Sr., owner of a Moscow-based microelectronics import-export firm, was charged with conspiracy and remains a fugitive. The company allegedly distributed the components acquired in the United States to Russian defense contractors licensed to procure parts for the Russian military and security service, and Russian companies involved in the design of nuclear weapons.
"The scale of this case is just daunting," Gaeta told Reuters. "But this was not a lone wolf operation. This is happening across the board with Russia."
Alexander Brazhnikov Jr. declined to comment on the case. His father couldn't be reached.
In another case, Alexander Fishenko, a dual citizen of the United States and Russia, ran a years-long scheme to procure and ship sensitive microelectronics from U.S.-based companies to Russian government customers, including its military and intelligence services.
Fishenko owned a Houston, Texas-based export company and also was an executive in a Moscow-based procurement company, according to federal prosecutors. Between 2002 and 2012, his export company shipped goods through New York to contacts in countries including Finland, Canada and Germany who would send them onto Russia. Among the items were electronics with applications in radar and surveillance systems, weapons guidance systems and detonation triggers.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

Fishenko and 10 other people were indicted in 2012 for participating in a conspiracy to sell controlled technology to Russia without required licenses. He later pleaded guilty to, among other charges, acting as an agent of the Russian government. Seven others were convicted either through pleas or at trial. Fishenko spent more than seven years behind bars.
New York lawyer Richard Levitt, who represented Fishenko in the case, declined to comment, and Fishenko himself couldn't be reached.
"It is common for illegal exports of controlled technology to go through middlemen overseas to hide the true destination of the goods," said Daniel Silver, a former federal prosecutor in Brooklyn who handled the Fishenko case. "These global networks can shield U.S. exporters by making it harder for law enforcement agents to connect the dots."
In recent years, Russia has tried to blunt Western export restrictions by making more parts at home or shifting to suppliers located in allied countries, such as China. Still, Russian companies remain heavily reliant on the West for high-precision machinery and some high-performance semiconductors like the radiation-hardened chips Sabirov imported.
"If a Russian satellite orbits around the Earth without a glitch, you can definitely assume that it contains Western electronics," an executive with a U.S. semiconductor maker said, asking not to be named. Russia doesn't make such chips and China, despite heavy investment, has yet to bridge the gap with rivals, the person said.


To supply its military, Russia has found high-tech suppliers in the U.S. and other Western countries. Between 2015 and 2018, Almaz-Antey, a state-owned manufacturer of Russia's sophisticated air-defense missile systems, managed to bypass German export restrictions and procure nearly $10 million worth of high-precision metalworking machines, according to a person familiar with the matter and an official case summary filed with a Hamburg court. Export-license papers claimed the machinery was destined to various Russian producers of civilian goods in the city of Yekaterinburg when, in fact, they were delivered to a nearby Almaz-Antey facility, according to the person familiar with the matter and the case summary. Almaz-Antey didn't respond to a message seeking comment.
Suzette Grillot, a professor of international studies at the University of Oklahoma, said Western trade restrictions on Russia worked during the Cold War because the West then dominated world trade. "When you went from the U.S. to Russia in the early 1990s, it was a different world technologically speaking, the place was definitely behind the times in communications and other technologies," she said.
But replicating Cold War sanctions to squeeze the Russian economy and military industry today seems like an elusive goal, Grillot said, because Russia has had almost unlimited access to Western technology for the past 30 years and can now also rely on alternative suppliers such as China and India. "You can't unring a bell," she said.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

Trained as a physicist and chemist, Wesley Morris had developed solutions to harden semiconductors against heat and radiation. In 2004, he founded SST (now called Vorago Technologies) in a bid to monetize his patented inventions. Morris told Reuters that his techniques caught the attention of the U.S. military, and SST received millions of dollars in research grants from the U.S. Department of Defense, including from top-secret missile programs, to hone its technology.
But 10 years later, in the spring of 2014, SST was still chasing its first significant commercial order. That's when Morris, the company's chief executive, said he learned from a newly recruited salesman that a Russian businessman, Sabirov, was interested in buying rad-hard chips from SST. Sabirov, the salesman said, wanted to purchase them for Russia's space agency, making him an attractive customer prospect because Russia relies almost entirely on imports for its rad-hard requirements.
The Russian space agency, Roscosmos, said it had no information about Sabirov's involvement in procuring electronic components for Russia.
Sabirov arrived at a meeting at SST's office in Austin in May 2014, accompanied by a Bulgarian associate, Dimitar Dimitrov. The two men formed an odd pair, Morris and several other people who dealt with them said. The Russian spoke English fluently and projected the confidence of a man with solid connections in his country's state bureaucracy. The Bulgarian appeared to be a brilliant scientist whose scuffed shoes suggested that he didn't worry too much about his attire. Both men seemed to have solid technical backgrounds.
According to Morris, Sabirov told him that one of his Russian companies, Kosmos Komplekt, had been buying rad-hard chips from SST's bigger U.S. rival, Aeroflex, since 2011, and was interested in transitioning to SST's products.
"I wanted to get the business," Morris recalled thinking at the time.
A spokesman for Cobham Group, which acquired Aeroflex in September 2014, said Aeroflex had stopped shipping rad-hard chips to Sabirov in Russia prior to the acquisition.
A week after the May 2014 meeting in Austin with Sabirov, SST's outside lawyer dampened Morris's expectations of quickly clinching a lucrative contract. "Anything that requires a license to Russia is currently subject to a presumption of denial," the lawyer told Morris and other executives, according to Commerce Department documents.
Morris told Reuters he wasn't ready to abandon what could be the transformational contract SST had longed for. From his conversation with Sabirov, Morris said he had grown hopeful the Russian would order $10 million worth of goods. He said he believed that the chips would be used in satellites, not in missiles.
Morris said that in July 2014, he and Sabirov discussed their options upon meeting on the sidelines of a nuclear-technology conference in Paris. Morris said his ideas hinged on obtaining one of the few export licenses U.S. authorities were still granting as part of Washington's cooperation with Russia on joint space programs.
Days after the Paris meeting, however, Morris lost hope. Geopolitical tension with Moscow had escalated after a Malaysian airliner flying through Ukrainian airspace was downed by a Russian-made missile, killing 298 people. Even though Moscow denied involvement in the tragedy, obtaining an export license to Russia was now virtually impossible, Morris concluded after conferring with SST's lawyer.
"We can't send you anything," the American CEO said he told Sabirov.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

But Morris said Sabirov proposed to him an alternative solution: how about using Bulgaria, a country for which an export license wasn't necessary, as a transit point? To avoid the need for a U.S. license, chips could be mounted on electronic boards in Sofia, effectively changing the product's designation in export documents before they were shipped to Moscow.
In early August 2014, Morris again conferred with SST's lawyer, who said the plan wouldn't fly. Unless Sabirov could prove he was "adding substantial value in Bulgaria," a license for export to Russia likely would be required, the lawyer advised in an email, according to Commerce Department documents. The documents don't name the lawyer.
That same month, Sabirov told SST that since sanctions had disrupted his business of procuring parts for Russia, he had set up a Bulgarian company that would target civilian markets in Europe, according to former SST employees and the Commerce Department documents. The plan was to assemble modules with chips and sell them to car makers for use in engines and exhaust systems. Rad-hard chips aren't commonly used in automobiles because of their cost.
Sabirov's Bulgarian business – Multi Technology Integration Group EOOD, or MTIG – was set up by a relative of a business partner in Sofia. The next month, September 2014, MTIG ordered a silicon wafer of rad-hard memory chips from SST for $125,000, according to interviews and federal court documents. Sabirov told SST that MTIG would test the chips and that more orders would follow, according to interviews and Commerce Department documents.

The wafer, which had been produced using SST's hardening process at a Texas Instruments Inc foundry, was shipped to MTIG at the end of January 2015, according to former SST employees. Four months later, after the eight-inch wafer had been cut into 115 memory chips, the semiconductors were shipped to one of Sabirov's companies in Moscow, Sovtest Comp, where a 4.6-pound parcel arrived on May 25, according to Russian customs records, interviews and Commerce Department documents.
Texas Instruments said it "complies with applicable laws and regulations in the countries where we operate. At this time, we are not selling into Russia or Belarus."
By the time SST shipped the wafer to MTIG, the U.S. company had undergone a change in management. In early January 2015, Morris had been stripped of his CEO title after losing a battle for control with the firm's main investor, New Scientific Ventures. NSV declined to comment. The new CEO, Bernd Lienhard, learned of the shipment to Bulgaria in March 2015, according to the Commerce Department documents. Vorago declined to comment about Lienhard being informed about the deal.
The company rebranded itself as Vorago Technologies that August, but its fortunes continued to rely on Sabirov. In the fall of 2015, Lienhard learned that the Russian was planning to order five more wafers. Lienhard sent Sabirov an email saying it was "the most important biz opportunity for us this year and we are very committed to do whatever necessary to help you," according to the Commerce Department documents.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

In November 2015, the two men exchanged more emails. Lienhard offered a steep discount if Sabirov ordered more wafers before year end.
"How would you feel about the following scenario? Could you buy only 3 wafers this quarter and we would reduce the price per wafer from currently $125,000 to $100,000?" Lienhard emailed Sabirov. "You would help us a lot."
Five days later, Sabirov asked if there were "any obstacles for direct shipment to Moscow?" Lienhard responded that the wafers would have to be sent to Bulgaria to comply with export regulations, according to the Commerce Department documents, which contained excerpts from the communications.
In December 2015, a new Vorago sales executive, Anne Joubert, met with Sabirov and Dimitar Dimitrov in Munich to discuss additional wafer purchases, according to interviews and Commerce Department documents. Days later, MTIG sent Vorago a purchasing order for five more wafers. Federal documents show that Vorago shipped two of them to MTIG in December 2015.
In July 2016, Joubert flew to Bulgaria where she met with Sabirov and the two Dimitrovs. During the meeting, Joubert asked if MTIG was shipping Vorago's rad-hard chips to Russia, according to interviews and federal court records. "Maybe," Sabirov replied. When Joubert said this would violate U.S. export regulations, Dimitar Dimitrov assured her that all of the chips the Texas company previously had shipped to MTIG had remained in Bulgaria
According to the federal indictment, this claim was false because some chips had been sent to Russia. The indictment says that the "Ship to" address on an MTIG invoice was Sabirov's company, Sovtest, in Moscow. Joubert declined to comment.
Sabirov continued discussing ordering more wafers, including during a meeting with Lienhard in Sofia in August 2018, according to the Commerce Department documents.
That December, an export control officer from the Commerce Department went to Sofia to verify that Vorago chips had been used by MTIG in Bulgaria. The officer met with the younger Dimitrov, Milan, who denied the semiconductors had been sent to Russia and said they were still in Bulgaria, according to the federal indictment.
By then, Vorago, Sabirov and the Dimitrovs were under investigation by both the Federal Bureau of Investigation and the Commerce Department for alleged export violations, according to interviews.
In early 2016, the company's founder, Morris, informed the FBI about what he viewed as alleged irregularities at the firm, including the sales involving Sabirov, according to people familiar with the matter.
Weeks after the tip-off, in April 2016, FBI agents raided Vorago's head office in Austin, searching the premises while staffers were told to remain in one room, according to the people familiar with the matter. "It was a very disruptive day," one former employee recalled.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

According to people familiar with the matter, the federal investigations made slow progress. In July 2019, the FBI raided the third floor of an office building, also in Austin, where Vorago had relocated. That same month, arrest warrants were issued for Sabirov and the Dimitrovs.
Seventeen months later, in December 2020, the U.S. Justice Department announced the indictment of the three men on charges of illegally procuring rad-hard chips and money laundering.
Then, last September – six years after the Texas company first began shipping the specialized chips to Bulgaria – the Commerce Department announced a settlement in which Vorago agreed to pay a penalty: $497,000, the proceeds of its sales. Neither Vorago nor its executives were charged in the criminal case.
((David Gauthier-Villars reported from Istanbul, Steve Stecklow from London and John Shiffman from Washington. Additional reporting by Karen Freifeld in New York and Tsvetelia Tsolova in Sofia. Editing by Janet McBride))

"Acquisition of radiation-hardening technology by nuclear-capable aggressive states, like Russia, could embolden them, increasing international security destabilization," Gough said. "Therefore, protection of these chips is extremely important to U.S. national security."
Today, Russia's efforts to circumvent U.S. restrictions on military and other sensitive technology are on the rise, according to U.S. Homeland Security Investigations officials. A specialized unit of 25 U.S. counter-proliferation analysts, whose objective is to spot suspicious shipments, shifted their sole focus from China to Russia in late February, the HSI officials said.
"China doesn't dominate our attention like they used to, and it's Russia where we've seen the biggest increase lately," said Greg Slavens, who recently retired after 30 years as a HSI counter-proliferation supervisor. "The Russians have steadily increased their attempts to get chips for missile and space technology."
The Kremlin did not respond to questions about U.S. accusations that it uses deceptive schemes to bypass Western sanctions and trade restrictions. Russia has previously cast Western sanctions as a hostile act.
U.S. Secretary of Commerce Gina Raimondo, who met with Ukrainian Prime Minister Denys Shmyhal in Washington on April 21, said in a statement the same day that her department is "laser focused on depriving Russia the items and technologies it needs to sustain its war machine."

Complicating matters for U.S. law enforcement: Since 2018, Russia no longer authorizes U.S. export-control officers to conduct on-the-ground checks to ensure that sensitive goods are used for their officially declared purposes, according to people familiar with the matter.

Even when suspects are identified, cases can take years to investigate and adjudicate while accused Russian nationals remain beyond the arm of U.S. law. In the Texas matter, it took about five years for U.S. authorities to bring criminal charges and impose a penalty.

Sabirov, as well as the two Bulgarian businessmen, Dimitar and Milan Dimitrov, were indicted in 2020 on charges of illegally exporting rad-hard chips to Russia and money laundering. And SST, which changed its name to Vorago Technologies in 2015, was fined $497,000 last year by the U.S. Department of Commerce's Bureau of Industry and Security in a separate enforcement action. The bureau oversees export licenses for goods that can be used for both civilian and military purposes.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

The Texas company, which had been repeatedly warned by its own lawyers that it couldn't ship rad-hard chips to Russia without a license, admitted that from 2014 to 2019, it had conspired with the three men to do just that. Reuters couldn't determine whether the chips ultimately were used for a military purpose. The U.S. attorney's office in the western district of Texas declined to comment.
In a statement, Vorago said it "is, and always has been, committed to zero tolerance compliance with all U.S. laws, including export controls." It said it "has been fully cooperative" in the U.S. investigations and "has implemented strengthened compliance procedures and training to prevent a recurrence."

The company also said it was "deliberately misled into believing that shipments were going to Bulgaria for use in Europe - a legal export. These customers provided a seemingly valid end-user certificate to Vorago certifying that the end user of Vorago's products was not in Russia

Sabirov denied any wrongdoing in an interview with Reuters and said the rad-hard chips never went from Bulgaria to Moscow, contradicting evidence gathered by U.S. prosecutors and customs records reviewed by Reuters. He said he always complied with U.S. export rules and never laundered money. "The sanctions they applied on myself, on my companies and on my friends are absolutely unfair, absolutely fake and absolutely wrong," he said.

Milan Dimitrov also denied any wrongdoing. The accusations of export violations are "nonsensical," he told Reuters. "The whole thing is a misunderstanding. "His father, Dimitar Dimitrov, couldn't be reached for comment.
Sabirov, who is in Russia, and the two Bulgarians remain fugitives in the criminal case.

A review by Reuters of U.S. court and other federal records shows that the Texas case isn't unique.
Between 2008 and 2014, a father-and-son team smuggled more than $65 million worth of sensitive microchips from New Jersey to Moscow-area companies directly associated with Russian military, intelligence and nuclear-warhead design programs, according to U.S. authorities.
Alexander Brazhnikov Jr. of New Jersey, a naturalized U.S. citizen born in Russia, pleaded guilty in federal court in 2015 to purchasing microelectronics inside the United States, repackaging and relabeling them, and then shipping the goods to Moscow apartments and vacant storefronts linked to his father, a Russian national. There were 1,923 shipments in all, and the son admitted that the money to pay for it was laundered from Russia through 50 foreign shell companies, registered in countries stretching from the Marshall Islands in the Pacific to Panama and Belize in Central America, court records show.
"We believe that the microchips were all going to the military-industrial complex because Russia doesn't produce anything else that would have required that level of chips," said Peter Gaeta, one of the prosecutors on the case, which remains open.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

The son, whose field of study was listed as "nuclear physics" in court records, was sentenced to 70 months in prison and was released in December 2018. His father, Alexander Brazhnikov Sr., owner of a Moscow-based microelectronics import-export firm, was charged with conspiracy and remains a fugitive. The company allegedly distributed the components acquired in the United States to Russian defense contractors licensed to procure parts for the Russian military and security service, and Russian companies involved in the design of nuclear weapons.
"The scale of this case is just daunting," Gaeta told Reuters. "But this was not a lone wolf operation. This is happening across the board with Russia."
Alexander Brazhnikov Jr. declined to comment on the case. His father couldn't be reached.
In another case, Alexander Fishenko, a dual citizen of the United States and Russia, ran a years-long scheme to procure and ship sensitive microelectronics from U.S.-based companies to Russian government customers, including its military and intelligence services.
Fishenko owned a Houston, Texas-based export company and also was an executive in a Moscow-based procurement company, according to federal prosecutors. Between 2002 and 2012, his export company shipped goods through New York to contacts in countries including Finland, Canada and Germany who would send them onto Russia. Among the items were electronics with applications in radar and surveillance systems, weapons guidance systems and detonation triggers.
Fishenko and 10 other people were indicted in 2012 for participating in a conspiracy to sell controlled technology to Russia without required licenses. He later pleaded guilty to, among other charges, acting as an agent of the Russian government. Seven others were convicted either through pleas or at trial. Fishenko spent more than seven years behind bars.

New York lawyer Richard Levitt, who represented Fishenko in the case, declined to comment, and Fishenko himself couldn't be reached.
"It is common for illegal exports of controlled technology to go through middlemen overseas to hide the true destination of the goods," said Daniel Silver, a former federal prosecutor in Brooklyn who handled the Fishenko case. "These global networks can shield U.S. exporters by making it harder for law enforcement agents to connect the dots."
In recent years, Russia has tried to blunt Western export restrictions by making more parts at home or shifting to suppliers located in allied countries, such as China. Still, Russian companies remain heavily reliant on the West for high-precision machinery and some high-performance semiconductors like the radiation-hardened chips Sabirov imported.
"If a Russian satellite orbits around the Earth without a glitch, you can definitely assume that it contains Western electronics," an executive with a U.S. semiconductor maker said, asking not to be named. Russia doesn't make such chips and China, despite heavy investment, has yet to bridge the gap with rivals, the person said.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

To supply its military, Russia has found high-tech suppliers in the U.S. and other Western countries. Between 2015 and 2018, Almaz-Antey, a state-owned manufacturer of Russia's sophisticated air-defense missile systems, managed to bypass German export restrictions and procure nearly $10 million worth of high-precision metalworking machines, according to a person familiar with the matter and an official case summary filed with a Hamburg court. Export-license papers claimed the machinery was destined to various Russian producers of civilian goods in the city of Yekaterinburg when, in fact, they were delivered to a nearby Almaz-Antey facility, according to the person familiar with the matter and the case summary. Almaz-Antey didn't respond to a message seeking comment.
Suzette Grillot, a professor of international studies at the University of Oklahoma, said Western trade restrictions on Russia worked during the Cold War because the West then dominated world trade. "When you went from the U.S. to Russia in the early 1990s, it was a different world technologically speaking, the place was definitely behind the times in communications and other technologies," she said.
But replicating Cold War sanctions to squeeze the Russian economy and military industry today seems like an elusive goal, Grillot said, because Russia has had almost unlimited access to Western technology for the past 30 years and can now also rely on alternative suppliers such as China and India. "You can't unring a bell," she said.

Trained as a physicist and chemist, Wesley Morris had developed solutions to harden semiconductors against heat and radiation. In 2004, he founded SST (now called Vorago Technologies) in a bid to monetize his patented inventions. Morris told Reuters that his techniques caught the attention of the U.S. military, and SST received millions of dollars in research grants from the U.S. Department of Defense, including from top-secret missile programs, to hone its technology.
But 10 years later, in the spring of 2014, SST was still chasing its first significant commercial order. That's when Morris, the company's chief executive, said he learned from a newly recruited salesman that a Russian businessman, Sabirov, was interested in buying rad-hard chips from SST. Sabirov, the salesman said, wanted to purchase them for Russia's space agency, making him an attractive customer prospect because Russia relies almost entirely on imports for its rad-hard requirements.
The Russian space agency, Roscosmos, said it had no information about Sabirov's involvement in procuring electronic components for Russia.
Sabirov arrived at a meeting at SST's office in Austin in May 2014, accompanied by a Bulgarian associate, Dimitar Dimitrov. The two men formed an odd pair, Morris and several other people who dealt with them said. The Russian spoke English fluently and projected the confidence of a man with solid connections in his country's state bureaucracy. The Bulgarian appeared to be a brilliant scientist whose scuffed shoes suggested that he didn't worry too much about his attire. Both men seemed to have solid technical backgrounds.
According to Morris, Sabirov told him that one of his Russian companies, Kosmos Komplekt, had been buying rad-hard chips from SST's bigger U.S. rival, Aeroflex, since 2011, and was interested in transitioning to SST's products.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

"I wanted to get the business," Morris recalled thinking at the time.
A spokesman for Cobham Group, which acquired Aeroflex in September 2014, said Aeroflex had stopped shipping rad-hard chips to Sabirov in Russia prior to the acquisition.
A week after the May 2014 meeting in Austin with Sabirov, SST's outside lawyer dampened Morris's expectations of quickly clinching a lucrative contract. "Anything that requires a license to Russia is currently subject to a presumption of denial," the lawyer told Morris and other executives, according to Commerce Department documents.
Morris told Reuters he wasn't ready to abandon what could be the transformational contract SST had longed for. From his conversation with Sabirov, Morris said he had grown hopeful the Russian would order $10 million worth of goods. He said he believed that the chips would be used in satellites, not in missiles.
Morris said that in July 2014, he and Sabirov discussed their options upon meeting on the sidelines of a nuclear-technology conference in Paris. Morris said his ideas hinged on obtaining one of the few export licenses U.S. authorities were still granting as part of Washington's cooperation with Russia on joint space programs.
Days after the Paris meeting, however, Morris lost hope. Geopolitical tension with Moscow had escalated after a Malaysian airliner flying through Ukrainian airspace was downed by a Russian-made missile, killing 298 people. Even though Moscow denied involvement in the tragedy, obtaining an export license to Russia was now virtually impossible, Morris concluded after conferring with SST's lawyer.
"We can't send you anything," the American CEO said he told Sabirov.
But Morris said Sabirov proposed to him an alternative solution: how about using Bulgaria, a country for which an export license wasn't necessary, as a transit point? To avoid the need for a U.S. license, chips could be mounted on electronic boards in Sofia, effectively changing the product's designation in export documents before they were shipped to Moscow.
In early August 2014, Morris again conferred with SST's lawyer, who said the plan wouldn't fly. Unless Sabirov could prove he was "adding substantial value in Bulgaria," a license for export to Russia likely would be required, the lawyer advised in an email, according to Commerce Department documents. The documents don't name the lawyer.
That same month, Sabirov told SST that since sanctions had disrupted his business of procuring parts for Russia, he had set up a Bulgarian company that would target civilian markets in Europe, according to former SST employees and the Commerce Department documents. The plan was to assemble modules with chips and sell them to car makers for use in engines and exhaust systems. Rad-hard chips aren't commonly used in automobiles because of their cost.
Sabirov's Bulgarian business – Multi Technology Integration Group EOOD, or MTIG – was set up by a relative of a business partner in Sofia. The next month, September 2014, MTIG ordered a silicon wafer of rad-hard memory chips from SST for $125,000, according to interviews and federal court documents. Sabirov told SST that MTIG would test the chips and that more orders would follow, according to interviews and Commerce Department documents.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

The wafer, which had been produced using SST's hardening process at a Texas Instruments Inc foundry, was shipped to MTIG at the end of January 2015, according to former SST employees. Four months later, after the eight-inch wafer had been cut into 115 memory chips, the semiconductors were shipped to one of Sabirov's companies in Moscow, Sovtest Comp, where a 4.6-pound parcel arrived on May 25, according to Russian customs records, interviews and Commerce Department documents.
Texas Instruments said it "complies with applicable laws and regulations in the countries where we operate. At this time, we are not selling into Russia or Belarus."
By the time SST shipped the wafer to MTIG, the U.S. company had undergone a change in management. In early January 2015, Morris had been stripped of his CEO title after losing a battle for control with the firm's main investor, New Scientific Ventures. NSV declined to comment. The new CEO, Bernd Lienhard, learned of the shipment to Bulgaria in March 2015, according to the Commerce Department documents. Vorago declined to comment about Lienhard being informed about the deal.
The company rebranded itself as Vorago Technologies that August, but its fortunes continued to rely on Sabirov. In the fall of 2015, Lienhard learned that the Russian was planning to order five more wafers. Lienhard sent Sabirov an email saying it was "the most important biz opportunity for us this year and we are very committed to do whatever necessary to help you," according to the Commerce Department documents.

In November 2015, the two men exchanged more emails. Lienhard offered a steep discount if Sabirov ordered more wafers before year end.
"How would you feel about the following scenario? Could you buy only 3 wafers this quarter and we would reduce the price per wafer from currently $125,000 to $100,000?" Lienhard emailed Sabirov. "You would help us a lot."
Five days later, Sabirov asked if there were "any obstacles for direct shipment to Moscow?" Lienhard responded that the wafers would have to be sent to Bulgaria to comply with export regulations, according to the Commerce Department documents, which contained excerpts from the communications.
In December 2015, a new Vorago sales executive, Anne Joubert, met with Sabirov and Dimitar Dimitrov in Munich to discuss additional wafer purchases, according to interviews and Commerce Department documents. Days later, MTIG sent Vorago a purchasing order for five more wafers. Federal documents show that Vorago shipped two of them to MTIG in December 2015.
In July 2016, Joubert flew to Bulgaria where she met with Sabirov and the two Dimitrovs. During the meeting, Joubert asked if MTIG was shipping Vorago's rad-hard chips to Russia, according to interviews and federal court records. "Maybe," Sabirov replied. When Joubert said this would violate U.S. export regulations, Dimitar Dimitrov assured her that all of the chips the Texas company previously had shipped to MTIG had remained in Bulgaria
According to the federal indictment, this claim was false because some chips had been sent to Russia. The indictment says that the "Ship to" address on an MTIG invoice was Sabirov's company, Sovtest, in Moscow. Joubert declined to comment.

Riaz Haq said...

Special Report: How military technology reaches Russia in breach of U.S. export controls

https://www.reuters.com/world/how-military-technology-reaches-russia-breach-us-export-controls-2022-04-29/

According to the federal indictment, this claim was false because some chips had been sent to Russia. The indictment says that the "Ship to" address on an MTIG invoice was Sabirov's company, Sovtest, in Moscow. Joubert declined to comment.
Sabirov continued discussing ordering more wafers, including during a meeting with Lienhard in Sofia in August 2018, according to the Commerce Department documents.
That December, an export control officer from the Commerce Department went to Sofia to verify that Vorago chips had been used by MTIG in Bulgaria. The officer met with the younger Dimitrov, Milan, who denied the semiconductors had been sent to Russia and said they were still in Bulgaria, according to the federal indictment.
By then, Vorago, Sabirov and the Dimitrovs were under investigation by both the Federal Bureau of Investigation and the Commerce Department for alleged export violations, according to interviews.
In early 2016, the company's founder, Morris, informed the FBI about what he viewed as alleged irregularities at the firm, including the sales involving Sabirov, according to people familiar with the matter.
Weeks after the tip-off, in April 2016, FBI agents raided Vorago's head office in Austin, searching the premises while staffers were told to remain in one room, according to the people familiar with the matter. "It was a very disruptive day," one former employee recalled.
According to people familiar with the matter, the federal investigations made slow progress. In July 2019, the FBI raided the third floor of an office building, also in Austin, where Vorago had relocated. That same month, arrest warrants were issued for Sabirov and the Dimitrovs.
Seventeen months later, in December 2020, the U.S. Justice Department announced the indictment of the three men on charges of illegally procuring rad-hard chips and money laundering.
Then, last September – six years after the Texas company first began shipping the specialized chips to Bulgaria – the Commerce Department announced a settlement in which Vorago agreed to pay a penalty: $497,000, the proceeds of its sales. Neither Vorago nor its executives were charged in the criminal case.
((David Gauthier-Villars reported from Istanbul, Steve Stecklow from London and John Shiffman from Washington. Additional reporting by Karen Freifeld in New York and Tsvetelia Tsolova in Sofia. Editing by Janet McBride))

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...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/


Russian President Vladimir Putin poses a clear and present threat. In attacking Ukraine three months ago, he also attacked the principles of sovereignty and territorial integrity, enshrined in the UN Charter, to protect all countries from being conquered or coerced. That’s why so many countries have united to oppose this aggression because they see it as a direct assault on the foundation of their own peace and security.

Ukraine is fighting valiantly to defend its people and its independence with unprecedented assistance from the United States and countries around the world. And while the war is not over, President Putin has failed to achieve a single one of his strategic aims. Instead of erasing Ukraine’s independence, he strengthened it. Instead of dividing NATO, he’s united it. Instead of asserting Russia’s strength, he’s undermined it. And instead of weakening the international order, he has brought countries together to defend it.

Even as President Putin’s war continues, we will remain focused on the most serious long-term challenge to the international order – and that’s posed by the People’s Republic of China.

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it. Beijing’s vision would move us away from the universal values that have sustained so much of the world’s progress over the past 75 years.

China is also integral to the global economy and to our ability to solve challenges from climate to COVID. Put simply, the United States and China have to deal with each other for the foreseeable future.

That’s why this is one of the most complex and consequential relationships of any that we have in the world today.

Over the last year, the Biden administration has developed and implemented a comprehensive strategy to harness our national strengths and our unmatched network of allies and partners to realize the future that we seek.

We are not looking for conflict or a new Cold War. To the contrary, we’re determined to avoid both.

We don’t seek to block China from its role as a major power, nor to stop China – or any other country, for that matter – from growing their economy or advancing the interests of their people.

But we will defend and strengthen the international law, agreements, principles, and institutions that maintain peace and security, protect the rights of individuals and sovereign nations, and make it possible for all countries – including the United States and China – to coexist and cooperate.

Now, the China of today is very different from the China of 50 years ago, when President Nixon broke decades of strained relations to become the first U.S. president to visit the country.

Then, China was isolated and struggling with widespread poverty and hunger.

Now, China is a global power with extraordinary reach, influence, and ambition. It’s the second largest economy, with world-class cities and public transportation networks. It’s home to some of the world’s largest tech companies and it seeks to dominate the technologies and industries of the future. It’s rapidly modernized its military and intends to become a top tier fighting force with global reach. And it has announced its ambition to create a sphere of influence in the Indo-Pacific and to become the world’s leading power.

China’s transformation is due to the talent, the ingenuity, the hard work of the Chinese people. It was also made possible by the stability and opportunity that the international order provides. Arguably, no country on Earth has benefited more from that than China.

Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/



China’s transformation is due to the talent, the ingenuity, the hard work of the Chinese people. It was also made possible by the stability and opportunity that the international order provides. Arguably, no country on Earth has benefited more from that than China.

But rather than using its power to reinforce and revitalize the laws, the agreements, the principles, the institutions that enabled its success so that other countries can benefit from them, too, Beijing is undermining them. Under President Xi, the ruling Chinese Communist Party has become more repressive at home and more aggressive abroad.

We see that in how Beijing has perfected mass surveillance within China and exported that technology to more than 80 countries; how its advancing unlawful maritime claims in the South China Sea, undermining peace and security, freedom of navigation, and commerce; how it’s circumventing or breaking trade rules, harming workers and companies in the United States but also around the world; and how it purports to champion sovereignty and territorial integrity while standing with governments that brazenly violate them.

Even while Russia was clearly mobilizing to invade Ukraine, President Xi and President Putin declared that the friendship between their countries was – and I quote – “without limits.” Just this week, as President Biden was visiting Japan, China and Russia conducted a strategic bomber patrol together in the region.

Beijing’s defense of President Putin’s war to erase Ukraine’s sovereignty and secure a sphere of influence in Europe should raise alarm bells for all of us who call the Indo-Pacific region home.

For these reasons and more, this is a charged moment for the world. And at times like these, diplomacy is vital. It’s how we make clear our profound concerns, better understand each other’s perspective, and have no doubt about each other’s intentions. We stand ready to increase our direct communication with Beijing across a full range of issues. And we hope that that can happen.

But we cannot rely on Beijing to change its trajectory. So we will shape the strategic environment around Beijing to advance our vision for an open, inclusive international system.

President Biden believes this decade will be decisive. The actions that we take at home and with countries worldwide will determine whether our shared vision of the future will be realized.

To succeed in this decisive decade, the Biden administration’s strategy can be summed up in three words – “invest, align, compete.”

We will invest in the foundations of our strength here at home – our competitiveness, our innovation, our democracy.

We will align our efforts with our network of allies and partners, acting with common purpose and in common cause.

And harnessing these two key assets, we’ll compete with China to defend our interests and build our vision for the future.

We take on this challenge with confidence. Our country is endowed with many strengths. We have peaceful neighbors, a diverse and growing population, abundant resources, the world’s reserve currency, the most powerful military on Earth, and a thriving culture of innovation and entrepreneurship that, for example, produced multiple effective vaccines now protecting people worldwide from COVID-19.

And our open society, at its best, attracts flows of talent and investment and has a time-tested capacity for reinvention, rooted in our democracy, empowering us to meet whatever challenges we face.

Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/


First, on investing in our strength.

After the Second World War, as we and our partners were building the rules-based order, our federal government was also making strategic investments in scientific research, education, infrastructure, our workforce, creating millions of middle-class jobs and decades of prosperity and technology leadership. But we took those foundations for granted. And so it’s time to get back to basics.

The Biden administration is making far-reaching investments in our core sources of national strength – starting with a modern industrial strategy to sustain and expand our economic and technological influence, make our economy and supply chains more resilient, sharpen our competitive edge.

Last year, President Biden signed into law the largest infrastructure investment in our history: to modernize our highways, our ports, airports, rail, and bridges; to move goods to market faster, to boost our productivity; to expand high-speed internet to every corner of the country; to draw more businesses and more jobs to more parts of America.

We’re making strategic investments in education and worker training, so that American workers – the best in the world – can design, build, and operate the technologies of the future.

Because our industrial strategy centers on technology, we want to invest in research, development, advanced manufacturing. Sixty years ago, our government spent more than twice as much on research as a percentage of our economy as we do now – investments that, in turn, catalyzed private-sector innovation. It’s how we won the space race, invented the semiconductor, built the internet. We used to rank first in the world in R&D as a proportion of our GDP – now we’re ninth. Meanwhile, China has risen from eighth place to second.

With bipartisan congressional support, we’ll reverse these trends and make historic investments in research and innovation, including in fields like artificial intelligence, biotechnology, quantum computing. These are areas that Beijing is determined to lead – but given America’s advantages, the competition is ours to lose, not only in terms of developing new technologies but also in shaping how they’re used around the world, so that they’re rooted in democratic values, not authoritarian ones.

The leadership – Senator Romney and others – the House and Senate have passed bills to support this agenda, including billions to produce semiconductors here and to strengthen other critical supply chains. Now we need Congress to send the legislation to the President for his signature.

We can get this done, and it can’t wait – supply chains are moving now, and if we don’t draw them here, they’ll be established somewhere else. As President Biden has said, the Chinese Communist Party is lobbying against this legislation – because there’s no better way to enhance our global standing and influence than to deliver on our domestic renewal. These investments will not only make America stronger; they’ll make us a stronger partner and ally as well.

One of the most powerful, even magical things about the United States is that we have long been a destination for talented, driven people from every part of the planet. That includes millions of students from China, who have enriched our communities and forged lifelong bonds with Americans. Last year, despite the pandemic, we issued more than 100,000 visas to Chinese students in just four months – our highest rate ever. We’re thrilled that they’ve chosen to study in the United States – we’re lucky to have them.


Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/



One of the most powerful, even magical things about the United States is that we have long been a destination for talented, driven people from every part of the planet. That includes millions of students from China, who have enriched our communities and forged lifelong bonds with Americans. Last year, despite the pandemic, we issued more than 100,000 visas to Chinese students in just four months – our highest rate ever. We’re thrilled that they’ve chosen to study in the United States – we’re lucky to have them.

And we’re lucky when the best global talent not only studies here but stays here – as more than 80 percent of Chinese students who pursue science and technology PhDs in the United States have done in recent years. They help drive innovation here at home, and that benefits all of us. We can stay vigilant about our national security without closing our doors.

We also know from our history that when we’re managing a challenging relationship with another government, people from that country or with that heritage can be made to feel that they don’t belong here – or that they’re our adversaries. Nothing could be further from the truth. Chinese Americans made invaluable contributions to our country; they’ve done so for generations. Mistreating someone of Chinese descent goes against everything we stand for as a country – whether a Chinese national visiting or living here, or a Chinese American, or any other Asian American whose claim to this country is equal to anyone else’s. Racism and hate have no place in a nation built by generations of immigrants to fulfill the promise of opportunity for all.

We have profound differences with the Chinese Communist Party and the Chinese Government. But those differences are between governments and systems – not between our people. The American people have great respect for the Chinese people. We respect their achievements, their history, their culture. We deeply value the ties of family and friendship that connect us. And we sincerely wish for our governments to work together on issues that matter to their lives and to the lives of Americans, and for that matter the lives of people around the world.

There’s another core source of national strength that we’ll be relying on in this decisive decade: our democracy.

A hundred years ago, if asked what constitutes the wealth of a nation, we might list the expanse of our land, the size of our population, the strength of our military, the abundance of our natural resources. And thankfully, we’re still wealthy in all of those attributes. But more than ever, in this 21st century, the true wealth of a nation is found in our people – our human resources – and our ability to unleash their full potential.

We do that with our democratic system. We debate, we argue, we disagree, we challenge each other, including our elected leaders. We deal with our deficiencies openly; we don’t pretend they don’t exist or sweep them under the rug. And though progress can feel painfully slow, can be difficult and ugly, by and large we consistently work toward a society where people from all backgrounds can flourish, guided by national values that unite, motivate, and uplift us.

We are not perfect. But at our best, we always strive to be – in the words of our Constitution – a more perfect union. Our democracy is designed to make that happen.

That’s what the American people and the American model offer, and it’s one of the most powerful assets in this contest.


Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/



We are not perfect. But at our best, we always strive to be – in the words of our Constitution – a more perfect union. Our democracy is designed to make that happen.

That’s what the American people and the American model offer, and it’s one of the most powerful assets in this contest.

Now, Beijing believes that its model is the better one; that a party-led centralized system is more efficient, less messy, ultimately superior to democracy. We do not seek to transform China’s political system. Our task is to prove once again that democracy can meet urgent challenges, create opportunity, advance human dignity; that the future belongs to those who believe in freedom and that all countries will be free to chart their own paths without coercion.

The second piece of our strategy is aligning with our allies and partners to advance a shared vision for the future.

From day one, the Biden administration has worked to re-energize America’s unmatched network of alliances and partnerships and to re-engage in international institutions. We’re encouraging partners to work with each other, and through regional and global organizations. And we’re standing up new coalitions to deliver for our people and meet the tests of the century ahead.

Nowhere is this more true than in the Indo-Pacific region, where our relationships, including our treaty alliances, are among our strongest in the world.

The United States shares the vision that countries and people across the region hold: one of a free and open Indo-Pacific where rules are developed transparently and applied fairly; where countries are free to make their own sovereign decisions; where goods, ideas, and people flow freely across land, sky, cyberspace, the open seas, and governance is responsive to the people.

President Biden reinforced these priorities this week with his trip to the region, where he reaffirmed our vital security alliances with South Korea and Japan, and deepened our economic and technology cooperation with both countries.

He launched the Indo-Pacific Economic Framework for Prosperity, a first-of-its-kind initiative for the region. It will, in the President’s words, “help all our countries’ economies grow faster and fairer.” IPEF, as we call it, renews American economic leadership but adapts it for the 21st century by addressing cutting-edge issues like the digital economy, supply chains, clean energy, infrastructure, and corruption. A dozen countries, including India, have already joined. Together, IPEF members make up more than a third of the global economy.

The President also took part in the leaders’ summit of the Quad countries – Australia, Japan, India, the United States. The Quad never met at the leader level before President Biden took office. Since he convened the first leaders’ meeting last year, the Quad has held four summits. It’s become a leading regional team. This week, it launched a new Indo-Pacific Partnership for Maritime Domain Awareness, so our partners across the region can better monitor the waters near their shores to address illegal fishing and protect their maritime rights and their sovereignty.

We’re reinvigorating our partnership with ASEAN. Earlier this month, we hosted the U.S.-ASEAN Summit to take on urgent issues like public health and the climate crisis together. This week, seven ASEAN countries became founding members of the Indo-Pacific Economic Framework. And we’re building bridges among our Indo-Pacific and European partners, including by inviting Asian allies to the NATO summit in Madrid next month.

Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/




We’re enhancing peace and stability in the Indo-Pacific; for example, with the new security partnership between Australia, the United Kingdom, and the United States, known as AUKUS.

And we’re helping countries in the region and around the world defeat COVID-19. To date, the United States has provided nearly $20 billion to the global pandemic response. That includes more than 540 million doses of safe and effective vaccines donated – not sold – with no political strings attached, on our way to 1.2 billion doses worldwide. And we’re coordinating with a group of 19 countries in a global action plan to get shots into arms.

As a result of all of this diplomacy, we are more aligned with partners across the Indo-Pacific, and we’re working in a more coordinated way toward our shared goals.

We’ve also deepened our alignment across the Atlantic. We launched the U.S.-EU Trade and Technology Council last year, marshaling the combined weight of nearly 50 percent of the world’s GDP. Last week, I joined Secretary Raimondo, Ambassador Tai, and our European Commission counterparts for our second meeting to work together on new technology standards, coordinate on investment screening and export controls, strengthen supply chains, boost green tech, and improve food security and digital infrastructure in developing countries.

Meanwhile, we and our European partners set aside 17 years of litigation about aircraft; now, instead of arguing with each other, we’re working to secure a level playing field for our companies and workers in that sector.

Similarly, we worked with the European Union and others to resolve a dispute on steel and aluminum imports, and now we’re coming together around a shared vision on higher climate standards and protecting our workers and industries from Beijing’s deliberate efforts to distort the market to its advantage.

We’re partnering with the European Union to protect our citizens’ privacy while strengthening a shared digital economy that depends on vast flows of data.

With the G20, we reached a landmark deal on a global minimum tax to halt the race to the bottom, make sure that big corporations pay their fair share, and give countries even more resources to invest in their people. More than 130 countries have signed on so far.

We and our G7 partners are pursuing a coordinated, high-standard, and transparent approach to meet the enormous infrastructure needs in developing countries.

We’ve convened global summits on defeating COVID-19 and renewing global democracy, and rejoined the UN Human Rights Council and the WHO, the World Health Organization.

And at a moment of great testing, we and our allies have re-energized NATO, which is now as strong as ever.

These actions are all aimed at defending and, as necessary, reforming the rules-based order that should benefit all nations. We want to lead a race to the top on tech, on climate, infrastructure, global health, and inclusive economic growth. And we want to strengthen a system in which as many countries as possible can come together to cooperate effectively, resolve differences peacefully, write their own futures as sovereign equals.

Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/




Our diplomacy is based on partnership and respect for each other’s interests. We don’t expect every country to have the exact same assessment of China as we do. We know that many countries – including the United States – have vital economic or people-to-people ties with China that they want to preserve. This is not about forcing countries to choose. It’s about giving them a choice, so that, for example, the only option isn’t an opaque investment that leaves countries in debt, stokes corruption, harms the environment, fails to create local jobs or growth, and compromises countries’ exercise of their sovereignty. We’ve heard firsthand about buyer’s remorse that these deals can leave behind.

At every step, we’re consulting with our partners, listening to them, taking their concerns to heart, building solutions that address their unique challenges and priorities.

There is growing convergence about the need to approach relations with Beijing with more realism. Many of our partners already know from painful experience how Beijing can come down hard when they make choices that it dislikes. Like last spring, when Beijing cut off Chinese students and tourists from traveling to Australia and imposed an 80 percent tariff on Australian barley exports, because Australia’s Government called for an independent inquiry into COVID’s origin. Or last November, when Chinese Coast Guard vessels used water cannons to stop a resupply of a Philippine navy ship in the South China Sea. Actions like these remind the world of how Beijing can retaliate against perceived opposition.

There’s another area of alignment we share with our allies and partners: human rights.

The United States stands with countries and people around the world against the genocide and crimes against humanity happening in the Xinjiang region, where more than a million people have been placed in detention camps because of their ethnic and religious identity.

We stand together on Tibet, where the authorities continue to wage a brutal campaign against Tibetans and their culture, language, and religious traditions, and in Hong Kong, where the Chinese Communist Party has imposed harsh anti-democratic measures under the guise of national security.

Now, Beijing insists that these are somehow internal matters that others have no right to raise. That is wrong. Its treatment of ethnic and religious minorities in Xinjiang and Tibet, along with many other actions, go against the core tenets of the UN Charter that Beijing constantly cites and the Universal Declaration of Human Rights that all countries are meant to adhere to.

Beijing’s quashing of freedom in Hong Kong violates its handover commitments, enshrined in a treaty deposited at the United Nations.

We’ll continue to raise these issues and call for change – not to stand against China, but to stand up for peace, security, and human dignity.

That brings us to the third element of our strategy. Thanks to increased investments at home and greater alignment with allies and partners, we are well-positioned to outcompete China in key areas.

For example, Beijing wants to put itself at the center of global innovation and manufacturing, increase other countries’ technological dependence, and then use that dependence to impose its foreign policy preferences. And Beijing is going to great lengths to win this contest – for example, taking advantage of the openness of our economies to spy, to hack, to steal technology and know-how to advance its military innovation and entrench its surveillance state.

Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/



So as we make sure the next wave of innovation is unleashed by the United States and our allies and partners, we’ll also protect ourselves against efforts to siphon off our ingenuity or imperil our security.

We’re sharpening our tools to safeguard our technological competitiveness. That includes new and stronger export controls to make sure our critical innovations don’t end up in the wrong hands; greater protections for academic research, to create an open, secure, and supportive environment for science; better cyber defenses; stronger security for sensitive data; and sharper investment screening measures to defend companies and countries against Beijing’s efforts to gain access to sensitive technologies, data, or critical infrastructure; compromise our supply chains; or dominate key strategic sectors.

We believe – and we expect the business community to understand – that the price of admission to China’s market must not be the sacrifice of our core values or long-term competitive and technological advantages. We’re counting on businesses to pursue growth responsibly, assess risk soberly, and work with us not only to protect but to strengthen our national security.

For too long, Chinese companies have enjoyed far greater access to our markets than our companies have in China. For example, Americans who want to read the China Daily or communicate via WeChat are free to do so, but The New York Times and Twitter are prohibited for the Chinese people, except those working for the government who use these platforms to spread propaganda and disinformation. American companies operating in China have been subject to systematic forced technology transfer, while Chinese companies in America have been protected by our rule of law. Chinese filmmakers can freely market their movies to American theater owners without any censorship by the U.S. Government, but Beijing strictly limits the number of foreign movies allowed in the Chinese market, and those that are allowed are subjected to heavy-handed political censorship. China’s businesses in the United States don’t fear using our impartial legal system to defend their rights – in fact, they’re frequently in court asserting claims against the United States Government. The same isn’t true for foreign firms in China.

This lack of reciprocity is unacceptable and it’s unsustainable.

Or consider what happened in the steel market. Beijing directed massive over-investment by Chinese companies, which then flooded the global market with cheap steel. Unlike U.S. companies and other market-oriented firms, Chinese companies don’t need to make a profit – they just get another injection of state-owned bank credit when funds are running low. Plus, they do little to control pollution or protect the rights of their workers, which also keeps costs down. As a consequence, China now accounts for more than half of global steel production, driving U.S. companies – as well as factories in India, Mexico, Indonesia, Europe, and elsewhere – out of the market.

We’ve seen this same model when it comes to solar panels, electric car batteries – key sectors of the 21st century economy that we cannot allow to become completely dependent on China.

Riaz Haq said...

Biden Administration’s Approach to the People’s Republic of China - United States Department of State by Sec of State Tony Blinken

China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.


https://www.state.gov/the-administrations-approach-to-the-peoples-republic-of-china/




We’ve seen this same model when it comes to solar panels, electric car batteries – key sectors of the 21st century economy that we cannot allow to become completely dependent on China.

Economic manipulations like these have cost American workers millions of jobs. And they’ve harmed the workers and firms of countries around the world. We will push back on market-distorting policies and practices, like subsidies and market access barriers, which China’s government has used for years to gain competitive advantage. We’ll boost supply chain security and resilience by reshoring production or sourcing materials from other countries in sensitive sectors like pharmaceuticals and critical minerals, so that we’re not dependent on any one supplier. We’ll stand together with others against economic coercion and intimidation. And we will work to ensure that U.S. companies don’t engage in commerce that facilitates or benefits from human rights abuses, including forced labor.

In short, we’ll fight for American workers and industry with every tool we have – just as we know that our partners will fight for their workers.

The United States does not want to sever China’s economy from ours or from the global economy – though Beijing, despite its rhetoric, is pursuing asymmetric decoupling, seeking to make China less dependent on the world and the world more dependent on China. For our part, we want trade and investment as long as they’re fair and don’t jeopardize our national security. China has formidable economic resources, including a highly capable workforce. We’re confident that our workers, our companies will compete successfully – and we welcome that competition – on a level playing field.

So as we push back responsibly on unfair technology and economic practices, we’ll work to maintain economic and people-to-people ties connecting the United States and China, consistent with our interests and our values. Beijing may not be willing to change its behavior. But if it takes concrete action to address the concerns that we and many other countries have voiced, we will respond positively.

Competition need not lead to conflict. We do not seek it. We will work to avoid it. But we will defend our interests against any threat.

To that end, President Biden has instructed the Department of Defense to hold China as its pacing challenge, to ensure that our military stays ahead. We’ll seek to preserve peace through a new approach that we call “integrated deterrence” – bringing in allies and partners; working across the conventional, the nuclear, space, and informational domains; drawing on our reinforcing strengths in economics, in technology, and in diplomacy.

The administration is shifting our military investments away from platforms that were designed for the conflicts of the 20th century toward asymmetric systems that are longer-range, harder to find, easier to move. We’re developing new concepts to guide how we conduct military operations. And we’re diversifying our force posture and global footprint, fortifying our networks, critical civilian infrastructure, and space-based capabilities. We’ll help our allies and partners in the region with their own asymmetric capabilities, too.

Riaz Haq said...

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Opinion The best China strategy? Defeat Russia.

By Fareed Zakaria


https://www.washingtonpost.com/opinions/2022/06/09/biden-administration-defeat-russia-contain-china-ukraine-war/


“We are now living in a totally new era,” said the 99-year-old Henry Kissinger, commenting on Russia’s invasion of Ukraine. In an op-ed last week, President Biden vividly outlined the stakes. “If Russia does not pay a heavy price for its actions,” he wrote, “it will send a message to other would-be aggressors that they too can seize territory and subjugate other countries. It will put the survival of other peaceful democracies at risk. And it could mark the end of the rules-based international order and open the door to aggression elsewhere, with catastrophic consequences the world over.”

In times like these, it seemed appropriate that Secretary of State Antony Blinken would deliver a major policy address, which he did late last month. Except that he chose to give the speech … on China. The talk itself contained nothing new; it was slightly more nuanced than the usual chest-thumping that passes for a China strategy these days. The real surprise was that, in the middle of the first major land war in Europe since 1945, with monumental consequences, Blinken chose not to lay out the strategy for victory but instead changed the subject. Washington’s foreign policy establishment is so wrapped up in its pre-crisis thinking that it cannot really digest the fact that the ground has shifted seismically under its feet.

Blinken declared that despite its aggression in Ukraine, Russia does not pose the greatest threat to the rules-based international order, instead giving that place to China. As Zachary Karabell suggests, this requires a willful blindness to decades of Russian aggression. Russia has invaded Georgia and Ukraine and effectively annexed parts of those countries. It brutally unleashed its air power in Syria, killing thousands of civilians. In responding to Chechnya’s desire for independence, it flattened large parts of the Russian republic, including its capital, with total civilians killed in that conflict estimated to be in the tens of thousands. Vladimir Putin has sent assassination squads to Western countries to kill his enemies, has used money and cyberattacks to disrupt Western democracies, and, most recently, has threatened the use of nuclear weapons. Does any other country even come close?

Riaz Haq said...

Opinion The best China strategy? Defeat Russia.

By Fareed Zakaria


https://www.washingtonpost.com/opinions/2022/06/09/biden-administration-defeat-russia-contain-china-ukraine-war/


Ironically, one of the people who attended Blinken’s speech was Sen. Mitt Romney (R-Utah), who during his presidential campaign in 2012 warned that Russia posed the single largest threat to the United States. Those, including myself, who dismissed his prognosis were wrong, because we looked only at Russia’s strength, which was not impressive. But Romney clearly understood that power in the international realm is measured by a mixture of capabilities and intentions. And though Russia is not a rising giant, it is determined to challenge and divide America and Europe and tear up the rules-based international system. Putin’s Russia is the world’s great spoiler.

This phenomenon of a declining power becoming the greatest danger to global peace is not unprecedented. In 1914, the country that triggered World War I was Austria-Hungary, an empire in broad decline, and yet one determined to use its military to show the world it still mattered and to teach a harsh lesson to Serbia, which it regarded as a minor, vassal state. Sound familiar?

America’s dominant priority must be to ensure that Russia does not prevail in its aggression against Ukraine. And right now, trends are moving in the wrong direction. Russian forces are consolidating their gains in eastern Ukraine. Sky-high oil prices have ensured that money continues to flow into Putin’s coffers. Europeans are beginning to talk about off-ramps. Moscow is offering developing nations a deal: Get the West to call off sanctions, it tells them, and it will help export all the grain from Ukraine and Russia and avert famine in many parts of the world. Ukraine’s leaders say it still does not have the weapons and training it needs to fight back effectively.

The best China strategy right now is to defeat Russia. Xi Jinping made a risky wager in backing Russia strongly on the eve of the invasion. If Russia comes out of this conflict a weak, marginalized country, that will be a serious blow to Xi, who is personally associated with the alliance with Putin. If, on the other hand, Putin survives and somehow manages to stage a comeback, Xi and China will learn an ominous lesson: that the West cannot uphold its rules-based system against a sustained assault.

Most of the people in top positions in the Biden administration were senior officials in the Obama administration in 2014, when Russia launched its first invasion of Ukraine, annexed Crimea and intervened in eastern Ukraine. They were not able to reverse Moscow’s aggression or even make Putin pay much of a price for it. Perhaps at the time, they saw the greatest threat to global order as the Islamic State, or they were focused on the “pivot” to Asia, or they didn’t prioritize Ukraine enough. Now they have a second chance, but it is likely to be the last.

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...

Senate Approves $280 Billion Bill to Boost U.S. Science, Chip Production
Chips act goes to House, where speaker has promised quick action

https://www.wsj.com/articles/senate-approves-280-billion-bill-to-boost-u-s-science-chip-production-11658942295?mod=hp_lead_pos3

The Senate on Wednesday approved a $280 billion bill to boost scientific research and the U.S. semiconductor industry, sending the legislation on to the House, where Speaker Nancy Pelosi has promised quick action.

The CHIPS and Science Act of 2022 creates a $39 billion fund that would provide direct financial assistance for the construction and expansion of semiconductor manufacturing facilities, among other purposes, according to a summary from the Senate Commerce Committee.

The bill was approved 64-33, with 17 Republicans joining Democrats to vote in favor.

Companies that could tap the funding for U.S. expansions include Intel Corp., Taiwan Semiconductor Manufacturing Co., GlobalFoundries Inc., Micron Technology Inc., Applied Materials Inc. and more.

A separate $11 billion program seeks to join with industry to advance semiconductor manufacturing research and workforce training, while another $2 billion fund aims to more quickly translate laboratory advances into military and other applications. Lawmakers added $24 billion in tax credits for investments in semiconductor manufacturing.

The bill has been in the works for more than three years. Senate Majority Leader Chuck Schumer (D., N.Y.) first started discussing it in 2019 with Sen. Todd Young (R., Ind.) when the two were exercising in the Senate gym.

“In the 1970s and 80s our companies could do just fine on their own,” Mr. Schumer said in an interview this week. “But in the 21st century, with countries like China and Germany investing heavily, we could sit back on the sidelines and who would lose out? American workers, American economic dominance, and our national security.”

During debate on the Senate floor this week, the bill’s supporters said that while competition with China was a primary motivator, they were spurred on by the disruption in semiconductor supplies during the Covid-19 pandemic. Most semiconductors, ubiquitous in modern electronics, are made abroad, and companies in industries from medical products to missiles have urged lawmakers to shore up supplies for the long term. A pandemic-related boom in chip demand has helped cause bottlenecks, though it is showing signs of easing in some industries.

“That vulnerable supply chain, if disrupted, could cause not only a severe economic depression in America but also threaten our national security directly,” said Sen. John Cornyn (R., Texas).

Opponents of the bill pushed to attach more strings to the funding and questioned the wisdom of a large subsidy to a profitable industry. Sen. Rick Scott (R., Fla.) called the package “one of the grossest gifts to corporate America I’ve ever seen.”

Sen. Bernie Sanders (I., Vt.) accused Intel Chief Executive Patrick Gelsinger of extorting lawmakers, pointing to the executive’s assertion that his and other companies would likely invest in manufacturing facilities in Europe or Asia if the bill doesn’t pass this summer.

“I worry not only about this bill. I worry about the precedent,” Mr. Sanders said. “Any company who is prepared to go abroad, who has ignored the needs of the American people, will then say to the Congress, ‘Hey, if you want us to stay here, you better give us a handout.’”


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...

#Russian #weapons in #Ukraine powered by hundreds of Western #electronic components made in #US, #Japan, #SouthKorea & #Europe. About two-thirds of the components were manufactured by US-based #technology companies. https://www.investing.com/news/stock-market-news/exclusiverussian-weapons-in-ukraine-powered-by-hundreds-of-western-parts--rusi-2866574

More than 450 foreign-made components have been found in Russian weapons recovered in Ukraine, evidence that Moscow acquired critical technology from companies in the United States, Europe and Asia in the years before the invasion, according to a new report by Royal United Services Institute defence think tank.

Since the start of the war five months ago, the Ukrainian military has captured or recovered from the battlefield intact or partially damaged Russian weapons. When disassembled, 27 of these weapons and military systems, ranging from cruise missiles to air defence systems, were found to rely predominantly on Western components, according to the research shared with Reuters.

It is the most detailed published assessment to date of the part played by Western components in Russia's war against Ukraine.

About two-thirds of the components were manufactured by U.S.-based companies, RUSI found, based on the weapons recovered from Ukraine. Products manufactured by the U.S.-based Analog Devices (NASDAQ:ADI) and Texas Instruments (NASDAQ:TXN) accounted for nearly a quarter of all the Western components in the weapons.

Other components came from companies in countries including Japan, South Korea, Britain, Germany, Switzerland, and the Netherlands.

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The U.S. government said in March that Russian firms were front companies that have been buying up electronics for Russia's military. Russian customs records show that in March last year one company imported $600,000 worth of electronics manufactured by Texas Instruments through a Hong Kong distributor, RUSI said. Seven months later, the same company imported another $1.1 million worth of microelectronics made by Xilinx, RUSI said.

Texas Instruments and AMD-owned Xilinx did not respond to a request for comment about the customs data.

Russia's military could be permanently weakened if Western governments strengthen export controls, manage to shut down the country's clandestine procurement networks and prevent sensitive components being manufactured in states that support Russia, RUSI said.

Riaz Haq said...

U.S. Lawmakers Look to Digital Dollar to Compete With China
The Federal Reserve is considering the idea, but in no rush to join a digital-assets space race

https://www.wsj.com/articles/u-s-lawmakers-look-to-digital-dollar-to-compete-with-china-11659925037?mod=Searchresults_pos4&page=1

Lawmakers are pushing the Federal Reserve to move swiftly toward issuing a digital dollar, to combat steps from China and others they say could one day threaten the U.S. status as the global reserve currency.

The bipartisan group of lawmakers, including Reps. Maxine Waters (D., Calif.) and French Hill (R., Ark.), has sought for the U.S. to counter global competitors launching digital versions of their currencies. The House Financial Services Committee, which both serve on, might vote on related legislation as soon as next month.

Ms. Waters has framed competition over new forms of central-bank money as “a new digital assets space race.” The Biden administration and the Fed don’t share a sense of urgency.

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Fed Chairman Jerome Powell has indicated the central bank isn’t in a rush, as it confronts inflation and a slowing economy. Mr. Powell has said it is more important to get the digital dollar right than to be first to market, in part because of the dollar’s critical global role. He has also said the Fed won’t issue a digital dollar without support from elected officials. The White House has largely remained neutral on a digital dollar, with President Biden ordering a study to determine its implications for issues such as economic growth and stability.

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Some in Congress say the U.S. is already behind the curve. Among the Group of 20 major economies, 16 are in the development or pilot phase of a digital currency, according to the Atlantic Council, a Washington think tank. The European Central Bank, on behalf of countries including Germany and France, is exploring designs for a digital euro and preparing to launch a test pilot.

Mr. Hill, the Arkansas Republican, said his concerns were animated in part by China, which began real-world testing of its own central-bank–issued digital currency in 2020. In an interview, he said China’s lending practices in the developing world could make it easier for the country to promote international uses of its digital currency—a potential threat to the dollar-based global economy.

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“We should be concerned about China’s predatory practices,” he said.

Chinese authorities haven’t ruled out international use of the e-CNY, the official name for the country’s digital currency, but say it is designed for small-scale domestic use by consumers.

Analysts are looking for signs that the People’s Bank of China will take concrete steps to join with central banks elsewhere to make it possible to use digital currencies between countries. The bottom line is that Beijing is uncomfortable with the outsize role the U.S. dollar plays in global commerce and in particular fears being frozen out of the dollar-based financial system, such as in response to a conflict over Taiwan.

International transactions in a digitized currency created by China, the thinking goes, could be a defensive weapon in such circumstances because they would happen beyond the reach of the U.S.

Riaz Haq said...

#China tops #US in quantity and quality of #scientific papers. #Chinese #research accounted for 27.2%, or 4,744, of the world's top 1% of most cited papers, overtaking the U.S. at 24.9%, or 4,330. #UK came in 3rd at 5.5%. #India stands 4th & #Japan 5th. https://asia.nikkei.com/Business/Science/China-tops-U.S.-in-quantity-and-quality-of-scientific-papers

China now leads the world both in the number of scientific research papers as well as most cited papers, a report from Japan's science and technology ministry shows, which is expected to bolster the competitiveness of its economy and industries in the future.

Research papers are considered higher quality the more they are cited by others. Chinese research accounted for 27.2%, or 4,744, of the world's top 1% of most cited papers, overtaking the U.S. at 24.9%, or 4,330. The U.K. came in third at 5.5%.

The ministry's National Institute of Science and Technology Policy compiled the report based on data from research-analytics company Clarivate. The figures represent 2019 levels, based on the annual average between 2018 and 2020 to account for fluctuations in publication numbers. The report was released Tuesday, the same day U.S. President Joe Biden signed into law the CHIPS and Science Act, a $280 billion bill framed as essential to winning economic competition with China through greater research.

Scientific research is the driver behind competitive industries and economies. Current research capabilities will determine future market shares in artificial intelligence, quantum technology and other cutting-edge fields, and may have a direct impact on national security as well.

China has quickly increased its footprint in advanced research in recent years. It overtook the U.S. in the total number of scientific papers in the 2020 report, then in the number of top 10% most cited papers in the 2021 report.

China published 407,181 scientific papers in 2019 according to the latest report, pulling further ahead of the U.S. at 293,434. In terms of the top 10% most cited papers, China accounted for 26.6% of publications, while the U.S. accounted for 21.1%.

"China is one of the top countries in the world in terms of both the quantity and quality of scientific papers," said Shinichi Kuroki, deputy director-general of the Asia and Pacific Research Center at the Japan Science and Technology Agency.

"In order to become the true global leader, it will need to continue producing internationally recognized research," he said.

Meanwhile, Japan is falling behind. It ranked fifth in the total number of publications and 10th in the top 1% most cited papers in the latest report after losing ground to India. It dropped to 12th place in the number of the top 10% most cited papers, passed by Spain and South Korea.

The number of universities in India have increased roughly 4.6 times from 243 in 2000 to 1,117 in 2018. Over two million receive a bachelor's degree in the sciences each year. In contrast, research Japan has slowed since the mid-2000s with no recovery in sight, stoking concerns about the effect on the country's economy and industries.

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


----------------

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...

Ukraine Routs Russian Forces in Northeast, Forcing a Retreat
Russia acknowledged that it had lost nearly all of the northern region of Kharkiv after a blitzkrieg thrust by Ukrainian fighters.


https://www.nytimes.com/2022/09/11/world/europe/ukraine-kharkiv-russian-retreat.html?smid=nytcore-ios-share&referringSource=articleShare

Stunned by a lightning advance by Ukrainian forces that cost it over 1,000 square miles of land and a key military hub, Russia on Sunday acknowledged that it had lost nearly all of the northern region of Kharkiv after a blitzkrieg thrust that cast doubt on a premise — widely held in Moscow and parts of the West — that Ukraine could never defeat Russia.

Russia’s pell-mell retreat from a wide section of Ukrainian territory it seized in the early summer rattled Kremlin cheerleaders and amplified voices in the West demanding that more weapons be sent to Ukraine so that it could win.

Victory for Ukraine is still far from certain, particularly with a second Ukrainian offensive in the south making far less rapid progress. Russian forces are dug into strong defensive positions near the Black Sea port city of Kherson, forcing Ukrainian troops to pay heavily for every foot of territory they retake.

But the speed of Ukraine’s advances over the weekend in the northeast — an area used by Russia as a stronghold — has muted the gung-ho bluster of Kremlin cheerleaders. It has also undermined arguments in places like Germany that providing more and better arms to Ukraine would only lead to a long and bloody stalemate against a Russian military destined to win.

Late Sunday, in a strike that Ukrainian officials condemned as a fit of pique over its losses, Moscow attacked infrastructure facilities in Kharkiv, leaving many civilians without power and water. President Volodymyr Zelensky said there was a “total blackout” in the regions of Kharkiv and Donetsk.

“No military facilities,” he wrote on Twitter. “The goal is to deprive people of light and heat.”


-----

Speaking at a news conference with his German counterpart, Ukraine’s foreign minister, Dmytro Kuleba, said, “And so I reiterate: The more weapons we receive, the faster we will win, and the faster this war will end.”


---------

For months now, administration officials have said there is no hope of a diplomatic solution to the war unless Mr. Zelensky’s forces win back enough territory to have the upper hand in any negotiated cease-fire or armistice. But the fear is that if Mr. Putin believes he is losing the war, he may deploy unconventional weapons.

Riaz Haq said...

China's dominance of manufacturing is growing, not shrinking
Country gaining market share in both low- and high-tech sectors

https://asia.nikkei.com/Opinion/China-s-dominance-of-manufacturing-is-growing-not-shrinking

William Bratton is author of "China's Rise, Asia's Decline." He was previously head of Asia-Pacific equity research at HSBC.

When it comes to discussions about China's manufacturing capabilities, there is an all-too-frequent disconnect between rhetoric and reality.

On the one hand, it is widely understood that Chinese producers are losing relative competitiveness. Higher labor costs, bitter trade frictions, rising geopolitical tensions and the domestic pursuit of zero-COVID are all encouraging exporters to leave the country.

China, it is thus argued, has passed "peak manufacturing" and its status as the world's manufacturer stands to be superseded by other countries in the region. By extension, this will materially impact China's economic trajectory and the region's evolving geopolitical balances.

On the other hand, there has been a lack of substantive evidence offered to support the above argument. Although anecdotes abound about certain companies relocating production out of China, the data suggests that such moves are not at the scale necessary to reverse the upward momentum of the country's manufacturing base, nor its international competitiveness.

The most obvious evidence of this is in trade flows.

It is not just that Chinese exports have remained remarkably robust despite COVID-related lockdowns. More than that, the latest numbers from the U.N. Conference on Trade and Development imply that Chinese producers have become more competitive in recent years, not less.

China's manufactured exports, for example, have been growing significantly faster than those of Germany, the U.S., Japan or South Korea. As a result, its share of global manufactured exports by value surged to a new high of 21% last year, compared to just 17% in 2017. The country is now a more important international supplier than Germany, the U.S. and Japan combined.

Furthermore, contrary to the view that supply chains are reducing their exposure to China, Chinese manufacturers have consolidated their primacy across the vast majority of sectors over recent years. In fact, what is particularly remarkable about China's evolving trade structure is that it has been able to simultaneously gain export share in both low- and high-technology industries, including those as eclectic as leather products, truck trailers and optical instruments.

Such gains are hardly indicative of an industrial base under stress. They instead highlight the hyper-competitiveness of China's producers, who increasingly dominate the East and Southeast Asian manufacturing landscape.

For all the chatter about companies leaving China and the changing geographies of supply chains, the reality is that it generated nearly half of the region's manufactured exports in 2021, compared to less than a third 15 years ago.

This competitiveness is derived from the complex and self-reinforcing interaction of multiple factors, many of which are a function of China's size. This allows the country to support far higher levels of domestic competition, innovation and specialization than its neighbors, and results in greater efficiencies and lower production costs, which regional rivals will always struggle to replicate. These scale benefits are subsequently magnified through aggressive industrial development policies that have no obvious precedent in terms of scope or ambition.

So China's manufacturing advantages must be viewed holistically, especially as it can be highly misleading, however tempting, to draw conclusions based on the trends of any specific factor.

Riaz Haq said...

China's dominance of manufacturing is growing, not shrinking
Country gaining market share in both low- and high-tech sectors

https://asia.nikkei.com/Opinion/China-s-dominance-of-manufacturing-is-growing-not-shrinking

William Bratton is author of "China's Rise, Asia's Decline." He was previously head of Asia-Pacific equity research at HSBC.


The country's rapidly rising wages, for example, attract much attention. But it would be a mistake to assume that this signals the loss of competitiveness in more labor-intensive industries.

Rather, it reflects dramatic improvements in productivity and a broader structural shift into higher technology sectors. Furthermore, the use of national averages masks the diversity of China's labor force, with a substantial pool still on relatively low wages.

This is seen in the irrefutable fact that the country's manufacturers are still gaining export share across low-technology and labor-intensive industries, including textiles. In other words, their innate advantages are so substantial and so overwhelming that higher labor costs by themselves have no material impact on their competitiveness.

As such, despite all the frequently cited anecdotes, there is no real evidence that the factors underpinning China's competitiveness are being reversed. Rather, Asia's manufacturing industries will continue to concentrate in China, further entrenching its status as the core of the region's economic system.

This is the challenge for the rest of the region. No matter how hard they try, few countries, if any, will be able to replicate or match China's natural advantages. And this will have profound longer-term economic and geopolitical consequences.

Against the onslaught of highly competitive Chinese products, emerging economies will struggle to develop the manufacturing sectors they need to achieve and sustain productivity-led growth over the long-term.

But even more advanced nations are not immune from the pressures created by China, with the hollowing-out of their industrial structures a very real danger. The displacement of Japanese and South Korean manufacturers from the global telecommunications equipment and shipbuilding markets demonstrates just how quickly China can engage with its neighbors at their own games -- and win.

So for all the suggestions that China's grip on manufacturing is weakening, the reality could not be more different. It is not the Chinese producers that are losing influence, but their rivals across the region.

In fact, the natural forces driving the country's competitive advantages are now both so substantial and entrenched that the rest of Asia is seemingly engaged in an unfair trade fight -- and one it is unlikely to win. The region's slide toward a clearly defined economic core-periphery structure -- with China dominating and the rest being disadvantaged -- now looks inevitable.

In turn, this is creating dependencies which will prove evermore difficult to disentangle, no matter how strong the apparent political commitment in some countries to do so.

This is seen in how recent attempts to diversify imports away from Chinese producers have been constrained by the lack of credible alternative suppliers. It is noticeable that Australia and India, countries positioning themselves as regional rivals to China, have increased -- not reduced -- their reliance on Chinese manufactured imports over the last three years.

It is true that this manufacturing mastery may not have been developed as a deliberate geopolitical tool. But in the same way the U.S. was able to use its post-World War II industrial leadership to advance its own interests, the reliance on Chinese products will naturally give Beijing unrivaled power and influence within Asia. As such, China's future economic and political dominance of the Asian regional economy is set to be underpinned by its vibrant, dynamic and hypercompetitive manufacturing industries, whatever the country's doomsayers may claim.

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...

#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.