Expertise about technology, markets, economics and politics

When We Have to Beg the Chinese for Their Technology, Will the China Hawks Lead the Delegation?

Last week, George told of some of the astonishing innovations on display at this year’s World Mobile Congress in Barcelona Spain, with a climax of graphene-enabled devices offering transformative potential for global telecommunications. On display were breakthroughs from the United Kingdom, Sweden, Germany, Israel, Japan, China and even some from the United States.

Alas, in the United States these days, hardware is mostly considered too hard. And where would we manufacture the stuff anyway, requiring horrors, chemicals and horror of horrors, energy production?

Making hardware just “ain’t” green enough for the USA, though graphene—a C02 sink not source—could make it so.

Amidst even this august assemblage in Barcelona, however, one company stood out, nay dominated the field, the same Chinese company that had invited George to attend: Huawei.

Yes, that Huawei, the world’s most formidable innovator of wireless telecom equipment, with markets in 170 countries and world-leading investments in R&D. Huawei, which you never heard of until it was depicted by the U.S. government as a sinister tool of the Communist Party, as if CCP leaders could even create a billion-dollar, world-leading enterprise to do a job 10,000 teenage hackers in Beijing could do as well while chilling between PhDs.

When the same officials could not identify any such device or explain how American network operators or Huawei’s highly motivated U.S. competitors could fail to detect it, they abandoned their original story, confident the mud would stick.

The new line was that Huawei couldn’t be trusted because it had pledged to assist Chinese security agencies against threats to their nation. Yet American companies operate under similar constraints and have been forced to leave their own networks insecure so U.S. intelligence agencies can hack them.

Equally absurd is the depiction of Huawei Founder-CEO Ren Zhengfei—who modeled his company on Silicon Valley and whose father was cashiered as a “capitalist roader” in the Chinese cultural revolution—as some dutiful apparatchik. Or the notion that Huawei is an elaborately mounted Trojan Horse for communist hackers and spies.

In Barcelona, it developed that this wonderful company which the United States tried and failed to terminate, is poised to lead the world in Carbon Age communications. Huawei has patented a graphene transistor and contrived an eight-inch graphene wafer to carry potential trillions of them.

One transistor does not a microchip make. Years of work lie ahead before such devices come to market. It is even possible that when (if) the graphene microchip comes it will come from another company or country, quite possibly from Jim Tour’s laboratory in Houston.

Still, Huawei’s breakthrough is deeply impressive.

Because graphene is a supreme conductor of both heat and electricity, graphene transistors may operate at 10 times, or more, the speed of silicon devices, using perhaps less than a tenth of the power. Here is the potential to turn the entire history of the semiconductor industry inside out and upside down.

Silicon triumphed via “low and slow.” Because of silicon’s unique properties, low-power, relatively low-frequency silicon transistors could be jammed closer and closer together without burning up. Instead of fewer transistors running fast and hot, we would multiply transistors exponentially but run them slow and cool. Low and slow launched the Silicon Era and changed the world.

Graphene transistors will stick with “low” because graphene conducts electrons with minimal resistance and graphene transistors need far less power than silicon to switch on and off. But they will be slow no longer, switching at least an order of magnitude faster than silicon. And as a “two dimensional” (i.e., one atom thick) material graphene circuits could function with only atomic distances between them.

If they prove to be manufacturable economically and at large scale, graphene chips—remember there is no such thing yet—could relegate silicon to a role as substrate or low-end material. The world would be better off for faster, cheaper, less energy consuming computation. Not better off would be silicon chip makers, including great American companies such as Nvidia, Intel, AMD, Qualcomm and Apple, still the world’s leaders yet quite likely lagging Huawei on the path to the Carbon Age.

It is not just the chip makers that would be challenged. Chips are delivered to your laptop, iPhone, automobile and automated factory courtesy of a global ecosystem, spanning thousands of companies working together across Asia, Europe and America. That is until the China Hawks decided to make destroying that global cooperation their life’s work.

Consider Holland’s ASML, today a gating factor in the silicon ecosystem, as much as Taiwan Semiconductor which actually manufactures the chips created by the paramount U.S. companies.  ASML is the world’s leader—truly there is no company even in second place, or third–in the lithographic technology used to etch micro-circuits, now in thicknesses countable in dozens of atoms. To do this, it must cut lines narrower than the wavelengths of the lasers that do the job. Imagine doing the New York Times crossword with an extra-wide Sharpie and you have the idea.

The current generation ASML technology, called extreme ultraviolet lithography (EUV), uses light with a wavelength of 13 nanometers (which still must be stepped down to cut sufficiently narrow lines). Its competitors are stuck a full generation behind using wavelengths more than 10 times as big.

ASML has tons of patent protection, but barely needs it. The process of building one of its advanced machines is so complex and entails so much process expertise that ASML could publish an instruction manual on the internet without fear. By the time any competitor built a machine, ASML would be delivering its next generation.

No chip maker can manufacture any of the last several microchip generations—the so-called 7nm, 5nm, or now 3nm generations—without ASML’s EUV.

This gave the China hawks a wonderful idea. Forbid the Chinese from buying ASML machines and they won’t be able to make any cool chips. They will be dead in the water. Yay!!!!! Just like that, WE WIN!!!! We don’t even have to invent anything new. Who needs innovation when you have politicians.

The slight challenges were that ASML is a Dutch company and some 30% of its revenues were coming from China. What would happen to Apple, or Microsoft, or Google, or Qualcomm, if permanently deprived of 30% of their markets overnight?

We can’t imagine the arm-twisting the U.S. government applied, but it must have been impressive because, regrettably, ASML and the Dutch caved.

Nonetheless, if the graphene transistor becomes a commercial reality, no one may need ASML.

In the coming Carbon Age of nano-scale devices, contrasting to the entire history of humans making things, machines will be made not from the top down by cutting or slicing, sharpening or pounding, pressuring or melting the larger into the smaller, but by building from the bottom up, even atom by atom. Graphene transistors will not be etched, they will be grown.

Growing them close enough together and in a functional alignment to produce a working micro-chip is just one of the problems on the path to a solution. But when it is solved, the answer may not involve cutting, or etching, or ASML.

China’s answer to the U.S. blocking its access to ASML machines may be to make ASML obsolete, which is, you know, even worse than losing 30% of your revenue.

We can’t know yet whether Huawei or any Chinese company will deliver the graphene chip. But if they do, at what price and for what concessions will the CCP allow them to be sold to the United States?  How much groveling will it take?

And if the Chinese, remembering ASML, just say no, will that be enough to make the deep state regret its wanton disruption of global supply chains. With its profound engagement in the worldwide capitalist high-tech fabric of standards and systems, Huawei represented a major obstacle to the CCP’s xenophobic dreams of self-sufficiency. U.S. protectionism is a supreme asset of the Communist world vision, enabler of Xi Jinping’s worst instincts, and a threat to the future of U.S. leadership as serious as our own “Emergency Socialism.”




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