Russian Electronics: Semiconductor and Processors #2

"A gift to the USA": Taiwan opposition accuses the government of handing over the largest microchip company.

Taiwan's main opposition party accused President Tsai Ing-wen of "giving away" the world's largest microchip company to the United States, the Taiwan News online newspaper reported. Opponents believe that building a factory in Arizona will "ruin" the company and lead to the flight of its talents.

Representatives of the Kuomintang party — Taiwan's main opposition force advocating closer ties with mainland China — recalled that it was during their party's rule that the Taiwan Semiconductor Manufacturing Co (TSMC) company was created, which has become a kind of "silicon umbrella" protecting the island from invasions.

"With a TSMC factory in the USA, [the American technology giant] Intel will be able to obtain the necessary technology to equate the production of its chips to the level of the Taiwanese company," warns Deputy Tseng Ming-chung.

As for the talent drain, the legislator believes that Intel's salary level, which is 3-5 times higher than TSMC's, will cause the Taiwanese company's engineers to move to the United States. Tseng called on President Tsai's administration to propose a plan to retain TSMC and protect Taiwan's silicon umbrella.

TSMC announced that it will invest 40,000 million dollars in the construction of a factory in Arizona and has already transferred 1,000 engineers to the USA, while another 2,000 will head there next year, recalled another Kuomintang deputy Alex Fai. In his words, Washington forced the Tsai Ing-wen administration to hand over the enterprise under the pretext of preventing advanced technology from falling into the hands of the Chinese Communist Party.

"TSMC could disappear with the brain drain and "With a TSMC factory in the USA, [the American technology giant] Intel will be able to obtain the necessary technology to equate the production of its chips to the level of the Taiwanese company," warns Deputy Tseng Ming-chung.

As for the talent drain, the legislator believes that Intel's salary level, which is 3-5 times higher than TSMC's, will cause the Taiwanese company's engineers to move to the United States. Tseng called on President Tsai's administration to propose a plan to retain TSMC and protect Taiwan's silicon umbrella. loss of jobs, as well as the consequences for the island. What will be left for Taiwan then?," concluded Fai.

At the beginning of December, TSMC announced its plans to build a second factory in Arizona, USA. This marks a big turn in the company's policy because before all the company's bases were located in Taiwan.

This is happening while European companies are moving their production to the USA due to high energy prices. At the beginning of 2022, the Danish jewelry company Pandora and the German car manufacturer Volkswagen announced that they would expand their production in the United States. Even the American Tesla suspended its plans for battery production in Germany, as it expects to receive tax breaks under the inflation reduction law adopted in mid-2022 by US lawmakers.

Yandex Translate from Spanish

https://sputniknews.lat/20221229/un-regalo-a-eeuu-oposicion-de-taiwan-acusa-al-gobierno-de-entregar-la-mayor-empresa-de-microchips-1134104479.html

US hands Koreans unleashed a chip war against China, by Yuri Zainashev for VZGLYAD. 03.01.2023.

In modern conditions, whoever produces the most advanced microchips owns the world. To prevent Beijing from catching up, Washington warned that it would ban the production of this product in China. But it was in the Celestial Empire that the Internet giants launched the production of chips. It's funny that the giants themselves belong to a third country - Korea. But America does not seem to care about Korean sovereignty.

US Deputy Secretary of Commerce Alan Esteves said that Washington is likely to limit the number of modern semiconductors produced by South Korean firms in China. This was reported by radio KBS WORLD . It is noteworthy that Estevez made such an unpleasant statement for the Korean audience at a joint forum of the two countries, organized in Washington by the Korean Foundation for International Exchanges and the Center for Strategic and International Studies (CSIS).

This is not the first time Estevez has called for preventing advanced, "sensitive" military technology from getting into Beijing's hands. In the name of "protecting U.S. national security," he has previously called for limits on "China's ability to use artificial intelligence, advanced computing, and other commercially available technologies for military modernization and human rights violations."

Last fall, the US government prohibited its companies and citizens from selling semiconductors made using American technology to China without obtaining a license. This happened shortly after President Joe Biden signed into law the US National Security Strategy, which cited rising Chinese power and Russia's "imperial ambitions" as the main threats.

From now on, any trade in semiconductors with partners in the PRC must be approved by Washington. However, as Kommersant wrote , a few days later, the US authorities took a step back. Temporarily - for a period of only a year - they allowed two Korean companies to continue to produce high-tech semiconductors in China. One of the companies is the world-famous Samsung Electronics, which owns a factory in Xi'an, China. The second was Hynix - a company that specializes in the production of semiconductor memory, the world's third largest chip manufacturer (after Intel and the same Samsung). This Korean giant owns a factory in the Chinese city of Wuxi.

And now, answering the question of a conference in Washington, what will happen in the fall, after the end of the annual delay, Estevez said: it is likely that the production of semiconductors will still be limited again. More precisely, we can talk about the technological level of the manufactured chips (that is, they will be allowed to continue producing more primitive ones, and prohibiting the production of advanced ones). Estevez added that consultations are underway with relevant companies on this issue, since Washington would like to minimize the losses from such bans for firms in Korea and other friendly countries.

Estevez made it clear that the severity of future bans depends on the behavior of China itself. In other words, he hopes that the "chip blockade" will become one of the levers of pressure on Beijing from Washington.

It is clear that Estevez's threats are in no way compatible with the interests of South Korea, because this country is connected with the Celestial Empire by many ties, Alexander Zhebin, a leading researcher at the Center for Korean Studies at the Institute of China and Modern Asia of the Russian Academy of Sciences, believes. “Suffice it to recall that the country's trade turnover with the PRC exceeds its combined trade turnover with the United States and Japan. If South Korea loses China as a trading partner, as a market for exporting its products, then this will have unpredictable consequences for the Korean economy,” the expert said.

“Individual politicians express annoyance at bans, such as those mentioned by the American deputy minister, but they all end up with the same thing - then the same politicians start begging Washington to enter into negotiations with them about whether some concessions can be made , delays. This was the case, in particular, recently with the US Inflation Control Act , which directly hit Korean electric car manufacturers. In general, Seoul, as a junior ally, is forced to take into account Washington's demands. Even when he doesn’t quite agree, he acts as America wants,” Zhebin explained.

Seoul cannot but remember the bad experience of 2016, when it agreed to host a battery of the American missile defense system on its territory, Zhebin is sure. “It is clear that the battery was aimed primarily at China. In response, China stopped the flow of its tourists, introduced a number of other measures from the arsenal of economic blockade. The Koreans were outraged, but the outrage was more ostentatious. After all, many of them understood that Seoul itself is to blame," the Korean scholar believes.

In general, the expert is convinced that Seoul politicians and businessmen will also seek concessions in the case of chips, ask for an extension of the “transition period”, and so on, and it will be more and more difficult to do this against the backdrop of the growing confrontation between the United States and China.

“The military-political elite of South Korea was brought up by the Americans, so they also experience fear of the growing power of China. She is sure that only in a bundle in the United States will Koreans be able to survive. But at the same time, Seoul does not want to part with the profitable production of chips either. Cooperation with China is too profitable. So quickly, Seoul will not get away from Chinese economic dependence,” Zhebin emphasizes.

So far, Beijing has bought $350 billion worth of chips a year from the US, South Korea and Japan. And under the conditions of sanctions, it may face an acute shortage of them, BFM.ru reported earlier . After all, China is still far from "semiconductor sovereignty", although the Communist Party set such a goal for 2025. Technological lag behind the leading manufacturers remains.

Meanwhile, the US set out to forge a technological alliance that already included Japan and the island of Taiwan. The goal is to squeeze China out of the global cycle of manufacturing and selling chips and at the same time provide itself with semiconductors. South Korea has also been proposed to join the coalition, but it seems to be hesitating so far.

According to German Klimenko, former adviser to the President of Russia on the development of the Internet, chairman of the board of the Digital Economy Development Fund, South Korea, on the one hand, must take into account the interests of the United States, but on the other, being an Asian country, it tries to maintain harmonious relations with its neighbors, that is, to withstand balance.

“But maintaining a balance in the world is now generally extremely difficult. Our SVO provoked sharp gestures from various powers, ” said Klymenko. As you know, before the world was divided according to who has natural reserves - oil, gas, coal, and so on, the expert recalled. “Now the world is changing rapidly. We still do not fully understand who will ultimately depend on what. It is only clear that the race in the field of microelectronics and artificial intelligence has begun. Whoever wins it will probably rule the world, as Vladimir Vladimirovich said, ” said the former adviser to the president.

Against this background, the satellite countries have one task - to join someone. “The peoples of Asia have a long historical memory. Yes, Koreans and Chinese have a relationship like a cat and a dog. However, both of them seem to consider themselves, if not to one ethnic group, then at least to a kindred one, so they are trying to get along, ”Klimenko explained to the VZGLYAD newspaper. “It is impossible to predict who will take sides in the coming years. The stakes are too high. I do not rule out that in the end South Korea will fall away from Washington and take the side of Beijing. By the way, racial or ethnic community will not necessarily be the main criterion - perhaps the main one will be technological superiority.

So far, there are products in the high-tech sector that Beijing cannot produce, the expert admits. “However, the Chinese are ready to solve a huge layer of tasks themselves. The history of the Middle Kingdom says that they are very stubborn. They have traveled in the IT industry in 20 years the path that we have traveled in 30. If China is not stopped now, it will either overtake the United States or find itself in good parity with them. At parity in any area, including semiconductors. And if the Chinese manage to do it, then the neighbors of the Celestial Empire will simply have no other choice but to join it", concluded Klimenko.

https://vz.ru/economy/2023/3/1/1201025.html