After more than 40 years of reform and opening up, our economy has developed rapidly. As early as a dozen years ago, it jumped to become the world's second largest economy. Our total import and export trade is the largest in the world, our supply chain system is the strongest in the world, and our manufacturing industry can dominate the world.
Even in the field of scientific and technological innovation, our performance is not inferior. Manned spaceflight, lunar fire exploration, satellite navigation, quantum information, 5G technology and other fields have achieved major results and entered the ranks of innovative countries.
These achievements are remarkable and miraculous. The great revival is just around the corner.
But why, a small chip, we are stuck in the neck by the United States. You may ask:
Are chips that complicated? China used to be able to come up with nuclear weapons, why can't it make high-end chips now?
Our national system is the best at concentrating on big things, as long as the government is willing to throw money and give policies, can it still come up with high-end chips?
Take 10,000 steps back, even if we can't figure it out, can't we buy it? In today's globalized world, can the United States stop others if it controls itself?
With these questions, let's talk about "Chip Wars", I believe we can solve these mysteries.
(The Chip Wars, subtitled The Battle for the World's Most Critical Technologies, was published in English in October 2022 and Chinese in May 2023, and Chris Miller, an associate professor of international history at Tufts University.) ）
On August 17, 2020, the U.S. Department of State and the Department of Commerce issued separate statements on their official websites to further tighten restrictions on Huawei's access to U.S. technology and included Huawei's 38 subsidiaries in 21 countries around the world on the "Entity List," aiming to crack down on Huawei's acquisition of commercial chips. So far, the total number of Huawei subsidiaries included in the US "entity list" has reached 152, marking the full start of the Sino-US chip war.
Chips have become an important bargaining chip in today's big country game.
The author believes that World War II was determined by steel manufacturing technology, the Cold War was defined by nuclear weapons, and the competition between China and the United States today is likely to be about computing power, and the most direct is chip technology. Chips are not only about technological innovation and economic development, but also determine international political relations and military strength. From machine learning to missile systems, from autonomous vehicles to unmanned warplanes, all these advanced technologies require high-end chips.
The production of chips is extremely complex, depending on a series of cutting-edge technologies or materials, including chip design software, manufacturing equipment, production processes and raw materials, and other aspects, and is also very expensive.
For example, to manufacture a typical chip, you generally need to use the design software of the American company, use the design architecture of the British Arm company, and then send it to TSMC in Taiwan to manufacture. TSMC needs ultra-pure silicon wafers and a special gas to manufacture chips, which can only be imported from Japan; In addition, the world's most sophisticated processing equipment, the lithography machine, is mainly produced by five companies, one Dutch company, one Japanese company and three American companies. Without the equipment of these companies, it would be virtually impossible to make advanced chips. After that, the chips are typically packaged and tested in Southeast Asia before being sent to Chinese mainland to be assembled into mobile phones or computers.
Let's take our commonplace Apple mobile phone as an example. Apple phones need more than a dozen chips to work, which manage battery, Bluetooth, network, audio, camera functions. Apple does not produce these chips at all, but purchases finished products. For example, the memory chip of Kaixia Company in Japan, the RF chip of Sijiaxun Company in the United States, and the audio chip of Silui Logic Company in Austin. Even the processor chips that run the mobile phone's operating system can only be designed by Apple, not manufactured by itself. Apple's processor chips are the most advanced in the world, and there is currently only one company in the world capable of manufacturing, which is TSMC in Taiwan.
The miniaturization of chips has been the greatest engineering challenge of our time. Today, no company can manufacture chips more precisely than TSMC.
Unlike most other products, the technology to make high-end chips is monopolized by only a few companies, and the technology of individual links is even controlled by only one company, and no other aspect of the economy and society is so dependent on so few companies. Chips made in Taiwan, for example, can provide 37% of the world's new computing power every year. Two South Korean companies produce 44% of the world's memory chips. In particular, the Dutch company ASML manufactures 100% of the world's EUV lithography machines, and each EUV lithography machine has hundreds of thousands of parts, which took tens of billions of dollars and decades to develop, and its current manufacturing cost is more than 100 million US dollars. Without these devices, cutting-edge chips simply would not be possible.
And the situation in our country is that in almost every link in the chip production process, we are extremely dependent on imports. Among them, the software used to design chips is dominated by American companies, Chinese mainland has a global market share of less than 1%; In terms of core intellectual property, Chinese mainland has a market share of 2%, with most of the rest occupied by the United States or the United Kingdom; In terms of providing manufacturing materials and manufacturing tools for chips, the market share of Chinese mainland is 4% and 1%, respectively; When it comes to chip manufacturing, China's market share is only 7%, and there is no cutting-edge technology at all, which means that the chips produced Chinese mainland can be made elsewhere. For advanced logic, memory and analog chips, Chinese mainland rely heavily on software and design in the United States, machinery and equipment in the United States, the Netherlands and Japan, and manufacturing processes in South Korea and Taiwan.
The above is the difficult situation faced by our chip industry, which can be described as shocking and crisis-ridden. It is already very difficult for us to achieve a technological breakthrough in a certain link, let alone the independence of the whole chain. But we have no choice, the game of the chip war, we must break, but the premise is to understand the situation first.
In the next issue, we will start from the Silicon Valley era in the United States and talk about how the chip industry got to where it is today.