Global South


Here Comes China: Scholz and Germany is toast.

Two selections from Godfree Robert’s newsletter.

“A subscriber, Frans Vandenbosch, writes: “German industry is fighting for survival, knowing very well that the future of the German economy is in cooperation with China. Germany is divided, the German media are bribed, the German politicians are threatened by the USA daily. But most big German MNC’s make 60% to 80% of their turnover in China. Without their China presence, there is no German industry. Kunshan, Shenyang and other Chinese cities are actually German, with few other foreign investments there. In Suzhou night clubs, the Chinese audience sings “Über den Wolken”  (von Reinhard Mey, 1974)  Yes, the Chinese audience is singing in German there !! And I can assure you, all the German employees of these MNC’s in Germany are very well aware of the importance of the cooperation with China”.

Mercouris stated the meeting with Scholz – simply Xi Jingping said .. We don’t Trust You!

Its worth while taking a look at the short 11 minutes video

I think in terms of Germany, all we can do is wait and watch.  I think they are toast.

But the most important is a piece by Godfree about The Chip Business.  We may as well look to the future.

First Photonic Chip Fab Opens
in Beijing next year

As electricity is displacing internal combustion in cars, photonic chips are displacing electronic chips in circuits. The switchover will accelerate when Sintone, a Beijing startup, opens the world’s first photonic chip foundry next year, neatly filling the high end chip gap created by US embargoes.

Technological implications

In an electronic integrated circuit, electron flux passes through electrical components like resistors, inductors, transistors, and capacitors. In a photonic integrated circuit, PIC, photons of light pass through optical components like waveguides, lasers, polarizers, and phase shifters.

PICs are far superior to electronic chips in speed, integration, heat generation, miniaturization, compatibility with existing mass manufacturing processes and cost, being produced entirely with Chinese equipment and IP.

Market implications

China is already the world’s largest market for PICs, expanding from $800 million in 2017 to $2 billion today. PICs increase bandwidth and data transfer speeds and reduce energy consumption in data centers, cutting cooling costs.

PICs make lab-on-a-chip (LOC) practicable, putting laboratories into doctors’ hands. Amazec Photonics markets a sensor with photonic chips which enables high-resolution temperature sensing, so doctors can measure cardiac output and circulating blood volume from outside the body. EFI’s ‘OptiGrip’ offers greater control over tissue feeling for minimal invasive surgery.

PICs facilitate communication between vehicles and urban infrastructure to improve driver safety, and can detect quantities of pressure, temperature, vibration, acceleration, and mechanical strain. PhotonFirst uses PICs to measure shape changes in airplanes, EV battery temperature, and infrastructure strain.

PICs can measure variables beyond the range of our senses, detecting disease, ripeness and nutrients in fruit and helping farmers determine soil quality, plant growth, and CO2. MantiSpectra’s infrared sensor fits into a smartphone and analyzes chemical compounds in plastics.

Financial implications

While US hawks insist the collateral damage is worth bearing, the sweeping expansion of US export restrictions, intended to isolate China, risks decimating US firms.

Nvidia, unable to sell its advanced AI chips to China, saw its market capitalization fall by $38 billion. AMD’s fell $16.5 billion. The combined market value of Applied Materials, Lam Research and KLA Corp, US makers of electronic semiconductor equipment – has fallen $25 billion since the bans were announced. Synopsys and Cadence, US designers of electronic design automation software, are now worth $9 billion less.

Geopolitical implications

After President Xi’s 2015 warning about dependence on foreign technology, Beijing invested billions to leapfrog existing IP, including overcoming PIC manufacturing challenges. If the new fab opens on time and the chips perform as expected, it will further reduce the value of American IP (and the geopolitical value of TSMC) and turn the embargoes into a trillion-dollar catastrophe, like Ukraine.

The specific condition for US success is that the target of export controls must have a sufficiently weak political will to abandon its intention to develop the industry in question immediately … However, China has both the will and an unmatched capacity for industrial policymaking to drive and guide the development of its own alternative technologies. Chinese companies and industries have long since begun the production of related products but are currently in the uncomfortable position of being constrained by the superior and more mature products of US companies. The subtlety of US bans is that it is the US government, rather than the Chinese government, that has helped these companies to achieve the effective exclusion of their competitors from the Chinese market which will, allow Chinese companies, in the medium-to-long term, to grow even faster and invest even more in R&D. Shen Yi (沈逸) and Mo Fei“From ‘Prevention’ to ‘Containment’:  

Future Implications

Just as China is ahead of the West in nuclear energy, and will overtake the West in integrated circuits next year, it is now commercializing quantum computing: Shenzhen International Quantum Academy has set up an Integrated Circuits and Electronics Centre. Focusing on issues crucial to the commercialization of quantum computing technologies, they’ll focus on bottlenecks in IC design, radio frequency and microwave device development. The centre’s international team of cross-disciplinary researchers are getting a new lab, dedicated entirely  to QIC design and cryoelectronics. SCMP.