I know that any time I talk about semiconductors, a significant percentage of my readership’s eyes glaze over, but this is Big Freaking News.
Intel shares rose 6% in premarket trading after Reuters reported that Taiwan Semiconductor Manufacturing, or TSMC, had approached US chip designers Nvidia, Advanced Micro Devices, and Broadcom about taking stakes in a joint venture that would operate the struggling chipmaker’s factories.
Four sources told Reuters that the Taiwanese chipmaking giant would run Intel’s foundry division under the new proposal, producing chips tailored to customer requirements but not owning more than 50%. The sources added that Qualcomm has also been approached about the venture.
TSMC is far and away the largest chip foundry (a company that builds chips for other companies, but doesn’t design its own chips) in the world, and the one with a clear technological lead over everyone else. TSMC has the third largest market cap of any semiconductor company.
Broadcom is the second-largest semiconductor company in the world by market cap, and they have their fingers in a lot of different pies: networking, wireless, storage, you name it. They’re generally considered a fabless chip designer, but the company is such a weird amalgamation of other companies (what we call Broadcom used to be Avago until they acquired Broadcom in 2016) that they might still have a lower end fab or two lurking somewhere in the company. They also use TSMC as a foundry, though I’m not sure how extensively. They’ve also recently made a big move into software, acquiring CA Associates and VMWare, among others.
Nvidia is a fabless chip designer (the sort of company that contracts with foundries to fab their chips) that went heavily into high end GPUs (the chips that render video for your PC, in Nvidia’s case geared toward high end games and other highly demanding tasks), then crypto-mining chips, and more recently into chips geared for AI applications, all very lucrative market segments, which has made Nvidia not only first among semiconductor market cap, but among the largest companies by market cap in the world (along with Apple and Microsoft). Nvidia has their chips fabricated by TSMC, as well as some by Samsung and GlobalFoundries, which was spun off from…
Advanced Micro Devices, which used to be an Integrated Device Manufacturer (or IDM, a company designs their own chips and builds them in their own fabs) creating Intel-compatible CPUs, but eventually spun off their fabrication plants as GlobalFoundries because they couldn’t keep up with Intel’s capital spending. AMD also has some of their highest end chips fabricated by TSMC. If AMD were to help take over Intel, it would be an extremely ironic ending to a longtime rivalry.
Qualcomm is a lot like Broadcom: A mostly fabless design house with its fingers in lots of different pies, and they’re about the sixth largest semiconductor company by market cap. Broadcom tried to acquire Qualcomm in 2017-18 and was blocked by the Trump45 administration.
Intel is an IDM, and for decades was the undisputed “chipzilla” of the semiconductor world. Intel’s CPUs were the dominant processor for the vast majority of the last 40 years and a huge ingredient for helping create the PC revolution. Intel used to be the technology process leader as well, but somewhere along the way they screwed up their sub-10nm process nodes, allowing TSMC to take the process technology crown. Indeed, they screwed up so badly that they’ve been forced to have TSMC fab some of its highest end chips. Despite having a vast number of fabs, Intel’s market cap has slipped down to 16th among semiconductor companies.
Back to the piece:
The sources noted that the Trump administration is exploring ways to revive Intel and strengthen US manufacturing under the ‘America First’ agenda. They added that TSMC’s joint venture pitch to chip designers took place before the company, alongside President Trump, announced plans last month to invest $100 billion in semiconductor manufacturing in the US, building on its existing $65 billion investment in its Phoenix, Arizona, factories.
Any deal between TSMC and Intel would be subjected to approval from the Trump administration.
If the Trump Administration’s goal is to increase available sub-10nm wafer starts (and it should be) and maintain American control of Intel’s fabs, then this proposal is a win-win. Intel’s fabs plus TSMC’s tech would create a foundry powerhouse. It wouldn’t happen overnight (nothing in semiconductors happens overnight), but probably in 12-24 months, depending on how quickly the new entity can acquire the necessary pieces of equipment to upgrade Intel’s fabs to thee new tech (I’m guessing that the availability of ASML steppers will, as usual, be the gating factor). And all this without the tens of billions in taxpayer subsidies for the CHIPS Act.
If this goes through, it would have mostly winners, with a few losers:
Winners
Every company that’s part of the deal. TSMC gets to radically expand production capacity without spending $20 billion+ to build a new fab. Nvidia, AMD, Broadcom and Qualcomm gain a lot more capacity for expanding production of their high end chips. Ditto for Apple (who’s not part of the deal, but who is TSMC’s biggest customer and a big demand driver for cutting edge fab capacity) and every other consumer of sub-10nm chips.
AMD additionally gets the egoboo of partially taking over its longtime hated rival and confirming it’s crown as the x86/x64 chip manufacturer of choice. Plus their then-risky decision to spin off GlobalFoundries looks like a genius move in hindsight.
The Trump Administration, which gets to take credit for vastly increasing American Foundry capacity at zero additional taxpayer expense and keeps Intel under American control.
Semiconductor equipment manufacturers like ASML, Applied Materials, LAM Research, Tokyo Electron and KLA (short term). It’s likely most or all of those companies (along with smaller players like Axcelis and Teradyne) will receive a bump in extra sales from leveling up Intel’s fabs to run TSMC’s process.
American chip startups: With so much high end capacity becoming available, existing and potential chip startups are going to look like more attractive investment capital opportunities.
ARM Holdings: ARM doesn’t make chips, they’re an IP design house that licenses their functional chip blocks to other chip designers. Just about every foundry and IDM is a licensee (yes, including Intel and TSMC), so unleashing more chip designs will almost certainly result in more royalties for ARM. (Nvidia tried to buy ARM in 2020, and regulators quashed that idea good and hard.)
Intel investors, who will either get a big lump-sum payment or shares in the new, probably far more profitable company (depending on how the buyout is structured).
Even Intel wins long-term by unleashing existing fab capacity to take on new business not tied to its faltering CPU manufacturing model. And actually, with TSMC’s process, Intel has a chance to recover in the CPU space as well.
Losers
Samsung: Along with TSMC and Intel, Samsung (which has both IDM and foundry components) has some of the best sub-10nm process tech in the world. They gain a whole lot of unleashed competition and stand on the outside looking in.
Intel‘s dreams of reclaiming their spot at the top of the heap, and suffering the indignity of being partially owned by AMD. How the mighty have fallen.
Every Chinese fab, which goes from “very far behind” to “even further behind.”
Semiconductor equipment manufacturers (long term): They better enjoy the out-of-band upgrade money from retrofitting Intel’s fabs, as it will likely mean a significant delay in anyone building a new cutting edge wafer fab for quite a while. And having two of their biggest customers team up is probably going to put them under a lot of downward pricing pressure.
GlobalFoundries (and other trailing edge foundries) might lose some business, but there’s very little overlap between Intel/TSMC cutting edge processes and GlobalFoundries trailing-edge fabs. Ditto UMC.
Are there anti-trust concerns with such a heavy accumulation of cutting edge process technology? Oh yeah. Big time. But almost all of those concerns were already there in some form or another thanks to the interconnected “cooperation” nature of the industry. All those companies going in with TSMC were already getting chips fabbed by TSMC. Samsung could try to claim that the deal would result in TSMC having a de-facto monopoly on sub-10nm foundry business, but it wouldn’t start with one, and that business isn’t the whole of foundry business (though it is the most profitable part), much less semiconductors as a whole.
Given that this would go a long way toward achieving Trump’s goal of increasing cutting edge fab capacity in America, I would imagine that the Trump47 administration could very well be persuaded to let this deal go through.
I’ve previously talked about China’s difficulties in catching up to the west in semiconductor manufacturing here, here, and here, among other places. To summarize: Western nations have an advanced, highly interconnected semiconductor manufacturing ecosystem that China doesn’t have the technical expertise to replicate. In particular, China has nothing like ASML’s extreme ultraviolet lithography machines (AKA a “stepper”) necessary to build the most advanced chips with the smallest feature geometries.
Though advancements that SMIC and Huawei have made in the semiconductor sector in recent years are pretty impressive, the companies are 10 to 15 years behind industry giants like Intel, TSMC, and Samsung, said Christophe Fouquet, chief executive of toolmaker ASML. It’s well known that even with the best-in-class DUV tools, Chinese fab SMIC will be unable to match TSMC’s process technologies cost-effectively. This is because Chinese companies cannot access leading-edge EUV lithography tools.
“By banning the export of EUV, China will lag 10 to 15 years behind the West,” said Christophe Fouquet in an interview with NRC (machine translated). “That really has an effect.”
ASML has never shipped its EUV tools to China due to the Wassenaar Arrangement, despite SMIC’s reported order for one EUV machine. The details remain unclear, but ASML did not deliver the machine to the Chinese foundry due to US sanctions. However, ASML kept shipping advanced DUV lithography tools, such as the Twinscan NXT:2000i, which are capable of producing chips on 5nm and 7nm-class process technologies.
As a result, SMIC has been producing chips for Huawei using its 1st-generation and 2nd-generation 7nm-class process technology for years now. This has certainly helped the Chinese high-tech giants weather U.S. government sanctions.
Having understood that EUV tools are not coming to China, Huawei and its partners have explored extreme ultraviolet lithography themselves with the aim of building their own lithography chipmaking tools and ecosystem, which will take 10 – 15 years at best. For reference, it has taken over 20 years for ASML and its partners from foundational work to complete commercial machines to build the EUV ecosystem.
China thought it had found a way out of the western ban on high end lithography machines. Turns out: Not so much.
“In the past two years, China has spent a staggering 8 billion euros to procure fewer than 120 Advanced immersion DUV lithography machines from Dutch company ASML.” DUV (Deep Ultraviolet) was the generation of machines before EUV, and can’t effectively pattern features of less than 10nm.
“On the surface this seemed like a bold and extravagant move. However, as of September 7th, the reality has turned into a bitter irony. Maintenance and upgrades for these machines are now completely restricted. In other words, starting next year these state-of-the-art [not quite – LP] lithography machines could become little more than scrap. To make matters worse, even repairs for older equipment are off the table.”
“Lithography machines are the backbone of semiconductor manufacturing, etching intricate circuits onto silicon wafers. Without proper maintenance and upgrades, these machines, worth tens of millions of euros each, will gradually deteriorate into expensive junk. Producing advanced chips smaller than 14 nanometers will become nearly impossible. Yield rates will plummet and costs will skyrocket.”
“Even TSMC, a global benchmark, requires ASML engineers to be stationed on site for regular recalibrations every 3 to 6 months. Earlier this year, an earthquake in Taiwan caused TSMC’s lithography operations to halt, and it took a month of recalibrations to resume lithography.” Requalification is indeed a huge pain in the ass.
“Machine maintenance depends on ASML proprietary components, software and technical support. Hiring a few engineers, or even the CEO of ASML, won’t solve the fundamental complexities of this highly specialized system. China’s attempts to rely on sheer manpower to bridge this gap are wishful thinking.”
“Thinking a few engineers could crack this technology is simply laughable. Lithography machines are just the tip of the iceberg in the complex semiconductor manufacturing supply chain.”
“China owns nearly 1,400 ASML lithography machines. With Western restrictions on maintenance spare parts and engineering services, these multi-million euro machines have been reduced to a rob Peter to pay Paul situation keeping them operational for just one more day at a time. Chip production is bound to shrink, creating a vicious cycle.”
“New sanctions implemented in September have blocked sales of models like the NXT1970i, shutting down access to both hardware and technology. At best, China’s capabilities remain stuck at the level of ASML’s older NXT 1470 machines, which date back to the early 2000s.”
“China’s so-called domestic lithography machines are limited to 65 nanometer dry DUV technology, with some reports claiming they can reach 55 nanometer. However, this is equivalent to ASML 2006-era technology, putting China 18 years behind. Worse, key components for these domestic machines still rely on suppliers from Japan and Germany.”
“China’s domestic lithography machines are largely a symbolic effort, more about saving face than actual technological advancement.”
There’s no way China can catch up to ASML in EUV lithography, and no way they can eliminate their deep dependence on western semiconductor manufacturing technology.
“Cutting edge EUV systems have been banned from China since 2019. Last June, high-end immersion DUV machines were added to the list. Now even older models like the NXT 1970i and 1980i can’t be sold or upgraded. China’s ambitions have been crushed, reducing it to square one.”
“This February, the Dutch Minister of Trade openly stated that China uses foreign high tech knowledge to advance its military capabilities, and ASML tools could produce sophisticated weapons. Handing over lithography machines to China is akin to arming an adversary, a move unacceptable on any strategic level.”
Without western technology, China’s desire for a technologically advanced semiconductor industry are dead in the water.
“The myth of China’s technological rise is unraveling and heading toward decline.”
When you buy a piece of high-end semiconductor equipment, you’re not just buying the machine, you’re buying the knowledgebase of deep technical expertise of both the on-site technical staff, as well as the process wizards back in Eindhoven, Santa Clara and Tokyo. There are inumerable parameters that need to be just right, and you need to know how to tweak them if the yield goes south. Without that expertise to guide you, the high end machines quickly become worthless.
I can imagine President Trump offering China a grand bargain, in which they stop stealing western technology, stop committing genocide against the Uighers, stop clashing with Philippine ships in the South China Sea, meet its treaty obligations regarding Hong Kong, and let international agencies inspects its high level bioweapon labs in exchange for easing semiconductor sanctions.
I doubt China would take such a deal, as it would be too humiliating for Xi to stand. But I can imagine Trump making it…
The fake Kamala bubble evaporates, another would-be Trump assassin is arrested, more Chinese spies on the staff of high profile Democrats, more NYC corruption raids, Ukrainian drones heat things up around Moscow, Intel and Stellantis layoff thousands each, another Harris County Democrat double-dips, a bit about Idaho, and some really stupid sailor shenanigans.
It’s the Friday LinkSwarm!
Evidently jailing Trump right before an election was a kangaroo too far even for this kangaroo court, so Trump’s sentencing has been pushed to after the election. “Judge Juan Merchan ruled Friday that Trump’s sentencing will take place on November 26, three weeks after election day, ensuring that Trump will not be sentenced in any of his criminal cases leading up to the election.”
In the friendliest possible format — a joint interview with VP nominee and emotional-support midwesterner Tim Walz, conducted by Dana Bash with the delicacy of an ornithologist gently hand-feeding hatchling chicks — Harris has revealed that her gaseously mindless word-cloud of a campaign is in fact an accurate reflection of her own personal vacuousness.
To be sure, Harris did not memorably self-destruct tonight. Whatever her failings, they are not those of Joe Biden, who couldn’t even articulate his words without slurring by the end. Her inarticulateness tonight was of the sort already known to be a Harris trademark, the endless jumble of nonsensical, comically vapid stock language. When she could fall back on a memorized list of talking points, she presented somewhat normally; the second she was required to respond directly to a question, then she began to spin out otiose nonsense like a pasta chef catering a Sicilian banquet. You could practically see the gears turning inside her head as she cast her eyes downward, stared laser-beams into the floor, and groped for cliches. She was more muted tonight than usual — her aides clearly ordered her never to display mirth under any circumstances, for fear the Kamala Kackle might emerge — and as a result, while she simulated sobriety for the most part, her body language was pronouncedly downbeat.
And all throughout she offered no answers to any policy questions whatsoever, nor any explanation for her various changes of position between 2020 and now. In theory, Bash asked most of the “right questions”; in practice, the way she solicitously asked them — sometimes even helpfully offering in advance a multiple-choice list of acceptable answers for Harris to choose from — turned them into cream puffs that Harris immediately used to serve up word salad.
Bash’s most pointed moment was when she pushed Harris about why she changed her position on a national fracking ban between 2020 and the present campaign. Harris’s answer was little more than, “Well, because I changed my mind when I became Joe Biden’s VP.” In the real world, anyone familiar with politics well understood that her “position” changed because Joe Biden — the presidential nominee — demanded it, and no other reason. Which of course is why it’s impossible to believe her when she says this is now her sincerely held view, as opposed to something to later be discarded once she can set her own priorities.
Eric Weinstein told Chris Williamson on the “Modern Wisdom” podcast that Donald Trump’s presidency has disrupted the old “rules-based international order,” which many view as an attempt to control global stability and wondered if the Republican nominee will “be allowed” to reenter the White House if elected in 2024. Weinstein argued that Trump’s unorthodox approach challenged the status quo, exposing flaws in the system and revealing that the impact of populist leaders on democracy and international agreements is more complex and significant than previously understood.
CHRIS WILLIAMSON: When we spoke at the start of the year, I said it was way too close to November to switch anybody out. Turns out that I was wrong.
ERIC WEINSTEIN: Beginner’s luck.
CHRIS WILLIAMSON: You said what are the odds that Joe Biden has a debilitating event between now and November including death, so he runs a one in 20 chance of dying in any given year or above that. I don’t think you know whether he’s even going to make it to November debilitating event could have been a debilitating public event
ERIC WEINSTEIN: I purposefully left it vague. I didn’t say the other part of it, which I now feel comfortable saying, which is…
CHRIS WILLIAMSON: What do you mean by that?
ERIC WEINSTEIN: I think there’s a remarkable story, and we’re in a funny game, which is: are we allowed to say what that story is? Because to say it, to analyze it, to name it, is to bring it into view. I think we don’t understand why the censorship is behaving the way it is. We don’t understand why it’s in the shadows or why our news is acting in a bizarre fashion. So let’s just set the stage, given that that was in February.
There is something that I think Mike Benz has just referred to as the rules-based international order. It’s an interlocking series of agreements, tacit understandings, explicit understandings, and clandestine understandings about how the most important structures keep the world free of war and keep markets open. There has been a system in place, whether understood explicitly or behind the scenes or implicitly, that says the purpose of the two American parties is to prune the field of populist candidates so that whatever two candidates exist in a faceoff are both acceptable to that world order.
From the point of view of, say, the State Department, the intelligence community, the defense department, and major corporations involved in international issues—from arms trade to, oh, I don’t know, food—they have a series of agreements that are fragile and could be overturned if a president entered the Oval Office who didn’t agree with them. And if the mood of the country was, “Why do we pay taxes into these structures? Why are we hamstrung? Why aren’t we a free people?” So what the two parties would do is run primaries with populist candidates and pre-commit the populist candidates to support the candidates who won the primaries. As long as that took place and you had two candidates that were both acceptable to the international order—that is, they aren’t going to rethink NAFTA or NATO or what have you—we called that democracy. And so democracy was the illusion of choice, what’s called magician’s choice, where the choice is not actually, you know, “pick a card, any card,” but somehow the magician makes sure that the card that you pick is the one that he knows.
In that situation, you have magician’s choice in the primaries, and then you’d have the duopoly field: two candidates, either of which was acceptable, and you could actually afford to hold an election. That way, the international order wasn’t put at risk every four years because you can’t have alliances that are subject to the whim of the people in plebiscites.
Under that structure, everything was going fine until 2016, when the first candidate ever to not hold any position in the military nor any position in government in the history of the Republic, Donald Trump, broke through the primary structure. Then there was a full court press: “Okay, we only have one candidate that’s acceptable to the international order. Donald Trump will be under constant pressure—he’s a loser, he’s a wild man, he’s an idiot, and he’s under control of the Russians.” And then he was going to be, you know, a 20-to-1 underdog, and then he wins. There was no precedent for this. They learned their lesson: you cannot afford to have candidates who are not acceptable to the international order and continue to have these alliances. This is an unsolved problem.
A Missouri man is facing federal charges following a series of alleged violent threats made via social media against former President Donald Trump, Republicans at large, and law enforcement officers, according to a criminal complaint filed in the Western District of Missouri on Aug. 30.
Justin Lee White, 36, is accused of using interstate communication to spread a slew of online threats to injure Trump, Republicans, and law enforcement in violation of federal law, culminating in a multi-agency investigation led by the FBI, according to the complaint.
Speaking of Trump assassination attempts, DHS personnel assigned to the protective detail for Trump’s Butler rally were given rigorous training. And by “rigorous training” I mean “they sat through a two hour webinar.”
Remember that “Harris Surge” in polls? Yet again, it was a case of oversampling.
As we’ve been highlighting since 2016, polls are not to be trusted thanks to various ‘tricks of the trade’ – most commonly, oversampling.
Last month we noted how the founder of the main outside spending group backing Kamala Harris for president says their own internal opinion polling is “much less rosy” than public polls.
“Our numbers are much less rosy than what you’re seeing in the public,” said Future Forward super PAC president Chauncey McLean said during a Monday event hosted by the University of Chicago Institute of Politics.
Now, the Washington Times reports that some pollsters are even sounding the alarm over Vice President Kamala Harris’ so-called ‘surge’ in the polls – which Harris pulled ahead in after replacing President Joe Biden as the Democratic nominee on July 21.
Since the switch, Harris is leading Trump nationally by nearly 2 percentage points and is either leading or tied with him in all seven battleground states. However, Republican analysts argue that these polling numbers may not accurately reflect voter sentiment due to biased polling methodology…
Critics point out that many polls have been sampling a disproportionately smaller share of Republican voters compared to exit poll data from the 2020 presidential election. The result, they say, is a misleading “phantom advantage” for Ms. Harris. According to them, this skewed sampling could be a strategic move to boost enthusiasm and fundraising for Ms. Harris’ campaign.
Trump campaign strategist Jim McLaughlin echoed this sentiment, stating, “They undersample Republicans” intentionally “to tamp down support and donations for Trump.” He added that the polls are part of a larger effort to create a narrative that favors Harris.
Trump has openly criticized the poll results. “It’s fake news,” Trump declared during a rally in Michigan. “They can make those polls sing.”
“Billionaire Mark Cuban Asked His Followers If They’d Prefer Their Kids Be Like Trump or Harris.” Turns out they preferred Trump by more than 2-1. (Hat tip: Instapundit.)
Another week, another high profile Democrat’s aide turns out to be a Chinese spy.
Linda Sun, a former aide to New York governor Kathy Hochul, acted at the direction of Chinese government and Chinese Communist Party officials while serving in state government, federal prosecutors alleged in an indictment Tuesday.
In a statement, the U.S. attorney’s office in the Eastern District of New York said that Sun was arrested Tuesday morning with her husband, Christopher Hu. They were expected to be arraigned later in the day.
Sun is a former deputy chief of staff to Kathy Hochul and has served in numerous roles throughout New York State government since her first post under the administration of former governor Andrew Cuomo in 2012. Before that, she served as Representative Grace Meng’s chief of staff, when the Queens Democrat served in the New York State assembly.
“As alleged, while appearing to serve the people of New York as deputy chief of staff within the New York State Executive Chamber, the defendant and her husband actually worked to further the interests of the Chinese government and the CCP,” U.S. Attorney Breon Peace said.
The federal government is alleging that Sun was an unregistered agent of the Chinese government and that her husband engaged in money-laundering while they benefited from millions of dollars in bribes from Chinese officials.
The indictment details a shocking pattern of collaboration with China’s consulate general in New York, with Sun at one point in 2020 letting a Chinese diplomat listen in on a private conference call for New York officials regarding the state government’s response to the Covid pandemic.
Chinese-government and CCP officials directed her to block Taiwanese officials from engaging with officials from New York. Beijing views the current government of Taiwan as a traitorous separatist movement and wants to annex the country.
According to court documents, Taiwan’s de facto consulate in New York City invited an unnamed politician, a description that matches the profile of then-governor Andrew Cuomo, to attend a banquet honoring then-Taiwanese president Tsai Ing-wen during her stopover in the city in 2019. Sun forwarded information about the invite to a Chinese official, telling that individual, “I sent you an email / Just an FYI / I already blocked it.” She then declined the invitation without consulting other New York executive chamber officials.
When Sun later asked a colleague to check if the politician was registered for the banquet, that staff member said that it was not on the schedule. Sun replied: “Perfect!”
She also manipulated messaging from the New York governor’s office, while consulting Chinese diplomats, the indictment stated.
Federal agents on Wednesday zeroed in on the highest ranks of Mayor Eric Adams’s administration, searching a home and seizing the phones of the New York City police commissioner, the first deputy mayor, the schools chancellor and others, according to people with knowledge of the matter.
The police commissioner. They seized the police commissioner’s phones. Wow.
Among the other officials the federal investigators sought information from were the deputy mayor for public safety and a senior adviser to the mayor who is one of his closest confidants, the people said. Both men have had other legal challenges.
The agents also searched the home and seized the phone of a consultant who is the brother of both the schools chancellor and one of the deputy mayors, the people said.
The nature of the investigations is unclear, but it appears that one is focused on the senior City Hall officials and the other touches on the police commissioner, the people said.
…
Representatives of the City Hall officials — the first deputy mayor, Sheena Wright; her partner, Schools Chancellor David C. Banks; the deputy mayor for public safety, Philip Banks III; and a senior adviser to the mayor, Timothy Pearson — could not be reached or declined to comment.
The consultant, Terence Banks, a brother of Philip Banks and David Banks, recently opened a government and community relations firm aimed at closing a gap “between New York’s intricate infrastructure and political landscape.” He, too, could not be reached for comment.
Several of the officials had their phones seized or records of their communications subpoenaed.
…
In addition to the police commissioner, Edward A. Caban, several other department officials, including Mr. Caban’s chief of staff and two Queens precinct commanders, also had their phones taken by federal agents, two of the people said.
Says Dwight: “It sounds like the whole Adams administration is so packed with corruption, they can’t even keep the lid screwed on.”
Behind the statistics: “August: 635K Foreign-Born Workers Gained Jobs as 1.3 Million Americans Lost Jobs.”
Germany’s conservative, populist, pro-border security Alternative for Germany won big in this week’s elections. Of course, the media, in unison, denounces anyone who objects to the mass importation of unassimilated Muslims into any European country as “far right.” And in Germany, this means they invariable compare Alternative for Germany to a certain mustachioed National Socialist.
President Trump endorses marijuana decriminalization vote. “Florida’s Amendment 3, titled Recreational Marijuana, would allow adults who are at least 21 years of age have up to 3 ounces of marijuana (a ‘small amount’?) and up to 5 grams of marijuana concentrate. At present, the state only allows medical patients with qualifying conditions to legally buy and possess cannabis.” Marijuana prohibition hasn’t worked. Full-bore marijuana legalization seems to have brought a whole host of problems, especially in blue states. Florida will provide another statewide laboratory of democracy to calibrate an approach.
Lowes may be getting out of the culture wars, but Home Depot is still in, having “partnered with LGBTQ mafia organization Human Rights Campaign on a school program that taught radical gender theory to elementary school kids.”
That budget deficit might also cause the Labour government to pull out of the F-35 procurement program. “Despite previous plans to acquire 138 F-35s, only 48 have been ordered.”
The head of Harris County’s Public Health Department, who was fired last week, has also been working for a California county since last January. Questions are swirling about her work in Texas, including her role in awarding a contract for sending mental health workers instead of police on some 911 calls.
Sources also say there is a pending criminal investigation into the county’s health department and related contracts.
County officials announced last Friday that Executive Director of Harris County Public Health Barbie Robinson had been dismissed, just days after the Houston Chronicle reported on communications surrounding a $6 million contract awarded to DEMA, a California-based company, to run the county’s Holistic Assistance Response Teams (HART).
The Texan has learned that in January 2024, Robinson also contracted with Yuba County, California to provide services for a three-year period. Robinson’s work for Yuba County’s public health department provides her with nearly $200,000 in compensation for hundreds of hours of work, all while managing Harris County’s public health department.
Sources familiar with the matter say that Robinson claimed to have obtained approval from former County Administrator David Berry and the County Attorney’s Office to engage in the additional work, but that current County Administrator Diana Ramirez was unable to confirm Robinson’s claims.
Other sources indicate that the Harris County District Attorney’s Office (HCDAO) has been investigating Robinson and nearly a dozen other individuals with the county, HART, and DEMA for several months.
This week, the McLennan County District Attorney’s Office dismissed murder charges against two Houston men involved in the self-defense incident at a party near the Baylor University campus, finally determining it was a justifiable homicide. While that was good news to Calvin Nichols Jr., it hardly makes up for the 635 days the man spent locked up in jail while the DA’s office slowly dragged its feet over the case.
According to police reports, on the night in question Nichols and his cousin, Jaytron Damon Scott, were invited to a party attended by a number of Baylor students, including football players. According to partygoers, Joseph Craig Thomas Jr. showed up uninvited and began threatening others with a gun, including a female student who asked him to move his car.
He later stuck a gun under the chin of a Baylor football player. And when Scott and Nichols were leaving the party, Thomas began to pistol whip Nichols.
That’s when Scott, acting in defense of his cousin, fired his pistol at Thomas, striking him multiple times and killing him. Murder charges were then filed against Scott and Nichols, a fact that Scott’s attorney, Bryan Cantrell, found unbelievable.
“I don’t know how this case got indicted,” Cantrell told KWTX.com. “This was the clearest self-defense case I have ever seen. And I think the problem is a lot of attorneys and, certainly the people of the community, don’t understand the law of self-defense.”
You would hope that the end of Abel Reyna’s term as McLennan County DA put a stop to this sort of thing, but evidently not.
The U.S. Department of Agriculture is preparing to implement the Biden-Harris administration’s Sustains Act which aims to regulate who will own environmental services.
According to private property rights advocates, American Stewards of Liberty (ASL), examples of environmental services include “the air we breathe, photosynthesis, pollination, and even the health benefits of open space.”
Specifically, the new law allows private funds to be used for conservation efforts on private land. The USDA will oversee the program, and the Secretary, preparing its implementation, will also decide who owns the environmental service.
Although the public may still provide the USDA with comments about the plan until September 16, 2024, ASL refers to the new law as “critical for proponents of the United Nations’ sustainable development agenda to achieve.”
The private property rights advocates see the program as a means to “provide the path to transfer America’s real assets from private citizens to federal and international interests.”
Screw both the Biden Administration and the UN.
The latest Stolen Valor Democrat is Maryland governor Wes Moore, who didn’t earn the Bronze Star he claimed he did.
Speaking of Idaho, how Micron defied the odds to become one of the biggest DRAM manufacturers in the world.
Intel just cancelled their 20A (2nm) node and will be fabbing their Arrow Lake processor at TSMC. “Intel projects it will save half a billion dollars by skipping the 20A node. The announcement comes as Intel embarks on a vast restructuring in the wake of troubling financial results last quarter. The company continues to lay off 15,000 workers, among the largest workforce reductions in its 56-year history.” It’s supposedly going full speed ahead with its 18A node, theoretically due in 2025. (Hat tip: Ace of Spades HQ.)
Intel and Japan are teaming up to work on EUV. Hard to see them making much progress given how large a lead ASML has…
Rael Enteen, Vice President of the Washington Commanders football team (AKA The Artist Formerly known As The Washington Redskins) has been fired.
He told…that, “over 50% of our roster is white religious, and God says, ‘F— the gays.’ Their interpretation. I don’t buy any of that. Another big chunk is low-income African Americans that comes from a community that is inherently very homophobic.”
…Enteen also said some players are “dumb as hell” and said some who were smart don’t stay that way after getting hit in the head too many times. He also said those who “get their heads knocked around a few times” are more susceptible to conspiracy theories.
Enteen also said, “I don’t think the commissioner of the NFL hates gay people, hates black people. Jerry Jones, who really runs the NFL, I think he hates gay people, black people.”
And James O’Keefe claims another scalp…
Legal Insurrection’s William A. Jacobson just got dis-invited from speaking on antisemitism at a synagogue in Tampa. “How could any Jew look around at the current geopolitical landscape and conclude that it’s safe to ignore all the various threats to their existence — not just Hamas terrorists in Gaza, but also the various murderous entities backed by the Islamic radical regime in Iran, to say nothing of Democratic primary voters in Dearborn, Michigan — because Trump is the real danger? What kind of cocoon are these people living in?”
DEI — the identity-obsessed dogma that goes by “diversity, equity, and inclusion” — has now trained Google’s new AI to refuse to draw white people. What’s even more alarming is that it’s also infected the supply chain that makes the chips powering everything from AI to missiles, endangering national security.
The Biden administration recently promised it will finally loosen the purse strings on $39 billion of CHIPS Act grants to encourage semiconductor fabrication in the U.S. But less than a week later, Intel announced that it’s putting the brakes on its Columbus factory. The Taiwan Semiconductor Manufacturing Company (TSMC) has pushed back production at its second Arizona foundry. The remaining major chipmaker, Samsung, just delayed its first Texas fab.
This is not the way companies typically respond to multi-billion-dollar subsidies. So what explains chipmakers’ apparent ingratitude? In large part, frustration with DEI requirements embedded in the CHIPS Act.
Commentators have noted that CHIPS and Science Act money has been sluggish. What they haven’t noticed is that it’s because the CHIPS Act is so loaded with DEI pork that it can’t move.
The law contains 19 sections aimed at helping minority groups, including one creating a Chief Diversity Officer at the National Science Foundation, and several prioritizing scientific cooperation with what it calls “minority-serving institutions.” A section called “Opportunity and Inclusion” instructs the Department of Commerce to work with minority-owned businesses and make sure chipmakers “increase the participation of economically disadvantaged individuals in the semiconductor workforce.”
The department interprets that as license to diversify. Its factsheet asserts that diversity is “critical to strengthening the U.S. semiconductor ecosystem,” adding, “Critically, this must include significant investments to create opportunities for Americans from historically underserved communities.”
The department does not call speed critical, even though the impetus for the CHIPS Act is that 90 percent of the world’s advanced microchips are made in Taiwan, which China is preparing to annex by 2027, maybe even 2025.
Handouts abound. There’s plenty for the left—requirements that chipmakers submit detailed plans to educate, employ, and train lots of women and people of color, as well as “justice-involved individuals,” more commonly known as ex-cons. There’s plenty for the right—veterans and members of rural communities find their way into the typical DEI definition of minorities. There’s even plenty for the planet: Arizona Democrats just bragged they’ve won $15 million in CHIPS funding for an ASU project fighting climate change.
That project is going better for Arizona than the actual chips part of the CHIPS Act. Because equity is so critical, the makers of humanity’s most complex technology must rely on local labor and apprentices from all those underrepresented groups, as TSMC discovered to its dismay.
Tired of delays at its first fab, the company flew in 500 employees from Taiwan. This angered local workers, since the implication was that they weren’t skilled enough. With CHIPS grants at risk, TSMC caved in December, agreeing to rely on those workers and invest more in training them. A month later, it postponed its second Arizona fab.
Now TSMC has revealed plans to build a second fab in Japan. Its first, which broke ground in 2021, is about to begin production. TSMC has learned that when the Japanese promise money, they actually give it, and they allow it to use competent workers. TSMC is also sampling Germany’s chip subsidies, as is Intel.
Intel is also building fabs in Poland and Israel, which means it would rather risk Russian aggression and Hamas rockets over dealing with America’s DEI regime. Samsung is pivoting toward making its South Korean homeland the semiconductor superpower after Taiwan falls.
To be fair, Intel has had fabs in Israel since since 1996, and Tower Semiconductor has had fabs in Israel since the 1980s. Poland, to the best of my knowledge, has never had a fab.
In short, the world’s best chipmakers are tired of being pawns in the CHIPS Act’s political games. They’ve quietly given up on America. Intel must know the coming grants are election-year stunts — mere statements of intent that will not be followed up. Even after due diligence and final agreements, the funds will only be released in dribs and drabs as recipients prove they’re jumping through the appropriate hoops.
So in the name of embedding the racist poison of social justice, the CHIPS Act, ostensibly designed to increase America’s share of cutting-edge semiconductor manufacturing, is actually driving new fab construction out of America.
2009 – The Obama-Biden administration takes office
November 1, 2013 – China / BHR:
Hunter Biden, business associate, and Chinese investors agree to create Bohai Harvest RST Equity Investment Fund Management Co., Ltd. (BHR), an investment fund controlled by the Bank of China, to focus on mergers and acquisitions, and investment in and reforms of state-owned enterprise.
December 4, 2013 – China / BHR
Vice President Biden travels with Hunter Biden on Air Force 2 to China and meets CEO of BHR, Jonathan Li. Shortly thereafter, BHR’s business license was approved and Hunter Biden was a board member.
February 5, 2014 – Kazakhstan
Kenes Rakishev, a Kazakhstani businessman, meets with Hunter Biden at a hotel in Washington, D.C.
April 15, 2014 – Ukraine
Burisma, a Ukrainian energy company, appoints Biden business associate to their board of directors.
After initially killing a bill on July 12, 2023 that would have increased the penalties on child sex traffickers, the Democrats who completely control the California Assembly’s Public Safety Committee reversed course one day later and voted to advance the bill.
With a final vote of 6-0, including two abstentions from progressive Democrats, the bill now moves to the Appropriations Committee, after which, if it is approved, can move the bill to be voted upon by the entire State Assembly. If passed, SB 14 will make trafficking of minors a serious felony that would qualify under California’s three strikes law, which keeps dangerous, serial criminals off the streets, and make individuals convicted of the crime ineligible for early release.
I highlight the two abstentions by Democrats. Even after a nationwide uproar over their willingness to block harsh penalties on those who traffic young children for sexual slavery, these two Democrats, including Assembly Majority Leader Isaac Bryan (D-Los Angeles), still could not bring themselves to vote for the bill.
State Senator Charles Schwertner (my state senator) has his DWI charges dismissed. Still, he hardly crowned himself in glory. At least he didn’t yell “Call Greg!” (It did make me wonder what Rosemary Lehmberg is doing today, and if she ever conquered her alcoholism…)
A detailed look at the recording of one of my favorite albums of all time: Peter Gabriel III.
Just what does electronic music pioneer Morton Subotnick’s “Silver Apples of the Moon” sound like? You know that scene in a 70s SciFi dystopia where someone’s face gets ripped off to reveal they’re a robot? It sounds like that.
GWAR plays for NPR. So on one side you have horrible monsters who are unbearable to listen to, and on the other side you have GWAR…
India has been trying to get into semiconductor fabrication for a while now, and after announcing a $10 billion investment fund, and with China locked out of so much semiconductor technology, there have been a lot of news bubbling up, but I want to focus on the Foxconn/Vedanta fab project.
The Economic Times is reporting that Foxconn and Vedanta are seeking to bring in European chipmaker STMicroelectronics as their technology partner in their proposed India manufacturing unit. The two companies announced their joint venture February 2021, with Foxconn as lead partner. Vedanta are reportedly seeking to onboard a CXO to head their semiconductor business.
Snip.
Vedanta-Foxconn are set to finalize a location for their facility in the next few weeks. The consortium are reportedly seeking a 800-1000 acre land parcel that is also well connected with Ahmedabad. The Gujarat government, as of media reports on September 16, showing sites at Sanand and Mandal-Becharaji in Ahmedabad district, two locations near Vadodara in central Gujarat, Dholera, Himmatnagar, Jamnagar, and Kutch. The plant has to be located at a distance from national and state highways so to cut off any vibration from heavy traffic movement. Further, no other major industry should be located in its vicinity.
Vedanta and Foxconn, in a 60-40 joint venture, will be setting up India’s first semiconductor production plant, a display fab unit, and a semiconductor assembling and testing unit over 1000 acres in Ahmedabad, state of Gujarat. The plant will begin production in two years as Foxconn plays the role of technical partner while Vedanta provides financial backing. The investment is worth over INR 1.54 trillion (approx. US$20 billion) and semiconductor manufacturing will be carried out by the holding company, Volcan Investments Limited.
Foxconn is a serious tech player that has serious mastery over the value-added chain. $20 billion, assuming it actually materializes, is real money, even in semiconductors. It’s right around the threshold to build a state of the art sub-10nm fab, even though it’s apparent that that’s not what they’re aiming for.
Vedanta, on the other hand, is another matter. They’re “a globally diversified natural resources company. We extract and process minerals, oil and gas.” Yeah, a natural resources company generally isn’t who you want running your fabs. Another strike is their talking about “Net Zero Carbon by 2050,” which suggests they may have their fingers in political scam pies.
STMicroelectronics is a real chipmaker that runs real fabs, but not the first company I would turn toward to purchase cutting edge process technology from, nor even the tenth. The fact that STM has already announced plans to team up with Global Foundries to build a new 300mm fab next to their existing fab line in Crolles, France in June 2022 makes me even more suspicious. Information on that existing 300mm Crolles fab is sketchy, and I know that for a long time it was a pilot rather than a production line, and I can see no evidence that it was ever expanded to volume production.
The fact that they plan to set set up a fab, a display fab, and a slice-and-dice packaging facility suggest a certain lack of focus. Flat Panel Display (FPD) fabs use familiar semiconductor steps, but the machines are very different because the substrates are different, and Samsung has huge dedicated display fabs. It’s setting up a modern chip fabrication plant that’s the difficult part, and while this combination could probably put together a solid trailing edge fab, like Bosch’s new 65nm fab. But that only cost $1.2B. Maybe they plan to build something in the 20-10nm range.
“The plant will begin production in two years.” Yeah, that’s not happening. Even giant players like TSMC and Intel generally take 2.5-3 years to stand up a new fab from breaking ground to starting up the line.
This could still happen, but the details are very sketchy. The slice and dice operation could be set up without too much difficulty, but it’s a low volume, low tech spinoff operation. A display fab would be more difficult, but it’s doable, though again, probably not in two years. But a real 300mm wafer, sub-65mn node microchip fabrication plant in India? I don’t see this set of players carrying that off well in three years. Five sounds more realistic, and that’s assuming the deal doesn’t fall apart.
Taiwan’s TSMC is also looking to set up a chip-fabricating factory in India, and is currently speaking to various government agencies to check the viability of setting up factory in India. TSMC already has one of its largest offices outside of Taiwan in India in Bengaluru, Karnataka, from where it provides support to its’ existing customers in Asia, Europe and North America and supports and encourages fabless companies in India in design and growth.
Ever since news N Chandrasekaran – chairman of the Tata group, announced that Tata Electronics (TEPL) will set up an Outsourced Semiconductor Assembly and Test (OSAT) facility in India, there has a been a lot of speculation, according to which, TSMC and Tata may enter into a partnership.
Besides TSMC, Powerchip Semiconductor Manufacturing Corporation, a Taiwanese chipmaker, is also in exploratory negotiations with several Indian companies to help establish new chip operations in the country, as per a report by Taipei Times. According to the newspaper, the memory chip maker’s announcement put an end to six months of speculation that it was planning to invest in India to diversify its operations despite Taiwan’s rising geopolitical tensions.
“Speaking to,” “exploring plans,” etc. These are very wishy-washy terms. Powerchip is a memory manufacturer that’s hardly flush with cash. I’m sure TSMC is talking to a lot of countries about fabs, but their newest one is under construction in Arizona.
International Semiconductor Consortium (ISMC), a joint venture between UAE’s Next Orbit Ventures and Israel’s Tower Semiconductor, was supposed to spend $3 billion to get started on a 40-65nm analog fab right about now, but I don’t see signs that’s actually happened. Tower is a real foundry, and the $3 billion pricetag and 4-5 year timeline seems realistic, but I’m not 100% sure they’re still interested in the project after Intel announced plans to buy them about a year ago. And having to bring in Arab petrostate funding for your venture is seldom a sign of strong financial viability.
There’s no reason you can’t build one or more modern fabs in India, but so far no major chip manufacturer has chosen to do so, despite the supposed availability of $10 billion in government subsidies.
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…
The rich world was a population column from [as opposed to a pyramid] 1945 to 1992, and with the end of the Cold War, the developing world became a column in 1992 until now. The problem is that this is all temporary, because birth rate keeps dropping. People keep living older and your column eventually inverts into an open pyramid upside down. And now you no longer have children, you no longer have a replacement generation at all, and there aren’t enough people in their 20s and 30s to buy everything, and there aren’t enough people in their 40s and 50s to pay for the retirees. So this decade was always going to be the decade that most of the advanced world moves into mass retirement, and the economic model collapses, and next decade was always going to be the decade that that happened to the developing world.
“The Chinese have jumped the ship and this is their last decade, too.”
“We now know that they’ve lied about their population statistics and they’re they over counted their population by over 100 million people, all of whom would have been born since the one child policy was adopted. So this is one of those places where they’ve got more people in their 60s and their 50s and their 40s and their 30s and their 20s.”
“Mao was concerned that as the country was modernizing, the birth rate wasn’t dropping fast enough, and that the young generation was literally going to eat the country alive. So they went through a breakneck urbanization program which destroyed the birth rate, at the same time they penalized anyone who wanted to have kids, and both of those at the same time have generated the demographic collapse we’re in now.”
The male to female sex ratio in China was bad before, and now it’s obviously worse.
“Without young people, we’ve seen their labor costs increase by a factor of 14 since the year 2000, so Mexican labor is now one-third the cost of Chinese labor. Their educational system focuses on memorization over skills, so despite a trillion dollars of investment in a bottomless supply of intellectual property theft, they really haven’t advanced technologically in the last 15 years. Mexican labor is probably about twice as skilled as Chinese labor now, even though it’s one-third the cost.”
“They’ve consolidated into an ethnic-based paranoid nationalistic cult of
personality, and it’s very difficult for the XI Administration to even run it, because it’s not an administration anymore no one wants to bring Xi information on anything.”
The Biden Administration has adopted the Trump Administration’s trade policies on China.
“They now have tech barricades that prevent the Chinese from buying the equipment, the tools or the software that’s necessary to make semiconductors. In fact, [Biden] went so far as to say any Americans working in the sector have to either quit or give up their American citizenship. Every single one of them either quit or was transferred abroad within 24 hours.”
“They’re completely dependent on the U.S Navy to access international trade, they are the most vulnerable country in the world right now. And based on how things go with Russia, we’re looking at a significant amount of raw materials falling off the map, specifically food and energy, and the Chinese are the world’s largest importer of both of those things. So there’s no version of this where China comes through looking good.”
“Say what you will about the Russian economy (it’s corrupt, it’s inefficient, it’s not very high value-add), but it’s a massive producer and exporter of food and energy. You put the sanctions that are on the Russians on Beijing and you get a de-industrialization collapse and a famine that kills 500 million people in under a year.”
“Even if the Chinese were able to capture Taiwan without firing a shot, it doesn’t solve anything for them. They’re still food importers, they’re still dependent on the United States, they’re still energy importers. And even if they take every single one of those semiconductor fab facilities intact, they don’t know how to operate them, because they can’t operate their own, their own are among the worst in the world.”
“One of the fun things about Russia versus China right now is that the Russian information security is so poor that American intelligence is literally listening on everything, but in China we can hear into the office but there are no conversations happening.” I suggest taking both these revelations with a few grains of salt. Maybe Zeihan has great sources in the intelligence community, or maybe Zeihan’s great sources are lying.
Plus more on how Xi has killed or exiled any possible challenger to his power, and how they’re now having a massive Flu Manchu outbreak. “Their overall health is worse than ours, diabetes as a percentage of the population is higher, they don’t have a critical care system like we have, and their hospitals are really their only line of defense.”
Next: Why EVs are a disaster.
“All kinds of people think I’m full of shit!”
Rogan: “What is your perspective on EVS?” Zeihan: “They’re not nearly
as good on carbon as people think. Most of the data that exists doesn’t take into the fact that most of this stuff is processed in China where it’s all coal doesn’t take [into account] the fact that most grids they run out are also majority fossil fuels. And that extends the break-even time for carbon from one year to either five or ten based on what model you’re talking. Cyber trucks are far worse than EVs, but the bigger problems we’re just not going to be able to make them much longer.”
To electrify everything “We need twice as much copper and four times as much chromium and four times as much nickel and ten times as much lithium, and so on. We have never, ever, in any decade in human history, doubled the amount of a mainline material production in ten years, ever, and we need all of this by 2030. No, it’s just not technically possible.”
Zeihan says California’s mandates for phasing out gasoline by 2035 aren’t quite as bad as they seem, as the bureaucracy has the ability to move the goal posts if they prove to be unfeasible. Pardon me if I’m not sold on the beneficent rationality of California’s hard left bureaucracy.
Speaking of things I’m skeptical of:
There is a fascinating discussion happening in the environmental community right now, because they’re being confronted with reality. So California and Germany have very similar Green Tech policies, but the Germans have spent three times as much as California, but are only getting about a fifth as much power. I don’t know if you’ve ever been to Germany, but the sun doesn’t shine in Germany. And now, with the Russians on the warpath and their clean-ish energy from natural gas going away, they’re going back to lignite coal in force. It was already their number one source of power. The idea that Germany’s green is ridiculous, because they rely on really, really dirty coal, now especially. But there’s now a conversation going on between the German environmentalists and the Californian environmentalists about why California, in relative terms of doing so well at this, while Germany is not. And the answer is simple geography, but that’s never been part of the conversation in the environmental community before. Now it is. They should have had this conversation 15-20 years ago, but they’re having it now. And as soon as they come to the conclusion, unwillingly but they’ll get there, that we have to choose where we put our copper and our lithium and our nickle, EVs are not going to make the cut.
This assumes that California environmentalists are susceptible to the sweet voice of reason, and that modern environmentalism isn’t half religion and half scam. “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” California’s Democratic power establishment has shown an amazing propensity to impose radical solutions that bring obvious and immediate harm to people that are not them. Why should they worry about forcing other people to buy pricey EVs when they already have theirs?
Next up: The drug war, both here and in Mexico.
Rogan starts by noting that marijuana legalization in California led to cartels planting massive amounts of weed in national forests, and suddenly guys who were game wardens are now wearing tactical gear and carrying machine guns.
“I think the mafia is a great example for why you shouldn’t look for the silver bullet [of drug legalization], because, yes, that in the 1920s during prohibition, was one of the big reasons it got going, but the mafia didn’t waste any time in diversifying and neither have the cartels.”
“They’ve gotten into cargo theft and kidnapping and avocados and limes and real estate and local government.”
“Now the attractiveness of gutting them of some of their primary income. Should we look at that? Of course! But it’s not so simple as removing one and it just all stops.”
“The challenge we’re seeing in Mexico right now is that the, uh, the air quotes “good” cartel the, one that saw drugs as a business, is being broken up. If you remember El Chapo—” Rogan: “That’s the good cartel?” Zeihan: “Sinaloa cartel, yeah. He thought of himself as a Korean conglomerate president. So it was like ‘We smuggle drugs. That’s our business. You don’t mess with things that mess with the business. You don’t trip the old lady, you don’t steal her purse, you don’t shoot at the cops. These are people who live where we operate, we want them to be on our side, so maybe even throw a party every once in a while. You focus on the business.'”
“The replacement cartel is Jalisco New Generation, They’re led by a former Mexican military officer who thinks that rather than don’t shit where you sleep so that the people on your side whenever you move into a town, you shoot it up. You do kick over the old lady, you do take her purse, you make the people scared of you, that’s the point of this. Drug running is a side gig.”
“We are here to be powerful, and drug running is just one of the ways we make that happen. And he has taken the fight to every cartel and the Mexican government, and they’re in the process of trying to break into the United States.”
“El Chapo and the Sinaloa became the largest drug trafficking organization in America under the Obama Administration. And one of the reasons our birth rate went down, so far so fast is they basically either co-opted or killed American gangs. So they killed the people who were doing the killing. Not a lot of Americans got killed after that.” I think he meant to say murder rate.
“All of the other cartels control the access points in the United States, but
Jalisco New Generation now is challenging every single one of them trying to break through. And if they do, and they bring their business acumen, if you will north of the border, they’re going to start killing white chicks named Sheila in Phoenix and then we’re gonna have a very different conversation.”
“Sinaloa they co-opted the Hispanic gangs, especially the Mexican gangs, because there wasn’t a language barrier there, and they really targeted and gutted a lot of the African-American gangs. They took over drug smuggling and distribution from them to deny them income and then they just shot a lot of people…it was pretty much completed by the time we got to 2013.”
“Look at the violent crime rates in the United States, they’ve been trending down really significantly since about 2004 and the drop from 2004 to roughly 2014 was amazing. That’s largely Sinaloa.”
And now all the cartels are fighting and the murder rate in Mexico is skyrocketing.
He’s not a fan of legalizing cocaine:
Also says that cartels are now laundering money via marijuana dispensaries using the federal reserve.
And he’s not a fan of Crypto:
Bonus: “Maxine Waters is not exactly the brightest person in congress.”
Remember Tsinghua Unigroup, a wholly owned business unit of Tsinghua University and itself owner of Yangtze Memory Technologies Co. (YMTC) (Previously mentioned here.) Well, it turns out that a bunch of their top executives just got arrested:
The video shows a picture of six semiconductor executives, all of whom have reportedly been arrested:
Dia Shijing, co-president of Tsinghua Unigroup
Lu Jun, president of Huaxin Investment
Zhao Weiguo, chairman of Tsinghua Unigroup
Ding Wenwu, president of National IC Industry Investment Fund,
Zhang Yadong, president of Tsinghua Unigroup
Qi Lian, another co-president of Tsinghua Unigroup
How a company runs with three presidents I couldn’t tell you. Must be a Chinese thing.
“In the past few days, several senior executives of the organization behind the semiconductor industry in Mainland china have been taken away by the CCP Central Commission for Discipline, Inspection and Investigation.” Given my knowledge of communist nomenclature, I strongly suspect that this is not the sort of organization you want to enfold you in their tender mercies.
“In 2014, the General Office of China’s Ministry of Industry and Information Technology announced the official establishment of the National Integrated Circuit industry investment Fund Company Limited [ICF], also known as the National Big Fund or big fund.” Probably best to think of them like USA’s SMEATECH, but with a whole lot more opportunities for graft.
Together two rounds of government funding added up to 320RMB, or about $47.4 billion, which should have driven additional public/private capital investment of some $240 billion divided up between China’s Ministry of Finance and large central Chinese enterprises, most of which are also owned by the state. Even for the semiconductor industry, that’s a lot of cheddar.
By some estimates, $100 billion of that had already been spent by 2021.
“The two phases of investment cover all aspects of integrated circuits (ICs), including IC manufacturing IC design, packaging and testing semiconductor materials and equipment, and industry ecological construction.”
ICF provides overall direction and management, while Huaxin Investment provides management of the second phase of fund investment.
“Eight years have passed, but high-end Chinese chips haven’t yet been produced, and the management of the state level chip industry has collapsed.” Reading between the lines, this means TSMC is still kicking their ass. If that’s the standard, then it’s a bit unfair because every other semiconductor manufacturer in the world is in the same boat.
On July 28, Xiao Yaqing, head of MIIT, fell from power. “Xiao was the spearhead of the Chinese communist party’s attempt to build a world-class chip industry, and eliminate its dependence on the US.” He supposedly tried to slit his wrists.
“The very next day, Xi Jinping immediately appointed a replacement a longtime aerospace official to take over MIIT.” Yeah, that’s really going to help your semiconductor goals.
“On July 15, Lu Jun, former deputy director of the China Development Bank Development Fund Management Department, was investigated Lu Jun was involved in many investment operations of the Big Fund, of which he was the sole manager. He was also former president of Huaxin.
Yang Zhengfan, another Huaxin executive, was also taken away.
Also arrested: Wang Wenzhong of Hongtai Fund and Gao Songtao, both involved with Huaxin and the Big Fund. And that’s probably not all. Evidently a whole network of semiconductor executives are being rounded up.
Dia Shijing of Tsinghua Unigroup was among those reported arrested, but Tsinghua Unigroup is saying “Nah, everything’s good here! Go about your business, citizens!”
In July 2021, Tsinghua Unigroup announced that it was overwhelmed by 200 billion RMB of debt and filed for bankruptcy because it couldn’t pay its bonds at maturity. Keep in mind that Tsinghua Unigroup, partially owned by Tsinghua University, is itself owner of YMTC, which is (I think) China’s biggest domestic memory chip manufacturer. Tsinghua/YMTC was previously one of China’s biggest semiconductor manufacturing success stories, second only to SMIC, and supposedly “the largest integrated circuit company in China.” They have actual working fabs up and running. And they’re still evidently a money-losing failure.
Tsinghua Unigroup has grown through mergers and acquisitions, buying up over 20 companies. This strategy is not unknown among western companies, as GlobalFoundries and NXP are both the results of a similar strategy. But neither of those companies is on the cutting edge.
“Tsinghua Unigroup has been using short-term loans rolling over to create long-term loans. These made the group’s cumulative liabilities too large and its financing structure unbalanced.” Yeah, I bet. “Get big quick” worked for a few doctcom era mega-success stories, but I don’t think it works in semiconductors.
Zhao Weiguo once boasted he was going to buy TSMC. Also, I’m going to kick Shaq’s butt in the slam dunk contest just as soon as I take time off from dating all these supermodels.
China Development Bank extended Tsinghua Unigroup 100 RMB credit between 2016 and 2020. Still a lot of cheddar.
I’m skipping over a whole lot of blow-by-blow “who owns what” in the corporate structure. Imagine if Spectre, the Gotti Family, and the Bank of England all had shares in Amway.
“Due to debt, Tsinghua Unigroup abandoned its plan to build DRAM memory chip manufacturing plants in Chongqing and Chengdu in southwest China earlier this year.” I bet that left a lot of pissed-off local commissars holding the bag.
“When the chip industry becomes a national strategy, but with no real oversight, it becomes a disaster zone of corruption, and a big cake for those in the circle to get rich for themselves.” True of any industry anywhere, but especially true of China, and especially true of semiconductors, where “fake it until you make it” isn’t an option if you’re actually building fabs.
“China cannot make high-end chips to this day.” True.
“American chip technology is far ahead of the world.” Also true, though with caveats. For semiconductor manufacturing, TSMC is on the cutting edge, with Intel and Samsung within striking distance. For semiconductor leaders, two American companies (Applied Materials and Lam Research) dominate a fair number of technologies, but Tokyo Electron is competitive in many of them, and ASML dominates the stepper market.
Skipping over the bits where China stole US (and other) tech, which should be familiar by now.
Enter the Trump Administration, “blacklisting and embargoing more than 600 Chinese high-tech companies and high-end manufacturing companies, as well as universities and research institutions.” Pissing off your biggest trade partner is generally not a great plan.
Result: Bottlenecks in China’s supply chains.
EDA makes software to design chips, and China has no real substitute.
Semiconductors are still a big item in China most recent Five-Year Plan (and yes, the Chicoms still use Five Year Plans, just like Mama Stalin used to make).
“The outside world has not seen the investment of the Big Fund break any bottleneck. However, the earthquake happening in the industry has directly shown people that there is a deep corruption in the Chinese chip industry.” Why should it be different than any other Chinese industry?
And just who is going to step up to those jobs running China’s increasingly-unlikely-to-succeed semiconductor moonshot, given that the last batch got rounded up by the Chinese Inquisition?
Interesting bit of history: Previous CCP head Jiang Zemin put his own son Jiang Mianheng in charge of developing China’s semiconductor industry, and also managed to make the country even more corrupt than it already was. And here we are.
It’s ironic that just as Washington was passing a giant graft bucket of semiconductor subsidies because China was supposedly kicking our ass, China itself was sacking the very people presiding over China’s own bucket of graft for not catching up to the west. The truth is somewhere between.
China was never going to catch up to western semiconductors because the gap was too large and you need a crazy swarm of free market capitalist entrepreneurs risking private money to eek out important incremental process tweeks to keep Moore’s Law going. China was never going to have that as long as they suffered under Communist rule. And a huge percentage the government money that was sloshed into semiconductors was indeed swallowed up by graft and diversion of funds. But all that money does appear to have helped China close the gap some. Granted, a lot of that was via systematic IP property theft, but it got them into the game.
The House on Thursday passed the bipartisan Chips and Science Act, which aims to increase domestic production of computer chips to allow the U.S. to become more competitive against China in the global technology market.
The bill passed the House in a 243-187 vote one day after passing the Senate in a 64-33 vote. The legislation now heads to the desk of President Joe Biden.
Biden called the passage of the bill on Thursday “exactly what we need to be doing to grow our economy right now.”
“Today, the House passed a bill that will make cars cheaper, appliances cheaper, and computers cheaper,” Biden said. “It will lower the costs of every day goods. And, it will create high-paying manufacturing jobs across the country and strengthen U.S. leadership in the industries of the future at the same time.”
Twenty-four Republicans voted to pass the measure, despite Republican leadership making a last minute push to discourage GOP lawmakers from supporting the bill. GOP leaders sought to keep the bill from passing after news broke on Wednesday that Senator Joe Manchin (D., W. Va.) had reached a deal with Democratic leaders on a nearly half-a-trillion dollar spending package targeting energy and climate, health care, and increased taxes on the wealthy.
Snip.
The measure includes $39 billion to “build, expand, or modernize domestic facilities and equipment” for semiconductors, $2 billion to specifically manufacture semiconductors and $11 billion for Department of Commerce research and development.
“Research and development” is no doubt going to be a rich conduit of graft to Democratic Party cronies having nothing to do with semiconductors.
For reference, $29 billion is probably just enough to build two state-of-the-art 300mm chip fabrication plants.
As I’ve argued before, the reasoning behind the bill is specious and it won’t result in a single new chip being fabbed in the next two years.
The most recent stats I can find show that the United States has some 47% of the semiconductor market. We (and Taiwan, and South Korea) are kicking China’s ass in semiconductors.
The chips China make are generally either: A.) Cheap, or B.) intended for their internal market. No one sends cutting edge chips to be fabbed in China because they don’t have the tech to do it and everyone know they’ll steal your designs and crank out knock-offs on the sly whenever possible. China’s semiconductor industry is mostly smoke and mirrors all the way down.
Semiconductor subsidies have all the hallmarks of a classic Washington boondoggle: The wrong action at the wrong time for the wrong problem.
Second, the shortage wasn’t the result of a “chip shortage,” it was the result of “a lack of available foundry wafer starts.” Automakers cancelled their orders for display drivers when it looked like Flu Manchu lockdowns were going to depress the economy for a while, and were caught off-guard by the V-shaped recovery under Trump, and got sent to the back of the line to get their product fabbed after they changed their mind. Remember, just about all foundries are running flat-out 24/7/365, pausing only to switch to different chips for different customers. There’s no slack in the system, and those wafer starts are already spoken for (and possibly paid for) by other customers well in advance. Just as nine woman can’t give birth to a fully grown baby in one month, you can’t just “make chips quicker” in an existing fab.
Third, remember that cutting edge semiconductor fabs are hideously expensive. Moore’s second law states that the cost of a new, cutting edge semiconductor plant doubles every four years. Samsung’s planned fab in Taylor, Texas is going to cost $17 billion.
Fourth, nothing about these subsidies will address the real problem with American semiconductors, which is that the overwhelming majority of cutting edge chip designs have to flow through TSMC fabs in Taiwan. What will solve that problem is TSMC opening a state-of-the art fab in Arizona in 2024. No amount of U.S. taxpayer money will make that already-under-construction fab start producing chips any quicker.
Could these subsidies boost American semiconductor manufacturing 2-3 years from now? Possibly. Knowing the cycling nature of the industry and the tendency of government subsidies to backfire, new/upgraded fab lines might come online just as the industry is experiencing a glut.
But the real key to restoring America to the cutting edge of semiconductor manufacturing is the already-in-progress inshoring of cutting edge foreign owned fabs from Samsung and TSMC, and having American semiconductor manufacturers like Intel and GlobalFoundries master sub-10nm chip fabrication processes, something they have heretofore been unable to do. (Intel is closer, having been on the cutting edge until they lost their way, while GlobalFoundries stopped all development on their 7nm node because they couldn’t find a way to make the investment pay off.)
Throwing buckets of budget-busting borrowed taxpayer money around isn’t going to make any of those things happen any faster.
