The horizon is not so far as we can see, but as far as we can imagine

US Chip Sanctions On China Appear To Be Failing Hard

Huawei, the first company to be slapped with sanctions, has announced a phone with 5G capability with domestic 7nm chips.

Huawei Technologies and China’s top chipmaker SMIC have built an advanced 7-nanometer processor to power its latest smartphone, according to a teardown report by analysis firm TechInsights.

Huawei’s Mate 60 Pro is powered by a new Kirin 9000s chip that was made in China by Semiconductor Manufacturing International Corp (SMIC)…

…The processor is the first to utilize SMIC’s most advanced 7nm technology and suggests the Chinese government is making some headway in attempts to build a domestic chip ecosystem, the research firm said…

…Buyers of the phone in China have been posting tear-down videos and sharing speed tests on social media that suggest the Mate 60 Pro is capable of download speeds exceeding those of top line 5G phones.

(Oh, and while it performs better in some ways than the best iPhone or Samsung, it costs about half of what they do.)

When I talked to an expert a couple years ago, he told me it would take many years to really deal with the sanctions because of the difficulty in creating the “tech that creates the tech.”

But that appears to not be true. The West didn’t ban lithography machines until nowish (the Dutch will export them till the end of the year), but…

Shanghai Micro Electronics Equipment (SMEE) is expected to deliver by year-end its proprietary SSA/800-10W, a 28-nm lithography machine, according to a report last week by Chinese newspaper Securities Daily.

This is less advanced than what you can get from the West, and there’s a scaling issue, but the idea that the Chinese won’t catch up is absurd and always has been, and no country can scale faster than the Chinese.

The end result of the chip bans will be that China winds up with the largest chip industry in the world, and I’d bet that in ten to fifteen years (and perhaps sooner, as they keep coming in before forecast) they will be slightly in advance of the West.

Scale matters. The West sent the world’s manufacturing floor to China, and just as when it moved to the US the Americans took the overall tech lead (with Germany the only real competitor at the time), China will take the tech lead.

These sanctions should have been used only a couple years prior to a war. (A war with China would be horrific, and the West is not ready for one, especially right now with the massive equipment and munitions draw down for Ukraine.)

Chinese aren’t stupid, the West is no longer special, having sold its patrimony and the idea that the Chinese were somehow incapable of catching up in tech if sanctioned was always ludicrous.

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  1. Soredemos

    The drastically reduced cost is the most interesting aspect to me. Similar or even slightly better performance for half the price. If they can translate that to chips outside the mobile space that could be huge. Nvidia GPUs in particular have gone so far up their own ass in terms of price it’s gotten absolutely absurd. The excuse is always that production costs have inherently gone up and TSMC simply has to charge companies that much to make their chips. China may prove that to be bullshit.

  2. Willy

    I used to call it economic patriotism, and that the guys selling us on the idea that outsourcing tech would create even more economic opportunities for the outsourcers were actually traitors aiming for short term bonuses for themselves. Turns out it was all just either preaching to the choir or falling on deaf ears.

    I read somewhere that GWB, once beloved by the conservative mob, is now unpopular if not even despised by many of his former worshippers. The Clintons aren’t in the same boat yet for liberals but slowly getting there.

    I can explain how bad ideas are actually bad ideas, but I don’t know how to make bad ideas uncool. Maybe a playful little ditty would do. He’s an economic patriot… she’s an economic patriot… wouldn’t you like to be an economic patriot too?

  3. Willy

    On the more plus, I noticed that Guatemala elected a center-left guy. The son of the last proggy guy America allowed them to elect some 75+ years ago, apparently. That guy even survived a couple dozen attempts by Catholic and military supported coups.

    I wonder what kind of nonsense American elites will cook up this time around to try and oust his son. Maybe perhaps, make banana republics fashionable again via an Operation PBSuccess II? (That’s where an innocent-seeming public broadcasting system agitprops the people into believing it’s all for the best, because communists. And in the dystopia which follows, immigrants flow northward proving once again that America is a land of opportunity, except this time minus a lot of industry, tech, and affordable lifestyles).

    I’ll shut up now.

  4. different clue


    “Cost” and “price” are two different things. “Cost” is not always internalized, monetized, and charged for. Part of the “cost” behind “low price” may be runaway pollution, rampant underpayment of rampantly overworked workers, no legal unions or organizing, etc.

    There are films, books, articles about that concept . . . some emblematic ones targetting Walmart its own self. But the process is vastly wider.

    The concept of America “banning certain chips to China” in order to “stop China’ rise” may well be what our Forcey-FreeTrade rulers have in mind. But it is an obsolete framing from a reality-standpoint.

    The reality is that China intends to exterminate every single aspect and trace of chipmaking in America the same way that Imperial Britain exterminated every last trace of textile industry and every other native industry in India in order to reduce India to being a mute helpless market for British manufactures and a mute helpless strip-mine to supply Britain with whatever Britain decided India could supply Britain with.

    So a more reality-based framing for the present and future would be “banning chip sales to China” in order to slow down the Chinese plan for Mercantilonial aggression and conquest of America. People invested in berating the evils of American Hegemonism are not yet prepared to see the emerging reality of America as the primary targeted victim-conquest of Imperial Chinese Colonialism. China’s goal for America is to turn America into One Big Overseas Tibet. And the American Upper Class goal is to be well paid cadres and operatives ruling Tibetamerica on China’s behalf and getting well paid for it. Believe it now or believe it later.


    I believe the trick is to make “cool” itself into an uncool thing. Remember that Huey Lewis and the News song ” Its Hip to Be Square”?
    Well, I sometimes tell people that I was square when square wasn’t hip, just as Barbara Mandrell was country when country wasn’t cool.

    So if we can un-cool cool itself, then we can un-cool the various cool kids like the Clintons who worked with their Republican status-aspiration-symbols to bring Forcey-FreeTrade to America.

    Maybe that approach is worth a try as well.

  5. Soredemos


    [Neo]liberal Democrats may in fact be dumber than the standard Republican they’ve been mocking and pretending to hate since the ‘glory’ days of the Jon Stewart Daily Show. They may never come around to hating the Clintons.

  6. Sara

    It’s great for humanity and the environment that China is able to quickly produce loads of cheaper digital pacifiers.

    Thanks Ian.

  7. StewartM


    Nvidia GPUs in particular have gone so far up their own ass in terms of price it’s gotten absolutely absurd. The excuse is always that production costs have inherently gone up and TSMC simply has to charge companies that much to make their chips.

    I thought the price of GPUs rise to astronomical levels were the damn cryptocurrency miners. I always wondered if a solution would be design GPUs incapable of cryptomining (but then again why? as you’d be undercutting profits).

  8. Soredemos

    @different clue

    The paranoid sinophobia is strong here.

  9. Soredemos


    The cryptoscam’s impact on GPU prices has been over for a couple years. Yet prices have not only stayed high, but ballooned. An RTX 4090 will cost you a minimum of $1600, and likely $2,000 or more.

  10. different clue


    Events over time will prove me right or wrong. If events prove me wrong then your assessment of my views will be vindicated.

  11. Willy

    Evangelicals were seduced by libertarian plutocrat-prop when the latter made their satanic ways sound cool. Patriotic, Christian, family oriented, hard-working, personal responsibility, self-reliant, constitutional, USA! USA! USA!, the daddy party… Join us, we’re the cool ones! Before that, nobody gave libertarianism much of a second thought.

    The truth is, the majority of those people that I know aren’t often that kind of stuff.
    Based on observation of their behavior, many don’t actually believe in those things. They just wanted to wear the cool clothes. When I tell them that Jesus made it hip to be square, they’ll mutter something about uncool trannies and Marxists.

  12. StewartM


    Having heard a tale of a Western corporation taken over by the Chinese, versus what happens when a Western corporation was taken over by another Western corporation, I would take the Chinese takeover in a heartbeat. For one, their leadership is more educated in the technical skills, so they value real things more than financialzation, but also there were no layoffs. The Chinese really seemed interested in making the corporation profitable instead of liquidating it for loot.

    The Japanese, I’ve heard, also behave similarly. This is why the West’s economy is stuck in decline while that of the East is in ascension. They believe that wealth is really about the ability to design, produce, and service better mousetraps than in creatively shuffling paper as our MBA leaders do.

  13. Mark Level

    I’m glad Biden has one-upped Drumpf in making the U$A an international pariah. Drumpf only pissed off the (formerly) wealthy European, Australian (etc.) Neo-colonies by saying the quite parts out loud– e.g. when rapist Bill O’Reilly deplored Putin’s “killers”, saying essentially Don’t “We” do that too? Biden has totally alienated the RoW (Rest of the World) with the stealing of funds here, sanctions on 1/3rd of the world (that are now backfiring big time, as this story shows), blustering threats that can only be carried out against the militarily weakest governments (or insurgencies), unending wars & corruption of Elites thru the deaths of our dependent stooges. So the jig is up!! Look for Americans to be shunned and spat upon when they travel abroad in the future. (I wouldn’t like it if it happened to me, but frankly as a U$ taxpayer we all really deserve it.) Nixon’s dreaded “paper tiger” status for USA is finally here. Cue Leonard Cohen’s “Everybody Knows.” . . . oh, & PS– Moon of Alabama today has an excellent post on exactly the same subject!!

    PPS– where’s Tallifer? I miss the cheery Imperial optimism from his/her cadre of “experts” that the U$ will emerge triumphant and ensorcelle the Jungle (per Josep Borrell) peons into decades more of enslavement at the hands of Bwana Whiteman, aka “the Garden.” Na Ga happen, but plenty of laughs as the Elites slaughter their own golden goose & imagine escaping to one of Elon’s “Libertarian” slave islands.

  14. different clue


    That used to be the attitude of American company leadership/rulership bosses and cadres. It has been said that the creation of the MBA degree and the deferral to the allegedly superior business leadership knowledge of Harvard Business School were early milestones on America’s road to a future of Failed ex-Soviet Republic status.

    The rise of the International Free Trade Conspiracy within America’s government and brain-leadership circles was another banana peel facilitating our slow-rolling fall all the way down to the bottom of the stairs.

    Believe it or not, quite a bit of Japanese process-quality was learned from Americans like Demming and Shewhart whose knowledge was sneered at and rejected in their own country. So they ( or at least Demming) took their knowledge to a country where prophets are given honor in their own lifetime.

    Japan still has an annual best-business-quality prize called the Deming which is awarded by the Emperor himself.

    If I had more time, I would give a better reply. Since I don’t have my own computer and depend on the screen-time bounty of others, I can only say so much at any one time.

  15. VietnamVet

    The Proud Boys leadership “who stood up” got 22, 17, 15 and 10 years in prison each. Coupled with the death of 400,000 American Workers with COVID and as many as 4 million out of work with Long-COVID, and another million American who have lost their jobs and were replaced with immigrants, the people who are thriving are the overseas for-profit racketeers. But these global, neo-feudal, high-caste rulers are so addicted to greed that they believe their own propaganda and will never acknowledge that the proxy WWIII is underway in Ukraine or that France is about to lose 20% of its uranium from Niger among a long string of disasters that started with the occupation of Afghanistan and the Iraq Invasion.

    The contradictions between belief and the truth are enormous. Joe Biden is prohibiting uranium mining around Grand Canyon and closing off Alaska North Slope oil production when the West is about to be limited to the 25% of the global petroleum supply in North America once the BRICS+ succeed with their divorce from Wall Street and the City of London. China is selling the rope for Intel and AMD to hang themselves building new Fabs in the desert Southwest USA. The Foxconn Fab in Wisconsin failed and is empty.

    Peace is only possible on Earth with the reemergence of sovereign nations, strong borders, equality, good government, and the rule of law. The neoliberal corporate/state Empires will inevitable end themselves.

    The denial of reality and the active termination of any service with public in its name; assure that the West will be unable to deal with its fall. If there was public health, public education, public transportation, public safety, and public planning, human survival is possible. With none, revolt and death are inevitable. Especially, if nuclear armed opponents go to war with each other without an UN armistice being signed and no DMZ built to separate Russia and NATO.

  16. KT Chong

    >These sanctions should have been used only a couple years prior to a war. (A war with China would be horrific, and the West is not ready for one, especially right now with the massive equipment and munitions draw down for Ukraine.)

    I disagree: a PROXY war with China would be the wet dream of a profit opportunity for the military complex industry.

    If the US was willing to provoke a proxy war with Russia, then China is the natural next step…. as long as the US believe it can avoid a direct conflict or war with Russia or China. A prolonged, never-ending proxy war in which the US do not have to send Americans to fight and die and create problems and repercussions for politicians, that is the really ideal profit-making, wealth-transferring scenario for the elites.

    That is the new war-profiteering model of America: provoke a proxy war with a powerful adversary that can make the war (and profits) last, without sending in American soldiers to fight and die, and get other people/foreigners/fools (Ukrainians, Taiwanese, etc.) to fight and die for US military industry complex. It is the perfect profit model, and we shall see how the US will bring it to the next level.

  17. different clue


    ( follow on to above . . . )

    Another American without mainstream honor in his own country is the currently practicing economist and economics professor Michael Hudson. The International Free Trade Conspiracy and its DC FedRegime personnel are not interested in Hudson’s political-economy advice. So he took his knowledge to a country where a prophet might find honor in his own lifetime. He is an economic policy advisor to the economic planning parts of the ChinaGov. Or so I have read.

    He would have been happy to give this advice to the AmeriGov itself, if America had a Gov interested in such advice. But it doesn’t. So he gives his advice to people who will respect it and give it a hearing and maybe even apply some of it. That is what sincere academics do. They believe in their advice and want to see it put to work in the real world. And if any of the ChinaGov’s actions have been informed by Professor Hudson’s advice, it looks like Professor Hudson gives good advice.

    If the ChinaGov really wanted to troll the DC FedRegime, they would create a Hudson Prize in the spirit of the Deming Prize, and find an economic actor/thing-doer each year to award it too. Maybe have the Chairman ( First Secretary?) of the CPC himself award the prize, just as the Emperor of Japan awards the Deming Prize in Japan.

  18. different clue

    @K T Chong,

    A few hundred thousand words ago, Naked Capitalism ran a screenshotted excerpt from a book by Dr. Sun Yat Sen. The text dealing with Britain’s longstanding practice of get other country after other country to fight a war for Britain’s benefit was highlighted in yellow, for easy visibility.

    When America fell under the control of an Anglophiliac elite, it adopted this legacy British approach. After having itself been tricked into fighting in World War One on behalf of the British Empire by 20th Century America’s most evil President, Woodrow Wilson. And that set the stage for a lot of what came after. ( FDR tried reversing the tide of elite Anglophiliac servitude by banning members of the Council on Foreign Relations from serving in Federal Government, and by making Joseph Kennedy the Ambassador to the Court of Saint James to make the point mader than made. But the naive Harry Truman let the CFR agents and infiltrationists back into government).

  19. StewartM


    Believe it or not, quite a bit of Japanese process-quality was learned from Americans like Demming and Shewhart whose knowledge was sneered at and rejected in their own country.

    I’m familiar with both men; Demming in particular. In fact, Demming was all the rage at my company shortly after I hired in.

    However, the reality is (and this is why, say, US automobiles never have caught up with Toyota and Honda in quality on Consumer Reports’ repair charts) is that it’s quite impossible to reconcile Demming’s engineering and customer-focused management system with Milton Friedman’s ‘shareholder value’ dictum (we want the loot, and we want it now, screw customers and workers and everyone else!). As corporations have voting systems akin to that of old Prussia (the biggest shareholders have the most votes) any attempt to really implement Demming here would end in a shareholder revolt. We like screwing customers!

    Of course, long-term, Milton Friedman leads to loss of market share and lower profits, but 1) hey many of us will be dead by then (the ‘death bet’) and 2) although we’re for ‘free trade’ when it comes to exporting jobs overseas, we will lobby the guv’mint to impose barriers for high-quality products produced overseas under a different management system than ours into the US, so our proles only can afford our crappy low-quality products and service.

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