ChinAI #98: Techlore - The Historical Rise of TSMC & Samsung in Semiconductors
Plus, the Trump admin's continued efforts to undermine US supply of AI talent
Greetings from a land where the residents ask “What Were Sports?...
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***I added some quick housekeeping edits to last week’s issue based on feedback from readers. The end of last week’s newsletter now has a “6.14.20 NOTE: This post was edited to adjust 1) a typo in GPT-3’s number of parameters, 2) the translated article’s title, and 3) a distinction between hyperparameters vs. parameters.” This will be standard operating procedure from now on. Since ChinAI issues are being cited in reports and academic writing, I want to maintain a more accountable system of editing. Thanks to Sören, Karson, and Max for pointing these out.
Feature Translation: TSMC at the head of history’s tide: two high walls (US & China) and one sharp knife (Samsung)
This week’s feature translation is a joint work with Joy Dantong Ma, who pitched this epic piece. My term for these types of pieces is “techlore:” longform pieces that read, at times, like epic poems in which the heroes (tech company leaders) wage battle over the commanding heights of the economy. “Development Bloggers” or the “Industrial Party,” usually people who have experience working in the tech industry and espouse techno-nationalist views, are emerging as a formidable force in Chinese media and the semiconductor industry is especially fertile ground for techlore.
Previously, ChinAI has featured techlore articles by other “development bloggers,” such as Boss Dai and Saidong (“development bloggers”), on the history and prospects of the mainland’s semiconductor industry. This week, we turn our attention to an article edited by Boss Dai on the historical rise of TSMC, the dominant Taiwanese company in control of critical components of the semiconductor chain.
All credit goes to Joy on flagging this piece. We previously worked together on a ChinAI project at MacroPolo/Paulson Institute back in 2018, where she led digital product development. Nowadays she works as a data scientist in Chicago, while continuing to write her observations on the AI industry and its implications for bilateral relations. Below is our analysis and summary of this TSMC-inspired techlore:
***If you’ve been meaning to subscribe for a while but haven’t gotten around to it, please do so. These longform articles take a lot of effort. The full translation is 23 pages and 6000+ words in English, and I want to establish a norm in this space that translation work is valued and compensated fairly. So please subscribe here to help support and more generously compensate contributors like Joy***
Let’s start with just an incredible passage from the last part of the article on TSMC’s Nightingale Army, which was an initiative to keep pace with Samsung. It’s the perfect embodiment of this techlore-style of writing: “The company assembled an unprecedented R&D team in the industry: the Nightingale Army - a team that worked at night. TSMC learned from Foxconn assembly line and built a three-shift R&D department to ensure 24-hour uninterrupted R&D. Nightingale's salary was much higher than assembly workers or regular R&D personnel - 30% increase in base salary and 50% in dividend. Attracted by the rewards, before long the Nightingale quickly gathered more than 400 people. Because staying up late harms the liver, the nightingale model is also called "liver buster.” A few sayings started to spread in Taiwan, “100,000 young people, 100,000 livers”, “the tougher the liver, the more money." In 2014, the total annual working hours of Taiwanese laborers was 2135 hours, far exceeding the rest of the world. When Intel was defeated by TSMC’s technology in 2017, some Intel employees went to TSMC to figure out why, and the answer was: you snooze you lose; you’ve been sleeping too much for too long.
Five part structure for the full essay: 1. TSMC’s rise to its central position in the semiconductor industry; 2) Samsung’s challenge; 3) Apple’s support for TSMC against Samsung; 4) Samsung poaches a key TSMC talent and gains a technical advantage ; 5) TSMC’s counterattack
Re: TSMC’s rise: Yes, TSMC benefited greatly from U.S.-educated/trained returnees (including the founder Morris Chang who was the No.3 at Texas Instruments), U.S.-licensed technology, and large sales orders from U.S. chip companies BUT ALSO the U.S. semiconductor industry benefited greatly from TSMC’s growth: many of today’s giants Qualcomm, NVIDIA, Marvell etc. were startups that rode the wave of TSMC’s fast growth
The best example of this is a story about how Nvidia, still a small company, called upon TSMC for an urgent order of wafers. This partnership helped Nvidia gain a stake in the market, and its CEO Jensen Huang commemorated his initial call with Morris Chang in a comic (image in full translation)
Unlike the current two-player game/zero-sum thinking that pervades Washington, the dominance of TSMC and Samsung, a Taiwanese company and Korean company bears out the complicated, cross-cutting alliances in the semiconductor industry. Behind the TSMC-Samsung rivalry is an invisible force from across the Pacific: American IT giants such as Apple and Qualcomm. Their ever-shifting support for TSMC and Samsung decided the outcome, on multiple occasions, of this ongoing battle, maintaining a balance between the two and thus avoiding any technology hegemony.
It’s hard to summarize much more without just telling you to read the ful translation. Here’s a sneak preview of some interesting details you’ll find: the difficulties TSMC faces in maintaining neutrality b/t US and China; movement of key TSMC talents to the mainland; story of how Samsung’s chairman Lee Kun-hee tried to poach TSMC founder Morris Chang for Samsung’s semiconductor division two years after TSMC was established; how 1987 revelations of Toshiba’s private sale of milling machines to the Soviet Union triggered a 301 investigation into Japanese semiconductors (a key opportunity for Samsung); a lot of intrigue re: talent poaching and key technical breakthroughs
FULL TRANSLATION: TSMC at the head of history’s tide: two high walls and one sharp knife
ChinAI (Four to Forward)
Must-read: MacroPolo’s Global AI Talent Tracker
Great to see Matt Sheehan and Ishan Banerjee’s really essential work on the technoglobal flows of AI research talent based off of papers at NeurIPs 2019 (the premier AI/ML conference). For its article on the release of this tracker, the NYT graphics team produced the following image, which summarizes the findings well:
This is what I told Paul Mozur in his reporting for this story:
The thread goes through some of her research, an impressive blend of econometrics and economic history, which shows that keeping out foreign scientists and students just hurts the overall U.S. innovation system.
Should-read: Jay Kang on Tou Thao, the Hmong cop who stood by, and the Myths of Asian American Solidarity
I first started reading Jay’s work when he was at Grantland (RIP) and have been reading it ever since. For The Time to Say Goodbye newsletter, his distinctive take on Asian-Americans “calling out” anti-blackness in our communities“It shouldn’t surprise anyone that these declarations almost always come from elite-educated, upwardly mobile East Asians and they’re almost always directed at poorer, or, at the very least, less genteel immigrants, whether nail salon workers, beauty shop owners, or, in this case, a Hmong-American policeman. There is almost no overlap between these groups. They might each have representatives at a summit or panel discussion in an academic setting, but Hmongs and other poorer Asian groups really only become “Asian American” when they fuck up and do something racist, or when they unexpectedly do something that falls in line with the sort of elite multiculturalism promoted by the professional “Asian-Americans.”
Should-read: ASPI Report on the CCP’s United Front system
By Alex Joske, this detailed report examines the united front (UF) system, a network of Chinese party and govt agencies that is increasingly trying to influence diaspora communities, MNCs, and foreign political parties. The technology transfer section is a little light (understandable, as ASPI will have a forthcoming report on this subject), and I think we need to have more debates about the potential chilling effects of overemphasizing UF-related risks vs. more vigilance re: UF activities. But this debate can’t happen without understanding the UF in more detail, which makes Alex’s report essential reading.
Thank you for reading and engaging.
These are Jeff Ding's (sometimes) weekly translations of Chinese-language musings on AI and related topics. Jeff is a PhD candidate in International Relations at the University of Oxford and a researcher at the Center for the Governance of AI at Oxford’s Future of Humanity Institute.
Check out the archive of all past issues here & please subscribe here to support ChinAI under a Guardian/Wikipedia-style tipping model (everyone gets the same content but those who can pay for a subscription will support access for all).
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