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From /u/gwern (@gwern ?): analysis on China’s semiconductor industry.
Recent export controls are directly targeting the Chinese ability to fabricate cutting-edge chips. The subsequent effect on electronics prices and the much-maligned supply chain won’t be pleasant—especially for China, and especially if their industry is already slumping. Consequences for the rest of the world are left as an exercise to the reader.
Given the forum, it’s not surprising that the focus is on AI. I’m more interested in the geopolitical outlook. This is an incentive to retaliate, perhaps even against the other regional semiconductor fabricator. And it is suggested that the timing is a calculated insult to Chinese leadership, as they are apparently going through a periodic dog-and-pony show of elections. Gwern suggests that China would otherwise be raising hell.
The counterpart in US domestic politics: crunching semiconductor supply will not mix well with inflation. I don’t think adding $50 to the next iPhone will make or break Democrats, but it seems unlikely to help.
I want to place predictions, but I don’t have a good grasp of the metrics involved. Place your bets, I guess, for:
China taking economic action
China taking military action
Consequences on Chinese industry
Tech policy towards China becoming a wedge issue in American politics
My greatest hope with these export controls are that they're merely graft. Biden has been championing the domestic semiconductor industry, with Congress granting tens of billions in subsidies to build domestic manufacturing. Maybe he's getting a kickback from the companies that benefit. Not the actual semiconductor companies, but the firms and unions involved in constructing and maintaining these specific facilities.
The alternative is that this is preparation for imminent war. The administration are not so dumb that they think this will permanently hinder Chinese industry. I've seen experts forecast that they'll probably be able to develop what they need in 2-3 years.
Why disrupt American industry so greatly for a mere 2-3 years of strategic advantage?
As Gwern points out, this may provoke a response from China. America dictating to a Taiwanese company that it can't sell its wares to China certainly seems like a violation of at least the spirit of the vague One China policy. That's a policy that the West already gets almost all of the benefit from. All China gets out of it is face-saving. The West and Taiwan get to treat Taiwan like a country in every way except name. They even get to have diplomatic relations, and embassies, just by another name.
What would America do if China controlled a vast amount of the world's rare earth mineral mines and decided that they'll no longer sell the products of those mines to America or its allies? Wait, they already do control a vast amount of rare earth minerals. Maybe that's the next step in this dumb escalatory spiral.
What if it were laughably trivial, and instead China secured exclusive access to all avocados grown south of the United States border? Would the United States do nothing?
Reopen Mountain Pass?
That’s what I am conflicted about. Sure, there is no fundamental reasons why the west/US couldn’t mine and extract its own lithium, so that it’s not dependent on China. But, would it actually be able to do it in practice? Would the overcome the political, NIMBY, environmental, ecological etc opposition? Can they actually get necessary know how and workforce to build what is needed?
Consider the current energy crisis in Europe. Seems like the obvious answer would be to just go all in on nuclear fission. Is this what is happening? No, European countries seem like to be more into trying to survive winter, expanding LNG terminals, and hoping that there is enough LNG capacity in future. Will there be? Can they depend on their US ally providing all of it? No, US is still not pushing hard into expanding fossils, instead we still go all in on ESG.
Seems to me that even if it is clear what needs to be done, the ability to actually pull it off is no longer there, there is no leader to pull the Realpolitik off and align everyone towards the goal. Instead, we get the standard multitude of interest groups that just makes everything impossible to build, as usual.
Even the greens have at least stopped digging when it comes to the nuclear power hole.
https://www.google.com/amp/s/amp.smh.com.au/world/europe/german-greens-suspend-nuclear-opposition-ahead-of-winter-power-threat-20221017-p5bq9s.html
I think it's one thing to build new power plants and another to start mining an existing mine again.
Germany is not even able to keep their existing power plants open during energy crisis in the face of opposition from the greens. I don’t think reopening a mine closed for more than a decade is going to be any easier.
They, in fact, are able to keep their existing nuclear plants open.
https://apnews.com/article/business-germany-olaf-scholz-christian-lindner-cda1fd82ab1be344ee60ecd67a10f15a
Barely. As the other post mentioned, it's only until April, but, more importantly, it's only three locations for which no new fuel will be purchased. That means that in January at the latest all three plants will have to greatly reduce their power output in order to be able to run all the way into April, at least according to the company maintaining operations.
It should also be mentioned that this decision was only reached after months of discussion. As late as two days ago it seemed plausible that the original end date (the new year) would stay simply because the parties in the governing coalition couldn't agree on this. It has only happened now because the chancellor used a special and very rarely used provision in German law that allows him to shutdown any debate within the (executive branch of the) government on its course of action.
Nasrudin was caught in the act and sentenced to die. Hauled up before the king, he was asked by the Royal Presence: "Is there any reason at all why I shouldn't have your head off right now?" To which he replied: "Oh, King, live forever! Know that I, the mullah Nasrudin, am the greatest teacher in your kingdom, and it would surely be a waste to kill such a great teacher. So skilled am I that I could even teach your favorite horse to sing, given a year to work on it." The king was amused, and said: "Very well then, you move into the stable immediately, and if the horse isn't singing a year from now, we'll think of something interesting to do with you."
As he was returning to his cell to pick up his spare rags, his cellmate remonstrated with him: "Now that was really stupid. You know you can't teach that horse to sing, no matter how long you try." Nasrudin's response: "Not at all. I have a year now that I didn't have before. And a lot of things can happen in a year. The king might die. The horse might die. I might die.
"And, who knows? Maybe the horse will sing."
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