How Chinese Investments in Emerging Technology Enable A Strategic Competitor to Access the Crown Jewels of U.S. Innovation
Another aspect to consider is that US-based private equity firms investing in high tech companies risk this technology getting into the hands of adversaries. As you start looking at what is available the conclusion is the US senate and congress could care less where investment flows end up. Investment firms are usually only concerned with sustained growth and increasing profits. That's just economic and financial reality in America; allegiance only to money. So if there is a private equity firm with a hedge fund with offices in London, New York and Hong Kong investing in TSMC, and TSMC opens a new microprocessor plant in China, do the managers and owners of that private equity firm care as long as it is a profitable investment?
Especially if George Soros is invested with that firm? Do the managers of a hedge fund with more than $40 billion under management invested in Taiwan's TSMC care one way or another about the "national security" of a state? How much difference would it make for the "national security" of the US, when another New York-based private equity firm owning a 25 percent stake in that same hedge fund management company, has a partner who is a retired US military general and heads its Global Institute?
Marshall Wace LLP Has $412,000 Stock Position in Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM)
Another example where "national security" is pretty much meaningless, as well as the idea of "protecting the homeland," is the same private equity firm the ex-military general is a partner at, has investments in other Chinese corporations contributing to a portion of a $300 million Series A round of investments in the company 58 Daojia (it's like craigslist) based in China. Here is another example with this same New York-based private equity firm with $39 billion in assets under management. It is invested in the Chinese firm COFCO working on becoming a global trading and commodity giant based around food. COFCO is working to consolidate a global supply chain to secure food for China.
Wouldn't there be a conflict of interest involved here with this US-based private equity firm investing in a China-based company seeking food sources for its own country and not for the US? China's COFCO is state-owned which means it is owned by the Chinese Communist Party (CCP). COFCO is under the direct supervision of China's State Council. COFCO will become a major supply chain component of China's Belt & Road Initiative and a US-based private equity firm with a retired US military general are investors n this Chinese company. There is no "national security" concerns here about protecting America's food supply chains?
Postmortem America - The Technology Has Been Gutted - American Jobs and Incomes Subverted - Strategic and Tactical Context
The above is illustrative of how investments in technology driven by growth and the demand for profits regardless of where the investments are placed, in this case with China-based companies. It also illustrates that "national security" is meaningless as a concept for "protecting the homeland" and the American people, but rather is structured to protect powerful globalist private equity firms leading back to high tech firms. This same private equity firm just mentioned is also invested heavily in the tech sector in Israel, while outsourcing American tech jobs to Israel has been going on by another US-based private equity firm. Observing what is going on you suddenly come to the realization these private equity funds are connected to private intelligence networks that direct investment to meet the strategic objectives of one country to displace the tech sector of another country, in this case China and Israel over America, and this is not compromising "national security?" And what about employment where thousands of American tech employees stand losing their jobs?
Israel: A Tradition of Innovation
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Source: Taiwan News
Taiwan's TSMC denies report US asked it not to sell chips to Huawei
World's largest contract chipmaker says shipments made in full compliance with regulations
By Sophia Yang | Taiwan News, Staff Writer | November 4, 2019
TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker, said it has never been asked not to ship chips to Huawei and that all shipments have been made in full compliance with regulations.
The Financial Times reported on Monday (Nov. 4) the U.S. government has over the past year repeatedly requested Taiwan's government restrain the Hsinchu-based company from selling chips to Huawei. Also, a U.S. official was said to have warned Taiwanese diplomats last month the chips "were going straight into Chinese missiles pointing at Taiwan."
In response, TSMC said it has not received requests from either government to stop exporting chips to Huawei. It added that its business operates in full compliance with the law.
Last year, Huawei was identified as a security threat by many governments for its alleged close ties with the Communist Party of China. However, the company claims it would never hand data to Chinese authorities.
Please go to Taiwan News to read the entire article.
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Ed.'s note: This technology should not be allowed into China. ASML based in the Netherlands manufactures the most advanced machines in the world used for manufacturing microprocessors. If the US allows China to obtain these Extreme Ultraviolet Lithography (EUV) machines to China, the US will secede to China its microprocessors essential for America's military systems. ASML are incredibly expensive machines running from between $50 and $150 million per machine. ASML's goal is to design their machines to place more circuits on a chip than is presently possible. In 2020, ASML projects to sell between between 35 to 40 machines per year. One of the reasons why Germany doesn't want ASML to sell their machines to China is because the German company Zeiss makes the optics for ASML machines.
This despite Germany needing China to build its economy. Zeiss is afraid though this technology will be obtained by China. Zeiss optics are considered the "heart" of ASML EUV machines. Earlier this year, Semiconductor Manufacturing International Corporation (SMIC), China's leading chip maker, denied it had received a long anticipated extreme ultraviolet lithography (EUV) machine from ASML. This news appeared after ASML's chief referred to China-US relations as a "headache." The US does not want China having access to this ASML machinery because it has military applications.
China's SMIC attempting to purchase ASML top end machinery has nothing to do with supplying Chinese researchers with lithography manufacturing knowledge but rather for its own push for achieving lower nm fab capacity to keep up with other foundries outside China. These machines cannot be replicated in China even if China had them, so what China might attempt doing is to hack into suppliers of ASML to get a better idea of how the machines are built. Ultimately, this involves closely guarded fundamental physics research and fabrication. There is now discussions on whether or not Intel plans to build a $11 billion microprocessor manufacturing plant in Israel. If this plant is constructed and with Intel having a 15 percent stake in ASML, this would possibly mean Intel in Israel will have access to these highly sophisticated machines.
ASML NXE:3400B Might Be The EUV Scanner Blocked By U.S. In Chinese Sale
Intel to buy 15 percent of silicon fab equipment maker ASML, wants manufacturing machines made faster
Intel To Spend $11 Billion To Build New Manufacturing Facility In Israel
The $150 Million Machine With $200 Billion at Stake for China
SinoDefenseBoard
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Source: HRW
The Takeaway from the ASML-China Controversy
By Yaqiu Wang | January 24, 2020
China's Foreign Minister Wang Yi at a meeting with European Council President Charles Michel in Brussels, December 17, 2019. © 2019 AP Photo
Last week, China's ambassador to the Netherlands said that bilateral relations were at risk if the Dutch government decided to deny the Dutch company ASML a license to export its Extreme Ultraviolet Lithography (EUV) machines to China. ASML is the world's only supplier of EUV tools, critical for the production of a new generation of powerful microchips, which in turn are essential for high-tech applications including the Internet of Things and cloud computing infrastructure.
The Netherlands isn't alone in facing Beijing's ire: last month, the Chinese ambassador to Germany threatened Berlin with blocking the sales of millions of German vehicles in China if it excludes Chinese tech giant Huawei as a supplier of 5G wireless equipment. In November, the Chinese ambassador to Sweden threatened Stockholm with "bad consequences" after Sweden made a fresh show of support for an imprisoned Chinese-born Swedish publisher.
Beijing is increasingly leveraging the lucrative Chinese market – 16 percent of the world economy – as a way to pressure foreign governments and companies to do what it wants, be that keeping mum about its human rights violations or to allowing Chinese companies access to sensitive advanced technologies. After the Houston Rockets general manager irked the Chinese government by tweeting his support for Hong Kong's pro-democracy protesters, all of the National Basketball Association's 11 official Chinese business partners – including a travel website, a milk producer, and a fast-food chain – suspended ties with the league. Lotte, a South Korean conglomerate with supermarkets across China, suffered a two-year boycott encouraged by Chinese authorities in response to bilateral tensions.
Clearly Beijing prefers a divide-and-conquer strategy to minimize criticism of its rights record, and when governments deal with China on their own, they often opt for silence. But if they band together, the power balance shifts.
Please go to HRW to read the entire article.
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Ed.'s note: The TSMC fab (fabrication) facilities located in China have to be at least two generations behind the fabs in Taiwan. It is likely the TSMC fabs in China are for Chinese customers only while Taiwan-based fabs are for Apple, AMD (Advanced Micro Devices) and Nvidia (microprocessors for A.I.). TSMC provides microprocessors to China's Huawei. The US military is the security guarantor for Taiwan and that security means preventing China from accessing Taiwan's technology in engineering and designing microprocessors. Israel has been seeking closer ties with Asian countries including Taiwan to exchange information and to work on R&D. Israel and Taiwan signed an Industrial R&D (Research and Development) Collaboration Agreement in 2015. This was the first R&D Agreement with Israel. There is very little information available in the way of what innovation, high tech and R&D collaboration has gone on since 2015.
Nvidia opens Israel AI research center
Since 2015, trade between Taiwan and Israel has increased (Israel's water technology) with a Memorandum of Understanding (MoU) signed between the two countries to increase economic development in both the private and public sector. Note that from an Israeli perspective on arms sales to China and Taiwan, doesn't mention high technology in microprocessor engineering and design. Taiwan's TSMC and an Israeli firm VisIC Technology are in a partnership as of 2018 to manufacture advanced 1200V GaN-based power switching devices.
VisIC Technologies Partners With TSMC to Offer Industry's Most Advanced 1200V GaN-based Power Device Solutions
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Source: DigiTimes
Highlights of the day: TSMC, UMC to increase fab capacity in China
DIGITIMES staff | Friday, 15 November 2019
TSMC has committed to building its most advanced fabs in Taiwan, but that doesn't mean that it will stop expanding production capacity elsewhere, particularly China, which is home to some of its biggest clients. Both TSMC and UMC have plans to increase their 12-inch fab capacity in China to meet growing demand from the country's IC designers. But the US-China trade has indeed been sending more Taiwanese investors returning hom from China. Innolux has already commit over NT$70 billion to building production lines in Taiwan. Fellow panel makers, AUO and CPT, are also increasing investments in Taiwan.
TSMC, UMC plan capacity expansions in China: TSMC and UMC both plan to expand production capacities at their 12-inch wafer fabs in China to satisfy growing demand from local chipmakers.
Innolux pledges to invest NT$70.1 billion in Taiwan: Panel maker Innolux will invest over NT$70.1 billion (US$2.29 billion) in Taiwan, the Ministry of Economic Affairs (MOEA) has announced. The MOEA has issued a green light to the Innolux project, saying it is in line with the government's goal of encouraging Taiwanese firm to return and invest at home.
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Ed.'s note: When you come across a news article like this from the Nikkei Asian Review, a broader understanding must be considered, otherwise it simply looks like a good stock option/investment. As surprising at it may be, there are very little controls in the US on investment capital flows into high tech firms. This article has to do with the Dutch technology firm ASML. ASML supplies extreme ultraviolet-lithography machines used for manufacturing microprocessors. ASML supplies these machines to Taiwan's TSMC (Taiwan Semiconductor Manufacturing Company). ASML has 67 percent (practically a de-facto monopoly) of the worldwide sales of lithography machines, with the competition consisting of Ultratech (US-based), Canon and Nikon (both Japan-based). These ASML machines are highly sophisticated but the machines that manufacture the machines that make the microprocessors are even more sophisticated.
TSMC is known as a contract manufacturer or a foundry where microprocessors are manufactured. When President Trump announced a "trade war" with China, his administration pressed the Dutch firm ASML not to sell its chip manufacturing technology to China. In June, 2016 it was announced ASML acquired the Taiwan-based Hermes Microvision firm for about $3.1 billion to add technology for creating smaller and more advanced semiconductors in Taiwan. Intel has a 15% ownership of ASML. The critical technology part about all this isn't specifically "chip manufacturing", what we want to focus attention on are the machines that manufacture the machines and software that manufacturer microprocessors. That's the critical link in all this. It is the machines that manufacture the machines that should not be allowed into the hands of China and Israel.
TSMC, Cadence and Others Benefit as Chip Design Activity Surges
ASML profit rises, refrains from giving guidance
TSMC in Taiwan has 5nm and is going for 3nm. The smaller the nm the more transistors can fit on a single chip. The smaller the better meaning chips will have more calculations and less electrical power consumption. China's AMIC which is the best fab operating in China is manufacturing at 14nm with plans last year they were working on manufacturing from 7nm to 10nm. Fabs require lots of engineers and a lot of money to run. They are enormously costly operations to run. China can throw money at it but without good engineers with experience they have no chance. This is why China is recruiting with all kinds of perks and benefits 3,000 engineers from Taiwan to work in their fabs in China. That is nearly one tenth of Taiwan's estimated 40,000 engineers working in microprocessor development. This should be of major concern to America.
Taiwan Loses 3,000 Chip Engineers To 'Made In China 2025'
Source: Nikkei Asian Review
Rise of TSMC gives windfall to Dutch chipmaking equipment giant
Sales to Taiwan triple as US-China trade war alters supply chains
By SHUHEI YAMADA, Nikkei Asia Tech chief editor | MARCH 18, 2020
ASML is the only commercial producer of cutting-edge extreme ultraviolet lithography equipment. (Photo courtesy of ASML)
TOKYO -- Dutch chipmaking equipment company ASML enjoyed solid earnings last year, even amid cooling chip demand, thanks to the advantage its top customer, Taiwan Semiconductor Manufacturing Co. has secured in the foundry market.
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Related:
America: Regain Your National Focus - End Facilitating China's Technological Superiority - Place Restrictions on Private Equity Investments - Bring the Technology Back to America and Lock It Down - US Military: What Is Your Ultimatum? - Free America; Free the World
Taiwan Semiconductor Manufacturing And Micron In The Face Of Huawei Threats And Headwinds - Part 2 (Micron)
Taiwan Battles WHO and China Over Coronavirus - AMD and TSMC Going Strong
Post-Coronavirus Reshuffle - Keeping Sensitive Technology Out of China - "Prepping For Military Struggle"
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