What to Expect, the Next Four Years

Earlier this week, China Tech Threat’s Roslyn Layton and Coalition for a Prosperous America’s (CPA) Jeff Ferry put out a new report on “Maintaining U.S. Leadership in Semiconductors and Countering China’s Threats.” They discussed it yesterday as part of CPA’s annual conference on “What to Expect, the Next Four Years.” In framing the discussion and summarizing the paper, Roslyn noted: American consumers were once told that Chinese IT was a good thing. That approach created many problems, including loss of manufacturing prowess and personal information, as well as increased cyberattacks and data breaches. Now we have a national security issue, and it’s playing out in many areas, including the semiconductor industry. Semiconductors are the building blocks of all electronics. They… Read More

President Biden Signs Executive Order Directing Review of U.S. Supply Chains

On Wednesday, President Biden signed an executive order directing both an immediate and year-long review of U.S. supply chains for critical products, including semiconductors.  “We need to stop playing catch up after the supply chain crisis hits,” President Biden said. “We need to prevent the supply chain crisis from hitting in the first place.” The executive order – which requires a 100-day review of semiconductors, pharmaceuticals, advanced batteries and rare earth minerals supply chains and a one-year review of six sectors of the economy – follows bipartisan calls from Congress cautioning about the dangers of a semiconductor shortage. “Right now, semiconductor manufacturing is a dangerous weak spot in our economy and in our national security,” Senator Chuck Schumer said Tuesday… Read More

Report: The Detrimental Impact of China’s Mercantilist Policies on the Semiconductor Industry

In his new report, Stephen Ezell, Vice President of Global Innovation Policy at Information Technology and Innovation Foundation (ITIF), explores how China’s aggressive strategy to distort and harm the global semiconductor market is continues to hurt the U.S and the market at large.    In highlighting the growth of the industry, he explains “a thriving global semiconductor industry depends upon three critical conditions: fair access to global markets, market-based competition to reduce artificial overcapacity and significant price declines, and minimal intellectual property theft.” To contextualize this, he uses the example of Applied Materials, ASML, KLA Tencor, and Lam Research, a collection of US and European companies that “manufacture the machines and tooling equipment that run semiconductor fabs.” Ezell explains that… Read More

Semiconductors are the New Oil: Looking ahead at the Semiconductor Market in 2021

In a webinar hosted by Semiconductor Industry Association (SIA) last week, participants emphasized the importance of the industry and expressed great expectations for its growth in the coming years. C.J. Muse, Senior Managing Director and Head of Global Semiconductor Research at Evercore ISI, said that while 2020 was a turbulent year for the industry, it was also “the year that there was recognition of the secular importance of semiconductors driving the digitalization across nearly every industry vertical.” His fellow participant, Dale Ford, Chief Analyst at the Electronic Components Industry Association (ECIA) also expressed optimism for the market, suggesting that if trend rates continue, the semiconductor industry will generate $750 billion in revenues by 2030 and could reach $1 trillion by… Read More

Lincoln Network Event: US to experience severe industrial loss without US Semiconductor Policy

On January 22, the Lincoln Network hosted a panel titled “The Future of U.S. Semiconductor Policy: Answering the China Chip Challenge.” Panelists included China Tech Threat Co-Founder Dr. Roslyn Layton, Stephen Ezell, Vice-President, Global Innovation Policy at the Information Technology and Innovation Foundation (ITIF), Dr. James Mulvenon, Director of Intelligence Integration at SOSi and Dan Lips, Director of Cyber and National Security at Lincoln Network. In the most critical part of the conversation, host Alexiaa Jordan commended Dr. Layton for clearly stating the steps the US can take in order to secure their policy, as well as naming the companies that this policy must address. In a follow up to this, Dr. Mulvenon noted that when US export control policy… Read More

China May Lag with Semiconductor Goals, But They Continue to Make Progress Through YMTC

Earlier this week Scott Foster, an analyst for Tokyo-based Lightstream Research and frequent Asia Times columnist, opined on China’s efforts to achieve their Made in China 2025 goals, with a specific focus on semiconductors. Foster makes a few main points: 1 – China is failing to fulfill its ambitious goals. For example, the country set a goal of producing 70% of their own needed semiconductors by 2025, but that they will not even account for 20%. 2 – On the other hand, China has been and will continue to invest in semiconductor manufacturing equipment, which is manifest in increased production. As proof, China’s spending on wafer fab equipment has doubled in the past five years and, consequently, the value of… Read More

Listen: Dr. Roslyn Layton and Dr. Jim Lewis on CSIS’ ChinaPower Podcast

Ahead of the inauguration of President-elect Joe Biden, China Tech Threat founder Roslyn Layton joined Bonnie Glaser and Jim Lewis on the Center for Strategic and International Studies’ (CSIS) ChinaPower podcast. Ms. Glaser is the senior advisor for Asia at CSIS and host of the ChinaPower podcast. Dr. Lewis is senior vice president and director of the Strategic Technologies Program at CSIS. China’s ambitions to dominate the global tech markets, coupled with its Military-Civil Fusion strategy, present a unique challenge to U.S. policymakers. Chief among those, notes Ms. Glaser, is striking the right balance between protecting dual-use technologies and fostering continued demand for American-made products, which will help continue to drive innovation. Despite controls on semiconductors and semiconductor manufacturing equipment (SME), U.S.-born products… Read More

Hudson Institute: The Importance of the Defense Industrial Base

On January 14, The Hudson Institute hosted a virtual discussion entitled “A Discussion on the Defense Industrial Base with Government Leaders.” The panel featured leaders from the Defense Department including Ellen Lord, Under Secretary of Defense for Acquisition and Sustainment and Robert Work, Former Deputy Secretary of Defense. Senator Mark Warner (D-VA) and Bryan Clark, Senior Fellow & Director, Center for Defense Concepts and Technology at Hudson Institute, also joined the conversation that was moderated by Jeb Nadaner, Deputy Assistant Secretary of Defense for Industrial Policy, Office of the Secretary of Defense for Acquisition and Sustainment at the U.S. Department of Defense. From the outset, the theme of the conversation centered on the need to address threats to our defense… Read More

U.S. Semiconductor Equipment Makers Reap Record Profits, Despite Export Controls

Despite export controls meant to stop sensitive U.S.-made technology and equipment from getting into the hands of China’s government and military, American semiconductor manufacturers Lam Research, KLA and Applied Materials have enjoyed record profits from continued sales to Chinese state-owned companies. In 2018 the global semiconductor industry experienced its biggest year ever. U.S. semiconductor toolmakers makers cornered half the world’s sales and stable growth in recent years—largely because of increasing demand from China. According to the chief financial officer of Applied Materials, China’s spending on U.S.-made semiconductor manufacturing equipment (SME) is up a whopping 50% in the last year alone. SME makers like Lam Research ship to China more than any other country. About half of those sales go to… Read More