Why China Can't make Chips!

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China isn't as high tech as you've been told...

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[mccallosone]

i am a teacher in China, and i agree with a lot of this. my students (ages 11-12) are very smart, and can memorize things very quickly, however, if you pose a real question that theyve never been given the answer to they struggle. there was a simple question on a test. Here is a box(pictured). What can you do with it? this melted the brains of my entire class. i explained the question. i said, you can write ANYTHING, just tell me what you can use a box for. they were confused. i gave an example, "ok, you can put pencils in it". they all wrote, put pencils in it. "no! thats an example, think of your own". they legit could. not. do it. they had never been told an answer, and were so afraid of getting the question wrong and being embarrassed, that they left it blank. it was crazy

[johnburke]

Towards the end, I think you glossed over the big big reason why the PRC will struggle to catch up especially in semiconductors (my area of research): the research. It’s not that Chinese nationals are incapable of putting in the hard work and getting to those goals because trust me, I saw so many Chinese friends work like heck doing real impactful research in grad school. In the right setting, just like us Americans they can really shine and innovate. However, the business and research culture makes no room for these kinds of success to be nurtured. Organizations and researchers have to be able to accept reasonable failures and learn from them while crediting those who did the hard work, and the CCP and PRC work culture don’t afford that. Failures are punished so risks are avoided, glitz and shine gets promoted. And when success is made, the top vacuums all the accolades and benefits. Even compared against how Taiwan set up TSMC, the difference is stark. They took risks on EUV that were really a huge gamble. The Taiwan government probably would have let TSMC wither if it couldn’t stand up internationally on its own, so the flexibility to fail and innovate was lifeblood. The CCP is desperate not only for self reliance but also for good propaganda at every step, especially internally, and this leads to sophomore quality research at best in companies that are given crutches until the party feels too much has been wasted

[themaxgruber]

Electronics, chip, reuse is a big problem. These parts are sold on the gray market and find their way into new equipment. Many times they are relabeled. I once had a part fail that I returned to the manufacturer. They stripped the label and found it was labeled as a 1000V part and was really 500V and had been taken from a used assembly. This is such a problem that the military now requires manufacturers to use approved vendors to build their assemblies. Our failure rates decreased significantly once we started buying from these vendors.

[michiellombaers]

I experienced that myself:
In the nineties I was working for a small Dutch company that designed and build professional audio recording & editting products. The first model was a 16bit machine that was constructed around an own design DSP chip. We sold two examples to Hong Kong and after an initial period with loads of questions around the user interface and handling of the system everything went quiet.
Fast forwards to 2000 and I was visiting Beijing for a trade show with our new 24bit system. During that show I heard a story that somewhere in Shenzhen there were 50 of our old systems stocked in a warehouse. After a short moment I made the connection and asked if those sytems might be missing 8 examples of a specific chip. The person who was telling that story was surprised; how could I know that?
Well ... that was our own design DSP that was forged for us ... and *only* for us.

[merinsan]

The problem is simple. You can't reverse engineer a manufacturing process.
You can only work out what the components are, and then from there you need to work out how to make those components.
With high end chips, the processes often require a knowledge of obscure physics, and a practical application of that, which has taken decades to refine.

[saltalmighty]

Well, being an IT-Technician myself, Chip technology is an ongoing race .. who can produce the fastest and effecient ones, even if they start perfecting their chips based on the current day Intel/ARM/AMD chips .. they won't get it right until atleast 10 years later, and at that point .. their own home based chips will be ancient tech

[gregmcfarland]

Helped my understanding of why China is so adamant about Taiwan being their property

[rbspider]

I worked with a Chinese woman at an American newspaper . Her assignment was to create an interactive webpage that allowed the user to click on a date and see what President Trump had tweeted on that day . She was a really nice person . When I told her that Trump would love it she got all nervous that the president would have her deported because I guess in her mind the president hadn't given her permission to make the page. I hope she wasn't a spy.

[ryanrex]

When you start to think about the machines that make the machines that make the machines to make high end chips, you can see the uphill battle to innovate quickly.

[audreyandlinCompany]

It's worse than that -- at this point, any company who has their equipment or machines manufacturered in China, deserves to go bankrupt. Now I see why the bearings on the pumps we bought kept failing -- the metal spheres were probably salvaged and did not have the tolerance for heavy use. The US distributor gave us 5 pumps, as each failed one after another, before they finally "threw in the towel" and refunded our money.

[doingtime]

This is exactly why the Taiwan issue is worrisome, China isn't just looking for a land grab, they want the technology from TSMC (the world's biggest and most cutting edge semiconductor company).

[omrilapidot]

I'm not expert on China but I've been with the (Israeli) tech industry for decades. The way to innovate is to *challenge the status quo*. To be fearless. To be able to point the mistakes of your superiors and propose new ways of moving forward without fearing retribution. From the little I know of China, this is far from their cultural norm.

[weetbix]

What you described with the corruption in China regarding the chip companies sounds 100% the same as the situation we had here in South Africa with bakeries and catering companies posing as PPE producing companies and just looting all the funds.

[Quondom]

The central problem is that China still conceives itself as an empire, the Middle Kingdom, the center of the world. But the world has changed. It is too late for empire-building. Things are too interdependent now. A single I-phone contains parts from 43 countries, some friendly to China, some not so much. After the recent confrontation over Pelosi, China laid an embargo on imports from Taiwan, but it COULDN’T embargo advanced microchips. Taiwan is its main source. A war with Taiwan would shut down the Chinese economy within weeks. And China is not the only country that depends on Taiwanese components. By attacking Taiwan, China would create a huge coalition against itself, something Russia has already experienced in Ukraine.

[williamdobbins]

I spent 5 years working at Papermate, making ball points. Pen points are not so much an engineered tech, but very much an art. We were the corporate head of point production. And there were still issues that took us a lot of talent, experience, and work to get through.

[oneark]

As a Chinese, I like to watch your video most, because you are one of the few honest bloggers I have seen on the Internet. You have really spoken out about China's problems, and the praise of other bloggers for China is too exaggerated. As a local, I know that China is not as good as they praise, and I really hope that China can really solve these problems instead of delaying to change

[Sander-zjwi]

The exact same happened in the DDR (German Democratic Republic) in the 80's. You could make good money on a certain chip so the DDR government pushed the electronics division to produce this chip. They did it, but by the time they could produce the chip, it could be bought in the open market for pennies.

[GrantsPassTVRepair]

I've often thought it's odd how Chinese officials put such importance on looking good in the eyes of the world and their own citizens, as if it's a sin to admit they have any shortcomings.

[homedeezyfasheezy]

A personal friend of mine works for Applied Materials in Austin TX. Currently they are working 60+ hours a week manufacturing a device that is used in the process of making micro chips. They are expected to almost double production over the next year. Applied Materials tried to move their operations to various SE Asian countries about 10 years ago but were unable to do so mainly because of the poor quality of work.