Why China is losing the microchip war

I'm always surprised how relatively unknown a company like ASML is to the larger audience. It has a unique key strategic position in the world that no other company has. You don't often see that and it represents both a strength and a weakness for the free western world.

As a person who has spent 35 years in silicon valley's chip industry, while this video has many things right it also misses many pieces of the puzzle. Labor cost is not the primary reason chip manufacturing moved offshore. A huge factor was that chip fabs are extremely expensive and capital for building them was very expensive in the USA in the 80s when this trend really ramped up. The inflation of the 70s was a mighty contributor to that. Yes, it is true that the south Korean and Taiwanese governments were very supportive of having their engineering students pursue graduate education in the USA and such students often dominated the Semiconductor section of American Graduate schools from at least the late 1970s. In my grad school 20 of 23 Research Assistants in Semiconductor physics were from either Taiwan or S. Korea. only 2 were Americans. Taiwan and S. Korea saw the strategic value while American politicians didnt distinguish between potato chips and semiconductor chips as one politico explicitly stated.

As someone who works as a scientific glassblower for the semiconductor industry, it's really interesting to see the geopolitical impact of some of the components we use.
We just make the glass and send it off, without really knowing how the apparatuses are used. This is the first time I've seen one of our customers mentioned outside of work.

This video has aged well - we banned a country with tens of thousands of engineers from accessing reasonable priced easily accessible chips, forced them to develop their own technology and now they can do it themselves.

I’ve been watching this happen and trying to stay up to date with this, you’ve done a pretty great job in showing how truly reliant and nearly immutable the world is on this supply chain, and the problems ahead

Are you sure China is losing the chip war? How about Huawei chip 9000s and 980A AI chip?

Some extra info: Zeiss, a german company that produces lenses is also the only company with the most advanced lenses which asml uses for their machines.

Maybe Vox should make a video about Why China is losing the Space station war. or the GPS war. or the EV war. all of which is sanctioned by the US.

It’s not just about chips. There are many process technologies. The emergence of CMOS put alternative technologies (ie NMOS) at a disadvantage. I used TSMC’s CMOS process in the 90s and that alone gave us an edge over companies with their own legacy fab.

Vox: Why China is losing the microchip war
China: Hold my beer

Regardless of what's being discussed and distorted, China remains the #1 chip production country in the world at 24% today .... Taiwan's TSMC #2 at 21% .... S Korea's Samsung #3 at 19% ...
US is asking TSMC to set up manufacturing operations in Phoenix, Arizona, USA ...

Vox: China will lose the chip war
Huawei : Hold My Mate 60 Pro

The production of this is fantastic and really shows the pressures that both countries face. Great job by the production team.

Great video. You managed to breakdown the complexity of this whole situation into easy to understand pieces for all.

I wrote my thesis on this very topic about 1 1/2 years ago and it is always great to see this topic get brought up more and more

I have seen a video of ASML and the factory in the Netherlands. The technology is really sophisticated and complex. If anything were to happen to that singular place and/or TSMC, there's a good chance we can regress technologically as a human race because the technology is not being shared and is monopolized. Really scary if you think about it.

Chip is essentially a commodity, chip technology development needs to be driven by profits, and China is the world's largest chip consumer market, as long as there are enough profits, China's development of its own chip industry is only a matter of time, the current sanctions and blockade led to the increase in the cost of obtaining chips from outside is only helping China to accelerate their achievement of this goal.

At only 7 moths since this video was released, huawei mate 60 pro now leads the market...

Brilliant video. Thanks.
While it may seem like the "chip war" is between China and the US allies, it's actually pretty 2 dimensional. US allies (Japan, South Korea and Taiwan) too are competing among themselves to out-pace each other. No one wants to end up in a situation where it can be casted out easily. While TSMC (of Taiwan) is building new plants in both America and Japan, their foreign investments do not involve most advanced technology, keeping the US' incentive to defend Taiwan from China intact.
Both Japan and South Korea has announced their own set of lucrative subsidies to poach companies from each other countries. They are also worried about losing market share in China and China hampering the supply chain of raw materials if it feels cornered.
This is just the beginning.

Great video. It enlightened me to the reasons behind the increase of taxes that the US had implemented and why they were going after so many China tech companies.

An insightful examination of the geopolitics surrounding the semiconductor industry. The concept of "silicon sovereignty" sheds light on the growing trend of techno-nationalism in the industry. The power dynamics between different players in the digiconomy and the geopolitical landscape are having a significant impact on the microchip landscape. It is crucial that we understand these intricacies in order to fully grasp the implications of this important topic.

now Huawei can make their own SOC chip

What a clear and perfect way to explain the chip Coldwar! Great work Vox team

Omg this video is just so embarrassing😂

Every now and then Vox just makes me fall in love with this world and its geopolitics, loved it

Greatly explained! Issue has been going on for years and this is the first time im seeing good coverage of underlying geopolitical issues

It was easy for the US to deal with the former Soviet Union, it was just a military superpower. It's easier to deal with the Japanese, they're just an economic challenge. However, dealing with China is a bit difficult. It is a military power plus an economic challenge plus a technological rival plus a diplomatic rival.
Thing is, bullies often don’t realize that they’re bullying people…

very good high level overview of the situation! There are alternative technologies in play but this is a really good starting point for anyone interested in the geopolitics of chips.

Vox had said so many things in this vid, but non of them are explaining why China is losing the war.

SMIC - the most successful Chinese chip maker just announced it can make 7nm chips, a step behind the bleeding edge 5nm chips of TSMC. This is an impressive feat and even if it cannot be exported (as its "very" close to TSMC design) it can still fullfill Chinese internal demand.

Thanks to SMIC which produces Huawei's 7nm Kirin 9000 chip,
Now China not only doesn't need TSMC but also ASML👏

In fact, China has already manufactured a lithography machine capable of producing 28nm wafers, but the yield is still relatively low. At the same time, the lithography machine capable of producing 14nm wafers has also entered the debugging stage. It is estimated that China will be able to fully grasp the "mature process (above 14 nanometers)" in two years. As for the more advanced EUV, there is no more definite news yet.

Huawei Mate 60 explained everything

You manage to break down the complexity of the whole situation into parts that are easy for all to understand.good video 👍

The last thing Chinese people lack is patience

Last week, Huawei Phone with made-in-China MPU has been released, which support 5G network as well as satellite call at the same time. Let's tell whether China is losing the war after a few years from now.

This is the sickest most informative ten minutes of my six academic years in medical school. Vox, you’ve outdone yourselves 💪🏼

Even though Huawei has created its true mobile phone, are you still unwilling to take down this embarrassing video? lol

You forgot to mention we are reaching the physical limitations when it comes to chip design, we are reaching the physical limitation on semiconductor technology and would need some breakthrough in physics to go even smaller

Everything in this video has been common knowledge in the tech circle in China for at least 4-5 years. There has been already quite some development over there since then. Who can predict what the situation will be in 20-30 years?

Funny to see this video after Huawei released a full in-house 7nm chip solution on the new P60 Pro. China is tightening the gap with the leaders in microchip. A 5nm chip is coming soon. Stay tuned.

I LOVED the production of this video. Simply superb. You keep pushing the barriers Vox, you are at the forefront of Moore’s Law.

It's too early to draw the conclusion. Keep in mind, majority of the chip market is 14nm and lower, not 3/5/7nm chips. You don't need those advanced chips in most devices or EVs.

Before 2004, the United States led the world in semiconductor technology, and foundries had to pay IBM's technology license fees. But in 2004, TSMC took the lead in developing 0.13-micron copper process technology ahead of IBM, ushering in the era of Taiwan's semiconductor technology leading the world. In 2014, IBM withdrew from the foundry business, and TSMC considered buying IBM's fab in New York State. However, even though IBM's technology has lagged behind Taiwan by a decade, the US Department of Defense and IBM, still worried about the already fading American technology influx into Taiwan, rejected the deal. High-tech semiconductor technology is the result of Taiwan's efforts to develop, and now the United States claims to "bring back" semiconductor production to the United States.

TSMC has been perfectly described as the most important company most people have never heard of.

This Cold War between the 2 is a major reason why no one should be reliant on either party when it comes to semi conductors. As an Indian, I’d very much like to use our technology brains and become self reliant on this front in the next 20 years.

Nowadays, any issue can be used as a security issue, especially when China has its own mobile phone chips that are not based on American technology, but are developed by others with their own architecture. Magnesia light can also be said to be a safety issue.

I used to work with both companies even before they were as big as these days. The Taiwanese and the Dutch holds the key in todays high tech and should use their strength to stop all the madness going on these days.

Anyone' here after china's 7nn Chip Breakthrough 😂😂

a lot of western optoelectronic companies have moved away from China after the mid 2000's because of IP infringement. Unlike complex high-density CPU's on silicon, optoelectronic tech involves a lot of III-V semiconductor epitaxy and bespoke fab processes - once those are know it's a lot easier to replicate and sell them for a significantly cheaper price.
In the UK a lot these industries were lost over the last couple decades. With regards to warfare we're constantly on the cusp of losing our steel industry. I guess paying profits to shareholders is a lot more important than state security.

The Philippines was once a very very important place for Intel to build microchips until Intel closed it's factories in 2001 due to global speding cuts.

In recent news, China produces 7nm chips with a good yield, which is as good as anything made in the US. They're closing the gap...

Japan and most Japanese people don't understand this story.
Toshiba had an impairment loss from the nuclear business, so the newspaper company was only reporting surface information that it had downsized its business and International position.
Recently, a semiconductor start-up company in Hokkaido has said that it will overtake TSMC.
It will be interesting to see what happens.

At that time, Samsung's 1T solid state price was as high as 1500 ￥. After China Yangtze Memory Technologies Co., Ltd. manufactured the memory chip, it was only 500 ￥. Previously, Samsung and other companies harvested the world, and now the CPU chip is also harvesting the world. After China's manufacturing success, the price of the CPU chip will be at least halved.

Even if China can gain influence over Taiwan that doesn’t mean dominance in chip manufacturing, as necessary software and machinery to produce such chips are only made in the us and Netherlands. The Chinese governments best move would be to invest significantly into paying software engineer graduates competitive rates that keeps them from wanting to move to the us or other countries

Brilliant, very well done. Explained succinctly the key players, the potential theft that led to export controls.

Good information but you sort of glosses over why companies started outsourcing to TSMC - it was about a change of business model from companies designing and building chips to just designing and outsourcing the building to a third party. These third parties could scale operations much better. Also they had heavy subsidies from the government of Taiwan - a point that is really important to note.

This did not age well.. Just 6 months later, Huawei is selling millions of phones with native 7nm 5G SOCs

Enjoyed every minute of watching this and learned a whole LOT. Thanks Vox

Who can imagine China makes breakthrough only 7 months after this video was released. Slap!

This kind of videos are the reason why I subscribed to Vox. More of these please!

As a Canadian its sad to see we didn't even receive a mention toward our groundbreaking chip technology... Yeah there's China, Russia, Japan & the US but Canada has some of the greatest chips known to man. All Dressed, Ketchup & Hickory Sticks to name a few, alone these three chips could out compete the entire chip market on a global scale, vastly overtaking any of the countries you mentioned.

Great video. You managed to breakdown the complexity of this whole situation🙂🙂

love to visit here again next year. maybe every year. I downond this video , for future use in my class. How's the Western media has the discrediting them self? Great historical evidence

Always love the videos in this series. Excellent job again!

You can ban them from advance chips but you can't stop them from development. Sooner or later they will have to develop because it's also matter survival for them as a country.

It is too early to say China is losing the chip war, when it is just started. When supply from the west is blocked, it forces China to put chip related development as top priority and it will change the path of the chip industry significantly. When self-made chip % is getting higher in China markets, it means less market share of the west chip industry. Not a good news to US and Europe, or Japan/Korea.

Loved this video, extremely well maid, informative and entertaining! Great work.

This didn't age very well

Microchip is harder to make than nukes and ICBMs and rockets, it represents the pinnacle of human technology, Intel alone has 10,000+ engineers in a single department doing R&D on chips

Although countries like Japan and South Koera are not subject to such severe U.S. sanctions, the price is that they are not independent politically and militarily, and once the core interests of the U.S. are harmed, the U.S. will sanction them without hesitation.

The Taiwan story is something people really need to pay more attention to. Learned a lot in this one.

Given that China produces about 8 times more STEM graduates than the USA each year, and that China files about 100,000 more patent applications each year - even if possibly softer - I wouldn't bet against China becoming the world's foremost chip designer and manufacturer within the next 5 - 10 years. As we've seen with Russia these past ten years, there's nothing like sanctions to spur import substitution and self-sufficiency. Cutting China off from technology and equipment is the biggest favor we could possibly do them.... The law of unintended consequences...

So well made, simple and very informative. thank you!

Huawei Mate 60 destroyed this video immediately lol
Slap!Slap!😅😅😅

Pls tell me why china now had 7nm chip ?

Amazing video, now I've got a better understanding of why the USA is so openly willing to protect Taiwan in the case if China decides to make a move.

Never had I understood the chip issue in just 10 min that clearly
awesome production Vox - thanks for that

As a Chinese, I'm more than happy that you really think so😊

Excellent production team to export a highly informative video to show mass people what exactly going on between these two giants.

1:23: 👥 China's monumental effort to transform the semiconductor industry has led to a Cold War with the US over security concerns.
2:14: The US government believed a deep partnership with chip companies would ensure access to the most advanced ones.
2:48: Many chip companies moved their manufacturing to countries with cheaper labor, encouraged by the US government.
3:26: Allied governments began investing in their own chip companies, leading to a struggle with the US over security.
7:00: 🌎 The US and China are engaging in a new Cold War over the chip industry, forcing countries and companies to pick sides.
9:02: Taiwan owns the most important choke point in the chip supply chain, manufacturing 63% of all chips and 92% of all advanced chips.
9:23: The US export controls have forced Taiwan's companies to choose between defying the US and selling to China or complying and cutting off China from some of its chips.
Recap by Tammy AI

The chip war is not in the narrow sense about security. It is about the United States maintaining its technological superiority over a rival which in turn affects its economic and military supremacy.

I honestly think one side holding a technology is scary, no matter if it’s us or them. Like a wise man once said, nuclear weapon keeps us safe because both side have them

everyone stands up for their own interest. For China and all other developing countries the current intellectual properties are not quite fair. So it's more of a struggle for market and technology as well as the interpretation of rules.

One of the other key points as to why the US is so protective is their understanding of Chinese technological development. China doesn’t have the same innovation priorities that the US does so their ability to grow organically is impaired. However they have remarkable abilities in breaking down, analyzing, and replicating preexisting components and tech. Thus getting blueprints or samples of cutting edge technology can enable them to catapult the the forefront.

Magnifique, la concurrence actuellement est axée sur le développement de chipsets pour l'AI et le 5G . Merci pour cette vidéo explicative

Think they miss-spelled "Wish" as "Why".

It safe to say that regardless of which political party controls the White House and Congress, it won't affect the foreign policy strategy of "containing" China. One of the few positives of superpower competition is the advancement of scientific and technological knowledge.

This is the one of the best videos I have seen recently on the chip war, easy to understand with in-depth analysis. Thank you.

Why don't we see content like this more often from Vox... Brilliant, absolutely brilliant 👍

For so many years, under the siege of the West, China has never lost any industrial competition. On the contrary, it has become stronger in all fields. There are two reasons. One is that the entire Chinese society maintains a sense of seriousness and collective honor , 2 is the solidity of the education industry and the seriousness of parents in the education of their children! In fact, China has never thought of competing with any country, it just became stronger naturally under the serious attitude of the whole society

The United States is trying its best to suppress Huawei. Huawei mate60pro 5G mobile phone is released, and the self-developed Kirin 9000s 5G SOC is back. Let's slap those who think they can defeat Chinese semiconductors! I like to watch you guys talk freely, but none of them become reality!🤣🤣

First, am not here to defend China (If you're a hater, then move on. I am here for evident-based discussion). Second, Vox team did a great job on summarizing tech/chip war happening now between China vs US in 10 min vid.
My first critic, the title is an eye-grabber; this war is on-going and China has not lost yet. It should be better titled, 'Why China is losing the microchip war up to this point'.
Now for some details not presented in the video to add another layer to this discussion.
First point on microchip itself: while microchip indeed are essential in all modern tech, the advanced chips (10nm) and the ones that China is losing right now is the advanced chips (

With China now imposing limitation in exports of raw materials for chips is hard to say now who will win the game in the end. In my opinion most obviously only lose-lose.

Thanks for spending the time to create and share this content awareness

This was ageing bad before Huawei Mate P 60 pro with 7 nm chip and 5 G with satellital calls :)

There is a substantial amount of "video game" thinking regarding the semiconductor industry with respect to the geopolitical struggle that is immature. The chips used today in most of the world's missiles are earlier generations, which ML China can already produce. Furthermore, the applications for these high-end chips are generally for expensive consumer electronics, and they have marginal use in the near future for military applications (AI, ML, buzzwords go here), that need to be coupled with a hard turn towards drone technology to apply them that hasn't happened in the US yet. The exclusion of ASML from being able to sell to China does three things that the US probably doesn't want: 1) hurts ASML's revenue and market share 2) allows space (and creates security necessity) for a ML Chinese toolmaker to develop, and 3) helps feed the perception of ML Chinese that the West is "keeping them down", by restricting access to technology they've been licensing for years. This is, in fact, what the West wants to do, but it hasn't gotten its own house in order, and is making piecemeal changes when it needs to pull the fire alarm.

As far as the most of the non-Western world is concerned, it is only good that there be a diversification of politico-strategic blocks and non-Western and other countries not alligned with the United States is possession of advanced IC chip and IC chip equipment capabilities and technologies. That makes it easier for them to have a choice and also brings down prices potentially...

ASML is the most important company in the world most people have never heard of.

IMO, asml, tsmc, Amd, and Nvidia are all really great companies to invest in. They're literally in most tech out there. Underrated stocks still imo. Got lucky and bought them when they were low, so easier for me to tout about them. But I still believe in them so I recommend them long term. Not financial advice, just my opinion haha.