Oxford Debate: Will China Win the Race for Supremacy in the Semiconductor Production?

all right good morning afternoon and evening depending on where you're joining us from my name is Nicola singer and on behalf of age Society Switzerland it's my pleasure to welcome you all to this Oxford style debate today the question we want to address is whether China can reach its goal of establishing a world-leading semiconductor industry by 2030. to begin let me quickly remind you of the structure of the debate today first in a little bit you will all get to vote on whether you agree or disagree on today's motion we will then have two teams arguing in favor or against that motion and trying to convince you will hear opening statements and rebuttals from each side after that we will move into the discussion where we welcome your questions please submit them using the Q a function which you will find at the bottom of your screen and zoom finally intubator will have two minutes for closing statements trying to summarize up and convince you that their position is the right one after that comes the most important part will you will vote again on the same question on whether you agree or disagree with the motion and the team that has gained more votes compared to the beginning will be declared the winner today's motion is China will win the race for Supremacy in the semiconductor production by the year 2030. we will start the initial poll now you should see it on your screen and you can vote Yes if you agree with the motion no if you disagree with the motion and I don't know if you don't know while you vote let me outline what we are debating today semiconductors basically every electronic device contains them the smallest chips going in production have transistors only three nanometers apart the supply chain is extremely complex and only a couple of firms are able to produce the most advanced chips Taiwan semiconductor manufacturing company or tsmc is one of them and currently by far the biggest player in the industry Tech firms around the world depend on the chip making on the island many regions including Europe the US and China fear and escalation of the dispute over Taiwan and are trying to increase their domestic production Chinese president Xi Jinping said in 2018 that semiconductors are as important for manufacturing than the heart is for humans and he said and I quote when your heart isn't strong no matter how big you are you are not really strong also important to note that China actually spends more on semiconductors than on any other imported good right now part of China's made in China 2025 industrial policy is to expand the local production of semiconductors to meet 80 of domestic Demand by 2030. today's debate will be on China's chances gaining the upper hand in semiconductor production um the post goes thank you very much for your votes let me now introduce our teams on the side arguing for the motion uh joining us is Sophie Charlotte Fisher a senior researcher at the center for security studies at bth Zurich and a research affiliate with the center for the governance of AI in Oxford Sophie's research focuses on the geopolitics and governance of emerging Technologies research topics include the U.S China competition in emerging Technologies the eu's approach to geopolitics and technology and the role of Technology firms in International Security joining her arguing for the motion is John Lee director of the consultancy East West Futures he's also a researcher at the light in Asia Center a consultant for The International Institute for strategic studies and a colleague on the EU China semiconductor Observatory John's research focuses on China and digital technology in particular China's cyberspace governance regime the semiconductor industry and future telecommunications Networks on the other side and arguing against emotion Jimmy Goodrich who is the vice president for Global policy at the semiconductor industry Association Sia in Washington DC in this role team Elites Sia's Global policy team and directs Sia's International competitiveness trade export control supply chain Global Market Research and China policy agenda that's quite a portfolio before moving to Washington DC in 2012 Jimmy spent a total of seven years working in the tech sector in China and finally joining Jimmy on the team arguing against emotion is Young Peter kleinhans uh head of technology and geopolitics that shifting Foundation new responsibility an independent non-party non-profit Tech policy think tank in Berlin Germany his focus is on the analysis of semiconductors as a strategic asset how resilient the global semiconductor value chain is to external shocks in how geopolitics affect this value chain thank you all so much for being here with us today without further Ado I would like to hand over to John arguing for the team in favor of the motion for your opening remarks John you have five minutes sorry you have four minutes on the clock there you go thank you very much Niko I think we need to begin by defining what do we mean by Supremacy or rather what does it not mean Supremacy does not mean Market leadership in every domain or technical leadership in every domain what it means for our purpose is a dominant Market position across the industry as a whole one which allows Chinese industry and the Chinese party of states to achieve its goals despite foreign opposition which makes sense in the context of China's overall policy goals as the Communist Party leadership has set them out not technical leadership for its own sake but making China a modern and Powerful socialist country by mid-century prosperous and able to assert its political goals against rivals foreign muted um but I will quickly reprise that um what do we mean by Supremacy it does not mean Market leadership in every domain or technical leadership in every domain but what it does mean is a dominant Market position across the industry as a whole that allows Chinese industry and government to achieve its goals despite foreign opposition this makes sense in the context of China's overall policy goals and China already has in place the constituents for this in the semiconductor sector and expanding chip design sector which closely serves growing in user Industries which are developing past in China with a focus on Next Generation Technologies such as risk 5 architecture the leading market share Chinese firms have in the packaging section of the supply chain and the large market share and Fabrication of mature nodes in the larger economy linked to the semiconductor industry are a critical part of this picture again technical leadership across multiple domain isn't required for dominant Market power when you can have faster implementation of Technologies and integration with past growing markets in the developing world and when it comes to the critical technology gaps China has been working on these for some time long-term state-led r d projects are so critical choke points have been running for almost two decades for example constituent Technologies for photo lithography which have been complemented potentially by Espionage as reporting about asml as indicated and in Chinese Private Industry we see startups for Eda software and AI oriented chips to use only two examples which have corresponded to recently introduced us export controls which show great potential although obviously they are starting from behind to fill these critical gaps within the time frame that we are discussing here so while geopolitical conditions are challenging they are also encouraging Chinese domestic industry to Imports to take import substitution seriously and the senior political leadership in China also recognizes the necessary conditions including giving the market a leading role albeit with a heavy State hand and maintaining International links with the global semiconductor industry perhaps most importantly Washington will not be able to plural All Foreign players into a United strategy to contain the development of Chinese semiconductor sector as the news from just this week regarding South Korea and other countries I think strongly suggests and therefore the potential for it um to effectively counter all of the advantages of the Chinese industry which are already observable which I have outlined before are going to um uh it is unlikely that U.S leadership will be enough to turn the tide and there I think I will conclude with my four minutes thank you very much uh John for this first opening statement arguing in favor of the motion let's move it right along and I'm going to ask young Peter kleinhans uh for his opening statement arguing for the team against the motion young Peter you as well have four minutes on the clock which starts now thank you very much let's start with uh what John just said a dominant Market position across the industry across the semiconductor value chain well if we talk about winning a race and Supremacy you would assume that Supremacy includes dictating terms and conditions being able to do as your police and to innovate to your heart extend with your domestic um industry now with semiconductors we have heard it in the um opening statement to this debate we talk about a transnational value chain that is defined by division of labor so of course China might gain market shares in artificial intelligence ships they might be able to have the most manufacturing capacity domestically but can you really talk about Supremacy if a cutting-edge AI chip that is used in servers from Alibaba or from tencent or from Baidu relies on cutting-edge Manufacturing in Taiwan that uses Dutch manufacturing equipment Japanese chemicals U.S chip design software so here the concept of Supremacy really does not fit to the realities of the valley chain which are transnational division of labor and to be honest if we dive deeper into that Valley chain the fact that in many of those areas for China to be to achieve Supremacy they would need to establish not just domestic alternatives to existing suppliers but they would need to compete at the global Cutting Edge if we look at manufacturing equipment if we look at chemicals that need High Purity levels in order to be used for Semiconductor manufacturing this is simply not feasible to go from zero to Global Competitive Edge within eight remaining years because it's already September 22. so the reality is that yes it is nice to talk about the heart needing to be strong and only only a healthy body relies on a healthy heart or I kind of cannot get the quote right here but the point is that semiconductor manufacturing is so complex as of today and is increasingly complex in the future just for the for the audience we talk about more than 1 000 production steps more than 60 different types of manufacturing equipment more than 400 different chemicals just to produce your modern semiconductor and the whole process takes four to six months to get an idea of the complexity China would need to be able to at least establish Market relevant Chinese Alternatives in every single of those 60 equipment areas in every single one of those 400 chemical areas to be able to say we are Supreme nobody can dictate us this will not happen within eight years time if in many of those areas you don't have a viable competitor established as of today so as my last point the reality is in 2030 China will continue to be highly reliant on foreign inputs for Semiconductor manufacturing and that includes on U.S inputs on European inputs on Japanese inputs with the obvious geopolitical tensions around thank you nicely done young Peter to the second perfectly at four minutes that was excellent thank you so much um we'll move it right along back to the team arguing in favor of the motion for your rebuttal Sophie Charlotte Fisher the floor is yours for four minutes thank you very much Nicole um I would like to pick up where my colleague John has left off and in the next four minutes I would like to redirect your focus to the year 2030 and actually offer another take on what Supremacy could mean by then ladies and gentlemen if there is one thing that we've seen of the last decade it is how rapidly technology and the associated Industries can change and develop ten years ago we didn't have SpaceX reusable rocket launchers Amazon's Alexa had brought the internet of things into our homes and deepminds Alpha go hadn't beaten a human champion at the complex board game of go yet these examples illustrate that in Tech Industries we cannot Define what progress let alone Supremacy means in an industry eight years from now based on what we know and see today we cannot simply assume that breakthroughs may occur along the same lines as previously but we have to understand that they may happen on unproven and unexpected pathways especially when we look at the semiconductor industry we should not only acknowledge that significant changes may occur until 2030 but we actually have to recognize the need for disruption in the industry let me tell you why most law which refers to prediction by Intel's co-founder Gordon Moore that the number of transistors on an integrated circuit would double roughly every two years and enable steady performance and functionality improvements is likely to approach its physical limits most forecasters including Mr Moore himself expect the law to end by around 2025. this Prospect raises some fundamental questions where will the next big in the industry come from and who will actually find then what Supremacy means in a post more error the answer is China will ladies and gentlemen China is especially well positioned to seize the opportunity presented by the end of Moore's Law and to develop the next generation of semiconductor technology that will disrupt the industry China has built up particular expertise in developing new superconductive materials and techniques that may allow it to transcend the current challenges to increasing computing power one reflection of this expertise is a patent obtained by Chinese telecoms giant Huawei program transistor but not only the industry but also the Chinese leadership is acutely aware of this trend and this need for innovation in the industry for example in its current 15th 14th Five-Year Plan Beijing has prioritized the development of third generation semiconductors more generally China as we've seen has made remarkable progress and filing and obtaining new semiconductor patents relative to the US in the period from 2019 until early 2022. but let me be clear and also reiterate a point that my colleague John has already made it is not only current research and development in China that uniquely positions the Tulip ahead I would also argue that the United States with its increasingly restrictive controls on semiconductors and Manufacturing equipment is actually helping China to innovate the restrictions significantly increase China's motivation and free resources to explore alternative Pathways to circumvent the restrictions and we can already observe this effect in some areas for example faced with restrictions of the Trump Administration on access to trips and Manufacturing equipment Chinese companies like Shanghai micro have made important progress in advanced packaging lithography machines offering one potential Pathway to circumvent some of the U.S export restrictions at least mitigating the impact finally those restrictions may have hurting its own position in the semiconductor industry and weaken its relative competitive competitiveness until 2030. as John has mentioned we have seen her elected in U.S allies like South Korea have been in supporting U.S policies directed against China like the trip 4 Alliance this is hardly surprising given the important role that the Chinese Marketplace for South Korean ship suppliers but also others and this market shares only expected to grow with that I closed my argument and yield back to our opposing Society thank you very much for your attention thank you very much Sophie for this final no I'm sorry we're not yet done I almost forgot you there Jimmy I'm sorry I'm finally handing it over handing it over to Jimmy Goodrich joining us from Washington DC for his rebuttal from the team arguing against motion Jimmy please you got your four minutes as well thank you well I think picking up on what JP mentioned about no one country or company is able to completely dominate the global semiconductor ecosystem today the United States nor Taiwan nor Japan nor Europe nor even China is in a single dominant position across the ecosystem and by 2030 I believe that that will still remain the case where multiple countries together will seem the fabric that creates This Global ecosystem from the Advanced Equipment materials to the design software to process technology the semiconductor industry is not one single Market it's defined by multiple different verticals hundreds of different types of chips and for around 30 different types of semiconductor Technologies each one of those is a microcosm of different companies different economics different barriers to entry different Technologies uh primarily I think China by 2030 will still face major hurdles uh from becoming a leader in areas of semiconductor logic process technology and design for various different factors number one being the technological complexity know-how and Workforce but beyond that also issues related to geopolitics export controls and other restrictions that Washington DC and its allies are imposing on China cannot be denied will have a significant degrading impact on China's domestic capability and that certainly poised to increase as tensions between the U.S and China escalate simply bending the laws of physics is more and more difficult today there are only three companies that are able to produce semiconductors at the most advanced feature sizes three nanometers none of them are in the People's Republic of China and even companies in that three-way race are struggling who is going to have the Next Generation two three 1.5 nanometer transistor it's unknown at this point what that transistor architecture will be physicists mathematicians material scientists are working hard outside of China primarily outside of China to research develop and mass produce that technology today China really has almost zero presence in the sub 7 nanometer production landscape which is a major disadvantage once you're behind and not part of that ecosystem it's very difficult to jump in the race and start from scratch in addition uh the U.S government and in partnership with foreign governments has imposed export controls on China first and foremost the inability to import extreme ultraviolet lithography simply means that China will have very few if zero options for producing semiconductors below five nanometer meaning that bolt between now and 2030 China will remain dependent on foreign sources of production for advanced logic devices that will also remain the same for dram as euv is a gating technology for Next Generation dram technology as well and estimates for China to develop their own extreme ultraviolet tool are very Grim perhaps could take 10 15 years uh if not longer given the advanced technology basic science and physics Metrology Optics that are involved in developing those machines uh so I believe uh that China will be increasingly relevant in the market it will have an increasing share of sales however it will be as dependent if not more on foreign inputs for its own supply chain through the end of the decade thank you very much Jimmy um for this final rebuttal um and that ends our first part of the Oxford debate with the opening statements and the rebuttal will move into q a um we welcome your questions from the audience here as well again if you want to ask a question please submit it in writing um on the Q a section on the bottom of your screen we have about 20-25 minutes here for the Q a so the sooner you get your question and the likeler is that we'll get around to asking it I want to jump right in um young painter I'm quoting here from a report that you co-authored recently which that China has significantly stronger position across the entire semiconductor value chain today compared to 10 years ago China should be expected to strengthen its National position in the global supply chain during this decade how can we be sure the strengthening does not lead to Supremacy the direction seems to be clear how can you be sure they're not reaching the goal it's it's always nice if you take me by my words so thank you for that um it comes back to what uh Jimmy uh elaborated before um it is it was without any question China will play a more substantial role in many areas of semiconductor design and Manufacturing in 10 years time or in eight years time um we see that right now for example just as one very very uh focused example in AI accelerators a Chinese startup Byron technology was just invited to hot chips this is one of the it's a funny name but it's one of the leading processor conferences in the United States and their Byron technology a startup that existed for three or four years and just announced a new chip that is competing relatively well with with the state of the art from Nvidia and others that is out there right now um and this is this is a major achievement no questions asked and it could very well be that in 10 years time um we actually have highly competitive AI chips designed from Chinese companies in global servers and data standards um but this is very very different from saying that China will have Supremacy across the entire value chain looking at chemicals equipment different types of equipment like Jim you said different types of chips it's very different to compete in power semiconductors to charge an electric vehicle then competing in AI chips then competing in memory chips these are all their own verticals these are all different markets so in that sense I think my question from my my sentence from that report uh still holds true but it is it is decidedly different to talk about having stronger position in the ecosystem versus achieving Supremacy because this no single region can achieve thank you um Sophie we've seen just in the recent few months um a slate of reports coming out of China uh that there are several corruption investigations going on against semiconductor Executives including crucially the head of What's called the big fun which is a huge state-runned investment fund that was supposed to funnel State money into the right directions and semiconductors aren't these investigations a clear sign that things are not going according to plan in China and are they not actually already dooming the objectives for 2030 um as uh as was noted before that's only eight years away so can you really achieve Supremacy if you're busy investigating the people who were supposed to do that for corruption actually I think we cannot infer from these types of Investigations that the companies and what they're doing and what and also the companies that they're investing in are actually not doing good work after all um so when we look for instance at these companies where the arrested Executives came from on where the truths investors are doing quite well um why MTC is one example so I wouldn't say that this is a sign that the industry as a whole is not doing well of course corruption is a common problem as we've seen over the last few years in China and this is certainly something when it comes to the distribution of money where improvements have to be made but I think this is not a prior for an indicator for how well the industry is actually doing and also the results um that they that they can produce thank you um continuing uh quotes from uh from from recent news reports Jimmy the Biden Administration Reuters has reported just recently planned next month to broaden its curbs and U.S shipments to China semiconductors used for artificial intelligence and Chip making tools so effectively it's trying um that's the Reuters report that I'm quoting here to find the choke point um where it could sort of squeeze uh China and I I think we can argue that of course in the short term um this may actually give China this Advantage um hurt the supply that they're receiving but wouldn't it be fair to say as your opponents have argued in this debate that these forms of export controls is denying China access to parts of the global value supply chain will only strengthen and reinforce domestic production and May in the long run be counterproductive so wouldn't it be assuming maybe taking your own argument that this is a globally integrated supply chain wouldn't it be better for players like the us but also Europe to include China in this process instead of pushing it out and with that only pushing it towards domestic production and and possibly Supremacy yeah that's a great question I think certainly uh the industry and the International Community would not like to see this level of um comp pressure and tension between the US and China and that's definitely leading to more restrictions coming from the US government um and absolutely uh the net result of an export control is almost always to put put an emphasis on the need for China or whomever else the control is imposed on to develop their own corresponding technology um however there is you know certain laws of physics and Engineering that come into play and it's not a question of uh will China have the termination to develop many of their own Technologies it's when and how long will it take um and in some areas I think progress will be more rapid um for example China's capability to develop uh manufacturing equipment tools software necessary for trailing Edge semiconductors will certainly improve significantly in some cases I think China will be able to have a basically foreign IP free production line uh for trailing Edge technology 90 65 perhaps even 40 nanometer um however trying to push that down to the Leading Edge by the end of the decade is still going to be a very difficult task and at the same time while China will be focused on just closing the Gap as to where the global industry is today the global industry is going to keep moving forward so the Innovation uh for lithography for the Next Generation materials for process technology it's not stopping and so uh what happens is when you're behind you're continually trying to catch up to a competitor who's always running faster than you um and that is going to be a significant burden for China to be able to close the gap in the Leading Edge of technology and I agree you know strongly with my teammate JP if you cannot close the gap in the Leading Edge of Technology it's difficult to achieve Supremacy thank you um John turning to you you started out with this really nice definition of Supremacy and what it actually means I think this uh was excellent that you did that so that we would all talk about the same thing but now my question to you is assuming your definition of Supremacy does any single country today have Supremacy in the semiconductor production and if no what makes you so sure that China could be the first country to actually achieve something no other country has achieved well Niko I would say that it is correct no country today has Supremacy even according to my definition what is different about China is that it is developing a role in Next Generation Industries smart manufacturing intelligent electric vehicles various applications about official intelligence and we could go on which combined with the strengthening that JP referred to of the position of Chinese firms across the semiconductor industry will give it an unprecedented level of dominance so once more we are not talking about China being able to necessarily close the gap with that technology Leading Edge in every field but we are talking about a situation where a country which is still dominant in manufacturing and that of course is another Redemption which is probably the subject of another debate but I've assumed it which is playing a central role in all of these next Generation Technologies built upon semiconductors also is attaining a very strong role and in some cases an industry leading role um across the value chain as Jimmy said um unless we talk about the Leading Edge in many areas it's already possible to Envision within the next few years and essentially Chinese IP resupply sorry foreign IP free supply chain in China and once more um we talk about the ability to achieve the Chinese State's goals it's not necessary for necessarily Chinese firms to be able to produce Cutting Edge lithography machines or perhaps the most efficient applications of substrates that take gallium oxide is one that has also recently been explored controlled by the United States if the overall Market power of Chinese firms in the industry and again all the industries put on top of it means that the US government is not able to Corral all of the other players in this industry to cut off Jonathan those Technologies or to adequately supervise the black market for those Technologies or to gain visibility in the same way that the Chinese government can because of its more intrusive Powers into all of the constituent Technologies then that puts China in a position with the upper hand and that's how I've defined Supremacy for the purposes of this debate thank you very much um now as as we mentioned at the top of this conversation uh young Peter there's an obvious kind of geopolitical component to all of this the world's leader in semiconductor manufacturing is Taiwan which China regards as its territory and seeks to reunify with so wouldn't it be possible for China to very simply achieve Supremacy by let's say achieving reunification through whatever means uh that will be but would sort of like integrating taiwan's Leading Edge into uh the the semiconductor production of the of the PRC not basically achieve that goal with one stroke yeah excellent question I mean this this certainly pops up um often maybe to uh regarding tsmc again it comes back to what uh jimin and I uh argued before don't think of tsmc in Taiwan as a monolithic company it is really a network organization that pulls together suppliers from across the world Talent from across the world to at the end of the day be able to manufacture the most advanced chips and yes it has around 90 percent of cutting-edge contract manufacturing so in that regard for this particular part of the value chain it certainly has achieved Supremacy at the moment in time but with reunification what would happen to tsmc tsmc depends on foreign talent that would more most likely leave the country uh tsmc depends on foreign suppliers those would most likely stop supplying to the tsmc tsmc and I think this is the most important Point heavily relies on mainly you as customers apple is the largest customer from tsmc so what would China gain if they have access or if they control even tsmc they would take over a company that itself is highly reliant on the global ecosystem and highly dependent on U.S customers so I'm certainly not the China expert in this round by a far short but I would say that if uh um a takeover from China happens that would be despite tsmc not because of tsmc thank you very much um I'm going to turn to some questions from the audience as well um now and please you know if you still have a question you haven't submitted it do this you can also instead of writing a question yourself go through the questions we've received there are plenty and you can upload the ones you would like to have answered most urgently and I will try to prioritize these as well for the time being uh Sophie the question from the audience is that given the complexity of semiconductor technology is China's ecosystem and culture of stage run companies really capable of Cutting Edge Innovation with semiconductor production of the Leading Edge kind that we're discussing here today really possible um in a state-run environment there are a lot of like assumptions and discussions I'm going to let you I'm going to let you answer and answer those as well yeah I mean this is obviously an often asked question and a concern that it's often raised when it comes to China but I think also looking beyond the semiconductor industry China has really proven over the past 20 years or so that is very well able to innovate especially also in areas where you know it doesn't simply copy something from the west but really innovates and I think the same we should at least assume for the semiconductor industry as I also said in my rebutter we may see progress and new developments on Pathways where we don't expect them yet and where we you know may may not see now or when we know now where it's coming from so I would definitely say China is able to innovate and we've seen this in many areas we've even seen this in the semiconductor industry and we should assume that China is able to do more especially given the additional resources that will be freed up and the increased willingness that will come from the restrictions for an imposed by other states on China in this industry thank you I actually want to I want to pick up something that you that you said in in your statement and just repeat it now um in your answer and put it to Jimmy So Jamie Sophie referred to this idea that you know Moore's Law is coming to an end in the next two to three years essentially and that whatever advantages we will see ON Semiconductor um innovation in the future will have to come from somewhere entirely different so what makes you so sure I may have misquoted Sophie here but I'll I'll let her correct me afterwards I'm first going to ask Jimmy the question um what makes you so assure Jamie that the post more wave of innovation in semiconductors cannot come out of China and that that will not give China the the edge in semiconductor production well there's certainly been um a graveyard of uh false predictions that Moore's Law is coming to an end uh we've seen that about every five years you know the New York Times or IEEE Spectrum runs a journal article that says Moore's Law is coming to an end and you know what every time uh the industry finds a way to continue innovating uh and in fact the road map through 2030 is pretty clear for logic device development uh there's a clear road map to go to below one nanometer with the innovation in the next three or four years of gate all around or carbon Nano sheet technology and then carbon fat technology even beyond that is under significant development and for example asml right now was working on the next generation of lithography tools that'll extend logic and dram scaling for at least another five years so I think through 2030 there's actually a clear path for Moore's law to be alive from a technology perspective the big of course wild card is investment will there be a major downturn in the market will there be a global economic depression that limits the ability for the industry to make the Investments necessary to realize those Next Generation technology breakthroughs there's a lot of reporting that in China China will innovate the next uh third generation semiconductor not based off of silicon technology whether it's gallium nitride gallium arsenide or other Compound Semiconductor materials I think this is actually just a complete misunderstanding of what compound semiconductor technology is it doesn't replace silicon it's complementary to it so where silicon technology is going to be the predominant CMOS architecture for advanced logic Advanced memory and storage that's about two-thirds of the entire gold semiconductor Market increasingly the analog or power semiconductor Market is going to see non-silicon-based technology be more relevant where does that come into play things like electric vehicles uh your power regulator for a solar panel um high power high energy consumption devices they're complementary but not replacing those data center AI chips that sit um in a supercomputer so we'll try to be able to ride the wave of third semiconductor generation development as China says to overtake the competition um no I don't think so um that's a false prophecy okay thank you um John turning to you it's it's certainly the case um as I think both you and Sophie have argued that over the last years and and decades China's uh economic and technological progress has been has been remarkable and there has been a lot of you know true technological innovation coming out of China but now we're seeing some headwinds you know there's an economic downturn of of sorts there's a real crisis in the property Market the political environment is becoming more unstable the zero covet uh you know has introduced a lot of uncertainty um into the system so wouldn't all these factors you know sort of also contribute to a Slowdown in industrial policy to slow them in actually achieving technological advancement of the magnitude that would be necessary to achieve Supremacy in the semiconductor production I think Michael what you're asking is whether the Chinese state is going to throw enough resources despite all of these problems at the semiconductor industry to achieve its goals and the answer is yes from my viewpoint I think for starters a lot of these problems are slightly seen out of context yes it's true that China's real estate sector is in serious trouble but there are also scope conditions that make up quite a different problem from Elsewhere for example Chinese banks are not going to play or there is not going I mean the big state on banks that pop up the whole system there is not going to be the equivalent of a lemon run um so although you will see a slowing of the economy the flow and effect to the government's resources I think is there is not a one-to-one equation but secondly the level of intervention that the Chinese State can achieve is simply on a different order of magnitude even under conditions of constraints like this um compared to what within liberal democracy certainly have available and I would say even let's say the other East Asian advanced economies um as Jimmy pointed out really the question for the advanced economies is will the investment dry up if the economic conditions are not there or if the wrong government policy are put in place and I've argued and I'll race them up in a moment that there are troubling signs that this may be the case there are dark clouds in the Horizon for the Western economies going forward so and there are a lot of questions over whether the approach being taken by the U.S government to export controls and even to the domestic support of the industry in cooperation with allies in let's say a non-zero thumb way um is actually going to be effective in the Chinese case as I've said I don't think that they are going to lack of resources throughout the industry the question is how effectively they will be used and there again we have to to quote leaves the one on commentator in the AI space distinguish between efficiency and Effectiveness as Sophie has pointed out the Chinese um have been this is perhaps a bit of a segue um but the Chinese have been successful in many cases where um predictions were long they that they could not reach the technological Frontier or even significant breakthrough and said the semiconductor industry is certainly you know far more complex and a much more difficult not to crack than any of the previous industrial examples but the reality is that even if a lot of the money is wasted if executives are arrested um for now seasons and so on there is so much money and so much incentive and enough human talents I would say in the Chinese ecosystem by this point that it would be very dangerous to bet against the Chinese approach being able to Brute Force if you like um through many different sections of the profession again this is not to say that they will achieve um technical leadership in the sense of having the most advanced technology um in every field but again if we talk about Supremacy it's an overall position of Leverage um in the industry that makes it impossible let's say for Korean firms or Japanese firms or european firms to divorce themselves from the Chinese market and indeed to become increasingly dependent on the Chinese market in many of the industries built on top of semiconductors and this is to say nothing of the developing world where Chinese influence is much greater then I think that there is definitely a shot for Supremacy as I've defined it um to be realized at let's say to the 2030 time frame thank you very much we have time for one last very short question and answer uh from the audience this isn't really going into to to either of of the team so I'm gonna just ask you Sophie and then maybe some of the others can jump in the question is does um the the china-russia connection the partnership Without Limits um as declared by the two countries um in February speed up the development in China and can it become a game changer I don't know what Russia would have um in terms of resources for Semiconductor development but maybe maybe it does is that sort of Alliance should it you know should it hold um for the long term gonna affect the development significantly or not I would I would frame this a little differently I think China has been very carefully observing what the US and its allies have been imposing on Russia when it comes to technology sanctions or more specifically export controls and especially also how these types of restrictions have now affected Russia's access to semiconductor technology China has been working for a long time on sort of sanction proving its economy insulating it from potential future external shocks and as both John and I have argued I would say if this Alliance or it's not officially Alliance but if there's no limit friendship is doing something it is again further underscoring China's willingness and also emphasizing the need to really become more independent in the semiconductor industry from Western technology perfect thank you so much um this is all the time we have for the Q a we're going to move on now to the closing statements each uh panelist will get two minutes on the clock and will proceed in the exact same order as we did when we started which means John Lee the floor is now yours for your final closing statement at two minutes please okay thanks Michael with two minutes to restate we must Define this correct question correctly what is dominance indeed there is no Prospect of one country monopolizing the Leading Edge in every technology in the semic docker Supply Chain by 2030 but semiconductors are not in products they are foundations for other Technologies and the industry is of strategic importance for that reason furthermore semiconductors must be optimized for those end users and where the industries are developing faster in China not in every case but even in many gray areas um the prospects for China are quite good to lead the global wave at least as far as the bulk of the investment money the fastest implementation of the Technologies in practice is happening that will have feedback effects to the Chinese semiconductor industry as well as creating an overall position in which Chinese industry and the Chinese State China Inc if you like will have the potential to achieve a dominant position over its rivals in the time frame we're talking about to 20 30. so perhaps um with the remaining 40 seconds let me highlight a couple of specific things um as Jimmy said in the case of logic processes um there is obviously a road map which may um not be moved by let's say breakthrough Technologies over the next 10 years but nonetheless um the demonstrate the foundation that's been shown by Chinese industry and if you look at the announcement capabilities about um Smith's ability to make a trip now at seven then meters there is clearly enough of a foundation there to build on in a situation where the phone industry may not be able to keep moving forward the technological Edge as fast as um our opponents have predicted I'm afraid that I have actually lost a few minutes there so I'll conclude and thank you all for your attention thank you very much John I just wanted to brief before we move on you mentioned at the top there this announcement um of snake which is a Chinese company to apparently have produced uh seven nanometer trips there's been some uh debate on whether that's actually true and how they achieved it we couldn't get into this um this is something if you're interested um uh to follow up on but now let's move on to closing statement from the team arguing against emotion young Peter kleinhans the floor is yours also for two minutes thank you I will actually go ahead and use the opportunity to take this mix 7 nanometer example as a great example for path dependency because we are not talking about Supremacy by 2050. we don't talk about Supremacy by 2040. it's about Supremacy by 2030 and for the remaining eight years it's all about path dependency the technical roadmaps are set in stone the existing dominant players will be for the supplier markets or the equipment the chemicals the semiconductor manufacturing will continue to be the dominant players as as of today so what happened with Smith nanometers was that Smith was able to achieve something similar to a seven nanometer process node but based on inferior technology that has been so far used for 40 nanometers for 10 nanometers so yes Smith can say that for a very simple type of Chip a Bitcoin mining chip they were able to produce that in seven nanometers but Smith seven nanometers cannot be prepared cannot be compared in terms of process technology level of sophistication with tsmc seven nanometers or seven or Samsung seven nanometers so the problem here again is that we dumped down the complexities of semiconductor manufacturing and think that we can compare single numbers the reality is that yes this was an achievement of smik no it was no surprise because we already knew since more than two years that smik is working on such a production line and they only achieved it for a very specific chip again it's it comes down to path dependencies and for 2030 the path dependencies for China are clear and that means Supremacy is simply out of the equation thank you very much young Peter kleinhans uh we'll move us right along to Sophie Charlotte Fisher um in Zurich for her closing statement arguing for the team in favor of the motion Sophie please thank you so much Nico um in my closing statement I would like to reiterate some of the arguments um that me and my colleague made that support the case that China will win the race for Supremacy in semiconductor production by 2030. in my rebutter I have argued that we should be more open to defining what Supremacy means by 2030 when we think about the uncertainties of the industry and we should consider them in this definition the limits in the industry as reflected by most law of course there have been many wrong predictions but it may very well be the case that we reach this limit at some point um gives us strong reasons to believe that Supremacy May in the future mean something different from where the industry stands today so as I said before we should be open for China to surprise us given not only the current research path that it follows but also the incredible resources that the Chinese government invests into this area and yes the element of surprise that we must see so China has not only the vision but it is well positioned to make breakthrough breakthroughs that could disrupt the industry and capture a leading industry in this new emerging markets for semiconductors as we've also argued in this debate the current export control restrictions that we see from the US and also other states May further underscore this willingness and provide resources for China to follow these goals and the development of advanced chip packaging nutrients is the architectures and new carbon-based materials could be game changers that we may not really realize as of today so in conclusion China May reach Supremacy and semiconductor production by 2030 not simply by trying to catch up in areas that we currently already see but by quote changing the lane and overtaking others thank you thank you very much Sophie and last but not least Jimmy Goodrich of the semiconductor industry Association your closing statement arguing against the motion well I appreciate the opportunity so I think just going back and if one were to look at The Five-Year Plan that the Chinese government has outlined since the 1980s you'll see in the 14th 13th 12th 11th 10th 9th 8th 7th et cetera et cetera that China's goal was to achieve semiconductor Supremacy and every one of those plans and unfortunately having a plan is not the same as implementing it um even having unlimited amounts of funding is not the same as having the right know-how technology Workforce and Market alignment to be able to innovate technology at the right speed necessary to meet market demand uh that doesn't mean that China won't be successful in some areas I agree uh with everyone that China will be increasingly competitive in trailing Edge technology commodity memory and other areas and maybe even in some trailing Edge equipment and materials but it'll still be dependent on key semiconductor leaders outside not inside of China uh through the end of the decade Beyond 2030 we don't know um what's the role of quantum competing other items but I think this is not necessarily the scope of our conversation but maybe for the next debate so thank you thank you very much Jimmy this concludes our debate thank you everyone uh for your fantastic argument it is now time for the final piece of the debate which is of course the second vote um for you the audience you will see the poll on your screen again the question is the same as at the beginning do you agree with today's motion uh click yes if you do click no if you don't click I don't know if you still don't know because we've talked a lot today um I'll give 40 seconds for the vote in silence and we'll pick it up afterwards we are ready so this is the big reveal um we're gonna see the results on the screen now so in the first poll 19 of you agreed with the motion and 49 disagreed with the motion in the second poll 26 um agree with the motion 59 disagreed with the motion and 15 didn't know and so if I'm interpreting this correctly the change is plus 10 for the team arguing against emotion that is Young paid the kleinhans and Jimmy Goodrich both teams actually won points um could uh convince um people who didn't know at the beginning but the team arguing against emotion again young paid declined Hanson Junior Goodrich got a little bit more that means you win this debate congratulations to both of you um thank you of course also to Sophie Charlotte Fisher and John Lee uh for this debate this was a tight tight result um and great to see um that so many people could make up their minds in in the process of this conversations with this we're at the end of today's Oxford debate thank you uh to our panelists for joining us today thank you um in the audience for all your questions

Channel: Asia Society

Views: 51,829

Keywords: asia society switzerland, program, current affairs, oxford debate, semiconductor production, china, taiwan, sophie-charlotte fischer, jimmy goodrich, jan-peter kleinhans, john lee, nico luchsinger

Id: qvMYVWngyjg

Length: 56min 43sec (3403 seconds)

Published: Fri Sep 23 2022