Chinese Economy Watch
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The Financial Times reported that as of Monday 11 November 2024, TSMC (Taiwan Semiconductor Manufacturing Company) plans to stop selling AI chips at advanced process nodes of 7 nanometres or smaller to Chinese companies.
TSMC’s new rules are targeted at the likes of Alibaba and Baidu, which have massive businesses in AI clouds. It seems that the Taiwanese company is pre-emptively looking to avoid any clashes with the forthcoming US administration. Given the election turmoil of recent days, it does not come as a huge surprise. The news is a considerable blow to Chinese companies that have grown to rely on Taiwan for their chip supply, for example, Baidu’s Kunlun chips for AI inferencing.
Nowhere is this more evident than with chipset technologies. The current US administration has presided over increasingly draconian measures against China in this space.
In 2022, it announced several rounds of restrictions on the sale of AI chips, a move that negatively impacted some US companies including processor designers NVIDIA and AMD. The raft of US restrictions significantly harmed Chinese technology companies. China faces severe limitations in accessing advanced semiconductor manufacturing equipment, which is crucial for producing high-performance AI chips. The inability to procure tools from leading manufacturers such as ASML and Applied Materials has stifled the growth of the sector.
The country has turned to its abundant young population to turbocharge universities, focusing on undergraduates and engineers trained to PhD level. A dozen higher education institutions recently set up integrated circuits departments including Tsinghua and Peking universities. As a result, China has been raising both the quantity and quality of STEM graduates and now has a large pipeline of skilled labour becoming available.
Another unintended consequence is the opportunity for homegrown companies to sell more of their own chips domestically. News that Huawei has started testing a new AI chip with potential clients in China is further proof of this.
Chinese hyperscalers and server manufacturers are reportedly testing the Ascend 910C processors as a replacement for NVIDIA technologies. The Ascend processor series was launched in 2019 and runs on Huawei’s Ascend Computing product line.
The chips are based on a neural processing unit (NPU) architecture which is custom-made for ML tasks. The company has also further developed another silicon architecture through its chip affiliate HiSilicon, responsible for the Kunpeng series. The Kunpeng series have gained a lot of traction in cloud computing and advanced analytics. HiSilicon is a Chinese fabless semiconductor company based in Shenzhen, Guangdong province, and wholly owned by Huawei. Both Kunpeng and Ascend run on ARM.
"How will the new US administration impact Chinese chip tech?" was originally created and published by Verdict, a GlobalData owned brand.
TSMC’s new rules are targeted at the likes of Alibaba and Baidu, which have massive businesses in AI clouds. It seems that the Taiwanese company is pre-emptively looking to avoid any clashes with the forthcoming US administration. Given the election turmoil of recent days, it does not come as a huge surprise. The news is a considerable blow to Chinese companies that have grown to rely on Taiwan for their chip supply, for example, Baidu’s Kunlun chips for AI inferencing.
Same old, same old for China
However, Chinese technology companies have grown accustomed to this type of protectionism, and the new administration may not represent a massive change from the restrictions that started in earnest with President Biden. The world is witnessing an era of growing protectionism which is leading all advanced economies to protect industries that are perceived as strategically critical.Nowhere is this more evident than with chipset technologies. The current US administration has presided over increasingly draconian measures against China in this space.
In 2022, it announced several rounds of restrictions on the sale of AI chips, a move that negatively impacted some US companies including processor designers NVIDIA and AMD. The raft of US restrictions significantly harmed Chinese technology companies. China faces severe limitations in accessing advanced semiconductor manufacturing equipment, which is crucial for producing high-performance AI chips. The inability to procure tools from leading manufacturers such as ASML and Applied Materials has stifled the growth of the sector.
How US restrictions helped Chinese chip ecosystem
It has been interesting to observe how US restrictions have started having the opposite effect than intended, forcing China to develop its own chipset ecosystem to include capabilities that are promoting greater self-sufficiency over the longer term. China has started pouring resources to boost its domestic processor technologies. These resources came in the form of greater subsidies, but also in other forms.The country has turned to its abundant young population to turbocharge universities, focusing on undergraduates and engineers trained to PhD level. A dozen higher education institutions recently set up integrated circuits departments including Tsinghua and Peking universities. As a result, China has been raising both the quantity and quality of STEM graduates and now has a large pipeline of skilled labour becoming available.
Unintended consequences for US
In the immediate aftermath of the US sanctions, firms such as Huawei, Baidu, and others began stockpiling resources in anticipation of further restrictions, including critical components, (memory chips from Samsung Electronics, for example). In addition, China has also looked for alternative supply chains and partnerships with suppliers outside of the US and its allies, with limited success.Another unintended consequence is the opportunity for homegrown companies to sell more of their own chips domestically. News that Huawei has started testing a new AI chip with potential clients in China is further proof of this.
Chinese hyperscalers and server manufacturers are reportedly testing the Ascend 910C processors as a replacement for NVIDIA technologies. The Ascend processor series was launched in 2019 and runs on Huawei’s Ascend Computing product line.
The chips are based on a neural processing unit (NPU) architecture which is custom-made for ML tasks. The company has also further developed another silicon architecture through its chip affiliate HiSilicon, responsible for the Kunpeng series. The Kunpeng series have gained a lot of traction in cloud computing and advanced analytics. HiSilicon is a Chinese fabless semiconductor company based in Shenzhen, Guangdong province, and wholly owned by Huawei. Both Kunpeng and Ascend run on ARM.
"How will the new US administration impact Chinese chip tech?" was originally created and published by Verdict, a GlobalData owned brand.
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NEW YORK/SINGAPORE (Reuters) - The U.S. ordered Taiwan Semiconductor Manufacturing Co to halt shipments of advanced chips to Chinese customers that are often used in artificial intelligence applications starting Monday, according to a person familiar with the matter.
The Department of Commerce sent a letter to TSMC imposing export restrictions on certain sophisticated chips, of 7 nanometer or more advanced designs, destined for China that power AI accelerator and graphics processing units (GPU), the person said.
The U.S. order, which is being reported for the first time, comes just weeks after TSMC notified the Commerce Department that one of its chips had been found in a Huawei AI processor, as Reuters reported last month. Tech research firm Tech Insights had taken apart the product, revealing the TSMC chip and apparent violation of export controls.
Huawei, at the center of the U.S. action, is on a restricted trade list, which requires suppliers to obtain licenses to ship any goods or technology to the company. Any license that could aid Huawei's AI efforts would likely be denied.
TSMC suspended shipments to China-based chip designer Sophgo after its chip matched the one found on the Huawei AI processor, sources told Reuters last month.
Reuters could not determine how the chip ended up on Huawei's Ascend 910B, released in 2022, viewed as the most advanced AI chip available from a Chinese company.
The latest clampdown hits many more companies and will allow the U.S. to assess whether other companies are diverting chips to Huawei for its AI processor.
As a result of the letter, TSMC notified affected clients that it was suspending shipments of chips starting Monday, the person said.
The Commerce Department declined comment.
A spokesperson for TSMC also declined to comment beyond saying it was a "law-abiding company...committed to complying with all applicable rules and regulations, including applicable export controls."
The Commerce Department communication -- known as an "is informed" letter -- allows the U.S. to bypass lengthy rule-writing processes to quickly impose new licensing requirements on specific companies.
Ijiwei, a Chinese media site covering the semiconductor industry, reported on Friday that TSMC notified Chinese chip design companies it would suspend 7 nanometer or below chips for AI and GPU customers beginning Nov. 11.
The action comes as both Republican and Democratic lawmakers have raised concerns about the inadequacy of export controls on China and the Commerce Department's enforcement of them.
In 2022, the Commerce Department sent is-informed letters to Nvidia and AMD restricting their ability to export top AI-related chips to China, and to chip equipment makers like Lam Research, Applied Materials and KLA to restrict tools to make advanced chips to China.
The restrictions in those letters were later turned into rules that apply to companies beyond them.
The U.S. has been delayed in updating rules on tech exports to China. As Reuters reported in July, the Biden administration drafted new rules on some foreign exports of chipmaking equipment and planned to add about 120 Chinese companies to the Commerce Department's restricted entity list, including chipmaking factories, toolmakers, and related companies.
But despite plans for an August release, and later tentative target dates for publication, the rules still have not been issued.
(Reporting by Karen Freifeld and Fanny Potkin; editing by Chris Sanders and Chizu Nomiyama)
The Department of Commerce sent a letter to TSMC imposing export restrictions on certain sophisticated chips, of 7 nanometer or more advanced designs, destined for China that power AI accelerator and graphics processing units (GPU), the person said.
The U.S. order, which is being reported for the first time, comes just weeks after TSMC notified the Commerce Department that one of its chips had been found in a Huawei AI processor, as Reuters reported last month. Tech research firm Tech Insights had taken apart the product, revealing the TSMC chip and apparent violation of export controls.
Huawei, at the center of the U.S. action, is on a restricted trade list, which requires suppliers to obtain licenses to ship any goods or technology to the company. Any license that could aid Huawei's AI efforts would likely be denied.
TSMC suspended shipments to China-based chip designer Sophgo after its chip matched the one found on the Huawei AI processor, sources told Reuters last month.
Reuters could not determine how the chip ended up on Huawei's Ascend 910B, released in 2022, viewed as the most advanced AI chip available from a Chinese company.
The latest clampdown hits many more companies and will allow the U.S. to assess whether other companies are diverting chips to Huawei for its AI processor.
As a result of the letter, TSMC notified affected clients that it was suspending shipments of chips starting Monday, the person said.
The Commerce Department declined comment.
A spokesperson for TSMC also declined to comment beyond saying it was a "law-abiding company...committed to complying with all applicable rules and regulations, including applicable export controls."
The Commerce Department communication -- known as an "is informed" letter -- allows the U.S. to bypass lengthy rule-writing processes to quickly impose new licensing requirements on specific companies.
Ijiwei, a Chinese media site covering the semiconductor industry, reported on Friday that TSMC notified Chinese chip design companies it would suspend 7 nanometer or below chips for AI and GPU customers beginning Nov. 11.
The action comes as both Republican and Democratic lawmakers have raised concerns about the inadequacy of export controls on China and the Commerce Department's enforcement of them.
In 2022, the Commerce Department sent is-informed letters to Nvidia and AMD restricting their ability to export top AI-related chips to China, and to chip equipment makers like Lam Research, Applied Materials and KLA to restrict tools to make advanced chips to China.
The restrictions in those letters were later turned into rules that apply to companies beyond them.
The U.S. has been delayed in updating rules on tech exports to China. As Reuters reported in July, the Biden administration drafted new rules on some foreign exports of chipmaking equipment and planned to add about 120 Chinese companies to the Commerce Department's restricted entity list, including chipmaking factories, toolmakers, and related companies.
But despite plans for an August release, and later tentative target dates for publication, the rules still have not been issued.
(Reporting by Karen Freifeld and Fanny Potkin; editing by Chris Sanders and Chizu Nomiyama)
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Congratulations to you CCP their Han slaves & Zhongguo in that order. With Trump back I fully expect him to precipitate conditions for a war which will decide who will dominate the world for the rest of the century.
Unfortunately I don't see him being present when the actual war is fought though great helmsman 2.0 would definitely be around & what's more in charge , actually initiating the war .
Congratulations once more ! Hopefully Zhongguo achieves 2 trillion USD in trade surplus within the next 3-4 years .
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China Reveals $1.4 Trillion Plan to Bail Out Local Governments
one of the many perils of a middle income economy, bailout season is here.
one of the many perils of a middle income economy, bailout season is here.
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I think one of many undoing of Chinese economy is its 1 child policy. Excess of males and a rapidly falling fertility rate. There was nothing natural about the Chinese population cuve.
Reaching 1.18 within such a short time will have deep consequences, China did not become rich enough to offset the population decline that will be felt in just 2 decade's.
Overall good for Tibetans, they have higher fertility rate than the Han chinese.
Reaching 1.18 within such a short time will have deep consequences, China did not become rich enough to offset the population decline that will be felt in just 2 decade's.
Overall good for Tibetans, they have higher fertility rate than the Han chinese.
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35 million excess males, good for Taiwan invasion project I guess.
Debt makes sense as long as your future has growth.
If you population shrinks, there is no growth.
People will need less housing, food, goods with a demographic like China. So if you have less people on the future, that is less production. Less production means less cash to pay off debt.
economy is super complicated system, amount of population just one factor.
India had fast growing population last 20 yrs, but gap with China on GDP and Per GDP was getting wider and wider. The GDP gap was from 2x to 6x.
And now it’s getting narrower what’s your point, I’m talking from a civilization state perspective, next 1000 years.
China maintained a lead for 4 decades and sacrificed its demographic dividend to achieve it. It’s not something to be proud of.
For 1000 yr scale, you'd better put your theory into chitchat or sci-fi section, i personally believe in 200 yrs, we will have artificial incubator.
Greeting taken.
Some extra gift from greeting?
View: https://x.com/suhasinih/status/1855829447116530023?t=swaNJhYpeCxF_8iCtSe_eg&s=19
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