by therealchiggs on 5/18/20, 4:14 AM with 214 comments
by fermienrico on 5/18/20, 5:25 AM
The problem starts when there is a massive asymmetry in the trade. China has completely blocked US services from Google to Uber, and gladly accepts manufacturing investment - Tesla Shanghai factory, Intel's Chengdu factory, etc. because the CCP knows that they will gain tremendously by having IP physically based in China. It leaks like a sieve. I've seen it first hand (in semiconductor industry).
America should protect its own interests and interests of other democratic nations before they get eroded, dismantled and sold off to CCP's interests. If China doesn't want American software services running and fairly competing because of CCP surveillance requirements, well...then the US should block all Chinese services from exploiting users[1] and their data, may be EU should block Chinese services from running there until there is strict GDPR requirements and the data is located in EU datacenters. There should be independent datacenter security audits just like CCP wants keys to iCloud datacenters. That would just get us to the fairness level and that's still not enough - there should be a reverse asymmetry to make up for last 20 years of damage - incentivize US/EU services and manfuacturing while simultaneously imposing sanctions and import duties on goods/services made in China. Why not? Can someone tell me why the US/EU shouldn't do the same? I should not be able to buy $1.99 USB cable including shipping from China.
by salimmadjd on 5/18/20, 5:32 AM
Estimates are that China is 10 years away to be able to build chips domestically that can compete with TSMC. Mostly because a lot of the precision chip making technologies are hard to make and are only made by a few manufactures and their exports are controlled.
However, I feel like our new competitive mindset is using the wall to block others. To wall off China to wall off immigrants.
I love to see manufacturing sector return to US and protect US jobs, however, it seems like instead of investing into the future, like we had in the 50s, 60s, 70s we are spending our limited resources waging all types of wars and then using our might to block other countries now.
We've lost our ability to make political decisions and planning with a long-term vision, and if we think building walls will stop innovation in other places, we're wrong.
All we're doing is setting back China for a few years, fueling a nationalistic fervor to motivate their public even more and once they've caught up, they'll even be stronger and more competitive.
While we might keep the aging Western Europe under our pressure, rest of the emerging world will be under China.
I'm also really curious how this action will ultimately impact Taiwanese views of merging with China. It's possible this might create more sympathy and create a massive defeat for the nationalist side of Taiwan and the country might vote to merge with China.
What would we do then? Stop Apple from buying chips from TSMC?
by billfruit on 5/18/20, 5:19 AM
Isn't that really crossing the line; It implies that if a country buys American Equipment/Software then they are at the whims of American policy; American equipment comes with strings attached: Really does not look appealing to many countries this.
What if Huawei rebrand themselves or try to gain a new identity etc, then US regulations has to catch up again.
Moreover is this some sort of punitive measure against Huawei? What if they approach US courts, what shall be the outcome?
by cesarb on 5/18/20, 12:02 PM
by _ph_ on 5/18/20, 10:04 AM
Next step, as China has already hinted towards, is actions in China against Apple. And we don't know how further the escalation will go. So far, any ambition of China towards Taiwan has been limited by the fact that China depends quite on Taiwanese fabs. Remove that, and accidents might happen... which would harm the whole world.
by jacquesm on 5/18/20, 5:20 AM
by ekianjo on 5/18/20, 1:38 PM
by wbraun on 5/18/20, 5:48 AM
Does this mean that Huawei loses the 5G competition because they are not going to be able to get the chips they need fabricated?
Is China going to try to split up Huawei into a bunch of "totally not Huawei" companies?
by strooper on 5/18/20, 5:09 PM
I thought this war of the giants will remain paused for the rest of the covid-19 situation, however, it seems unlikely before some major causality. And Huawei seems to be in the center of the stage.
by tanilama on 5/18/20, 12:47 PM
Might need to wait for sometime to see exactly what its position in all these.
My bet it will eventually comply but leave some vagueness here and there. After all, hurting TSMC is hurting the world.
by DevKoala on 5/18/20, 4:24 AM
by trixie_ on 5/18/20, 5:17 AM
by chvid on 5/18/20, 5:37 AM
"TSMC shares in Taiwan were down more than 2% in Monday morning trade, while the benchmark index was down less than 1%."
So the market seems to think that is probably not such a big deal or guesses that a solution/workaround will be found. Also that the US may cut-off TSMC supplies to Huawei has been rumoured for about a year now and is an extension of the restrictions on Google software/services and the ARM chip designs.
by russli1993 on 5/19/20, 1:17 AM
What? You just tried to bankrupt company by cutting off all of their suppliers and partners of business. Of course they will try to survive by trying to self-reliant. The company employs 100,000 people, is super important to the local economy and employment in the shenzhen area, and has over 50% of the shares in China's entire core internet infrastructure. If Huawei does not get the supply it needs, it cannot serve the entire China's core internet, do you know how much danger that causes to China's communication infrastructure security? How much economic damage to the country it's going to be? This actually directly harms China's national security. Whereas the US claims Huawei harms its national security, when Huawei is not even in the US. When Huawei gets killed off, how do you tell the workers of Huawei and their families, that their livelihood is gone because by its killed of by you, which is a foreign government to them. Are you sure you can deal with the anti-American sentiment afterwards. There is a saying in Chinese "cut of the way someone earns money is equal to killing their parents" （断人财路如杀人父母）You also know that the average Chinese person is super proud of Huawei as a brand right?
This rule change effectively forces all companies in the world that is in the semiconductor industry to abide by US governments wishes. TSMC 7nm processes has less then 10% of US IP and technology. It was developed by Taiwan people with TSMC own investment. But they invariably could use a technology that is in the ERA. Hell, Intel processors is one, and god forbid if the production line has a computer that contains Intel chips. You could argue that this Intel chip assisted in producing Huawei's chip no? Where do you draw the line? The US government can just decide how to enforce this based on their feelings of the day? Are you sure this the standard for international justice?
For alleged IP infringement against Huawei, get the evidence and sue the company at court. I am all for it, as long as there is trial. So far there are two cases IP infringement cases that I know of, 1 in 2003 with Cisco that settled out of court. 2 with T-mobile in 2013 with regarding a phone testing arm. But Huawei's main business is base bands, routers, and consumer electronics. By the way, Ercission has cross licence agreement with Huawei to access Huawei's 5G patents. Huawei has many invention patents in 5G, that is recognized globally. I don't get where the theft of IP comes from that warrant the company to be killed off.
For security issues. Let the market decide, let the customer decide. Customer should be able to make a comprehensive product selection process based on their needs. And if the market says no to Huawei, then Huawei is dead. But let the market decide. US companies can also compete with Huawei, and say they are more secure. Huawei sucks. That is all fine. And I am also fine with the US government producing security assessments on Huawei, and telling every country on earth to not use Huawei equipment. That is US government's right. But at least the customer can decide for themselves if Huawei is worth anything. If Huawei is dead because of that, then sure. Its all fair and square. The US can also form alliances with other countries and make sure the country ban Huawei equipment in their countries too. That is the US right too. There are so many ways to compete with Huawei.
US gov's action is as if, China ordered that every country in the world shall not do business with Microsoft, and forces Microsoft to go bankrupt right now. Imagine if the Microsoft cloud and office365 stops running because of that. US would probably sent warplanes to China by then.
Huawei's 4G technology worked really well for China's environment and was affordable for mass development. It is key enabler in allowing the country to deploy 4G to almost everywhere in China, even the remote villages. This enabled everyone with smartphone to use the internet. And as result, services like mobile payment, shopping, gaming all flourished in China. It in turns create a massive cellphone market in China. Apple, Qualcomn, Xllinx, and host of consumer product providers, or Huawei's US suppliers all benefited from this. Competitions in the phone space also pushed the innovation and pricing for smart phones. Huawei was one of the first to push smartphone camera quality and added multi-focal lengths to phones. It pushed Apple and Samsung to innovate on cameras too, look at where smartphone photography has become. I believe US and Chinese technology companies can work together in their respective markets, to make technology more useful, enrich the economy, and make people's lives better. Its not a zero sum game. But the US government is viewing it as such. If US wants to win, China must lose.
With the US government essentially taking the world's companies into hostage in killing off Huawei, I am not sure if US Gov is being a responsible world citizen.
by augustt on 5/18/20, 5:04 AM
by ngcc_hk on 5/18/20, 6:08 AM
by synaesthesisx on 5/18/20, 5:22 AM
by whoevercares on 5/18/20, 12:56 PM
by forgot_again on 5/18/20, 4:28 AM
China is fundamentally opposed to everything the US and Democracies around the world stand for politically. Likewise, the US and friends are fundamentally opposed to everything China stands for politically. There is no Universe in which two diametrically opposed juggernauts do not come into conflict. Conflict is simply inevitable when the stakes are this high and there is no greater power able to force deescalation.
Either China converts to Democracy or the US and friends adopt Chinese style authoritarianism, or one of the two belligerents collapses either on its own in the manner of the Soviet Union, or by force.