The Chip Insider®– 4 Chips Acts = 2 Successes + 2 Failures with lessons to learn.

Summary: 4 Chips Acts = 2 Successes + 2 Failures with lessons to learn

In the mid-2010s, government support of the semiconductor industry, starting with China’s ‘Made in China 2025…’ came into vogue. China’s open challenge to the global world chip order prompted geopolitical responses … from the United States, the European Union, and Japan. With the EU recent doubling down with its Chips Act II, it’s a good time to go back and review…

Having clear and attainable objectives is probably the most important success factor in the fast-moving world of technology. Japan has always been good at this. In its 1970’s… Today, they are well on their way with Rapidus. Both efforts were great examples of the ‘if you build it, they will come’ strategy, because semiconductors are a team sport… China’s ‘Made in China 2025’ objective was to be able to manufacture 50% of the chips in China that China consumed… you might think of it as a ‘if you fund it, they will come’ model. It’s far more complex than just funding it… China’s lei tai (擂臺) competition development model starts with … Similar to Rome’s gladiatorial games, survival is based on speed, skill, and financial fitness on diets of extremely thin margins… You’ve seen this movie before in solar: Jinko, in communications: Huawei, in smartphones: Xiaomi, and in EVs: BYD. Clearly, China’s lei tai model works. In the case of semiconductors, lei tai has been transformative… The EU’s objectives in its Chips Act I were to “strengthen Europe’s technological sovereignty, manufacturing capacity, and innovation in semiconductors by” spending money... the EU’s lack of progress is the result of lacking a clear and executable objective. The US’s objectives were initially clear in 2018 when the idea of funding a semiconductor R&D center was in play… With free money on the table, there was division within the industry and in Congress over who got the cash… It took 4 years to get what would become The CHIPS and Science Act signed into law. Its clear weakness was a lack of hard objectives… Two years later, when Trump was elected, few of the funds had been released... Little substantive had been accomplished over 6 years. That’s 3 full clock cycles of Moore’s Law nodes standing still. The costs were high... In summary, of the four chips acts, China and Japan have been the most successful... The key success heuristics are: seed it with money, move fast, get the right leadership to run it, and empower their decision making.

Attention getting items: Applied Materials’ Logic Master Class: I highly recommend this class on the latest wafer fab technologies in Logic. The video replay can be found on its IR website.

Maxims: The Three Traits of Great Leaders…clarity of purpose… building the teams that built the system… they are learn-it-all’s, not know-it-all’s.

“If you chase the market… You’ll always see its backside.”
– David Morrell