Wednesday, October 20, 2010

Hardware in politics

Barack Obama and I have at least one thing in common, we both like to read ForeignPolicy and Sports Illustrated.  I usually don't find much hardware news in my foreign policy morning brief (a blog title makes me feel real important), but today I find that China has stopped exporting rare earth elements to the U.S. which are required for the manufacture of all of our favorite technologies (cell phones, fiber optic Internet backbone, etc.), which until recently China has been providing to the entire world (95% global supply).

Undeterred, Intel has announced it's first 22nm fab will be located in the U.S., which will cost something like $8B, a surprising move in some respects since historically most of Intel's fabs are outside the U.S. in places like Israel, Malaysia, and Costa Rica.  The increasing cost of new fabs (yes really, $8B!) has necessarily created a consolidation in the semiconductor industry, with only one player (Intel) capable of production at 32nm (or better) for about 10 months, and previously competitive companies are coming together to prevent falling further behind.  In fact it is quite arguable that "half nodes" like 40nm and 28nm are an admission that the traditional nodes cannot be delivered in lock step with Intel, and the missing months are costly. All this leads to the conclusion that, with the possibility of escalating trade wars, a state-of-the-art domestic fab is of key strategic importance.

In response to China's increasing dependence on imported computers, the Chinese national processor "Godson" was developed, and can be fabricated by STMicroelectronics within China's borders.  With respect to placing a lower bound on the processor performance that can be achieved without imports, Godson could be considered a huge success and a security blanket of sorts.  Intellectual property issues did arise early in Godson's development due to using an instruction set based on MIPS but without the patented instructions.  Licensing agreements were eventually worked out with MIPS technologies (founded in the U.S.), which were arguably unnecessary but certainly put a stop to any ongoing controversy.

It will be interesting to find out how the world responds to China's reluctance to export rare earth elements, and where future fabs and processor architectures will emerge in the context of their increasing political importance...

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