Friday, March 13th 2020

New U.S. Regulation Prevents Huawei Buying from TSMC, Could Backfire: Chinese Press

Huawei is planning a response to a recent administrative move by the U.S. Department of Commerce that makes it impossible for foreign companies such as Taiwan's TSMC to serve it. Huawei's mobile SoC design house subsidiary, HiSilicon, is highly dependant on TSMC to contract manufacture its SoCs on the company's 7 nm (N7), and various 10 nm-class FinFET nodes. Huawei is preparing to port some of its SoC designs to a 14 nm node of China's state-owned Semiconductor Manufacturing International Corp (SMIC) as contingency. Without access to 7 nm, Huawei's plans to lead the global 5G infrastructure market would hit severe roadblocks. The U.S. move has triggered a heated (and somewhat loaded) reprisal from Global Times, a newspaper that's regarded in diplomatic circles as a platform for hawkish unofficial messaging by the Chinese government.

China could blackmail the U.S. into lifting its trade ban and a more recent supplier-access denial to Huawei, with potential shortages of essential medical supplies, particularly face masks. An eminent Chinese industrial analyst, Ma Jihua, told Chinese newspaper Global Times: "The Huawei problem has been elevated to one of national interests and Chinese firms may stop supplying much-needed face masks if the U.S. provokes [a fight with Huawei]." In addition to Chinese suppliers, American firms such as 3M manufacture face masks in China, besides several other consumables needed to fight epidemics, such as gloves, hazmat suits, goggles, etc.
No huawei, no face masks: China to the US
Over 1,700 people in the U.S. tested positive for an NCoV infection, and have been quarantined. Maintaining these quarantines, along with the arduous task of decontaminating large populated areas, requires a steady supply of consumables for healthcare and sanitation workers. The United States government in May 2019 imposed a trade ban on Huawei, forcing much of the western tech industry to boycott the Chinese company in compliance with the ban.

The U.S. government has, however, given Huawei some breathing room with an administrative ordinance that allows U.S. companies to do business with Huawei until May 15, 2020, extending from a previous deadline of April 1. The administration also cleared the decks for easy import of medical equipment and supplies from China, something the Global Times report interprets as a tacit admission by the U.S. that it needs China to fight COVID-19. "The US recently granted exclusions for medical products from China, giving a tacit sign of its reliance on Chinese supplies just like US rural areas depend on Huawei telecom equipment," reads the report.
Source: Global Times
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27 Comments on New U.S. Regulation Prevents Huawei Buying from TSMC, Could Backfire: Chinese Press

#1
R0H1T
I doubt this will happen, sine the ban is in name only & Huawei is merrily selling all of their handsets with key/essential US tech. But if it does come to pass wonder what'd be the towards China around the globe? China cares a lot about their (public) image as much as anything else, to jeopardize their future growth over one Huawei seems like a short term move that'll undoubtedly have serious consequences for them.
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#2
AsRock
TPU addict
Yet another reason the US and other country's should become self reliant, we depend on way to much from them. And to think this is China's fault once again.

China don't give a flying f*ck about the west, so why should we.
Posted on Reply
#3
the54thvoid
AsRock
Yet another reason the US and other country's should become self reliant, we depend on way to much from them. And to think this is China's fault once again.

China don't give a flying f*ck about the west, so why should we.
Because people want cheaper things. I know a lot of folk are happy to buy 'local' but there's a tonne out there who simply want to buy things cheap as possible. It's up to companies to grow some nuts and put production back in our own back yards. I'd pay more, knowing that.
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#4
Vayra86
Huawei is too eager and confirms any and all suspicion against them and the Chinese government behind it. Soft power didn't work so now they swing the banhammer? Lol. Definitely a big no no to deal with these guys in infra.

Its that distinction between a 'partner' and a 'contractor' right there. Contractors can grow to become partners. This is not how they do it.
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#5
biffzinker
the54thvoid
It's up to companies to grow some nuts and put production back in our own back yards.
You want them to have a back bone aka not be spineless? Good luck with that.
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#6
silentbogo
It seems like yet another opinion piece (from an outlet fond of criticizing US). I think in the previous news I've already noted that the response from TSMC was something along the lines of "We don't respond to gossip", and I'm sure US govt. doesn't have enough sway and recently didn't earn enough good will to stop a multi-billion Taiwanese corporation from doing business with multi-billion Chinese corporation.
In regards to sanitation supplies, depending on how bad COVID19 situation gets (and it's already bad enough), there is a chance of it happen regardless of TSMC and Huawei conundrum.
For example, only 2 days ago we've got a nation-wide quarantine, and the first thing on our govt. bucket list was banning ALL sanitation supply export that's manufactured in Ukraine. And that's with only 1 officially confirmed case of the virus (there are rumors that it's around 80, so I assume it's actually somewhere in-between).
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#7
JAB Creations
China could blackmail the U.S. into lifting its trade ban and a more recent supplier-access denial to Huawei, with potential shortages of essential medical supplies, particularly face masks.
There go my plans to walk with impunity through the Great Sneeze Alley. How will society continue to function?! :kookoo:
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#8
R0H1T
AsRock
Yet another reason the US and other country's should become self reliant, we depend on way to much from them. And to think this is China's fault once again.

China don't give a flying f*ck about the west, so why should we.
If only the top 1% had the same agenda. This is where the paths of common man & the elites diverge, also the reason why taxing the hell out of them is a good idea. If you bring back a lot of manufacturing who benefits the most? Probably the bottom 10% who're employable or can be trained to take up the jobs that were outsourced. Who does it hurt the most ~ well that's easy ~ the likes of Apple, Google, Intel, MS, Amazon, Walmart & their board executives+top shareholders.

The real fight has always been with the devil we know (companies that profit from not paying taxes, offshoring & of course skirting laws to increase their margins) vs the devil we suspect of malice i.e. CCP. Again this doesn't excuse China from all the stunts they've pulled but the reason why they can get away with it has as much to do with (corporate) greed as anything else!
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#9
Imsochobo
China didn't have a reason to be a top player here, now they do.
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#10
ARF
the54thvoid
Because people want cheaper things. I know a lot of folk are happy to buy 'local' but there's a tonne out there who simply want to buy things cheap as possible. It's up to companies to grow some nuts and put production back in our own back yards. I'd pay more, knowing that.
There are other countries outside of China where manufacturing would be much cheaper. It is not so cheap to manufacture in China anymore, the salaries there are higher these days.

Look at Eastern Europe, South America, Africa and you will find plenty of undeveloped markets with huge potential to embrace those production plants from China.
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#11
the54thvoid
ARF
There are other countries outside of China where manufacturing would be much cheaper. It is not so cheap to manufacture in China anymore, the salaries there are higher these days.

Look at Eastern Europe, South America, Africa and you will find plenty of undeveloped markets with huge potential to embrace those production plants from China.
Yeah, and I hope the companies come home before they make use of more 3rd world labour. Then again, it's a horrendous irony, the terrible wages and work conditions provide income to those who had none. It's a messy world when profit is prized above morality.
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#12
Vayra86
the54thvoid
Yeah, and I hope the companies come home before they make use of more 3rd world labour. Then again, it's a horrendous irony, the terrible wages and work conditions provide income to those who had none. It's a messy world when profit is prized above morality.
The world has and will always be this way. Any other line of thinking is utopia unless you are ready to have a government that actively enforces that. It means a number of things, first of all it means doing a lot less of everything compared to now. Good luck selling that idea.

The US somehow thinks free market is the way to get to that utopia, but its the polar opposite of course, if you don't regulate, human nature will find its course, and 'survival of the fittest' applies there. Every time. Even altruism is based on it, go figure. "Get those jobs back", except we handily forget the industrial revolution where we had those jobs, and then look at the work conditions they were done under.

Why do you think our labor is more expensive? Because we've made it more comfortable... Something's gotta give and nobody is ready to give nonetheless.
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#13
ARF
The USA doesn't invest in its allies in Europe, while heavily supports the Chinese economy. Go figure...
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#14
Vya Domus
The US has been seriously stepping out of their own bounds as of late and it's not going to end well, they are not into a position to dictate what foreign companies do. I guess the rationale is that they'll comply because the US is big market which they would rather keep close but they're threading a fine line.
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#15
Totally
Why are people still on about face making they do little to prevent an individual from contractiolng, it's strength lies in preventing spread as they catch the pathogen keeping it out of the air and elsewhere.
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#16
silentbogo
ARF
There are other countries outside of China where manufacturing would be much cheaper. It is not so cheap to manufacture in China anymore, the salaries there are higher these days.

Look at Eastern Europe, South America, Africa and you will find plenty of undeveloped markets with huge potential to embrace those production plants from China.
It's cheap to manufacture in China not because of that mythical cheap labor, it's because China has infrastructure, experience and know-how. It's cheap cause they already do it en-masse, and they do it fast.
Moving manufacturing to another country is not that simple - in order to make stuff you need factories and infrastructure. It'll just end up like in many other places: you order goods from [insert your favorite country here], they outsource most of it to subcontractors in other places, those in turn order everything from Chinese manufacturers, and when it all comes back and gets assembled - you get the same thing, only much more expensive and with "Proudly made in [insert your country name]" sticker.
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#17
ARF
silentbogo
It's cheap to manufacture in China not because of that mythical cheap labor, it's because China has infrastructure, experience and know-how.
And the notorious Chinese poor quality! So, you exchange the future of your countries for cheap Chinese "goods" and the future of their country.
Nice! Not.
silentbogo
It's cheap cause they already do it en-masse, and they do it fast.
Moving manufacturing to another country is not that simple - in order to make stuff you need factories and infrastructure. It'll just end up like in many other places: you order goods from [insert your favorite country here], they outsource most of it to subcontractors in other places, those in turn order everything from Chinese manufacturers, and when it all comes back and gets assembled - you get the same thing, only much more expensive and with "Proudly made in [insert your country name]" sticker.
You need infrastructure anyways. Factories means jobs for ourselves, profit for ourselves, future for ourselves.
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#18
silentbogo
ARF
And the notorious Chinese poor quality!
In 99.9% cases quality depends on customer requirements. You can't put the blame on manufacturer for this, if it's the client that chose the path of "as cheap as possible".
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#19
LFaWolf
I see repeatedly people say they would pay more for USA made products. So let's talk about economics and a few things -

1. The average factory worker in China makes $4-$5k RenMinBi (China Dollar) a month. That roughly translates to $700+ USD a month. Let's round it up nicely and say it is $800 USD.
2. A low end factory, union worker in the US makes $13 an hour. That translates to $13/hour x 8hour/day x 22 days/month to $2,288 USD a month.
3. Say we hold everything else such as materials cost equal, minus the transportation cost of shipping the finished products back to US, then would you say the cost of the goods will at least double to what we currently pay? In other words, an MSI laptop (a product made in China), costs $1k USD, but the Dell laptop with the same configuration but made in USA, will cost you $2k USD, will you be willing to pay double for it?
4. Basically, hypothetically, everything made in the USA will cost you double. Are you will to pay that to support USA to wean off its reliance on China? People say "pay more". What does "pay more" mean to you? 50% more? Double more? What can you afford to do? And, will your employer pay you double for your effort?
5. For decades, consumers have been trained to buy on cost, the cheapest goods but with certain quality, in other words the best bang for the bucks, regardless of where it was manufactured. Do you think we can now "untrain" that mindset? The cats are out of the bag. We are way too late for that. For manufacturers that charge double for the same goods but made in USA, people won't buy it and they will go out of business very soon.
6. What we need to do now is managing the relationship with China properly. The tariff hurts China as much as it hurts us, so they do want to talk and make it work. China needs us as much as we need them.

So, get off this silly notion of paying more for USA made goods. It may make you feel good, but in reality, most won't and can't even afford to do it.
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#20
ARF
Who will pay the costs linked to the damages on the environment because of the transportation ?
Cargo ships and airplanes are the largest contributors to global warming caused by increased pollution.

Today the temperature reported is high 23°C here in my city.
The highest on record on the date was 19°C back in 1990!
Posted on Reply
#21
eidairaman1
The Exiled Airman
ARF
Who will pay the costs linked to the damages on the environment because of the transportation ?
Cargo ships and airplanes are the largest contributors to global warming caused by increased pollution.

Today the temperature reported is high 23°C here in my city.
The highest on record on the date was 19°C back in 1990!
Bless your heart.

73°F is nothing.
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#22
Turmania
I'm all for around 10-15% price hike as long as the goods that I buy are 100% made outside of China.the problem is there are so many components especially in a tech product you don't know where it all came from.but we have to start from somewhere. And it will be a good feeling that we do not support slave labour and very bad working conditions.
Posted on Reply
#23
eidairaman1
The Exiled Airman
Turmania
I'm all for around 10-15% price hike as long as the goods that I buy are 100% made outside of China.the problem is there are so many components especially in a tech product you don't know where it all came from.but we have to start from somewhere. And it will be a good feeling that we do not support slave labour and very bad working conditions.
Unfortunately its like moving a ship to change course
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#24
silentbogo
ARF
Who will pay the costs linked to the damages on the environment because of the transportation ?
Cargo ships and airplanes are the largest contributors to global warming caused by increased pollution.
That's actually a good example of why US companies still manufacture overseas. Realistically no one cares about pollution if the source is not on their backyard.
Regardless of whether it's manufacturing or recycling, if you can't see it - it won't do you any harm. Build a polyethylene recycling factory in Maine, or an electronics dump in Cali - you'll get swarmed with neo-hippies.
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#25
AsRock
TPU addict
silentbogo
That's actually a good example of why US companies still manufacture overseas. Realistically no one cares about pollution if the source is not on their backyard.
Regardless of whether it's manufacturing or recycling, if you can't see it - it won't do you any harm. Build a polyethylene recycling factory in Maine, or an electronics dump in Cali - you'll get swarmed with neo-hippies.
Never mind 1/2 that shit is just burned out of sight.
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