How the US strangles China's tech industry｜The Chip Race📱

[Music] [Music] this is a chip you'd find it in your phone your hard drive your camera or maybe even your calculator the ic industry is worth hundreds of billions of dollars countries actually fight over it [Music] the launch of sputnik is of america by christopher columbus in the 20th century the soviet union and the u.s were engaged in a space race believe that this nation should commit itself of landing a man on the moon and returning him safely to the earth the race ended up with the most insane human achievements today's chip race however has nothing to do with distance it's all about downsizing this nail-sized chip is the brain of your smartphone or the computer which you're using to watch this video right now the chip is packed with countless of these pin shaped things we call transistors transistors are used to perform calculations the more you can pack in a single chip the faster it becomes over the years engineers have found ways of shrinking transistors to microscopic level from packing thousands of these onto a chip now with over 3.3 billion transistors we were able to pack 11.8 billion transistors 15.3 billion chance it's the only the most powerful error the chip race it's simply a race between semiconductor companies in bringing the smallest process notes to the market this race only concerns cutting-edge chips meaning the smallest ones possible usually measured in nanometers well who are the major players the two leading players in the industry are from taiwan and south korea both are capable of producing five nanometers processed notes at commercial volume while the runner-ups are all stuck at seven to ten nanometers tsmc and samsung have already started development on three nanometers notes the us is two years behind china at least four years yet somehow they seem to be the loudest in the race well i guess it's true that anti-vessels make the most noise so before we dive into the race we must take two minutes to understand the semiconductor industry to get an idea of who the major players are and the roles they play but if you'd like to ignore all that you're welcome to skip to this timestamp but mind you it's like watching game of thrones from season three it would look cool on screen but you wouldn't be able to follow there are three stages to the production line design manufacture test assembly and packaging that was a lie there are actually way more steps than that but i wouldn't stress over them companies used to do all three steps in-house since the 80s the industry split these departments up into specialized companies each being responsible for an individual stage hence fabulous foundry and outsourced semiconductor assembly and test companies were born so what does a foundry do they don't design they don't do retail they simply make the chips companies spend fortunes in r d's and equipments and to build these dustless fabrication plans the foundry industry is monstrously competitive here are some of the names you might have heard of tsmc is the largest of them all accounting for more than half of the global market cap they only take care of the manufacturing part but before it gets made someone must first design it designs can be done in offices no fabrication plans needed hence they're usually called fabulous let's use smartphone as an example first you design the chip then you give it a name anything that sounds sophisticated will do like snapdragon 855 kirin 9000 i love you 3000 i mean who cares then you send your design over to the fabs for manufacturing in a way it's like surrogation once your chip was born and tested they'll hand it back to you feel free to put it in your latest product line and voila customers will queue overnight outside of your shop [Music] here are some of the famous fabulous companies you might have heard of it's worth noting that high silicon is owned by huawei a chinese mobile company there are also companies that specialize in packaging and testing we call them osats but they are not as competitive as the other two finally we still have control freak companies like intel and samsung who prefer keeping everything in house they also manufacture chips for other fabulous companies too due to technological gap and globalization the supply chain network is distributed all over the world trust me our phones have seen way more than us now that we've gotten this out of the way we can finally start the game one of the protagonists in this game is smic the biggest foundry in china they've recently announced that they're able to achieve process notes close to seven nanometers which they refer to as n plus one experts actually say it's closer to eight nanometers but let's not get hung up on my new detail we'll just call it seven nanometers for now and here's where they run into serious bottlenecks mainly because of this see to pack billions of transistors into the size of a fingernail it can only be done via extreme ultraviolet lithography the only company in the world that produces these monster machines is asmol a dutch company that's actually what samsung and tsmc are currently using to make their cutting-edge chips in order to achieve anything below seven nanometers one needs this equipment which by the way is worth more than 100 million euros well are you kidding that's like pocket change for smic i'll take two thank you very much what they're about to experience is the longest shipment delay turns out that the us government has intervened they've convinced the officials in netherlands to withhold asmo's export license without this critical machine smake is likely stuck at seven nanometers or maybe in a couple of years they might decide to release this machine to china when everybody else is already making three nanometer ships it'll be like receiving a playstation 3 this christmas i mean do they still have games aside from its manufacturing potential chinese phone manufacturers are affected too as i've mentioned before high silicon is a fabulous company owned by huawei hi silicon specializes in chip design including huawei's latest kirin series it was designed in-house then shipped to tsmc for manufacturing 2020 was supposed to be a big year for huawei it overtook apple and samsung to become the number one smartphone player in the world in july this year huawei released new products that use 5 nanometers technology something only apple was capable of but again enter the greatest [ __ ] block ever the us government has intervened again with a foreign direct product rule how does that differ from the entity list imposed on huawei in 2019 the entity list refrains u.s companies from supplying certain components to huawei it's a domestic policy foreign direct product rule on the other hand requires every company in the universe who uses u.s technology to apply for a license before supplying huawei so not only are we cutting ties our partners will be cutting ties with you as well especially you tsmc is of course huawei tried to get around the restrictions and said you know what we don't need to design our own chips let's just buy trips from other fabulous companies it actually worked for a while but the usb in u.s said nice try but no [Music] so let's recap due to all sorts of export restrictions and key machinery ban when it comes to making cutting edge chips they can't make they can't outsource they can't buy i mean they've snookered the entire chinese semiconductor industry unless there's a miracle i don't see any way around it not to mention that's only the manufacturing side high silicon also has other concerns on designs regarding eda software and architectures but those are not as pressing we'll get to that next hand over the years chinese officials tried to convince tsmc to make ships in china tsmc was like fine but don't bother asking for our most advanced boundaries i mean don't even think about it as a result tsmc actually has a 60 nanometers fab in nanjing china funny thing the founder of tsmc actually predicted last year he said if the tension between us and china keeps growing tsmc will become a highly contested spot for geopolitical strategists well soon after that u.s successfully convinced tsmc to invest 12 billion dollars and move their 5 nanometers production to arizona they've also agreed to do research and development on u.s soil plus they train hundreds of american engineers in taiwan so they can run these future plants that's about it the chinese semiconductor industry is currently stuck at a bottleneck meanwhile the us government is trying to take the liberty to seal that bottle thanks for watching if you learned something new in this video please share it to your friends click subscribe and the bell icon to get notified for similar weekly interesting content for instance is the global economy going backwards click on last week's video and i'll bring it to you straight in five minutes see you next week

Channel: Straight up

Views: 77,874

Rating: 4.8508224 out of 5

Keywords: straight up, vertical

Id: hcQmI6N5t2I

Length: 9min 50sec (590 seconds)

Published: Sun Dec 20 2020