Commerce Secretary Raimondo points to Huawei's chip as evidence of effective US sanctions

[midian182]

What just happened? US Commerce Secretary Gina Raimondo says that the controversial Kirin 9000s SoC powering Huawei's recent Mate 60 Pro handset isn't as advanced as US chips, thereby proving the sanctions against the company and China are having their intended effect.

When Huawei unveiled the 5G-capable Mate 60 Pro last August, many saw it as an affront to the US sanctions that have been placed on China and some of its businesses. The Kirin 9000s chip powering the phone is made on what appears to be SMIC's 7nm (N+2) process, created without access to EUV machines that have been cut off by US actions. It was reported last month that the Commerce Department is assessing whether SMIC broke US rules to produce the chip – one senior Commerce Department official said it "potentially" did.

Huawei Mate 60 Pro

It was noted at the time that SMIC is about 10% behind what TSMC labels as 7nm. Furthermore, we now have chips made on the 3nm process, such as Apple's A17 Pro used in the iPhone 15 Pro. Raimondo pointed out the chip's inferiority during her interview with CBS News' 60 Minutes.

"What it tells me is the export controls are working because that chip is not nearly as good," Raimondo said. "It's years behind what we have in the United States. We have the most sophisticated semiconductors in the world. China doesn't. We've out-innovated China."

Elsewhere in the interview, Raimondo said she's focused on preventing China and Russia from obtaining US-designed advanced semiconductors.

"If you think about national security today in 2024, it's not just tanks and missiles; it's technology. It's semiconductors. It's AI. It's drones," she said. "And the Commerce Department is at the red-hot center of technology."

Raimondo added that the Commerce Department had stopped all semiconductor chips from being sold to Russia following its invasion of Ukraine, highlighting stories of Russian tanks using chips from household appliances due to sanctions placed on the country.

CBS' Lesley Stahl pointed out that trade with China accounts for 750,000 jobs in the US. "We want to trade with China on the vast majority of goods and services. But on those technologies that affect our national security, no," Raimondo replied.

The US' reliance on Taiwan, which China has long claimed to be part of its territories, was also brought up in the interview. Raimondo said the situation makes the US "vulnerable."

"We allowed manufacturing in this country to wither on the vine in search of cheaper labor in Asia, cheaper capital in Asia, and here we are," she said. "We just pursued profit over national security."

The US is trying to change that status quo with the CHIPS Act, designed to bring advanced semiconductor manufacturing back to the United States. The Biden administration has recently handed out billions of dollars of CHIPS money to Samsung, TSMC, and Intel to build new fabs in the US and upgrade existing facilities.

There was controversy over Huawei's MateBook X Pro (above) this month, a laptop powered by Intel's Meteor Lake chips. When asked if Raimondo was being tough on big businesses like Chipzilla, she said, "I hold businesses accountable as much as anyone."

"When I tell them they can't sell their semiconductors to China, they don't love that, but I do that," she added. That could also be a reference to Nvidia, which has previously warned that chip sanctions on China could hurt American companies.

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Commerce Secretary Raimondo points to Huawei's chip as evidence of effective US sanctions

 

[The Talking Tech]

Good news!

It was about time the U.S to realized having China growing their economy without oversight it only affected us for decades to come.

It was bad enough we helped their economy while putting us at risk by sending thousands of manufacturing jobs over seas.

 

[Dimitriid]

'You see folks, we truly see the magic of free market forces creating innovation, especially when we interfere with the free market to intentionally remove competitors!'

The fact that this is a pretty high State official saying and how I'm sure most people commenting won't see it as a fundamental flaw of Capitalism makes this a pretty alarming statement.

 

[Mouseface]

'You see folks, we truly see the magic of free market forces creating innovation, especially when we interfere with the free market to intentionally remove competitors!'

The fact that this is a pretty high State official saying and how I'm sure most people commenting won't see it as a fundamental flaw of Capitalism makes this a pretty alarming statement.

You are wrong, it has to be free AND fair market. China dumps its deliberate overcapacity on world markets in order to destroy foreign industry. Then they put the prices back up. That is not good for anyone.

It robs other developing countries of industry they need and it is value destroying, just like China did with its bonikers real estate bubble which is now popping (the largest in human history, what a disgrace)

 

[p51d007]

And you can trace that back to 1972 when Nixon opened "relations" with China, then when Clinton signed the most favored nation trade status in 2000.
By 2018, U.S. manufacturing jobs had decreased by almost 5 million since 2000, with the decline accelerating.
Of course, the CEO's, stockholders and what not of a lot of corporations are just as much to blame for dumping manufacturing in the USA for China, because of their slave labor which resulted in HIGHER profits!

"We allowed manufacturing in this country to wither on the vine in search of cheaper labor in Asia, cheaper capital in Asia, and here we are," she said. "We just pursued profit over national security."

 

[human7]

I'm all for adding competition to the markets. Whether or not the sanctions are effective, China will undoubtedly have high quality chip making capabilities in the next decade or so. Even if they do not catch up completely, they will eventually be able to enter the market and compete at the entry- to mid-market range.

At that point, we can look back and ask if the sanctions truly accomplished what the lawmakers intended.

 

[kinetix]

You are wrong, it has to be free AND fair market. China dumps its deliberate overcapacity on world markets in order to destroy foreign industry. Then they put the prices back up. That is not good for anyone.

It robs other developing countries of industry they need and it is value destroying, just like China did with its bonikers real estate bubble which is now popping (the largest in human history, what a disgrace)

So, when Uncle Sam or some Europawn has manufacturing overcapacity, they are "manufacturing powerhouses", but if China has the overcapacity, is it duping?

 

[gamerk2]

And you can trace that back to 1972 when Nixon opened "relations" with China, then when Clinton signed the most favored nation trade status in 2000.
By 2018, U.S. manufacturing jobs had decreased by almost 5 million since 2000, with the decline accelerating.
Of course, the CEO's, stockholders and what not of a lot of corporations are just as much to blame for dumping manufacturing in the USA for China, because of their slave labor which resulted in HIGHER profits!

"We allowed manufacturing in this country to wither on the vine in search of cheaper labor in Asia, cheaper capital in Asia, and here we are," she said. "We just pursued profit over national security."

Opening relations with China post-Mao was fine; it made sense as a way to keep the Soviet Union in check, forcing them to make overtures back to the US. After all, in a three Superpower world, you don't want to be the one left out of the alliance.

The real issue was Reagans economic policy, which sadly we still are dealing with to this day. Lower unemployment by spending on the economy (including money we don't have), lower inflation by driving down production costs (directly leading to outsourcing and declining wages). Fast forward forty years, and it's quite clear the long-term consequences have been a disaster.

 

[Endymio]

"We allowed manufacturing in this country to wither on the vine in search of cheaper labor in Asia, cheaper capital in Asia, and here we are," she said. "We just pursued profit over national security."

While the argument itself has merit, the problem is that the wage gap between the US and Asia is significantly smaller today than it was in 1960, when the US made half of all manufactured goods in the entire world. Wages don't play as large a role as the horrendous regulatory climate in the US. Between the EPA, the IRS, the FTC, the CFPB, OSHA, and a dozen other federal bodies -- not to mention the ever-present chance of a billion-dollar class action suit for the thinnest of justifications -- manufacturing anything in the US is nearly impossible at any wage level.

 

[TempleOrion]

While the argument itself has merit, the problem is that the wage gap between the US and Asia is significantly smaller today than it was in 1960, when the US made half of all manufactured goods in the entire world. Wages don't play as large a role as the horrendous regulatory climate in the US. Between the EPA, the IRS, the FTC, the CFPB, OSHA, and a dozen other federal bodies -- not to mention the ever-present chance of a billion-dollar class action suit for the thinnest of justifications -- manufacturing anything in the US is nearly impossible at any wage level.

LOL Absolute crap. It amazes me you can keep posting the same derivative (and wrong) drivel you always do

 

[gamerk2]

While the argument itself has merit, the problem is that the wage gap between the US and Asia is significantly smaller today than it was in 1960, when the US made half of all manufactured goods in the entire world. Wages don't play as large a role as the horrendous regulatory climate in the US. Between the EPA, the IRS, the FTC, the CFPB, OSHA, and a dozen other federal bodies -- not to mention the ever-present chance of a billion-dollar class action suit for the thinnest of justifications -- manufacturing anything in the US is nearly impossible at any wage level.

Which is hilarious when you consider that Federal regulations are far more loose then they were in the '60s, and recent rulings make it almost impossible for lawsuits to get class action status, and that's *before* you remember that most employees now are forced to sign forced arbitration agreements upon being hired, forgoing their right to sue in court.

The difference is both SE Asia (specifically China, but also other locations) basically throwing money at companies to convince them to build facilities there, as well as the technology gap closing enough where it is feasible to do production overseas (which it really wasn't in the '60s).

 

[Endymio]

Which is hilarious when you consider that Federal regulations are far more loose then they were in the '60s,

Utter nonsense. The EPA didn't even exist in the 1960s, nor any of permit and licensing requirements, nor its thousands of pages of regulations. The Federal Register -- which contains all such rules and regulations -- was a mere 12,700 pages in 1961. By 1990, it was 53,000 pages, and today it's over 90,000 pages. And each and every page contains multiple rules -- sometimes more than a dozen per page, that every business and individual in the country must follow. Most are ambiguously written and open to interpretation, and -- even worse -- constantly changing.

In 1960, the average time to receive permits to build a new mine in the US was less than 6 months, and nearly 100% of applications were granted. Today, the average time is 7 to 10 *years* and costs upwards of $10M to apply. More than 90% of applications are denied -- and the applicants receive no refund when it happens. Chemical plants, refineries, metal smelting, etc can take longer, and are much more expensive. Who's willing to spend $50M+ just to try to get permission to start such a project, when the odds are stacked against them?

Even industries with little to no real emissions are affected by EPA "environmental impact statement" requirements, as they might alter the flow of water near a wetland, disturb the habitat of a protected species of mole or fern, or cause "noise pollution" that might upset migratory birds.

And of course the EPA isn't stopping, with several hundred new rules enacted in just the last two years alone. One single rule just published this month may shut down as many as 218 chemical plants, while another requires every coal-fired power plant in the country to capture its CO2 emissions, or stop producing electricity. If enacted, there goes 16% of the US electricity supply.