10/17/2022: China's Semiconductor Industry is Rekt
US citizens and green card holders are banned from working for Chinese chip companies.
The 20th Party Congress of China is currently in progress and Xi Jinping is set to be *re-elected* for the third term. He is breaking the CCP convention of stepping down after two 5-year terms. With his re-election for the third term, he basically becomes a dictator for life. As illustrated in the tweet above, his vision for China could be summarized as
Xi sits on top of the party, the party sits on top of China, and China sits on top of the world.
It appears that national security and Communist Party control is more important than economic prosperity and personal freedom of Chinese people. His policy is obviously not optimizing for the welfare of Chinese people as the world witnessed how the strict zero covid policy strains the Chinese economy.
Interestingly, just a few days before the opening of the 20th Party Congress of China, President Biden announced the ban of US citizens and green card holders supporting the development, production or use of integrated circuits at some chip plants located in China. Overnight, many American executives and key R&D staff working for the chip making companies resigned.
China has been trying hard to build a self-sufficient semiconductor manufacturing industry. Despite $100B+ dollars of investments, China doesn’t have a lot to show, lagging behind Taiwan, Korea and the USA in design and manufacturing of semiconductor chips. I grew up in Taiwan and majored in Electrical Engineering at the National Taiwan University. Taiwan is known for the top semiconductor manufacturing firm: TSMC (Taiwan Semiconductor Manufacturing Company). A good number of my college classmates work for TSMC and various top chip design firms such as MediaTek. It’s hard and advanced engineering work without very high pay compared to working for FANG companies. The top talents in China probably mostly work for BAT instead of semiconductor manufacturing. Now, they couldn’t even lure foreign talents with deep expertise to make things happen. In addition, it is reported that there’s a lot of corruption going on and many of these investments are not managed properly. It’s not surprising that China hasn’t been able to become a leader in the semiconductor sector.
I believe the talent ban and failed investments in semiconductor are actually good for the world. If China grows very strong and self-sufficient technologically under a dictatorship, what do you think will happen next? Obviously, they are going to challenge the USA to become a superpower and be a bully on the international block. We need to stop China while we still can. I would also like to pray for Chinese people to not suffer too much under Emperor Xi’s rule in the coming years. The world order is changing and I hope China doesn’t overtake America under a dictatorship.