Chapter 193: Seemingly Reasonable Suggestions Are Actually Traps
The solution proposed by Liu Deyin is simple but effective.

"The semiconductor industry is a very typical technology, labor and enterprise intensive industry. China currently has a slight advantage in technology, even though they have many shortcomings, such as semiconductor equipment, semiconductor materials, chip production technology, engineering team, etc.

They cannot compare with the world's leading level in these aspects.

But they have the biggest advantage of topological semimetals, which is enough to offset all the disadvantages of their products at the consumer end.

For the Federation, if we allow China's chips to expand production capacity and occupy the market, then China will quickly catch up on its shortcomings. By that time, even if we have mastered topological semimetal technology, we will not be able to restrict the development of China's semiconductor industry."

It has to be said that Liang Mengsong once worked at TSMC, and his ideas are similar to those of Liu Deyin.

Liu Deyin thought that it would be all right if China caught up in other areas, while Liang Mengsong thought that it would be all right if TSMC caught up in the field of topological semimetals. Although the two sides stood on different positions, the key points they were thinking about were exactly the same.

“So for the Federation, we need to limit the scale of Chinese chip production, restrict their market, and slow down their pace of catching up.

This is the most urgent matter at the moment.”

In Liu Deyin's opinion, it is too late to hold this hearing now.

Although the federal Congress has always been swift in dealing with issues related to China, federal market restrictions alone are far from enough, and China itself cannot expect to sell chips to the federal government.

More important are markets outside the federation, especially Europe.

As a developed country, Europe is a market that cannot be ignored.

It can also be seen from the data that last year, Europe was the only region in the world where chip sales share increased, while chip sales in the Americas fell by 5% and in Japan by 3%.

Europe rose 4%.

Now it is clear that Europe is not going to give in. Anyway, it does not have much semiconductor industry. The ASML that it has cultivated with great difficulty is being coveted by America, which is trying every means to poach it.

The congressmen present here are all old guys, and are familiar with what happened back then. They may not have been congressmen at that time, but they also worked in Washington, and it is even possible that they drafted the agreement at that time.

They considered Neon's behavior a betrayal.

"Which companies are cooperating with China?" A congressman could hardly hide the anger in his tone. It was a performance but also his true feelings.

In their view, Japan is an object of their will. The suicide scene was already excessive enough, and cooperating with Chinese companies in the semiconductor field was even more excessive.

As for Germany, to be honest, for the Federation, Germany has a higher degree of autonomy than Japan. This is not because Germany is stronger, but because Germany has a killer move that makes them fearful.

The Federation is not worried that Japan will really come together with China, which is unrealistic, but they are worried that Germany, Russia and France will really come together. Even if it is only a deep economic integration, it is enough to make them feel scared.

"There are too many Nikon, Canon, Fuji, and Hitachi in Japan, and Zeiss, Siemens, Volkswagen, etc. in Germany. These companies are either already cooperating with China or preparing to cooperate with China in the field of new chips," said Liu Deyin.

The CEOs of Intel and Texas Instruments looked at him with disapproval, because no one expected Liu Deyin to be so ruthless.

Everyone has heard more or less about the cooperation between these companies and China, but because there are no federal restrictions, they don't want to mention it.

In the process of globalization of the chip industry, Korea and 4V obtained most of the advanced production capacity, Federation obtained upstream patent authorization, and Neon obtained raw material production capacity. Everyone performed their duties, and Europe was just a loser in this process.

ASML is just a beautiful accident.

“Sorry, I want to mention that the Federation has never prevented these companies from cooperating with China.

The federal government simply does not allow lithography machines with a process technology below 14nm to be exported to China, or specifically restricts ASML from providing services to China.

But there have never been restrictions in other areas, and previous restrictions were only on semiconductor equipment.

There have always been rumors that the Federation wants to restrict the export of advanced process raw materials to China, but this has always been just a rumor, so Neon has been exporting raw materials including photoresist to China.

There has never been any regulation that restricts the joint research and development of topological semimetal chips," said the Intel president.

The Federation has been unable to reach a consensus because technology giants led by Intel, Nvidia and Apple are very eager to reach an agreement with China and hope to carry out joint research and development with China in the field of topological semimetals.

Lee Jae-yong, the head of Samsung Electronics, nodded and said, "Yes, we are also in contact with China, hoping to cooperate on the new material of topological semimetal.

This is a purely commercial act. As a company spanning multiple fields, it is impossible for us to ignore such an advantageous material. If there are federal restrictions, we will definitely comply with them. ”

In their opinion, Liu Deyin is too bad. The blue ocean market of topological semi-metal chips will definitely be a market worth hundreds of billions of dollars in the future, and even more than hundreds of billions.

A large number of leaders in different segments will emerge in the upstream and downstream, and there will be a lot of opportunities. TSMC’s own ecological niche has been occupied by SMIC, and it wants all companies to avoid squeezing into this ecological niche.

Liu Deyin’s logic is, if I can’t get in, then no one should go. We can form an alliance and play by ourselves, and let the federation give this alliance protection.

However, in the view of other semiconductor companies, participating in China's ride on the bandwagon is the most direct and effective way. Once they can use China's topological semimetal materials, it will bring huge stimulating effects to the market.

“I think what Mark said is inappropriate. Restricting China’s semiconductor industry is based on the premise that they have no advantages. Now that they have achieved a breakthrough, are we going to restrict them again and then divide the global market into two camps and hand over the other camp to China?
That's too extreme," said Frank, Intel's chairman.

Mark is Liu Deyin's English name.

The local Anglo-Saxons feel that 4V is too extreme on the China issue, which is a bit deliberate.

“Of course, we can form a joint R&D alliance led by Oak Ridge National Laboratory and join forces with semiconductor giants, just like we did with EUV lithography.

The question is how long will it take? It took ten years from the project launch to the official production of EUV lithography equipment.

The process of topological semimetal will not be simpler than EUV and will take more than ten years.

Do we have to wait ten years?
The Chinese's process technology has already broken through 1nm in performance. How far will they go by then?

Who here dares to bet? Who dares to give Mr. Huaren Zhiguang, who is far away in Yanjing, another ten years? "

Frank felt that Liu Deyin's opinion sounded effective but was completely impractical in practice.

"I just said that ideally, China would occupy about half of the market, and we would occupy the other half.

However, China has never minded sharing technology with its allies. What if they share topological semimetal-related technology with Europe?
When we are about to succeed in research and development, they package these technologies and trade them with Europe?

We are left with only the domestic market. We have invested huge amounts of money, but all we get is the federal domestic market. Who will be responsible for this situation then?
Mark or everyone here?" Frank said bluntly.

"What we need to do now is to incorporate China into the chip system and regard them as a semiconductor raw material producer, no different from Japan.

Neon produces photoresists, chemical polishing materials, packaging materials, copper, etc., while China produces topological semi-metal films that have the same function as silicon wafers.

Even if their films are more expensive than silicon wafers, no matter how high the premium is, it should be cheaper than giving up half of the market share to China, right? "

After listening to Frank's opinion, the congressmen present began to nod their heads, feeling that Liu Deyin's opinion was simply offering a life to China.

"Mr. Yeri, your suggestion is very good. I just have one question, which is how to convince China to cooperate?
What if they are unwilling to cooperate?" one MP asked.

"There are many ways to get China to cooperate," Frank said.

I believe there are still many weapons in the Federation's arsenal that can be used. I believe that everyone here is an elite in this field.

And if China does not accept cooperation, we can completely use the monopoly as an excuse to make them lose the entire market.

We need to play with them within the rules of the game, rather than outside the rules. Outside the rules, we need to spend more effort and consume more credit to persuade our allies.

This is not a good thing." Frank said earnestly.

Twenty years ago, Frank's proposal would have been passed without a doubt, as everyone knew the benefits of cooperation.

From a rational point of view, Frank's proposal is very reasonable and highly feasible.

Cooperation with the Federation in the field of topological semimetals will benefit China in the short term but be disadvantageous in the long term.

But now is 2024, an era of confrontation, and lawmakers have lost their minds, or dare not show their rational side on the China issue.

(End of this chapter)