I watched this interview on youtube. I’m not sure why there isn’t a link in the transcript.
I thought it was an excellent interview. The interviewee was down to earth and knew what he was talking about, and Freddie asked all the right questions.
One question Freddie could have pressed harder on was why did the West allow Taiwan to become so central to global chip production? Part of the answer seems to be that, up until about a decade ago, the chance of China seriously threatening Taiwan’s autonomy seemed slim because of US military superiority. Also, by implication based on other remarks by Chris Miller, the process is so complex and expensive only a national government could replicate what Taiwan achieved and probably no country wanted to undertake the task.
Still, having so much advanced chip production location in a small, vulnerable island looks like a self-inflicted wound by the West…
I agree with Freddie’s conclusion that a 20% chance of major conflict over Taiwan in the next five years is uncomfortably high. But what can we now do that won’t further antagonize China and perhaps increase the chance of war?
More interviews like these, Unherd.
It would be just as easy to ask how they let China become the supplier of 80% of rare-earth metals, or why the west elected to offshored most every kind of manufacturing to the third world and Asia. The answer is the same in each case, other nations adopted the rules of globalism but not the ideology and took advantage of obvious holes in the system. They used what they had, cheap and plentiful labor combined with a more pragmatic and less idealistic attitude towards environmental concerns and took advantage of short term thinking from western leadership. As unbelievable as it sounds, the long-term effects of deindustrialization were never seriously considered. In this case, Taiwan’s government recognized the importance of the chip industry earlier than others and subsidized the industry heavily allowing their companies an advantage, government money, that others were not given, distorting economic outcomes in their favor, presumably for the purposes of building geopolitical power and staving off possible annexation. Simply put, they exploited globalism in the same way their would-be conquerors did, with the advantage of being on friendlier terms with the nations who control chip technology (US and Japan). I admire Taiwan for building a healthy and prosperous nation under difficult conditions (having a large, belligerent neighbor determined to conquer your people does tend to encourage pragmatic thinking). They simply saw an opportunity and took it. More broadly though, this is the world globalism has made for us. It may have made us wealthier in immediate material terms, but we’re paying for its failures in other ways.
Few are aware that the Taiwanese also sponsored the creation of the ERSO PC BIOS chip by reverse engineering of the original IBM BIOS chip. The government then stood behind legal challenges. The PC explosion was created by the numerous clones starting in the late 70’s as witnessed by the page count of ads in “Computer Shopper” of the period. Many Taiwan companies rose to meet demand, most now gone. Home PC board assembly was common in Taiwan before automation and before labor costs drove production to China. The creation of TMSC is in line with the government and there were adequate skilled people to start as Taiwan moved to higher value products. The key has been a real partnership between industry and government over a long period; something lacking in the US where one party detests manufacturing.
US tool manufacturers are low rate, high value producers making highly specialized equipment. They began as suppliers to US chip makers to gain a foothold and now dominate the market along with a few EU makers.
Few are aware that the Taiwanese also sponsored the creation of the ERSO PC BIOS chip by reverse engineering of the original IBM BIOS chip. The government then stood behind legal challenges. The PC explosion was created by the numerous clones starting in the late 70’s as witnessed by the page count of ads in “Computer Shopper” of the period. Many Taiwan companies rose to meet demand, most now gone. Home PC board assembly was common in Taiwan before automation and before labor costs drove production to China. The creation of TMSC is in line with the government and there were adequate skilled people to start as Taiwan moved to higher value products. The key has been a real partnership between industry and government over a long period; something lacking in the US where one party detests manufacturing.
US tool manufacturers are low rate, high value producers making highly specialized equipment. They began as suppliers to US chip makers to gain a foothold and now dominate the market along with a few EU makers.
It would be just as easy to ask how they let China become the supplier of 80% of rare-earth metals, or why the west elected to offshored most every kind of manufacturing to the third world and Asia. The answer is the same in each case, other nations adopted the rules of globalism but not the ideology and took advantage of obvious holes in the system. They used what they had, cheap and plentiful labor combined with a more pragmatic and less idealistic attitude towards environmental concerns and took advantage of short term thinking from western leadership. As unbelievable as it sounds, the long-term effects of deindustrialization were never seriously considered. In this case, Taiwan’s government recognized the importance of the chip industry earlier than others and subsidized the industry heavily allowing their companies an advantage, government money, that others were not given, distorting economic outcomes in their favor, presumably for the purposes of building geopolitical power and staving off possible annexation. Simply put, they exploited globalism in the same way their would-be conquerors did, with the advantage of being on friendlier terms with the nations who control chip technology (US and Japan). I admire Taiwan for building a healthy and prosperous nation under difficult conditions (having a large, belligerent neighbor determined to conquer your people does tend to encourage pragmatic thinking). They simply saw an opportunity and took it. More broadly though, this is the world globalism has made for us. It may have made us wealthier in immediate material terms, but we’re paying for its failures in other ways.
Last edited 1 year ago by Steve Jolly
J Bryant
1 year ago
I watched this interview on youtube. I’m not sure why there isn’t a link in the transcript.
I thought it was an excellent interview. The interviewee was down to earth and knew what he was talking about, and Freddie asked all the right questions.
One question Freddie could have pressed harder on was why did the West allow Taiwan to become so central to global chip production? Part of the answer seems to be that, up until about a decade ago, the chance of China seriously threatening Taiwan’s autonomy seemed slim because of US military superiority. Also, by implication based on other remarks by Chris Miller, the process is so complex and expensive only a national government could replicate what Taiwan achieved and probably no country wanted to undertake the task.
Still, having so much advanced chip production location in a small, vulnerable island looks like a self-inflicted wound by the West…
I agree with Freddie’s conclusion that a 20% chance of major conflict over Taiwan in the next five years is uncomfortably high. But what can we now do that won’t further antagonize China and perhaps increase the chance of war?
More interviews like these, Unherd.
Last edited 1 year ago by J Bryant
Peter B
1 year ago
This article only details two aspects of the US chip industry sanctions on China:
R1: Restricting access to purchase high end chips
R2: Restricting access to the most advanced (EUV) lithography machines (from ASSML in the Netherlands)
It misses two other important policies:
R3: Preventing Chinese chip design companies from using leading edge processes at Western fabs (chip manufacturing plants) (principally TSMC in Taiwan). Huawei’s mobile phone chip subsidiary HiSilicon lost access to TSMC over a year ago. That’s a serious problem for them.
R4: Denying access to leading edge chip design tools (software) needed to design the very latest/smallest geometry chips
These last two points are also critical. It is impossible to design the most advanced chips without the required software *and technical support* (which will also be denied). And just as with the advanced lithography equipment, it will prove impossible for the Chinese to catch up now. Producing the required software and machines needs years of development (and debugging) and tens of billions of dollars. And they won’t have a large enough market to recover the costs, even if they could.
The Chinese have only themselves to blame. They’ve been stealing Western technology for at least two decades and destroying some of our high tech industries (telecoms) as a result.
Agree with your points.
One interesting issue is what happens outside of the 5 year timeline touted, where we may start to see other technologies (perforce) compete with lithographic EUV – assuming its death has not been exaggerated once again.
China will still be behind with the west on a technical footing but if they backed something new now (Gan or optronics or other silver bullet), they’d at least have a chance to compete – they certainly can’t with existing R&D and fabrication plants as the technology and infrastructure isn’t there.
Not saying I’d bet on it, but a long term strategy is probably their only option (other than annexation).
I often think the Asian culture where failure is not often tolerated is a hindrance to innovation. Very hard to change cultural values. Many patents in Asia are “me too” adjustments possible because of culture. Just my opinion.
I often think the Asian culture where failure is not often tolerated is a hindrance to innovation. Very hard to change cultural values. Many patents in Asia are “me too” adjustments possible because of culture. Just my opinion.
This happens to be my industry, so for once I’m commenting on something I have real experience in. But that’s no guarantee of being correct – as always opinions vary even amongst those with experience.
On the prevailing pessimism in the West. I do find the default assumption that the leaders of the West are always clueless and incompetent while those in places like Russia and China are on the ball baffling. How did we end up being so much more free and wealthy if we had worse leaders ?
Agreed! I think the legacy of The Great War has much to answer for, particularly as it also sired WWII.
However on balance ‘we’ the English/Anglo-sphere or whatever you want to calls us have done rather well* over the past four centuries.(starting in 1603 in fact.)
As for Russia and China our ‘academics have been singing their praises from 1917 onwards. A more self-hating bunch would be hard to imagine. Oiks in the true (Greek) meaning of the word.
(* Remembering off course the old adage “self praise is no recommendation!”)
Agreed! I think the legacy of The Great War has much to answer for, particularly as it also sired WWII.
However on balance ‘we’ the English/Anglo-sphere or whatever you want to calls us have done rather well* over the past four centuries.(starting in 1603 in fact.)
As for Russia and China our ‘academics have been singing their praises from 1917 onwards. A more self-hating bunch would be hard to imagine. Oiks in the true (Greek) meaning of the word.
(* Remembering off course the old adage “self praise is no recommendation!”)
This happens to be my industry, so for once I’m commenting on something I have real experience in. But that’s no guarantee of being correct – as always opinions vary even amongst those with experience.
On the prevailing pessimism in the West. I do find the default assumption that the leaders of the West are always clueless and incompetent while those in places like Russia and China are on the ball baffling. How did we end up being so much more free and wealthy if we had worse leaders ?
Agree with your points.
One interesting issue is what happens outside of the 5 year timeline touted, where we may start to see other technologies (perforce) compete with lithographic EUV – assuming its death has not been exaggerated once again.
China will still be behind with the west on a technical footing but if they backed something new now (Gan or optronics or other silver bullet), they’d at least have a chance to compete – they certainly can’t with existing R&D and fabrication plants as the technology and infrastructure isn’t there.
Not saying I’d bet on it, but a long term strategy is probably their only option (other than annexation).
Fascinating, thank you.
I knew none of this so it is most encouraging.
Peter B
1 year ago
This article only details two aspects of the US chip industry sanctions on China:
R1: Restricting access to purchase high end chips
R2: Restricting access to the most advanced (EUV) lithography machines (from ASSML in the Netherlands)
It misses two other important policies:
R3: Preventing Chinese chip design companies from using leading edge processes at Western fabs (chip manufacturing plants) (principally TSMC in Taiwan). Huawei’s mobile phone chip subsidiary HiSilicon lost access to TSMC over a year ago. That’s a serious problem for them.
R4: Denying access to leading edge chip design tools (software) needed to design the very latest/smallest geometry chips
These last two points are also critical. It is impossible to design the most advanced chips without the required software *and technical support* (which will also be denied). And just as with the advanced lithography equipment, it will prove impossible for the Chinese to catch up now. Producing the required software and machines needs years of development (and debugging) and tens of billions of dollars. And they won’t have a large enough market to recover the costs, even if they could.
The Chinese have only themselves to blame. They’ve been stealing Western technology for at least two decades and destroying some of our high tech industries (telecoms) as a result.
j watson
1 year ago
Really good Article. Thank you.
Grateful if risk has dropped to 20%. Had seen informed commentary suggest higher. Albeit Putin’s Ukraine experience will have been risk-informative for Xi.
CM refers to need to rapidly strengthen deterrence. AUKUS announcement yesterday on Subs too slow but nonetheless clear message and direction. Still a need to turn Taiwan into a porcupine, discretely initially if poss and then visibly. Deterrence has to be demonstrable.
j watson
1 year ago
Really good Article. Thank you.
Grateful if risk has dropped to 20%. Had seen informed commentary suggest higher. Albeit Putin’s Ukraine experience will have been risk-informative for Xi.
CM refers to need to rapidly strengthen deterrence. AUKUS announcement yesterday on Subs too slow but nonetheless clear message and direction. Still a need to turn Taiwan into a porcupine, discretely initially if poss and then visibly. Deterrence has to be demonstrable.
Kevin R
1 year ago
Excellent interview…..one of the most informative I’ve heard in a long while, thanks. This subject seems to have been chronically under-analysed in the media until now….
Kevin R
1 year ago
Excellent interview…..one of the most informative I’ve heard in a long while, thanks. This subject seems to have been chronically under-analysed in the media until now….
Elliott Bjorn
1 year ago
Be a lot worse than the Great Depression. They still had ag and industry – they just lacked the people with money to buy stuff. This is 100% opposite.
This situation is supply side, not demand side driven.
This means billions starving as industry and products are stopped in their tracks. But whatever – this guy has several things I do not agree with.
”Two decades ago, it was obvious, in the event of world war, who would win. Today, it is not at all obvious who would win. That uncertainty created by our decision to let our military advantages over China deteriorate”
China cannot win a war – not a real War, because like Japan, Like UK in WWII the vital resources (oil, metals, food…) have to get there – and they have to go through a tiny gap in the Malacca straits – and they can easily be Blockaded by Subs and missiles. China would starve.
But they can do MAD, not just Nuk ‘Mutually Assured Destruction’ but with chips too, and all kinds of manufacturing. So I do not see it…. Unless the Schwab/Gates/WEF Eugenics global de-population thing is due, then it is assured to happen.
Let’s face it; any good dictator worth his salt can take the nuke option. The idea of nukes is that everybody is afraid to use them. One day somebody will take that option.
If I was Mr China or Mr North Korea and wanted to show that I meant business, I wouldn’t nuke LA or New York. I’d choose somewhere in Europe because Europe can’t fight back. So there is NATO in theory but a theory is what it is.
Let’s face it; any good dictator worth his salt can take the nuke option. The idea of nukes is that everybody is afraid to use them. One day somebody will take that option.
If I was Mr China or Mr North Korea and wanted to show that I meant business, I wouldn’t nuke LA or New York. I’d choose somewhere in Europe because Europe can’t fight back. So there is NATO in theory but a theory is what it is.
Elliott Bjorn
1 year ago
Be a lot worse than the Great Depression. They still had ag and industry – they just lacked the people with money to buy stuff. This is 100% opposite.
This situation is supply side, not demand side driven.
This means billions starving as industry and products are stopped in their tracks. But whatever – this guy has several things I do not agree with.
”Two decades ago, it was obvious, in the event of world war, who would win. Today, it is not at all obvious who would win. That uncertainty created by our decision to let our military advantages over China deteriorate”
China cannot win a war – not a real War, because like Japan, Like UK in WWII the vital resources (oil, metals, food…) have to get there – and they have to go through a tiny gap in the Malacca straits – and they can easily be Blockaded by Subs and missiles. China would starve.
But they can do MAD, not just Nuk ‘Mutually Assured Destruction’ but with chips too, and all kinds of manufacturing. So I do not see it…. Unless the Schwab/Gates/WEF Eugenics global de-population thing is due, then it is assured to happen.
Emre S
1 year ago
This read like a well informed and measured article – I liked it.
I do wonder however whether this interview comes with the wrong conclusion about the probability of a conflict. When Japan attacked Pearl Harbour it wasn’t the great likelihood of its success that motivated them to do it – it was rather that any time later would have guaranteed failure that they decided to take the bad odds. Incapacitating the Pacific fleet would give Japan at least an initial advantage, and another roll of the dice going forward.
China is in a similar situation. It’s caught in the AI revolution without the proper investment just at the wrong time. Xi Jinping has already broken the rules on limits on his term, managed to consolidate his control, and was hoping to make his signature achievement giving China a great power peer status with US ending their “humiliation”. If the sanctions are successful, they turn the tide pushing China back to subservient status to the West. Attacking Taiwan now would give China a tactical advantage by constraining chip supply, even perhaps allow China to acquire some of the technology, at the very least greatly disrupt the Western economy for a long time. China may just decide to go for the roll of the dice instead of facing guaranteed decline.
Last edited 1 year ago by Emre S
Emre S
1 year ago
This read like a well informed and measured article – I liked it.
I do wonder however whether this interview comes with the wrong conclusion about the probability of a conflict. When Japan attacked Pearl Harbour it wasn’t the great likelihood of its success that motivated them to do it – it was rather that any time later would have guaranteed failure that they decided to take the bad odds. Incapacitating the Pacific fleet would give Japan at least an initial advantage, and another roll of the dice going forward.
China is in a similar situation. It’s caught in the AI revolution without the proper investment just at the wrong time. Xi Jinping has already broken the rules on limits on his term, managed to consolidate his control, and was hoping to make his signature achievement giving China a great power peer status with US ending their “humiliation”. If the sanctions are successful, they turn the tide pushing China back to subservient status to the West. Attacking Taiwan now would give China a tactical advantage by constraining chip supply, even perhaps allow China to acquire some of the technology, at the very least greatly disrupt the Western economy for a long time. China may just decide to go for the roll of the dice instead of facing guaranteed decline.
Last edited 1 year ago by Emre S
Steve Jolly
1 year ago
Let’s hope we don’t see a day where Chinese landing craft are crossing the Taiwan strait, because regardless of rhetoric, the strategic reality is that the US and probably most of the world besides would be at war the following day. I believe the USA should make it clear, publicly or discretely, to the Chinese government that a military action across the Taiwan strait would be met with immediate retaliation without ruling out a nuclear response. That is, to my mind, the best chance we have of ‘convincing’ the CCP that Taiwan isn’t worth it. MAD has prevented WWIII for almost eight decades. Go with what works.
Steve Jolly
1 year ago
Let’s hope we don’t see a day where Chinese landing craft are crossing the Taiwan strait, because regardless of rhetoric, the strategic reality is that the US and probably most of the world besides would be at war the following day. I believe the USA should make it clear, publicly or discretely, to the Chinese government that a military action across the Taiwan strait would be met with immediate retaliation without ruling out a nuclear response. That is, to my mind, the best chance we have of ‘convincing’ the CCP that Taiwan isn’t worth it. MAD has prevented WWIII for almost eight decades. Go with what works.
This really bothered me – this is 100% political interjecting, and also not true where he talks of MAD.
”But there’s lots of examples of wars in history that have been waged by leaders who have decided the economic costs were worth it, or underestimated the economic costs — look at Putin, for example. I think anyone who is betting on “mutual-assured economic destruction” to maintain the peace doesn’t have much grounding in history on which to base that faith.”
Well it was Biden who triggered MAD – and not against USA, USA profits from the Ukraine war in a twisted way and Russia does OK too – No – the Mutually Assured Destruction Biden ushered in with his $130,000,000,000 of un-audited aid, and real time targeting and surveillance, to one of the most corrupt nations on earth is the assured destruction to the EU and Ukraine.
Putin thought he could go in, kill the corrupt puppet leaders and the Oligarchs – replace them with his puppet ones who would not join EU and NATO, and leave Ukraine intact.
Biden triggered MAD. He decided a proxy war which 100% destroyed Ukraine and its people, and also Europe to a high degree economically, was a good idea. Putin just went in to straighten out some things. Biden triggered MAD. But a very weird kind of MAD – one where the two antagonists are not really harmed – but leave everyone else flattened, and the actual potential enemy, China, better off.
Biden, he has a different way of looking on the world than I do.
Biden didn’t send the tanks in, Putin did. Biden hasn’t tried to flatten entire cities with cruise missiles, again that falls entirely on the Kremlin. There have been many times throughout history when America and the west have been at fault and behaved despicably, but this isn’t one of them
Biden/the US stopped the signing of a peace agreement on multiple occasions – before and right after the start of the war (by way of Britains favorite clown), so let’s not sell the Wests contribution to this atrocity of a war short.
Indeed, in response to a US-inspired coup and Bush’s earlier insistence that Ukraine would join NATO. Recency bias is of course useful when trying to rewrite history.
Indeed, in response to a US-inspired coup and Bush’s earlier insistence that Ukraine would join NATO. Recency bias is of course useful when trying to rewrite history.
Well, I suspect not even a transcript, video and forensic evidence from the conversation between BoJo and Zelenskyy would suffice as evidence, but in the interest of open debate I provide you with the following:
The article talks about an existing (but tentative) agreement between both sides, with no less a source than Fiona Hill, that was (in all likelihood) torpedoed by Boris the flying Fox:
“Russian and Ukrainian negotiators appeared to have tentatively agreed on the outlines of a negotiated interim settlement,” wrote Fiona Hill and Angela Stent. “Russia would withdraw to its position on February 23, when it controlled part of the Donbas region and all of Crimea, and in exchange, Ukraine would promise not to seek NATO membership and instead receive security guarantees from a number of countries.”
So, will you now tell me how this would have been worse than the current situation considering the dead, the destruction, the brain drain and the lost swathes of land (in addition to adverse global effects for basically everyone except the US and perhaps China)?
Or will you impugn the source?
Either way, it’ll still get worse before it gets better and that deal strikes me as superior to almost anything the Ukrainians can hope for.
Well, I suspect not even a transcript, video and forensic evidence from the conversation between BoJo and Zelenskyy would suffice as evidence, but in the interest of open debate I provide you with the following:
The article talks about an existing (but tentative) agreement between both sides, with no less a source than Fiona Hill, that was (in all likelihood) torpedoed by Boris the flying Fox:
“Russian and Ukrainian negotiators appeared to have tentatively agreed on the outlines of a negotiated interim settlement,” wrote Fiona Hill and Angela Stent. “Russia would withdraw to its position on February 23, when it controlled part of the Donbas region and all of Crimea, and in exchange, Ukraine would promise not to seek NATO membership and instead receive security guarantees from a number of countries.”
So, will you now tell me how this would have been worse than the current situation considering the dead, the destruction, the brain drain and the lost swathes of land (in addition to adverse global effects for basically everyone except the US and perhaps China)?
Or will you impugn the source?
Either way, it’ll still get worse before it gets better and that deal strikes me as superior to almost anything the Ukrainians can hope for.
Biden/the US stopped the signing of a peace agreement on multiple occasions – before and right after the start of the war (by way of Britains favorite clown), so let’s not sell the Wests contribution to this atrocity of a war short.
Biden didn’t send the tanks in, Putin did. Biden hasn’t tried to flatten entire cities with cruise missiles, again that falls entirely on the Kremlin. There have been many times throughout history when America and the west have been at fault and behaved despicably, but this isn’t one of them
Elliott Bjorn
1 year ago
This really bothered me – this is 100% political interjecting, and also not true where he talks of MAD.
”But there’s lots of examples of wars in history that have been waged by leaders who have decided the economic costs were worth it, or underestimated the economic costs — look at Putin, for example. I think anyone who is betting on “mutual-assured economic destruction” to maintain the peace doesn’t have much grounding in history on which to base that faith.”
Well it was Biden who triggered MAD – and not against USA, USA profits from the Ukraine war in a twisted way and Russia does OK too – No – the Mutually Assured Destruction Biden ushered in with his $130,000,000,000 of un-audited aid, and real time targeting and surveillance, to one of the most corrupt nations on earth is the assured destruction to the EU and Ukraine.
Putin thought he could go in, kill the corrupt puppet leaders and the Oligarchs – replace them with his puppet ones who would not join EU and NATO, and leave Ukraine intact.
Biden triggered MAD. He decided a proxy war which 100% destroyed Ukraine and its people, and also Europe to a high degree economically, was a good idea. Putin just went in to straighten out some things. Biden triggered MAD. But a very weird kind of MAD – one where the two antagonists are not really harmed – but leave everyone else flattened, and the actual potential enemy, China, better off.
Biden, he has a different way of looking on the world than I do.
I watched this interview on youtube. I’m not sure why there isn’t a link in the transcript.
I thought it was an excellent interview. The interviewee was down to earth and knew what he was talking about, and Freddie asked all the right questions.
One question Freddie could have pressed harder on was why did the West allow Taiwan to become so central to global chip production? Part of the answer seems to be that, up until about a decade ago, the chance of China seriously threatening Taiwan’s autonomy seemed slim because of US military superiority. Also, by implication based on other remarks by Chris Miller, the process is so complex and expensive only a national government could replicate what Taiwan achieved and probably no country wanted to undertake the task.
Still, having so much advanced chip production location in a small, vulnerable island looks like a self-inflicted wound by the West…
I agree with Freddie’s conclusion that a 20% chance of major conflict over Taiwan in the next five years is uncomfortably high. But what can we now do that won’t further antagonize China and perhaps increase the chance of war?
More interviews like these, Unherd.
Reminds me of rather of when we ‘swapped’ Heligoland for Zanzibar in 1890, and hey presto the Germans start building “The High Seas Fleet”.
It would be just as easy to ask how they let China become the supplier of 80% of rare-earth metals, or why the west elected to offshored most every kind of manufacturing to the third world and Asia. The answer is the same in each case, other nations adopted the rules of globalism but not the ideology and took advantage of obvious holes in the system. They used what they had, cheap and plentiful labor combined with a more pragmatic and less idealistic attitude towards environmental concerns and took advantage of short term thinking from western leadership. As unbelievable as it sounds, the long-term effects of deindustrialization were never seriously considered. In this case, Taiwan’s government recognized the importance of the chip industry earlier than others and subsidized the industry heavily allowing their companies an advantage, government money, that others were not given, distorting economic outcomes in their favor, presumably for the purposes of building geopolitical power and staving off possible annexation. Simply put, they exploited globalism in the same way their would-be conquerors did, with the advantage of being on friendlier terms with the nations who control chip technology (US and Japan). I admire Taiwan for building a healthy and prosperous nation under difficult conditions (having a large, belligerent neighbor determined to conquer your people does tend to encourage pragmatic thinking). They simply saw an opportunity and took it. More broadly though, this is the world globalism has made for us. It may have made us wealthier in immediate material terms, but we’re paying for its failures in other ways.
Few are aware that the Taiwanese also sponsored the creation of the ERSO PC BIOS chip by reverse engineering of the original IBM BIOS chip. The government then stood behind legal challenges. The PC explosion was created by the numerous clones starting in the late 70’s as witnessed by the page count of ads in “Computer Shopper” of the period. Many Taiwan companies rose to meet demand, most now gone. Home PC board assembly was common in Taiwan before automation and before labor costs drove production to China. The creation of TMSC is in line with the government and there were adequate skilled people to start as Taiwan moved to higher value products. The key has been a real partnership between industry and government over a long period; something lacking in the US where one party detests manufacturing.
US tool manufacturers are low rate, high value producers making highly specialized equipment. They began as suppliers to US chip makers to gain a foothold and now dominate the market along with a few EU makers.
Few are aware that the Taiwanese also sponsored the creation of the ERSO PC BIOS chip by reverse engineering of the original IBM BIOS chip. The government then stood behind legal challenges. The PC explosion was created by the numerous clones starting in the late 70’s as witnessed by the page count of ads in “Computer Shopper” of the period. Many Taiwan companies rose to meet demand, most now gone. Home PC board assembly was common in Taiwan before automation and before labor costs drove production to China. The creation of TMSC is in line with the government and there were adequate skilled people to start as Taiwan moved to higher value products. The key has been a real partnership between industry and government over a long period; something lacking in the US where one party detests manufacturing.
US tool manufacturers are low rate, high value producers making highly specialized equipment. They began as suppliers to US chip makers to gain a foothold and now dominate the market along with a few EU makers.
Reminds me of rather of when we ‘swapped’ Heligoland for Zanzibar in 1890, and hey presto the Germans start building “The High Seas Fleet”.
It would be just as easy to ask how they let China become the supplier of 80% of rare-earth metals, or why the west elected to offshored most every kind of manufacturing to the third world and Asia. The answer is the same in each case, other nations adopted the rules of globalism but not the ideology and took advantage of obvious holes in the system. They used what they had, cheap and plentiful labor combined with a more pragmatic and less idealistic attitude towards environmental concerns and took advantage of short term thinking from western leadership. As unbelievable as it sounds, the long-term effects of deindustrialization were never seriously considered. In this case, Taiwan’s government recognized the importance of the chip industry earlier than others and subsidized the industry heavily allowing their companies an advantage, government money, that others were not given, distorting economic outcomes in their favor, presumably for the purposes of building geopolitical power and staving off possible annexation. Simply put, they exploited globalism in the same way their would-be conquerors did, with the advantage of being on friendlier terms with the nations who control chip technology (US and Japan). I admire Taiwan for building a healthy and prosperous nation under difficult conditions (having a large, belligerent neighbor determined to conquer your people does tend to encourage pragmatic thinking). They simply saw an opportunity and took it. More broadly though, this is the world globalism has made for us. It may have made us wealthier in immediate material terms, but we’re paying for its failures in other ways.
I watched this interview on youtube. I’m not sure why there isn’t a link in the transcript.
I thought it was an excellent interview. The interviewee was down to earth and knew what he was talking about, and Freddie asked all the right questions.
One question Freddie could have pressed harder on was why did the West allow Taiwan to become so central to global chip production? Part of the answer seems to be that, up until about a decade ago, the chance of China seriously threatening Taiwan’s autonomy seemed slim because of US military superiority. Also, by implication based on other remarks by Chris Miller, the process is so complex and expensive only a national government could replicate what Taiwan achieved and probably no country wanted to undertake the task.
Still, having so much advanced chip production location in a small, vulnerable island looks like a self-inflicted wound by the West…
I agree with Freddie’s conclusion that a 20% chance of major conflict over Taiwan in the next five years is uncomfortably high. But what can we now do that won’t further antagonize China and perhaps increase the chance of war?
More interviews like these, Unherd.
This article only details two aspects of the US chip industry sanctions on China:
R1: Restricting access to purchase high end chips
R2: Restricting access to the most advanced (EUV) lithography machines (from ASSML in the Netherlands)
It misses two other important policies:
R3: Preventing Chinese chip design companies from using leading edge processes at Western fabs (chip manufacturing plants) (principally TSMC in Taiwan). Huawei’s mobile phone chip subsidiary HiSilicon lost access to TSMC over a year ago. That’s a serious problem for them.
R4: Denying access to leading edge chip design tools (software) needed to design the very latest/smallest geometry chips
These last two points are also critical. It is impossible to design the most advanced chips without the required software *and technical support* (which will also be denied). And just as with the advanced lithography equipment, it will prove impossible for the Chinese to catch up now. Producing the required software and machines needs years of development (and debugging) and tens of billions of dollars. And they won’t have a large enough market to recover the costs, even if they could.
The Chinese have only themselves to blame. They’ve been stealing Western technology for at least two decades and destroying some of our high tech industries (telecoms) as a result.
Agree with your points.
One interesting issue is what happens outside of the 5 year timeline touted, where we may start to see other technologies (perforce) compete with lithographic EUV – assuming its death has not been exaggerated once again.
China will still be behind with the west on a technical footing but if they backed something new now (Gan or optronics or other silver bullet), they’d at least have a chance to compete – they certainly can’t with existing R&D and fabrication plants as the technology and infrastructure isn’t there.
Not saying I’d bet on it, but a long term strategy is probably their only option (other than annexation).
Let’s hope there isn’t a ‘DREADNOUGHT’ moment.
I often think the Asian culture where failure is not often tolerated is a hindrance to innovation. Very hard to change cultural values. Many patents in Asia are “me too” adjustments possible because of culture. Just my opinion.
Let’s hope there isn’t a ‘DREADNOUGHT’ moment.
I often think the Asian culture where failure is not often tolerated is a hindrance to innovation. Very hard to change cultural values. Many patents in Asia are “me too” adjustments possible because of culture. Just my opinion.
Fascinating, thank you.
I knew none of this so it is most encouraging.
This happens to be my industry, so for once I’m commenting on something I have real experience in. But that’s no guarantee of being correct – as always opinions vary even amongst those with experience.
On the prevailing pessimism in the West. I do find the default assumption that the leaders of the West are always clueless and incompetent while those in places like Russia and China are on the ball baffling. How did we end up being so much more free and wealthy if we had worse leaders ?
Leaders in the west have typically been more hands off.
Agreed! I think the legacy of The Great War has much to answer for, particularly as it also sired WWII.
However on balance ‘we’ the English/Anglo-sphere or whatever you want to calls us have done rather well* over the past four centuries.(starting in 1603 in fact.)
As for Russia and China our ‘academics have been singing their praises from 1917 onwards. A more self-hating bunch would be hard to imagine. Oiks in the true (Greek) meaning of the word.
(* Remembering off course the old adage “self praise is no recommendation!”)
Leaders in the west have typically been more hands off.
Agreed! I think the legacy of The Great War has much to answer for, particularly as it also sired WWII.
However on balance ‘we’ the English/Anglo-sphere or whatever you want to calls us have done rather well* over the past four centuries.(starting in 1603 in fact.)
As for Russia and China our ‘academics have been singing their praises from 1917 onwards. A more self-hating bunch would be hard to imagine. Oiks in the true (Greek) meaning of the word.
(* Remembering off course the old adage “self praise is no recommendation!”)
This happens to be my industry, so for once I’m commenting on something I have real experience in. But that’s no guarantee of being correct – as always opinions vary even amongst those with experience.
On the prevailing pessimism in the West. I do find the default assumption that the leaders of the West are always clueless and incompetent while those in places like Russia and China are on the ball baffling. How did we end up being so much more free and wealthy if we had worse leaders ?
Agree with your points.
One interesting issue is what happens outside of the 5 year timeline touted, where we may start to see other technologies (perforce) compete with lithographic EUV – assuming its death has not been exaggerated once again.
China will still be behind with the west on a technical footing but if they backed something new now (Gan or optronics or other silver bullet), they’d at least have a chance to compete – they certainly can’t with existing R&D and fabrication plants as the technology and infrastructure isn’t there.
Not saying I’d bet on it, but a long term strategy is probably their only option (other than annexation).
Fascinating, thank you.
I knew none of this so it is most encouraging.
This article only details two aspects of the US chip industry sanctions on China:
R1: Restricting access to purchase high end chips
R2: Restricting access to the most advanced (EUV) lithography machines (from ASSML in the Netherlands)
It misses two other important policies:
R3: Preventing Chinese chip design companies from using leading edge processes at Western fabs (chip manufacturing plants) (principally TSMC in Taiwan). Huawei’s mobile phone chip subsidiary HiSilicon lost access to TSMC over a year ago. That’s a serious problem for them.
R4: Denying access to leading edge chip design tools (software) needed to design the very latest/smallest geometry chips
These last two points are also critical. It is impossible to design the most advanced chips without the required software *and technical support* (which will also be denied). And just as with the advanced lithography equipment, it will prove impossible for the Chinese to catch up now. Producing the required software and machines needs years of development (and debugging) and tens of billions of dollars. And they won’t have a large enough market to recover the costs, even if they could.
The Chinese have only themselves to blame. They’ve been stealing Western technology for at least two decades and destroying some of our high tech industries (telecoms) as a result.
Really good Article. Thank you.
Grateful if risk has dropped to 20%. Had seen informed commentary suggest higher. Albeit Putin’s Ukraine experience will have been risk-informative for Xi.
CM refers to need to rapidly strengthen deterrence. AUKUS announcement yesterday on Subs too slow but nonetheless clear message and direction. Still a need to turn Taiwan into a porcupine, discretely initially if poss and then visibly. Deterrence has to be demonstrable.
Really good Article. Thank you.
Grateful if risk has dropped to 20%. Had seen informed commentary suggest higher. Albeit Putin’s Ukraine experience will have been risk-informative for Xi.
CM refers to need to rapidly strengthen deterrence. AUKUS announcement yesterday on Subs too slow but nonetheless clear message and direction. Still a need to turn Taiwan into a porcupine, discretely initially if poss and then visibly. Deterrence has to be demonstrable.
Excellent interview…..one of the most informative I’ve heard in a long while, thanks. This subject seems to have been chronically under-analysed in the media until now….
Excellent interview…..one of the most informative I’ve heard in a long while, thanks. This subject seems to have been chronically under-analysed in the media until now….
Be a lot worse than the Great Depression. They still had ag and industry – they just lacked the people with money to buy stuff. This is 100% opposite.
This situation is supply side, not demand side driven.
This means billions starving as industry and products are stopped in their tracks. But whatever – this guy has several things I do not agree with.
”Two decades ago, it was obvious, in the event of world war, who would win. Today, it is not at all obvious who would win. That uncertainty created by our decision to let our military advantages over China deteriorate”
China cannot win a war – not a real War, because like Japan, Like UK in WWII the vital resources (oil, metals, food…) have to get there – and they have to go through a tiny gap in the Malacca straits – and they can easily be Blockaded by Subs and missiles. China would starve.
But they can do MAD, not just Nuk ‘Mutually Assured Destruction’ but with chips too, and all kinds of manufacturing. So I do not see it…. Unless the Schwab/Gates/WEF Eugenics global de-population thing is due, then it is assured to happen.
Let’s face it; any good dictator worth his salt can take the nuke option. The idea of nukes is that everybody is afraid to use them. One day somebody will take that option.
If I was Mr China or Mr North Korea and wanted to show that I meant business, I wouldn’t nuke LA or New York. I’d choose somewhere in Europe because Europe can’t fight back. So there is NATO in theory but a theory is what it is.
Let’s face it; any good dictator worth his salt can take the nuke option. The idea of nukes is that everybody is afraid to use them. One day somebody will take that option.
If I was Mr China or Mr North Korea and wanted to show that I meant business, I wouldn’t nuke LA or New York. I’d choose somewhere in Europe because Europe can’t fight back. So there is NATO in theory but a theory is what it is.
Be a lot worse than the Great Depression. They still had ag and industry – they just lacked the people with money to buy stuff. This is 100% opposite.
This situation is supply side, not demand side driven.
This means billions starving as industry and products are stopped in their tracks. But whatever – this guy has several things I do not agree with.
”Two decades ago, it was obvious, in the event of world war, who would win. Today, it is not at all obvious who would win. That uncertainty created by our decision to let our military advantages over China deteriorate”
China cannot win a war – not a real War, because like Japan, Like UK in WWII the vital resources (oil, metals, food…) have to get there – and they have to go through a tiny gap in the Malacca straits – and they can easily be Blockaded by Subs and missiles. China would starve.
But they can do MAD, not just Nuk ‘Mutually Assured Destruction’ but with chips too, and all kinds of manufacturing. So I do not see it…. Unless the Schwab/Gates/WEF Eugenics global de-population thing is due, then it is assured to happen.
This read like a well informed and measured article – I liked it.
I do wonder however whether this interview comes with the wrong conclusion about the probability of a conflict. When Japan attacked Pearl Harbour it wasn’t the great likelihood of its success that motivated them to do it – it was rather that any time later would have guaranteed failure that they decided to take the bad odds. Incapacitating the Pacific fleet would give Japan at least an initial advantage, and another roll of the dice going forward.
China is in a similar situation. It’s caught in the AI revolution without the proper investment just at the wrong time. Xi Jinping has already broken the rules on limits on his term, managed to consolidate his control, and was hoping to make his signature achievement giving China a great power peer status with US ending their “humiliation”. If the sanctions are successful, they turn the tide pushing China back to subservient status to the West. Attacking Taiwan now would give China a tactical advantage by constraining chip supply, even perhaps allow China to acquire some of the technology, at the very least greatly disrupt the Western economy for a long time. China may just decide to go for the roll of the dice instead of facing guaranteed decline.
This read like a well informed and measured article – I liked it.
I do wonder however whether this interview comes with the wrong conclusion about the probability of a conflict. When Japan attacked Pearl Harbour it wasn’t the great likelihood of its success that motivated them to do it – it was rather that any time later would have guaranteed failure that they decided to take the bad odds. Incapacitating the Pacific fleet would give Japan at least an initial advantage, and another roll of the dice going forward.
China is in a similar situation. It’s caught in the AI revolution without the proper investment just at the wrong time. Xi Jinping has already broken the rules on limits on his term, managed to consolidate his control, and was hoping to make his signature achievement giving China a great power peer status with US ending their “humiliation”. If the sanctions are successful, they turn the tide pushing China back to subservient status to the West. Attacking Taiwan now would give China a tactical advantage by constraining chip supply, even perhaps allow China to acquire some of the technology, at the very least greatly disrupt the Western economy for a long time. China may just decide to go for the roll of the dice instead of facing guaranteed decline.
Let’s hope we don’t see a day where Chinese landing craft are crossing the Taiwan strait, because regardless of rhetoric, the strategic reality is that the US and probably most of the world besides would be at war the following day. I believe the USA should make it clear, publicly or discretely, to the Chinese government that a military action across the Taiwan strait would be met with immediate retaliation without ruling out a nuclear response. That is, to my mind, the best chance we have of ‘convincing’ the CCP that Taiwan isn’t worth it. MAD has prevented WWIII for almost eight decades. Go with what works.
Let’s hope we don’t see a day where Chinese landing craft are crossing the Taiwan strait, because regardless of rhetoric, the strategic reality is that the US and probably most of the world besides would be at war the following day. I believe the USA should make it clear, publicly or discretely, to the Chinese government that a military action across the Taiwan strait would be met with immediate retaliation without ruling out a nuclear response. That is, to my mind, the best chance we have of ‘convincing’ the CCP that Taiwan isn’t worth it. MAD has prevented WWIII for almost eight decades. Go with what works.
Unfortunately, China already has very, very, very advanced chips.
Like the ones that control the idiot’s lantern in your pocket.
https://www.google.com/search?q=the+wire+doctor+who&sxsrf=APwXEdeMcjtGRO6wSKBaf1F4gi126wYBFA%3A1682887392376&ei=4NJOZJ7RFoWXhbIPqdSRmAo&oq=The+Wire+d&gs_lcp=Cgxnd3Mtd2l6LXNlcnAQARgFMggIABCKBRCRAjIICAAQigUQkQIyCAgAEIoFEJECMggIABCKBRCRAjIFCAAQgAQyBQgAEIAEMgUIABCABDIFCAAQgAQyBQgAEIAEMgUIABCABDoKCAAQRxDWBBCwAzoKCAAQigUQsQMQQzoHCC4QigUQQzoHCAAQigUQQzoLCAAQgAQQsQMQgwE6BggAEBYQHjoICAAQFhAeEA86CAgAEIoFEIYDSgQIQRgAUP8MWIJGYMZtaAJwAXgAgAFxiAGiApIBAzIuMZgBAKABAcgBCMABAQ&sclient=gws-wiz-serp#fpstate=ive&vld=cid:15887869,vid:K5lxc5zXLLU
They read all your money transactions.
They tell Xi Jin Ping how much you drink.
And they can stop you boarding Michael O’Leary’s aeroplanes and exercising your rights to free movement.
Be afraid.
Be very afraid.
This really bothered me – this is 100% political interjecting, and also not true where he talks of MAD.
”But there’s lots of examples of wars in history that have been waged by leaders who have decided the economic costs were worth it, or underestimated the economic costs — look at Putin, for example. I think anyone who is betting on “mutual-assured economic destruction” to maintain the peace doesn’t have much grounding in history on which to base that faith.”
Well it was Biden who triggered MAD – and not against USA, USA profits from the Ukraine war in a twisted way and Russia does OK too – No – the Mutually Assured Destruction Biden ushered in with his $130,000,000,000 of un-audited aid, and real time targeting and surveillance, to one of the most corrupt nations on earth is the assured destruction to the EU and Ukraine.
Putin thought he could go in, kill the corrupt puppet leaders and the Oligarchs – replace them with his puppet ones who would not join EU and NATO, and leave Ukraine intact.
Biden triggered MAD. He decided a proxy war which 100% destroyed Ukraine and its people, and also Europe to a high degree economically, was a good idea. Putin just went in to straighten out some things. Biden triggered MAD. But a very weird kind of MAD – one where the two antagonists are not really harmed – but leave everyone else flattened, and the actual potential enemy, China, better off.
Biden, he has a different way of looking on the world than I do.
Biden didn’t send the tanks in, Putin did. Biden hasn’t tried to flatten entire cities with cruise missiles, again that falls entirely on the Kremlin. There have been many times throughout history when America and the west have been at fault and behaved despicably, but this isn’t one of them
Biden/the US stopped the signing of a peace agreement on multiple occasions – before and right after the start of the war (by way of Britains favorite clown), so let’s not sell the Wests contribution to this atrocity of a war short.
And it didn’t start in February 2022, despite what the western media would have us believe.
You’re correct, the Russians invaded Crimea and sent troops to eastern Ukraine years before
Indeed, in response to a US-inspired coup and Bush’s earlier insistence that Ukraine would join NATO. Recency bias is of course useful when trying to rewrite history.
Indeed, in response to a US-inspired coup and Bush’s earlier insistence that Ukraine would join NATO. Recency bias is of course useful when trying to rewrite history.
You’re correct, the Russians invaded Crimea and sent troops to eastern Ukraine years before
Care to provide any evidence that the UK blocked the Ukrainians from signing a peace treaty that they were desperate to accept?
Well, I suspect not even a transcript, video and forensic evidence from the conversation between BoJo and Zelenskyy would suffice as evidence, but in the interest of open debate I provide you with the following:
https://responsiblestatecraft.org/2022/09/02/diplomacy-watch-why-did-the-west-stop-a-peace-deal-in-ukraine/
The article talks about an existing (but tentative) agreement between both sides, with no less a source than Fiona Hill, that was (in all likelihood) torpedoed by Boris the flying Fox:
“Russian and Ukrainian negotiators appeared to have tentatively agreed on the outlines of a negotiated interim settlement,” wrote Fiona Hill and Angela Stent. “Russia would withdraw to its position on February 23, when it controlled part of the Donbas region and all of Crimea, and in exchange, Ukraine would promise not to seek NATO membership and instead receive security guarantees from a number of countries.”
So, will you now tell me how this would have been worse than the current situation considering the dead, the destruction, the brain drain and the lost swathes of land (in addition to adverse global effects for basically everyone except the US and perhaps China)?
Or will you impugn the source?
Either way, it’ll still get worse before it gets better and that deal strikes me as superior to almost anything the Ukrainians can hope for.
.
I have, but unfortunately the Bot has deemed it inadmissible :/
Maybe it’ll still show up later
.
Well, I suspect not even a transcript, video and forensic evidence from the conversation between BoJo and Zelenskyy would suffice as evidence, but in the interest of open debate I provide you with the following:
https://responsiblestatecraft.org/2022/09/02/diplomacy-watch-why-did-the-west-stop-a-peace-deal-in-ukraine/
The article talks about an existing (but tentative) agreement between both sides, with no less a source than Fiona Hill, that was (in all likelihood) torpedoed by Boris the flying Fox:
“Russian and Ukrainian negotiators appeared to have tentatively agreed on the outlines of a negotiated interim settlement,” wrote Fiona Hill and Angela Stent. “Russia would withdraw to its position on February 23, when it controlled part of the Donbas region and all of Crimea, and in exchange, Ukraine would promise not to seek NATO membership and instead receive security guarantees from a number of countries.”
So, will you now tell me how this would have been worse than the current situation considering the dead, the destruction, the brain drain and the lost swathes of land (in addition to adverse global effects for basically everyone except the US and perhaps China)?
Or will you impugn the source?
Either way, it’ll still get worse before it gets better and that deal strikes me as superior to almost anything the Ukrainians can hope for.
.
I have, but unfortunately the Bot has deemed it inadmissible :/
Maybe it’ll still show up later
.
And it didn’t start in February 2022, despite what the western media would have us believe.
Care to provide any evidence that the UK blocked the Ukrainians from signing a peace treaty that they were desperate to accept?
Biden/the US stopped the signing of a peace agreement on multiple occasions – before and right after the start of the war (by way of Britains favorite clown), so let’s not sell the Wests contribution to this atrocity of a war short.
Biden didn’t send the tanks in, Putin did. Biden hasn’t tried to flatten entire cities with cruise missiles, again that falls entirely on the Kremlin. There have been many times throughout history when America and the west have been at fault and behaved despicably, but this isn’t one of them
This really bothered me – this is 100% political interjecting, and also not true where he talks of MAD.
”But there’s lots of examples of wars in history that have been waged by leaders who have decided the economic costs were worth it, or underestimated the economic costs — look at Putin, for example. I think anyone who is betting on “mutual-assured economic destruction” to maintain the peace doesn’t have much grounding in history on which to base that faith.”
Well it was Biden who triggered MAD – and not against USA, USA profits from the Ukraine war in a twisted way and Russia does OK too – No – the Mutually Assured Destruction Biden ushered in with his $130,000,000,000 of un-audited aid, and real time targeting and surveillance, to one of the most corrupt nations on earth is the assured destruction to the EU and Ukraine.
Putin thought he could go in, kill the corrupt puppet leaders and the Oligarchs – replace them with his puppet ones who would not join EU and NATO, and leave Ukraine intact.
Biden triggered MAD. He decided a proxy war which 100% destroyed Ukraine and its people, and also Europe to a high degree economically, was a good idea. Putin just went in to straighten out some things. Biden triggered MAD. But a very weird kind of MAD – one where the two antagonists are not really harmed – but leave everyone else flattened, and the actual potential enemy, China, better off.
Biden, he has a different way of looking on the world than I do.