China’s domestic semiconductor industry landscape has changed considerably. The Biden administration has continued to impose export control restrictions on Chinese firms, and the October 7, 2022, package of controls targeted not only advanced semiconductors (such as GPUs used for running artificial intelligence and machine learning workloads) but also expanded significantly on controls over semiconductor manufacturing equipment (SME). One goal of the U.S. controls is to prevent Chinese firms from moving into nonplanar technology processes, such as FinFET and eventually Gate All Around (GAA). The new restrictions included novel end-use controls and controls on U.S. persons, posing major new challenges...
Your claims are that China is 20 years behind and lacks the technological know-how to catch up. My claim is that China is 5 years behind hardware-wise, already knows how to scale fabrication for near-bleeding-edge nodes, that those 5 years are only marginally important because of the end of Moore’s Law, and that Nvidia’s effective monopoly makes that 5 year lead very tenuous indeed. Essentially, that the West’s technology node lead is basically irrelevant.
This entire semiconductor war is operating under the assumptions that China is bound by power and production constraints (due to cost) and thus cannot outpace US AI development. Military/space applications don’t care, Huawei’s already fucked by sanctions, consumer electronics OEMs are untouched by sanctions, edge devices consider 28nm to be the brand shiny new node…
Basically, it pins the entire issue on the back of Nvidia. Of course, Nvidia is now charging $40k per H100, Facebook holds the bulk of them, and the cost of building a GPU cluster is skyrocketing.
Meanwhile, construction is cheap in China due to oversupply in the construction industry, electricity is cheap in China due to oversupply in the green energy industry, and basically everything 14nm+ is also cheap due solely to already having the equipment to build it. Nvidia’s lead in efficiency cannot offset 40k capex, which is what the next few years will show.
So, surprisingly, my conclusion is that China’s lack of bleeding-edge node capability does not have a significant immediate geopolitical implication. China is perfectly capable of building 28nm chips, and with that 14nm is rather trivial. This is using either domestic supply chains or unsanctioned foreign supply chains. Should China languish for another decade, we may run into problems, but SMIC is on track to release 5nm this year (widely estimated to be the peak economically achievable by DUV quad-patterning) and SMEE has already announced a domestic ArFi DUV lithography machine. The supply chain is there. The gap towards EUV is twofold: the high-power light source and the photoresist. Reminder that both TSMC 7nm and Intel 7 do not use EUV, and their yields are perfectly acceptable (both nodes took some time to scale, I’ll admit). Everything else is a matter of throwing manpower at the problem.
Let’s take a step back and assume that China is stuck in their current state indefinitely. That is, they can produce DUV machines absurdly cheaply, but will never have an EUV machine. Even if China is stuck on 7nm while Intel rolls out 18A, so what? $/transistor isn’t scaling with node anymore, so the main driver is perf/W. Given that China’s green energy transition will pump absurd amounts of electricity into the grid in the near term, the more accurate driver is work/J. This matters solely, solely for mobile applications where reliability isn’t a concern.
Again, a strangely confrontational near total agreement with my conclusions that China will be able to easily produce consumer-centered microchips and have difficulty closing the gap to cutting edge microchips.
Two differences of opinion but I can see:
You argue that progressively more advanced microchips don’t matter, I cannot see how having more advanced thinking machines is going to be a less important to automation, AI, national security going forward than they already are.
you believe it’s only a matter of “throwing manpower at the situation” for the Chinese to catch up to TSMC, which does not bear out.
If restaurant A has one cook that has created the most popular omelet through a set of interdependent recipes and complex creative cooking methods, and restaurant B next door hires a new cook every week, instructs them how to create an adequate omelette, and asks them to create a better omelet than the cook at A, restaurant B could easily be stuck with 100 cooks who have learned how to create an adequate omelette and are continuing that set of processes without ever finding a better recipe.
It does not automatically follow that having more cooks is going to result in a better omelette.
Culturally, Taiwan thrives on innovation and creativity. China survives by hierarchy, tradition and established processes.
Again, it isn’t impossible that those one hundred cooks will come up with the perfect omelette, although it’s illogical to think all it takes is hiring more cooks and teaching them the recipe for an adequate omelette to create a better omelette then the cook at restaurant A.
More efficient chips do not have emergent behaviours (outside of, say, mobile and autonomous vehicles). More efficient chips make things more economical. Total compute capability is a function of manufacturing capability (which reflects in capital cost), electricity (which reflects in operating cost), and efficiency (which also reflects in operating cost). If your manufacturing capability is obscene and your electricity output is obscene, then you can handwave a lot of efficiency concerns by just scaling the number of chips you have in a system. In terms of aggregate computing capability, 5nm is more than sufficient to keep pace given enough scale.
There’s an interesting figure that I saw a while ago: China’s % of electricity generation dedicated to data centers is lower than both the US and EU, and due to top line electricity generation growth this proportion is basically not expected to move in the next decade. China has a LOT of freedom to tank efficiency losses that other regions simply do not.
There’s a small condition here that scaling usually has some degree of losses, but for LLM training it’s basically non-existent and for supercomputing it’s supposed to be around 10% losses due to networking/etc.
Your claims are that China is 20 years behind and lacks the technological know-how to catch up. My claim is that China is 5 years behind hardware-wise, already knows how to scale fabrication for near-bleeding-edge nodes, that those 5 years are only marginally important because of the end of Moore’s Law, and that Nvidia’s effective monopoly makes that 5 year lead very tenuous indeed. Essentially, that the West’s technology node lead is basically irrelevant.
This entire semiconductor war is operating under the assumptions that China is bound by power and production constraints (due to cost) and thus cannot outpace US AI development. Military/space applications don’t care, Huawei’s already fucked by sanctions, consumer electronics OEMs are untouched by sanctions, edge devices consider 28nm to be the brand shiny new node…
Basically, it pins the entire issue on the back of Nvidia. Of course, Nvidia is now charging $40k per H100, Facebook holds the bulk of them, and the cost of building a GPU cluster is skyrocketing.
Meanwhile, construction is cheap in China due to oversupply in the construction industry, electricity is cheap in China due to oversupply in the green energy industry, and basically everything 14nm+ is also cheap due solely to already having the equipment to build it. Nvidia’s lead in efficiency cannot offset 40k capex, which is what the next few years will show.
So, surprisingly, my conclusion is that China’s lack of bleeding-edge node capability does not have a significant immediate geopolitical implication. China is perfectly capable of building 28nm chips, and with that 14nm is rather trivial. This is using either domestic supply chains or unsanctioned foreign supply chains. Should China languish for another decade, we may run into problems, but SMIC is on track to release 5nm this year (widely estimated to be the peak economically achievable by DUV quad-patterning) and SMEE has already announced a domestic ArFi DUV lithography machine. The supply chain is there. The gap towards EUV is twofold: the high-power light source and the photoresist. Reminder that both TSMC 7nm and Intel 7 do not use EUV, and their yields are perfectly acceptable (both nodes took some time to scale, I’ll admit). Everything else is a matter of throwing manpower at the problem.
Let’s take a step back and assume that China is stuck in their current state indefinitely. That is, they can produce DUV machines absurdly cheaply, but will never have an EUV machine. Even if China is stuck on 7nm while Intel rolls out 18A, so what? $/transistor isn’t scaling with node anymore, so the main driver is perf/W. Given that China’s green energy transition will pump absurd amounts of electricity into the grid in the near term, the more accurate driver is work/J. This matters solely, solely for mobile applications where reliability isn’t a concern.
Again, a strangely confrontational near total agreement with my conclusions that China will be able to easily produce consumer-centered microchips and have difficulty closing the gap to cutting edge microchips.
Two differences of opinion but I can see:
You argue that progressively more advanced microchips don’t matter, I cannot see how having more advanced thinking machines is going to be a less important to automation, AI, national security going forward than they already are.
you believe it’s only a matter of “throwing manpower at the situation” for the Chinese to catch up to TSMC, which does not bear out.
If restaurant A has one cook that has created the most popular omelet through a set of interdependent recipes and complex creative cooking methods, and restaurant B next door hires a new cook every week, instructs them how to create an adequate omelette, and asks them to create a better omelet than the cook at A, restaurant B could easily be stuck with 100 cooks who have learned how to create an adequate omelette and are continuing that set of processes without ever finding a better recipe.
It does not automatically follow that having more cooks is going to result in a better omelette.
Culturally, Taiwan thrives on innovation and creativity. China survives by hierarchy, tradition and established processes.
Again, it isn’t impossible that those one hundred cooks will come up with the perfect omelette, although it’s illogical to think all it takes is hiring more cooks and teaching them the recipe for an adequate omelette to create a better omelette then the cook at restaurant A.
More efficient chips do not have emergent behaviours (outside of, say, mobile and autonomous vehicles). More efficient chips make things more economical. Total compute capability is a function of manufacturing capability (which reflects in capital cost), electricity (which reflects in operating cost), and efficiency (which also reflects in operating cost). If your manufacturing capability is obscene and your electricity output is obscene, then you can handwave a lot of efficiency concerns by just scaling the number of chips you have in a system. In terms of aggregate computing capability, 5nm is more than sufficient to keep pace given enough scale.
There’s an interesting figure that I saw a while ago: China’s % of electricity generation dedicated to data centers is lower than both the US and EU, and due to top line electricity generation growth this proportion is basically not expected to move in the next decade. China has a LOT of freedom to tank efficiency losses that other regions simply do not.
There’s a small condition here that scaling usually has some degree of losses, but for LLM training it’s basically non-existent and for supercomputing it’s supposed to be around 10% losses due to networking/etc.
That is interesting, do you recall where you saw that data about electricity generation growth in different countries?