Japan, The Netherlands Join China Semiconductor Ban

Japan and The Netherlands have evidently decided to sign onto the Chinese semiconductor ban.

The talks between the US, Japan, and the Netherlands over wider bans on exports of semiconductor technology to China have reportedly seen the three agree to concerted action.

As The Register has often chronicled, the US has restricted exports of critical chipmaking and silicon technologies to China, hoping to prevent its economic and strategic rival from developing military technologies – and to protest human rights abuses.

While the Home of the Brave has spawned many of Earth’s most significant chipmakers and designers – Intel, AMD, Qualcomm and many others have headquarters stateside – other nations also export semiconductor tech to China. The Land of the Free would rather put a stop to that if possible.

The Biden Administration also recognizes that its bans could be seen as creating an opportunity for other nations to cash in on the absence of US vendors in the Chinese market. The three-nation talks therefore have the extra dimension of making sure America’s policies have their desired effect against China and don’t harm the home team.

Those twin desires saw Japan and the Netherlands in talks with the US last week, and according to numerous reports the meetings produced a unified approach to restrict semiconductor exports to China.

Without equipment from the US, Japan and The Netherlands, you can’t equip and run a modern semiconductor fabrication plant.

Peter Zeihan (him again), who has evidently lost a bet requiring him to dress as Gimli, discusses the ramifications.

This is one case where Zeihan gets the generalities right, but is wrong on some specifics.

  • Right: The idea that China can just forge a complete “alternative” semiconductor supply chain out of thin air to replace western alternatives is indeed “hideously wrong.” “The nature of the semiconductor industry is more of an ecosystem. There are there’s very few places that without, significant industrial build out, could even pretend to do more than two or three steps of it, much less than a dozen or so steps that are necessary.”
  • However, in conflating semiconductor manufacturing and semiconductor equipment manufacturing (possibly to avoid contracting hypothermia) he’s muddied things up a bit. There are five essential semiconductor equipment manufacturers:
    • Applied Materials (USA)
    • ASML (The Netherlands)
    • KLA (USA)
    • LAM Research (USA)
    • Tokyo Electron (Japan)

    If you’re building a modern, sub-10nm fab, chances are pretty good you need all five. You have to have an ASML EUV stepper, or else you have to go with trailing-edge machines from Canon and Nikon and deal with the computational pain and complexity of self-aligned quadruple patterning. You need KLA inspection tools to raise and maintain yields, and you need, at the very least, one of AMAT, LAM or TEL to provide the rest. Take away all three and you can’t equip a fab, period.

  • “We now have an agreement, and very soon the Dutch will formally be joining the sanction system against the Chinese.”
  • “The best [chips], these are 10 nanometer and smaller. This is typically what’s in your cell phone or in your high-end computers and servers those about 80% percent of them are actually fabricated in Taiwan, with another 20% in South Korea.” No. Although TSMC and Samsung are indeed leaders in this space, Intel has had 10nm processes running in their advanced fabs is Hillsboro and Chandler for a while, even though they’ve suffered yield problems.
  • His assertion that only China does legacy 90nm and above processes is false, as a look at this list of wafer fabs will attest, as there are a lot of companies (TI, TowerJazz, Oki, Mitsubishi, etc.) still profitably running older nodes, though many are comparatively funky technologies like BiCMOS, Analog, GaAs, etc.

    • Some quibbles about the details, but he gets the big picture right.

    As for his suggestion that companies stick to over 10nm nodes, well, I don’t think much of it. Those that can do >10nm nodes will and push the technology forward, and those that can’t afford to won’t…

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    This entry was posted on Tuesday, January 31st, 2023 at 7:48 PM and is filed under Democrats, Elections, Foreign Policy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

    5 Responses to “Japan, The Netherlands Join China Semiconductor Ban”

    1. Northern Redneck says:
      February 1, 2023 at 8:06 AM

      “… 80% percent of them are actually fabricated in Taiwan, with another 20% in South Korea.”

      And don’t forget that both Samsung and TSMC already have extensive manufacturing facilities in the US, and are expanding their extant facilities and/or adding new facilities.

    2. Lawrence Person says:
      February 1, 2023 at 8:36 AM

      Samsung does. TSMC’s new fab in Arizona isn’t slated to open until 2024.

    3. Northern Redneck says:
      February 1, 2023 at 5:41 PM

      TSMC has actually long had a fab in Camas, Washington. It’s not bleeding-edge these days, but TSMC knows how to run fabs profitably. They also note (boastfully!) that over their entire history (going back to 1987) they have never discontinued a process – they can still keep turning a profit on all of them. Impressive.

    4. California Curmudgen says:
      February 2, 2023 at 9:50 AM

      Does locking China out of mainland production make Taiwan a more tempting target to invade? If so, I hope the fab plants there have a plan to not be captured intact.

    5. Instapundit » Blog Archive » DECOUPLING: Japan, The Netherlands Join China Semiconductor Ban…. says:
      March 2, 2023 at 10:35 AM

      […] DECOUPLING: Japan, The Netherlands Join China Semiconductor Ban. […]

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