It’s becoming harder to get super-rich in China – Asia Times

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” To getting rich is glorious”. In the 1980s, this was one of the most popular phrases – formally, at least – to illustrate the attitude at the sun of the opening-up time in post-Maoist China.

China’s paramount chief of the time, Deng Xiaoping, apparently justified this unconventional situation for an supposedly democratic Marxist country by saying:” Foremost you allow some make money, then more likely follow”.

And earn income as well. One of the earliest example is Nian Guangjiu, the leader of Fool’s Melon Grains, who quickly transitioned from being a poor farmer to a rich entrepreneur. However, Nian’s story serves as a morality lesson for those who followed.

In 1989, he spent time in prison on charges of embezzlement and another offences, and his company was taken from him. To get wealthy in China was certainly possible, but it was a way that usually led to prison and perdition.

Despite this, China now has a shared happening with the established world: a group of fantastically wealthy people, and the importance of business people, frequently in the exclusive market, in generating this.

A billboard of Deng Xiaoping in a street in China.
A poster of China’s major president from 1978 to 1989, Deng Xiaoping, in Shenzhen. Photo: Eric007 / Shutterstock

There was only one US dollars businessman when Forbes released the first Chinese “rich list” in 1999, a Hong Kong mogul based on the island called Rong Yiren.

By 2010, this number had risen, perhaps by a liberal estimate, to over 60. And over the course of a decade, it rose to 389, a remarkable illustration of how far China had come since the Maoist government’s almost utter hunger.

The Hurun Report’s wealth tracker, which uses a different method for calculating and valuing assets, has expanded even further, suggesting that China currently has the most billionaires in the world ( 814 ), outpacing the US with 800.

Entrepreneurs may have been a useful indicator of China’s dynamic market, but they are also a missed reminder of how severe injustice is in China. In 2021, according to the Gini factor, an international standard for differences between the richest and poorest cultures, there were considerably more inequality in China than in the US or UK.

Since China’s present leader, Xi Jinping, came to power in 2012, his reported philosophy has been to” serve the people” and offer” common prosperity”. That means more money, but more evenly shared out. When I visited both Beijing and Shanghai in late August 2024, the phrase” Popular success” was almost universal.

However, the residual effects of the pandemic and the US’s continued tensions are already causing turbulence in China’s market. The government’s central bank has announced a significant stimulus package that has, at least, sparked a protest on China’s stock market because the slump has been significant enough to enable it.

Therefore, extravagant prosperity and billionaires who appear to be above the law are undesirable these days. According to the Hurun Report information, China lost about 155 members of this elite team between 2023 and 2024, along to its recent forecast of 814 entrepreneurs.

Money comes at a cost

Beyond the fact that China’s economy has been sluggish over the past two years and that everyone’s situation has typically become more difficult to live in, there are some other factors that contribute to this sweltering of the environment for China’s super-rich.

Some of China’s most well-known entrepreneurs, including Jack Ma Yun, the founder of Alibaba, apparently left after receiving a democratic backlash for making inflammatory remarks about the Chinese government and official authorities.

And another extremely wealthy people may have used these high-profile cases as a great excuse to avoid potential problems by emigrating from China.

Jack Ma Yun smiling while holding his hand over his face.
Jack Ma Yun stepped down as head of Alibaba, one of the world’s largest e-commerce businesses, in 2019. Photo: Richard Juilliart / Shutterstock via The Talk

While not in the course of the total richest of the wealthy, 13, 800 entrepreneurs departed China in 2023 according to one document, mostly to the US, Canada and Singapore.

The concerns over the economics and politics of their home countries appear to be the driving forces behind the individuals in this class. The fact that it is becoming increasingly difficult to obtain goods and cash out of China highlights how hard these individuals want to have a base elsewhere.

We should n’t overstate the problem, though. Although a little less wealthy than in the past, it is still acceptable in China. However, it’s probably preferable to be very close to the Communist Party in people and to be very close to it in order to become wealthy while working in high-tech industries that the government benefits.

For instance, Wang Chuanfu, founder of Taiwanese electric car maker BYD, has doubled his prosperity in the area of a few decades. According to Forbes, he is presently worth US$ 20 billion. Due to his company’s strategic and economic goals and products, he is still largely safe to live in Shenzhen, where he is already based.

Unfortunately, though, the richest man in China since 2021 is Li Shanshan, who produces extremely non-technical bottled metal waters under the Nongfu company. Finally, a key factor in keeping out of problems if you are super-rich in China is both to be in super-high or extremely low-technology companies.

Kerry Brown is professor of Chinese Politics, chairman of the Lau China Institute, King’s College London

This content was republished from The Conversation under a Creative Commons license. Read the original content.

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Sinking feeling engulfs China submarine program – Asia Times

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China’s naval hegemony ambitions were undermined by the new falling of its most advanced nuclear underwater at a Wuhan port, which exposed critical weaknesses in its protection abilities as a result of an extreme defense buildup and rising sea tensions with the United States and its Pacific allies.

Last month, multiple media outlets reported that China’s most advanced nuclear-powered attack submarine ( SSN), the first of the new Zhou class built by China State Shipbuilding Corporation ( CSSC), sank while docked at the Wuchang shipyard, according to US defense sources.

Cranes were spotted by satellite imagery at the wharf, which analysts believe were used to retrieve the submerged vehicle by early June, followed by their discovery. The US Department of Defense ( DOD ) confirmed the incident, marking a potentially significant setback in China’s bid to close the gap with US naval dominance.

The event raises concerns about China’s education standards, equipment value and internal transparency within its security industry, which has long been affected by corruption. The event has not received any comments from the Chinese authorities. At the same time, the submersible may be salvaged and repaired, although difficulties are expected.

The US might gain a semblance of benefit in the underwater world due to the ship’s demise, which would be crucial for any possible conflict with Taiwan. China, yet, continues to develop its submarine features, apparently recently receiving help from Russia.

Although there are n’t many details about the Zhou-class SSN, it appears to be an evolution of earlier Chinese nuclear submarine designs. Defense News reported in May 2022 that satellite imagery had revealed a new class or subtype of a Chinese nuclear-powered attack submarine, which might be equipped with advanced stealthy propulsion and vertical launch system (VLS ) cells for cruise missiles.

According to Defense News, the submarine has specific green patches on its deck, a cruciform steering arrangement, and a potential veiled propulsion system, which suggests pump-jet technology. It notes that this coincides with China’s continued research into such engine systems, enhancing secrecy and functional capabilities.

The cause says that the ship’s style, closely resembling the Model 093 Shang class, indicates it may be a development of this class, perhaps the Model 093B. It mentions that the ship’s capabilities, including possible land-attack and anti-ship missions, meet into China’s method for long-range offensive hit capabilities, targeting US Navy assets and distant property targets like US bases on Guam.

Malte Humpert explains in a GCaptain article last month that the mishap was most likely brought on by a lack of administrative and technological experience as well as the combined effects of small complacency problems in explaining the contributing factors. According to Humpert, China’s tight vertical chain of command likely contributed to these issues, with permission taking precedence over adaptability and empowerment.

China’s increased underwater production and marine modernization efforts, which are consistent with the latest setback, are continuing to close the US-China’s maritime balance.

Alexander Palmer and other authors mention China’s increased submarine production capabilities in a report released in June 2024 for the Center for Strategic and International Studies ( CSIS ) think tank, which highlights its ambition to match or surpass the US in undersea warfare capabilities.

According to Palmer and another, China has accelerated its manufacturing plans, including through the development and construction of superior nuclear-powered boats. They point out that China’s marine modernization is moving more quickly than the US Navy’s work on submarines.

The People’s Liberation Army-Navy ( PLAN ) has a focus on both conventional and nuclear-powered submarines, according to the authors. They mention China’s efforts, including expanding its SSN fleet, which is crucial for both its sea denial and proper deterrence goals.

Palmer and others note that while China’s increasing submarine presence poses a potential threat to US operations in the Indo-Pacific place, the country still has a competitive advantage in underwater warfare.

But, corruption within China’s defence industry, particularly in manufacturing, significantly challenges its ambitious marine modernization efforts, undermining the quality and reliability of its rapidly expanding submarine fleet.

In a 2021 article in the peer-reviewed Journal of Humanities, Arts, and Social Sciences, Yang Yi mentions that corruption in China’s defense industry has become a pressing issue that is deeply ingrained within the structure of state military enterprises.

Yi asserts that since the 1980s, China’s transition from a planned to a market economy, particularly in military enterprises, has fostered corruption. He mentions that this corruption is brought on by monopolistic control, a lack of accountability, and intertwining corporate and political power.

He claims that senior executives in defense companies frequently abused their positions to extort money from the government, as evidenced by cases like those involving Anhui Industrial Group and AVIC Ltd, where officials were discovered to have manipulated company assets for personal gain.

According to Yi, a central issue is the “dual role” system, in which company executives also serve as Communist Party officials, creating conflicts of interest and making oversight difficult. Additionally, he claims that the secrecy surrounding military contracts and the absence of fierce market competition have increased corruption.

While he mentions that Chinese President Xi Jinping’s anti-corruption campaign has resulted in numerous convictions, systemic issues, such as the intertwining of relationships ( guanxi ) and a lack of effective governance reforms, continue to hamper efforts to eradicate corruption in China’s defense industry ​.

China’s naval modernization efforts are susceptible to a lack of corruption in Chinese shipbuilding companies. The issue raises questions about the reliability and quality of the ships being produced for the navy.

China’s defense sector struggles with corruption, but the US struggles to build its submarine fleet with industrial and workforce limitations. These problems could put the US in the same position as China, leaving it with shoddy, subpar warships plagued by safety and reliability concerns.

Jerry Hendrix makes a significant challenge for the US submarine production base in a 2024 American Affairs article, primarily as a result of supply chain disruptions and workforce shortages.

Hendrix says the US Navy’s ambitious plans to expand its submarine fleet, including Virginia-class attack submarines and the Columbia-class ballistic missile submarines, are hindered by a lack of skilled labor and critical components.

He points out that the Covid-19 pandemic exacerbated these issues, causing delays and increasing costs. Additionally, he says the US industrial base’s capacity is strained by the simultaneous need to maintain and upgrade existing submarines.

USNI News reported last month that there were serious concerns about the workmanship of US Navy subs and aircraft carriers. Concerned about the potential effects on national security and operational readiness, USNI mentions that several vessels have discovered critical welding flaws and defective parts.

The source mentions that the USS Delaware, a Virginia-class submarine, and the USS Gerald R Ford, a Ford-class aircraft carrier, are among the affected vessels. Previous investigations have identified a number of issues with welding quality, including improper welding techniques and the improper use of wrong materials in US warships.

The US Navy, according to USNI, has started a thorough review of its quality control procedures and is working closely with contractors to address the issues in response to those findings.

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GLICs begin targeted capital deployment under MOF’s Gear-uP programme to boost key sectors

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  • attempts to use US$ 29.1 billion over the course of five times to stimulate economic growth.
  • Initiative aims to boost M’sian business, increase the rakyat’s quality of life

Panel Session Group Photo at Invest Malaysia 2024 featuring (from left) CEO Bursa Malaysia, Muhamad Umar Swift, CEO Employees Provident Fund (EPF) , Ahmad Zulqamain Onn, managing director Khazanah Nasional, Amirul Feisal Wan Zahir, CEO Kumpulan Wang Persaraan (Diperbadankan) (KWAP), Hajah Nik Amlizan Mohamed and chief executive Lembaga Tabung Angkatan Tentera (LTAT) , Mohammad Ashraf Md, Radzi.

Malaysia’s Government-Linked Investment Companies ( GLICs ) reiterated their joint commitment to supporting the Ekonomi Madani framework through targeted capital deployment in high-growth, high-value sectors at the Invest Malaysia 2024 Conference, themed” Where Policy Meets Progress”, launched recently by Anwar Bin Ibrahim in Johor.

During a panel session, GLIC heads highlighted their focus areas within the Ministry of Finance ( MOF ) -led Gear-uP initiative, which aims to deploy US$ 29.1 billion ( RM120 billion ) over the next five years to drive economic growth. The eyes of KWAP, EPF, Khazanah, and LTAT discussed areas for targeted investment, including agriculture, the semiconductor business, the venture capital habitat, system, clean energy, data centres, care, and biopharmaceuticals.

The Malaysian economy has shown significant growth in the first half of 2024, expanding by 5.1 % year-to-date (YTD ). The Ringgit’s 5.1 % increase against the USD YTD reflects this good trend. Also, the Malay equity market has outperformed the place, with the KLCI rising 13.5 % YTD and reaching a multi-year substantial of 1, 678.8 in August. The Ekonomi Madani Framework’s success, particularly in terms of financial reform and governmental measures, is reflected in this consistent economic efficiency.

Building on this success, the Gear-uP initiative seeks to further strengthen Malaysia’s economic foundations, with GLICs leading efforts to” Raise the Ceiling” of Malaysia’s economic stature and” Raise the Floor” of the rakyat’s quality of life. By concentrating on domestic investments, the initiative aims to bring about new financial ecosystems and gain Malaysians equally.

Hajah Nik Amlizan Mohamed, CEO of KWAP, said,” KWAP is implementing a new Strategic Asset Allocation ( SAA ) to optimise our portfolio’s risk-return profile, aiming to diversify further with private market investments. This is in line with our goal, which is to maximize returns while also advancing the national agenda of creating a vibrant local personal market in accordance with the framework of the Madani Economy.

She added,” We have identified three key strategic focus areas: agriculture and food security, the semiconductor industry, and the venture capital ecosystem. Our crops goal is to promote nationwide food security by supporting novel agribusinesses. We want to advance Malaysia’s reputation internationally by moving away from simple production to more sophisticated production processes like chip design and difficult presentation. Through our walk money efforts, we are cultivating an ecology that encourages innovation, creativity, and risk-taking”.

” These proper investments aim to gain significant long-term worth while contributing to Malaysia’s economic growth. By focusing on these businesses, KWAP is positioned to drive technology, create high-skilled career, and help sustainable economic growth, benefiting our partners and reinforcing KWAP’s function as a vital institutional investor in Malaysia’s financial landscape”, she concluded.

As part of the Gear-uP initiative led by the Ministry of Finance, KWAP has committed to allocating US$ 9.7 billion ( RM40 billion ) to Malaysia’s private sector, contributing to the collective US$ 29.1 billion ( RM120 billion ) pledged by six major GLICs.

Employees Provident Fund ( EPF ) CEO Ahmad Zulqarnain Onn stated that the company’s reallocation into domestic direct investments supports our national strategy for sustainable growth while remaining compliant with the broader national agenda for sustainable growth. A significant portion may be directed towards infrastructure projects, including clean energy, data centres, and critical transportation centers like airports and burden roads —sectors necessary to Malaysia’s long-term growth. As we anticipate the growing demands of an aging population, our health is also at the forefront of our strategy to ensure our investments deliver long-term value while ensuring our mission is to provide a secure and dignified retirement for Malaysians.

Khazanah Nasional’s managing director, Amirul Feisal Wan Zahir, stated that the company will continue to leverage its strategic position to deploy capital across the continuum of capital, starting with the National Fund-of-Funds initiative and pursuing initiatives for Mid-Tier Companies and efforts in the semiconductor sector. Khazanah’s ‘ A Nation that Creates ‘ framework will focus on boosting national productivity through investments in productivity, innovation, and business transformation. We will prioritise connectivity, energy transition, and digitalisation to raise the ceiling for all Malaysians”.

He continued,” To raise the floor, we will concentrate on sustainable economic development with an emphasis on capacity building through talent upskilling and reskilling to align with global megatrends.”

Lembaga Tabung Angkatan Tentera ( LTAT ), the company’s CEO Ashraf Radzi, emphasized LTAT’s commitment to strengthening Malaysia’s pharmaceutical value chain by promoting local biopharmaceutical production through its investee company, Pharmaniaga Berhad.

” This strategic focus aims to lower import dependence and ensure the supply of crucial pharmaceutical products, while enhancing public access to essential healthcare. He continued,” Investing in the domestic pharmaceutical sector contributes to the creation of a self-sustaining healthcare supply chain that benefits Malaysians and adds value to the national economy.”

Click here for more information on the MOF-led Gear-uP programme.

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Money Talks Podcast: ‘Radical ideas’ needed to revitalise the Singapore stock market

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Here’s an extract from the talk: &nbsp,

Andrea Heng:
When it comes to what is listed on the SGX, the financial organizations are highly favored by Taiwanese investors. Some analysts now claim that the SGX lacks variety, making it safer than other markets. This seems to be a little contradictory. If it’s secure and safe, how does the lack of diversity actually hamper us more than make us happy? &nbsp,

Yang Eu Jin: &nbsp,
We’re certainly a very different business. Surely in terms of the value of the stocks, we have around 600 over listed firms. Of course, they come from a variety of businesses, but many of them are pretty small. In the financial industry, the big boys are therefore three. Yes, we are a healthy industry, and we are a steady business. ( If you ) compare us to virtually any other market out there, we are a lot more stable. &nbsp,
 
Andrea:
But are we boring? &nbsp,

Eu Jin: &nbsp,
Sure we are, but that’s not a terrible thing. There is an investment firm whose motto is” Be boring, make money”. &nbsp,

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Julapun pushes for talks on casino complex plan

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PUBLISHED: 1 Oct 2024 at 06: 02

Deputy Finance Minister Julapun Amornvivat
Deputy Finance Minister Julapun Amornvivat

Julapun Amornvivat, deputy finance minister, is contacting all related state agencies to talk about the government’s plan to allow casinos to be located in pleasure complexes.

He anticipates that the conversation will be over by the middle of the month.

He stated that the debate may concentrate on the method for collecting taxes because the State Fiscal and Financial Disciplines Act has requirements that the government may follow.

The work specifies that duty variety is the duty of the Customs, Revenues, and Excise agencies under the Finance Ministry. As for, the process cannot be delegated to a separate council, as the House had proposed before.

When asked about the House’s recommendation to establish a new account to assist people who have gambling problems, Mr. Julapun claimed the ministry would need to hold more discussions because existing laws forbid a ministry or agency to establish a superfluous fund.

Mr. Julapun stated that all private investors who want to join can participate in the entertainment complex task.

As such, when the leisure complex act gets the House’s authorization, the government may first develop obvious rules to control the business, he said, noting that this process could take a long time to finish.

He claimed that if big entertainment companies like Walt Disney and Universal Studios establish a reputation in the country once the bill is approved, they are encouraged to do so as long as they adhere to the strict rules in a transparent manner.

” We need to thoroughly examine the job to avoid negative effects on the economy and society,” he said.

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Cause to buy, cause to sell China’s new bull market – Asia Times

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As Beijing’s signal campaign sends China stocks skyrocketing, matter analyst Stephen Jen&nbsp, among the bull who think China’s biggest protest since 2008 is just getting started.

” Foreign equities&nbsp, are really devalued”, says Jen, the chief executive officer of Eurizon SLJ. Because “investors are so thin everything Taiwanese”, he notes,” a severe rally is entirely feasible”.

Chinese shares rose for a ninth straight day on Monday ( September 30 ) thanks to China’s bold moves last week to slash interest rates, lower mortgage rates, relax regulations for homebuyers in major cities, reduce the amount of cash banks must keep in reserve, and telegraphed moves of stimulus to come.

Today’s wave by as much as 9.1 % in the standard CSI 300 Catalog is the biggest since 2015, a month drenched in relevance for President Xi Jinping’s state. In July and August 2015, Shanghai shares plunged to a third of their worth in just three months.

Fast-forward to the present, the People’s Bank of China’s ( PBOC ) actions, coupled with the US Federal Reserve’s big easing and falling global oil prices, mean China’s risk assets “ought to do very well”, Jen says. ” After the US vote, I expect world stocks to march profoundly into year-end”, he adds.

No so fast, warns Stephen Roach, past Asia-region chair for Morgan Stanley. Is China’s long-term financial problem over now that the Politburo has issued a message of further emergency meetings, asks economist Roach? If it were only that easy”.

Roach remains “increasingly concerned that China was at risk of falling into a&nbsp, Japanese-like quagmire&nbsp, –&nbsp, a&nbsp, balance strip recession&nbsp, characterized by slowdown and depreciation as an extension of the bursting of a big debt-fueled property bubble”.

Matter Roach among the academics wondering what, oh what, the share bulls rushing China’s means are thinking.

In fact, investors are rushing up into everything China without project plans to restore the still troubled real estate market, rebalance growth engines toward services and apart from exports, enhance local governments ‘ struggling balance sheets, and create strong safety nets to encourage China’s families to save less and spend more.

President Xi’s staff should be focused on the gap between those reversing China little posts, which Bank of America Corp discovered was one of the most crowded industry in the world, and the unrelenting China bears if it wants to keep the bulls work going.

That means entering the march with bold plans to carry out the liberalizing measures his Communist Party has promised to do since 2013 but has failed to deliver.

For today, China’s rapid return to economic stimulus setting has the nation’s attention. However, Zhiwei Zhang, an economist at Pinpoint Asset Management, is right to say that” the key policy to address the macro challenge remains to be fiscal.

In order to help China meet its 5 % economic growth target, local media are buzzing about an additional 2 trillion yuan ( US$ 285 ) worth of bond sales. Much more may be needed, nevertheless, to improve poor household demand and offset headwinds from overseas.

Japan’s increase in interest rates to their highest level since 2008 poses a risk to other countries. Another shows signs of strain in the US economy as a contentious election draws near, with both Democrats and Republicans threatening new tariffs on everything made in China.

Last week, PBOC Governor&nbsp, Pan Gongsheng&nbsp, unveiled a barrage of support measures, including a reduction in the seven-day reverse repurchase rate to 1.5 % from 1.7 %. Additionally, the PBOC announced the largest-ever rate reduction for its one-year policy loans, cutting loan prime rates and deposit rates.

The Politburo, Beijing’s top decision-making body, called for a “forceful” implementation of these and other measures supposedly to come. Additionally, it highlighted a new need to” stop declining” the real estate market.

These efforts might include removing some of the restrictions on home purchases that are still in place. Top cities could impose restrictions on visitors who are not from their own neighborhoods. In other words, liberalizing China’s “hukou” residence permit system.

Beijing has n’t yet provided a detailed timeline or procedure for getting bad assets off the balance sheets of large property developers to lessen their default risks. Or to encourage local governments to purchase unfinished real estate projects without further deteriorating their already fragile fiscal standing.

Premier Xi Qiang’s team has also made significant efforts to make more market space available for small and medium-sized private companies by reducing the dominance of state-owned enterprises. And global investors still are n’t clear on the state of Xi’s crackdown on China’s biggest tech companies.

Roach is one of the people who is concerned that last week’s Politburo statement only “paid lip service to fiscal stimulus imperatives,” even on fiscal issues. These actions were more likely to be viewed as broad promises than as a comprehensive list of planned actions.

Roach points out that while the Politburo vowed to stop the housing market’s decline, policy choices were made in support of this goal, primarily through lower mortgage rates, downpayment requirements for second homes, and lower interest rates on so-called social housing.

Roach remarks that the long-awaited fiscal program, which would absorb the surplus of unsold homes and turn it into low-income public housing, had a notable lack of detail.

China continues to be wary of implementing the kind of fiscal bazooka that was so successful in sparkeding its recovery in 2009-10, like Japan, where fiscal actions in the 1990s were repeatedly strained by rising public sector indebtedness. And perhaps that’s with good reason”, he says.

Roach points out that the Chinese government’s debt-to-gross domestic product ratio was 85 % in early 2024, nearly three times what it was in 2009. Following Lehman Brothers ‘ demise in the US, Beijing finally started using the stimulus apparatus.

It’s imperative, though, that Team Xi do more to deal with investors ‘ underlying concerns about China’s financial system than just throw money at the problem, economists say.

Last week, the PBOC cheered stock punters by unveiling a new 500 billion yuan ($ 71 billion ) swap facility that funds, securities firms and insurance companies can tap to buy equities. The facility could be increased to 1.5 trillion yuan ($ 214 billion ).

Beijing is also introducing a lending facility for publicly traded companies to buy back shares and increase holdings. It will start at 300 billion yuan ($ 42 billion ) and possibly grow to 900 billion yuan ($ 128 billion ). Additionally, a type of market stabilization fund might be in the works.

Last week, Wu Qing, the chairman of China Securities Regulatory Commission, said Beijing will roll out moves to encourage mergers and acquisitions.

With all that, there’s little doubt the stimulus floodgates have been opened. We believe that the persistent growth weakness has hit policymakers ‘ pain threshold, and the policy put has been triggered, as Goldman Sachs analysts wrote in a note.

Yet Team Xi needs to combine supply-side actions to further strengthen China’s investment environment for the long run to ensure the bull run continues.

As Roach explains, comparisons with Japan are far from perfect. There are many characteristics of China that are fundamentally different from those that contributed to Japan’s numerous “lost decades,” he claims.

” Other than being a large developing economy with several still untapped sources of future growth– namely, &nbsp, household consumption, urbanization, and&nbsp, insufficient capital endowment&nbsp, of its large workforce – China also benefits from understanding the lessons of Japan”.

For now, Roach admits,” China’s seemingly outsized policy stimulus took most of us by surprise”. He adds that” the financial authorities apparently came to the rescue with their own version of a “big bazooka” just as we had grownaccustomed to Beijing’s grudging response to increasingly serious economic problems. ‘&nbsp, At least that’s the verdict of the Chinese equity market”.

Follow William Pesek on X at @WilliamPesek

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China wakes, US builds, woke wanes and tariffs tally – Asia Times

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Your weekly, almost weekly Noahpinion collection of intriguing news from around the world is now in order.

1. China accepts the fact of the economic system.

I made the argument two weeks ago that China is experiencing a lack of global demand, and that the answer would be to have the central authorities A) loan out banks and local government funding entities, and B) apply fiscal and monetary stimulus. Maybe Xi Jinping reads my site. China is implementing some more significant signal steps:

In a unique staged media briefing broadcast live around the world on Tuesday, the People’s Bank of China led the charge to rekindle mood, opening its stock market and lowering borrowing costs. The next day it kept the good news flowing by&nbsp, lowering&nbsp, the interest rate on its one-year money to lenders by the most on history, while the government issued exceptional cash pamphlets and floated new incentives for some homeless graduates…

The 24-man Politburo under the leadership of Xi made a second-quarter-of-a-kind promise on Thursday, adding more growth-boosting goodies, vowing to increase governmental spending, and making its first “declining” pledge to prevent property prices. The wave of policy announcements even revealed a new emphasis on boosting use, saying it was “necessary to listen to the concerns of the people.”…

Foreign companies soon soared. Xi’s state appears to be attempting to bail out the Chinese banking system, which is even more encouraging ( at least if you want China to keep growing ):

China’s largest state lenders may receive up to 1 trillion yuan ( US$ 142 billion ) of money to strengthen their capacity to support the country’s struggling economy. Such a move would be the first moment since the global financial crisis in 2008 that Beijing has injected money into its large businesses.

Injecting money refers to “giving businesses money,” for those who are unfamiliar. It implies a loan.

This is probably even more important than trigger, since getting banks lending once is the key to a sustained recovery. Foreign supporters have long held that the state and banks are one and the same because of the “unitary position” principle, which is applied to the “unitary state” concept.

That concept is probably incorrect. Foreign banks have their own subsidies, and fear getting culled by the state if they fail. Giving them a cushion against loss by injecting them with money helps them gain the confidence to give again.

The last step in this process would be to rescue China’s regional government financing systems, which have grown to be very significant in China’s regional economies. But only bailing out the banks and doing some significant fiscal and monetary stimulus may have a huge impact in terms of shortening and ameliorating China’s recession.

2. The “build something country”

US economic policy has been shifting toward industrial policy. A number of commentators who are opposed to this change have been quick to dismiss the entire endeavor as a result of seeing any signs of trouble. For instance, Matt Cole and Chris Nicholson wrote an op-ed in The Hill in March of this year that was so explosively titled” DE I killed the CHIPS Act.”

Their single piece of evidence for this bold thesis was that TSMC’s fab in Arizona was projected to have significant delays due to a dispute with local construction unions.

In fact, the labor dispute it referenced had already been resolved even before that disparaging op-ed was published. And just one month after the op-ed was published, TSMC was given the official receipt of its CHIPS Act funding and suddenly declared that its Arizona project was on schedule.

Now, less than six months later, &nbsp, Tim Culpan reports&nbsp, that TSMC’s Arizona plant has started making some chips for Apple. They’re producing a fairly advanced chip, and they’re reportedly producing good yields:

The A16 SoC from Apple, which debuted in the&nbsp, iPhone 14 Pro, was first introduced two years ago in the&nbsp, iPhone 14 Pro, and is currently being produced in small, but significant quantities at TSMC’s Fab 21 in Arizona. This puts the Arizona project on track to reach its&nbsp, production target in the first half of 2025.

This is a BFD. The US government’s$ 39 billion CHIPS for America Fund is the star project under the CHIPS Act. The fact that they chose the most advanced chip in terms of both volume and technology shows that Apple and TSMC want to start big…

Currently, TSMC produces yields in Arizona that are, in essence, neck and neck, slightly below what is enjoyed in Taiwan back home. Most important, though, is that improvements are moving so rapidly that true yield parity between Taiwan and Arizona is expected to be reached in coming months.

Everyone has egg on their face now that everyone leaped at the chance to call the CHIPS Act a failure after the initial delay report.

In addition, the Inflation Reduction Act, Biden’s other significant piece of industrial policy legislation, appears to be giving US solar manufacturing a significant boost. Solar manufacturers are &nbsp, ramping up production, and the US is getting the ability to build the pieces of the solar supply chain that it had previously outsourced entirely to China and other countries:

Source: Jesse Peltan &nbsp

Although this is still insignificant in comparison to what China can produce, it means that if a war breaks out, the US will not be able to use solar power.

Note that both the successes in chips and solar are cases where the private sector made most of the investment itself, and the US government simply&nbsp, prompted&nbsp, that investment with subsidies.

This contrasts starkly with the US government’s promise to build things itself, and which was stymied by its lack of state funding and its own byzantine permitting process.

A big lesson to be learned from this is that Matt Yglesias is correct, and that the US government has willfully squandered a lot of its state funding since the 1970s. Therefore, the most effective industrial policy, at least right now, is for government to act as the spur for the private sector to invest its own money.

The even more important lesson is that knee-jerk critics of industrial policy need to be a little more prudent and circumspective, or else they’ll keep coming off as silly when industrial policy succeeds. We need intelligent, thoughtful critics who can identify the problems, challenges, and drawbacks that are bound to be found in industrial policy. People who simply pounce on any whiff of difficulty are unhelpful.

3. Justifications for tariffs

The US government is becoming more hostile to Chinese imports all the time. The “de minimis” exemption, which allows Chinese companies like Temu and Shein to send Americans small, inexpensive packages without paying tariffs, has recently been made public by Biden. Additionally, Biden’s administration is putting a ban on Chinese components in any cars that are connected to the internet to prevent potential sabotage, considering an outright ban.

Meanwhile, Trump is going around promising tariffs, tariffs, and&nbsp, more tariffs&nbsp, as the solution to a variety of economic ills ( or just because&nbsp, he really likes tariffs ). Some people are talking about it, but this is not the election’s most important policy issue.

For instance, Kim Clausing, an economist, contends that the US should cut down on tax havens by reducing the incentive for offshoring in favor of tariffs. But I think that while this is a laudable move, it would n’t really do much vis-a-vis China, because China is not a tax haven. The reason Democrats have been favoring tariffs on China, which is&nbsp, national security, is really missing from Clausing’s proposal.

Meanwhile, Oren Cass has a post at the Atlantic in which he makes a general case for tariffs as a useful policy tool. Some excerpts:

[Economists ‘] first error is to only take into account the costs of tariffs, and not the benefits… [ D] omestic production has value beyond what market prices reflect… [ D] tarifs [d ] omestic production has value… to the extent that they combat those harms, they accordingly bring collective benefits…

Manufacturing does matter, as the effects of globalization have shown. It matters for national security, ensuring both the&nbsp, resilience of supply chains&nbsp, and the&nbsp, capacity of the defense-industrial base. It also has a significant impact on growth…

Manufacturing is the engine of innovation. As the McKinsey Global Institute has &nbsp, noted, the manufacturing sector plays an outsize role in private research spending. Complete supply chains and engineering expertise are followed when offshore manufacturing heads. Firms and workers positioned near the factory floor and close to competitors, suppliers, and customers benefit from the tight feedback loop between design and production, which is necessary for improvements in both.

Cass also argues that the harms from tariffs will be limited when foreign companies circumvent the tariffs by building their products in the US. Additionally, he makes note that tariffs do generate more tax revenue.

You’ll hear me saying similar things when I defend industrial policy because all of these arguments are reasonable. But there are two questions here that Cass does n’t really address.

First of all, I believe Cass has largely identified real externalities, but that does n’t imply that tariffs are the most efficient policy tool for addressing those externalities. &nbsp,

Tariffs ‘ effects are limited&nbsp, by exchange rate adjustment — when you put tariffs on China, the yuan gets cheaper, partially negating the effect of the tariff. Additionally, tariffs on intermediate goods actually exacerbate many of the externalities Cass discusses by preventing domestic manufacturers from receiving affordable inputs for their production processes. For national security reasons, it might be a cost that is worthwhile to pay, but it is a real cost.

And second, Cass ‘&nbsp, general&nbsp, defense of tariffs ignores many of the real, specifc features of Trump’s tariff proposals. Trump would impose tariffs on US allies rather than strengthen national security because it would stifle competition on both sides and prevent them from achieving economies of scale. Additionally, it would strain both sides ‘ defense-industrial bases.

So on both sides of the tariff debate, I still see too much debate about ideal policies, and not enough engagement with the specific policies being enacted or proposed. That said, I think the debate has significantly improved since it was a few years ago, which is good. I always want to see more of Clausing and Cass ‘ arguments made in a reasonable way rather than yell at ideological positions.

4. The onset of fatigue

The inert coagulum of a once highly reactive sap is the conservatism of a religion — its orthodoxy. — Eric Hoffer

Let’s talk about wokeness as long as we’re on the subject of identity politics from the year 2010. I wrote a number of posts about this sociocultural phenomenon back in 2021 and this one is the one I summarized here.

My basic thesis is that wokeness is a Protestant-derived American belief system and social phenomenon that has been around since before the founding of the United States, and that it periodically resurfaces for a while when technological and economic changes allow.

And my fundamental prediction is that after the efflorescence of the 2010s, wokeness will fade into a waxy orthodoxy, ruling a shrinking number of university administrations, school boards, and online communities, before reappearing on the scene many decades from now.

Musa al-Gharbi wrote a great post last year that pulled together various data sources to show that the” Great Awakening” of the 2010s is waning. Now The Economist has &nbsp, a similar post, with different data sources. Several examples are provided:

[ D] discussion and support for woke views reached their peak in America in the early 2020s and have since declined significantly… Almost everywhere we looked, a similar trend emerged: wokeness increased sharply in 2015 as Donald Trump entered the political fray, increased in the aftermath of# MeToo and Black Lives Matter, reached its highest point in 2021-22, and has since decreased…

In the most recent Gallup data, from earlier this year, 35 % of people said they worried” a great deal” about race relations, down from a peak of 48 % in 2021 but up from 17 % in 2014…In]General Social Survey ] data the view that discrimination is the main reason for differences in outcomes between races peaked in 2021 and fell…in 2022. Young people and those on the left have experienced some of the biggest rises and subsequent declines in woke thinking…

The share of Americans who view sexism as a serious issue or a moderately serious issue reached a record high of 70 % in 2018….

Pew finds that the share of people who believe someone can be a different sex from the one of their birth has fallen steadily since 2017, when it first asked the question. According to YouGov, the proportion of trans people who play for sports teams that match their chosen gender rather than their biological sex has increased from 53 % in 2022 to 61 % in 2024.

The use of the term” white privilege” in television reached its highest level in 2021, appearing roughly 2.5 times for every million words in the New York Times and The Times in 2020…

Mentions of DEI in earnings calls shot up almost five-fold between the first and third quarters of 2020…They peaked in the second quarter of 2021…They have since begun to drop sharply again…The number of people employed in DEI has fallen in the past few years.

This corresponds to my 2021 forecasts. And if I’m correct, this pattern will continue over the coming years, even as conservatives continue to find and highlight instances of wokeness in mainstream culture, including academia, and other progressive areas. Wokeness is an orthodoxy now, and orthodoxies are n’t fun and cool anymore.

However, wokeness is not particularly optimized for being a conservative set of rules and traditions, but rather for being a charismatic activist movement. So I anticipate that its decline will be quick, up until, of course, it resurrects. But that will be when you and I are very old or dead.

5. Unions versus automation

It’s very hard to be a pro-union pundit when&nbsp, unions make demands like this one:

About 45, 000 dockworkers along the US East and Gulf Coasts are threatening to strike on October 1st, a move that would shut down ports that handle about half the nation’s cargo from ships…

The International Longshoremen’s Union wants to see a total ban on automation of cranes, gates, and container movements used in 36 US ports…

A prolonged strike would almost certainly hurt the US economy. The union members anticipate going on their biggest fight against the automation of job functions at ports, according to Union President [ Union President ] Daggett.

We do n’t think robotics should supplant humans, he said. ” Especially a human being that’s historically performed that job”.…

According to experts, it’s unclear whether automation will cause layoffs in the Ports of Long Beach and Los Angeles, according to a study conducted by the Economic Roundtable of Los Angeles in 2022 that was funded by the West Coast dockworkers union…

However, another study conducted by a professor at the University of California, Berkeley that year, which was commissioned by port operators and shippers, found that paid hours for port union members increased by 11.2 % between 2015 and 2021, the same year.

At the huge Port of Rotterdam, one of the world’s most automated ports, union workers pushed for early-retirement packages and work-time reductions as a means to preserve jobs. And ultimately, a researcher from Erasmus University in the Netherlands discovered that mechanization did n’t lead to significant job losses.

In terms of automation, US ports outperform their counterparts in Asia and Europe. Analysts note that most US ports take longer to unload container ships than do those in Asia and Europe and suggest that without more automation, they could become even less competitive.

The prohibition of automation is only a means of destroying the goose that produces the golden eggs, ultimately causing harm to dockworkers. It also imposes a tax on the entire US economy. If you did n’t like the inflation of 2021, you should want more efficient, high-capacity automated ports. Instead of resuming self-defeating luddism, the US should emulate Rotterdam.

This shortened and reorganized article was originally published on Noah Smith’s Noahpinion&nbsp, Substack, and is now republished with kind permission. Read the original here &nbsp, and become a Noahopinion&nbsp, subscriber&nbsp, here.

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The Deep Tech goldmine: Challenges and opportunities in Malaysia’s growing ecosystem

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  • Strength of the transistor habitat provides a good foundation for the development of new capabilities
  • It is crucial to encourage designers to rise as owners in order to foster innovation.

Ir. Dr Bernard Lim, vice chairman of MBAN Penang believes that Malaysia’s existing semiconductor ecosystem offers a strategic advantage for deep tech startups, particularly those focused on hardware.

As technology evolves, Malaysia is positioning itself at the vanguard of profound software, a business promising long-term growth and innovation. But, startups and investors alike continue to face a significant problem as they try to commercialize deep systems. Ir. speaking at the monthly MBAN Forum next year. Dr Bernard Lim, vice president of MBAN Penang, highlighted the potential of serious technology, while also managing expectations for buyers.

Malaysian Business Angels Network is abbreviated as MBAN.

Understanding strong technical

Deep software, or heavy technology, is different from standard technology startups models where innovation revolves around business models and consumer-facing applications. Strong technology on the other hand, focuses on medical advances and engineering-driven options. Startups in this space work on disruptive technologies such as artificial intelligence ( AI), blockchain, biotechnology, and advanced computing, which require long research and development ( R&amp, D) cycles before delivering commercial returns.

” The gestation period is longer”, Lim emphasised. It’s not just about coming up with an idea and putting it into action. In heavy software, you need major R&amp, D, testing, prototyping, and constant elegance before even thinking about marketplace entry”.

Long birth period, large investment challenges

Deep tech’s lengthy gestational cycle and difficulty provide unique challenges. Companies in this industry usually need a few years to introduce their products. Unlike technology companies, which can run fast, deep technology solutions involve equipment development, extensive research, and stringent regulatory compliance, particularly in sectors such as healthcare and biotechnology.

Buyers, especially those expecting quick results, need to change their perspective when dealing with deep-tech companies. As Lim noted,” Do n’t expect a three-year return. You may wait five to eight times, and in health industries, it might take even more”.

This prolonged timeline, coupled with higher cash requirements, creates major barriers to entry. Investors must be persistent and have a thorough understanding of the complex industrial processes involved.

Malaysia’s place in the semiconductor business

Malaysia’s solid foundation in the silicon industry is one promising place. Since entering the world semiconductor industry in 1972, the state has grown to become the sixth-largest producer of electronics. Lim said that by 2030, the global semiconductor market could reach US$ 1 trillion globally ( RM4.21 trillion ).

Despite a momentary decline in the market following Covid-19, demand for electronic parts is expected to recover, driven by advances in high-performance technology, artificial intelligence, and consumer technology. Malaysia’s existing semiconductor ecosystem offers a strategic advantage for deep tech startups, particularly those focused on hardware.

Penang: The Silicon Valley of the East?

Penang is emerging as Malaysia’s hub for deep tech innovation. The state has for decades been at the forefront of Malaysia’s semiconductor sector, often referred to as the” Silicon Valley of the East.” With a rich pool of engineering talent and an established manufacturing infrastructure, Penang is well-positioned to lead the country’s deep tech charge said Lim.

However, challenges remain. As Lim noted, many engineers in Penang have traditionally worked in factories, focusing on production rather than entrepreneurship. ” Many engineers in Penang have spent years in factories, focusing on production, but what we need now is for them to take the leap into entrepreneurship, to lead their own startups and drive innovation in the ecosystem”. &nbsp, Encouraging these engineers to take this leap is crucial for the ecosystem’s growth, he asserts.

Collaboration and the development of the ecosystem

Another encouraging development is that Malaysia’s deep tech ecosystem is no longer limited to Penang. Selangor and Sarawak, along with projects like the Selangor IC Design Park and Sarawak’s growing interest in integrated circuit design, are also making progress. These initiatives aim to expand the nation’s capabilities in semiconductor and deep tech, encouraging cooperation among states.

Although the road to deep tech success may be difficult, Malaysia is well-positioned to capitalize on the upcoming wave of technological advancements with its expanding expertise in semiconductors and a push for innovation across multiple states. We hope to eventually imitate Silicon Valley and expand as quickly as possible. That’s our wish. And longer term, we aim to expand the deep tech ecosystem throughout Malaysia”, said Lim​.

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LitUp network, International Gateway Company sign MoU to enhance connectivity infrastructure in Asean region 

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  • MoU outlines both parties cooperation on jobs in Thailand &amp, Asean&nbsp,
  • Initiative piece of OMS Group’s US$ 300M investment in infrastructure development

Left to right - Rozaimy Rahman, managing director of LitUp Network, Pichit Satapattayanont, CEO of International Gateway Company, Richard Sun, deputy CEO of OMS Group and Supat Eamwiwat, vice president of International Gateway Company.

A Memorandum of Understanding with International Gateway Company Limited, a subsidiary of OMS Group Sdn Bhd, has been signed, which is a major step in improving Thailand’s system communication system and boosting both LitUp Network’s and International Gateway Company’s appearance in the Asean area.

In a statement, the firm confirmed that this is part of OMS Group’s US$ 300 million ( RM1.2 billion ) allocation to invest in expanding its submarine cable systems and terrestrial infrastructure. This funding will be important in supporting the proper partnership outlined in the MoU, which will enable both businesses to create cutting-edge communication solutions that meet the growing need for trustworthy online services in the area.

The MoU specifies a partnership between the two businesses to work on a variety of projects in Thailand and the Asean place, including wire docking stations and submarine wire systems. The partnership will contain the following efforts:

  • Network Connectivity Infrastructure: Develop and provide superior community communication infrastructure to support the growing need for high-speed, trusted internet services.
  • Establish and maintain submarine cable getting points, points of existence, and related equipment that are necessary for the successful implementation of the submarine cable system and landing facilities.
  • Potential Collaboration: The agreement will extend to all potential online infrastructure projects, leveraging the expertise and resources of both parties.

” We are thrilled to work with International Gateway Company on this crucial initiative. This MoU marks a significant step in our effort to strengthen Thailand’s and the region’s network infrastructure. Together, we will deliver world-class connectivity solutions that are crucial for the digital economy”, said Rozaimy Rahman, Managing Director of LitUp Network.

Our shared goal,” to advance Thailand’s connectivity landscape and expand to the ASEAN region,” is reflected in this collaboration with LitUp Network. ” We look forward to working closely with LitUp Network to provide innovative solutions that are in tune with the changing needs of the region,” said Pichit Satapattayanont, CEO of International Gateway Company.

The Satun-Hatyai-Songkhla-Rayong cable system, or” Satun-Hatyai-Songkhla-Rayong cable system,” is a new subsea cable system that LitUp Network and International Gateway Company are developing together. This will be a complement to the Hatyai and Bukit Kayu Hitam systems that are currently being developed, respectively. This strategic partnership will strengthen LitUp Network’s and International Gateway Company’s presence in Thailand and complement their wider plan to expand their presence throughout the ASEAN region. This collaboration aims to provide innovative connectivity solutions that will promote and accelerate digital transformation and promote economic growth in Thailand and beyond by combining the strengths of both businesses.

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China’s lithography gains a glass half full, not half empty – Asia Times

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As Beijing tries to become more self-sufficient in high-end chip-making products, China’s most just disclosed progress in semiconductor printing technology has received widespread suspicion. However, it makes more sense to observe China’s progress than to let competitors be complacent about how much it has to go in the critical tech field.

On semiconductor production lines, printing equipment is used to move circuit styles from the photomask (template ) to the chip. China has overcome this technical obstacle in order to establish a self-sufficient semiconductor manufacturing sector that is immune to US-led restrictions.

China’s Ministry of Industry and Information Technology ( MIIT ) announced earlier this month that it wanted Chinese chip makers to put two domestically produced lithography systems on a list of equipment.

One is a krypton fluoride ( KrF ) scanner capable of producing integrated circuits ( ICs ) with 130 nanometer ( nm ) design rules. A 65nm argon fluoride ( ArF ) scanner can produce chips in addition to the other. Details on throughput, alignment accuracy and the name of the manufacturer ( s ) were not provided.

65nm is a long way from the 28nm that China has recently targeted, and it is even further away from the 5nm it has allegedly reached using imported printing technology.

KrF and ArF refer to excimer laser light solutions with frequencies of 248nm and 193nm, both. KrF and ArF scanners are the two deep ultra-violet ( DUV) lithography systems that preceded the leading-edge extreme ultra-violet ( EUV) systems monopolized by ASML of the Netherlands. The frequency of EUV light is 13 nm.

Chinese semiconductor printing methods appear to be able to compete with older models from ASML, Nikon, and Canon. In ascending order of modern style, Canon, Nikon and ASML make most of the world’s Circuit printing techniques, with ASML extensively in the global market share result.

Canon supplies i-line and KrF printing systems to makers of less-advanced reasoning and storage chips, devices used in communications technology, power semiconductors used in electric vehicles and different applications, and Circuit presentation. The term i-line refers to a previous-generation technology that uses 365nm ultraviolet ( UV) light from mercury vapor lamps.

In the 1970s and 1990s, Canon released its first silicon printing system in Japan, and it quickly established itself in the markets for the i-line and KrF systems. Nonetheless, it never attempted EUV and failed to move to ArF at the turn of the century. Canon is currently developing a completely new systems called nanoimprint printing, which has not yet been made available for mass production.

The Japanese Ministry of International Trade in Industry ( MITI ) established the VLSI Technology Research Association (VLSI Labs ) in 1976 to create technology that could compete with the US semiconductor equipment market. Nikon was given the task of creating a system that could reduce the size of Circuit designs by ten.

Nikon, which like its colleague camera-maker Canon could render high-quality lenses but which also had detailed high-speed level positioning technology, produced a device that, in Nikon’s words, “was precise enough to reach a tennis ball with an arrow on the top of Mt Fuji all the way from Tokyo”.

The device was a step-and-repeat IC lithography system – a” stepper”, which stepped across the wafer one chip at a time, enabling higher resolution than the mask aligners they replaced.

Aligners, which use a mask that covers the entire surface of the wafer, were faster than the first steppers, but they were unable to keep up with Moore’s Law, which states that the number of transistors on an integrated circuit doubles every two years.

Nikon delivered a prototype in 1978 and shipped its first stepper for commercial use in 1980, a machine with one micrometer ( one micron, or 1, 000nm ) resolution and highly accurate alignment. In 1982, the first shipment to the US was made. By the end of the 1980s, mask aligners and the American companies that made them, Perkin-Elmer and GCA, had been largely displaced by Japanese steppers.

In the 1990s, steppers were replaced by step-and-scan systems– scanners, which expose only part of the mask as they move. A smaller lens was created as a result, which reduced both aberrations and cost while boosting resolution.

The history of Nikon’s product introduction shows the rate of progress:

1984: first i-line stepper ( 800nm resolution )

1988: first KrF stepper ( 500nm )

1994: i-line stepper ( 350nm )

1998: KrF scanner ( 180nm )

1999: first ArF scanner ( 180nm, reduced to 110nm the same year )

2004: ArF scanner ( 65nm )

The more developed of the two lithography systems announced by China’s MIIT this month appears to be comparable to those made by Nikon 20 years ago.

An ArF immersion scanner was created by Nikon in 2005 for mass production at 55 nm, with the first unit arriving in January 2006. In immersion lithography, the gap between the lens and the wafer is filled with water, which has a higher refractive index than air ( i .e., higher than 1.0), allowing for the creation of smaller features on the wafer. This method was also employed in the creation of 45 nm devices.

The most recent Nikon ArF immersion scanner’s resolution was 38 nm, which is as low as it goes according to the published specs. By 2012, that is down to. This machine had the ability to generate double-patterned ICs at 22 nm.

By 2024, Nikon was talking about meeting 5nm requirements with multiple patterning. Lam Research, a US manufacturer of semiconductor etching equipment, explains multiple patterning as follows:

” For decades, one of the major trends in electronics has been miniaturization, which has helped pack in more functionality, extend battery life, and lower production costs per chip. Up until recently, the semiconductor industry was able to scale lithography capabilities to shrink integrated circuit ( IC ) feature dimensions in response to consumer demands for smaller, more powerful products.

Although this method has been successfully employed for many years, modern, more advanced chip designs have smaller and denser features that necessitate going beyond the conventional lithography wavelength’s. Advanced patterning techniques are used to overlay multiple patterns of larger dimensions on these chips to achieve smaller and/or more tightly packed features. The most fundamental pattern pattern used is double patterning, which increases feature density by twofold.

Multiple patterning explains how Chinese semiconductor manufacturers can use ArF immersion systems purchased from Nikon or, more likely, ASML to create chips at the 7nm or even the 5nm process node, for example, the processors for the newest Huawei smartphones. The effective limiting for DUV lithography for commercial use is 5 nm.

ASML was founded in 1984. It played catch-up for 20 years, but in 2003 it released the first TWINSCAN ArF immersion scanner, a dual-stage system that exposed one wafer while the next wafer was being measured and aligned to achieve higher throughput and accuracy.

In terms of the value of systems sold, ASML overtook Canon and Nikon and then took an unsurmountable lead, with its market share for IC lithography increasing from less than 30 % in 2001 to more than 80 % in 2023.

In 2010, ASML shipped the first EUV scanner. By 2016, it was shipping batches of high-volume production machines. EUV lithography currently permits mass production at 3 nm, with the anticipated arrival of 2 nm soon and 1 nm by the tenth century.

ASML’s market dominance of the IC lithography market’s high end is apparent in its most recent sales figures: In the three months to June 2024, ASML sold eight EUV, 32 ArF immersion, 11 ArF dry, 33 KrF and 16 i-line lithography systems.

Nikon, which sold only four i-line systems in the three months to June due to the timing of deliveries, expects to sell five ArF immersion, six ArF dry, two KrF and 22 i-line systems in the year to March 2025– i. e., fewer ArF and KrF machines in a year than ASML shipped last quarter.

In the three months to June, Canon sold 10 KrF and 50 i-line systems, and it anticipates selling 54 KrF and 190 i-line systems in the year to December. In mature technologies, Canon is a high-quality, high-volume competitor for the Chinese, a challenging benchmark that is not subject to sanctions.

SMEE ( Shanghai Micro Electronics Equipment Co) is China’s leading producer of IC lithography equipment. Founded in 2002, SMEE has developed lithography systems for front-end IC manufacturing and back-end IC packaging, power semiconductors, LEDs ( light-emitting diodes ), MEMS ( micro electro-mechanical systems ) and FPDs ( flat panel displays ).

FPD lithography equipment is primarily produced by Nikon and Canon, which are the main manufacturers of which ASML does n’t produce and which are not regulated by the US.

SMEE makes ArF scanners capable of producing ICs with 280nm, 110nm, 90nm and now, probably, 65nm design rules – which means that SMEE is probably the manufacturer of the lithography systems currently being promoted by China’s MIIT.

Since at least 2020, SMEE has been working on immersion lithography. However, it is premature to say whether a system that can produce ICs at the 28nm process node is either nearing completion or has been successfully developed.

In April of this year, reports indicated that another Chinese company, Naura Technology, had launched a lithography R&amp, D project using a technology called self-aligning quadruple patterning, but this has not been confirmed. According to DigiTimes, Nikon is” closely monitoring Naura, which produces etching and deposition equipment capable of 28nm production.

It’s possible that Naura is also developing the technology, but SMEE has probably found 28nm-capable lithography systems to be very challenging to produce. There is no way they would be able to accomplish it, and smaller resolutions almost certainly will follow. SMEE is reportedly working on EUV.

Now that the US has pressured the Netherlands to stop providing services to Chinese customers, the Chinese are feeling more urgent.

Although how successful this new sanction will be, how effective it will be will remain to be seen, it gives the Chinese an additional incentive to make more efforts to replace imported equipment.

Follow this writer on&nbsp, X: @ScottFo83517667

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