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Time of India
16-06-2025
- Business
- Time of India
View: Chips won the Cold War. Rare earths may win the next
By David Fickling In retrospect, the symbolism of the moment was foreboding. On May 15, 2019, President Donald Trump signed an executive order banning US firms from doing business with Chinese telecommunications companies, including Huawei Technologies Co. Five days after that first broadside in a brewing trade-and-technology war, President Xi Jinping was photographed touring a factory producing rare-earth magnets. Such devices, his visit seemed to imply, could be a geopolitical weapon for China quite as potent as advanced semiconductors are for the US. Six years later, those battle lines are hardening. In the first major US-China trade dispute of Trump's second term, Beijing was able to use its control of rare earths to force Washington to a deal last week. The magnets produced from them are essential for the lightweight, powerful motors driving everything from automated car seats to guided missiles. After the US imposed its first round of tariffs in April, China started limiting export permits, causing US manufacturers to warn of imminent shutdowns. 'FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA,' Trump said in a social media post Wednesday, announcing the trade deal had been finalized. Beneath the all-caps boastfulness there's a worrying note of desperation. America has been caught napping. Beijing's response to being frozen out of the microprocessor ecosystem was an all-out drive to bridge the technological gap. State-owned chip foundry Semiconductor Manufacturing International Corp. has deployed $33.5 billion on capital expenditures, and $4 billion on research and development, since the middle of 2019. Huawei spends 180 billion yuan ($25 billion) on R&D every year, founder Ren Zhengfei said in a recent interview. Just 12 months ago, the government created a separate $47.5 billion semiconductor investment fund. The US chip fortress still looks pretty impregnable, barring an unexpected DeepSeek moment. Although Huawei is reported to be developing a 3-nanometer chip to match the most advanced non-Chinese processors as soon as next year, Ren said its best designs still 'lag behind the US by a generation.' A lesson of asymmetric warfare, though, is to exploit your enemy's weaknesses, rather than attempt to match their strengths. That's where rare earths come in. A technological conflict is simply a disguised version of a real flesh-and-blood battle. As Chris Miller's 2022 book Chip War explains, the US advantage in semiconductors was a crucial factor in winning the Cold War. By making processing power incredibly lightweight and error-free, it enabled America to build a far more fearsome military machine. Cruise missiles guided by tiny onboard computers could destroy targets with pinpoint accuracy, rendering them more deadly than Soviet missiles that perennially veered off course. Rare-earth magnets promise to replicate that processing-power revolution in mechanical power — making motors smaller, stronger, cheaper, and more efficient. It's an innovative leap perceptible to anyone who's used a $25 drone: The tiny devices only exist today because of the way this new technology (along with the parallel revolution of lithium-ion batteries ) allows us to move objects in undreamt-of ways. As with cruise missiles in the 1970s, this innovation promises to change the way future wars will be fought. Consider Ukraine's bold drone strike on Russia's long-range bomber fleet earlier this month. Blinded by culture wars over the energy transition, America is doing far too little to close this technological gap. Its military needs for rare-earth magnets, as we've written, have been pretty much met at minimal cost. Compared to the hundreds of billions that China is pouring into chips , the Pentagon has built a rare-earth supply chain since the start of 2020 with $439 million in grants and loans. Worse is the way lithium-ion batteries are falling victim to politics. The looming repeal of Biden era clean-energy subsidies and the resultant collapse of the electric-vehicle supply chain may reduce the output capacity of US battery manufacturers in 2030 by about 75%. That would halt almost every plant not already under construction, and ensure the country can only produce enough cells to power about a fifth of annual car sales. America will be left more dependent on China, both for auto batteries and the host of more crucial niche applications for lithium-ion technology. In the golden age of semiconductors, the US instinctively knew that its strength as a great power lay in its determination to remain at the bleeding edge of innovation. When the might of the state forces technology to submit to ideology, though, the consequences can be disastrous. That's the road the US is heading down, however, in letting China take the lead in rare earths, solar panels, lithium-ion batteries and the other clean electrical technologies of the future. Should American troops find themselves on some future battlefield without the critical minerals and batteries to match the swarms of drones deployed against them, they'll rue the day Washington turned its back on the future.
Time of India
16-06-2025
- Business
- Time of India
Chips won the Cold War. Rare earths may win the next
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads In retrospect, the symbolism of the moment was May 15, 2019, President Donald Trump signed an executive order banning US firms from doing business with Chinese telecommunications companies, including Huawei Technologies Co. Five days after that first broadside in a brewing trade-and-technology war, President Xi Jinping was photographed touring a factory producing rare-earth magnets. Such devices, his visit seemed to imply, could be a geopolitical weapon for China quite as potent as advanced semiconductors are for the years later, those battle lines are hardening. In the first major US-China trade dispute of Trump's second term, Beijing was able to use its control of rare earths to force Washington to a deal last week. The magnets produced from them are essential for the lightweight, powerful motors driving everything from automated car seats to guided missiles. After the US imposed its first round of tariffs in April, China started limiting export permits, causing US manufacturers to warn of imminent shutdowns.'FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA,' Trump said in a social media post Wednesday, announcing the trade deal had been the all-caps boastfulness there's a worrying note of desperation. America has been caught response to being frozen out of the microprocessor ecosystem was an all-out drive to bridge the technological gap. State-owned chip foundry Semiconductor Manufacturing International Corp. has deployed $33.5 billion on capital expenditures, and $4 billion on research and development, since the middle of 2019. Huawei spends 180 billion yuan ($25 billion) on R&D every year, founder Ren Zhengfei said in a recent interview. Just 12 months ago, the government created a separate $47.5 billion semiconductor investment US chip fortress still looks pretty impregnable, barring an unexpected DeepSeek moment. Although Huawei is reported to be developing a 3-nanometer chip to match the most advanced non-Chinese processors as soon as next year, Ren said its best designs still 'lag behind the US by a generation.'A lesson of asymmetric warfare, though, is to exploit your enemy's weaknesses, rather than attempt to match their strengths. That's where rare earths come in.A technological conflict is simply a disguised version of a real flesh-and-blood battle. As Chris Miller's 2022 book Chip War explains, the US advantage in semiconductors was a crucial factor in winning the Cold War. By making processing power incredibly lightweight and error-free, it enabled America to build a far more fearsome military machine. Cruise missiles guided by tiny onboard computers could destroy targets with pinpoint accuracy, rendering them more deadly than Soviet missiles that perennially veered off magnets promise to replicate that processing-power revolution in mechanical power — making motors smaller, stronger, cheaper, and more efficient. It's an innovative leap perceptible to anyone who's used a $25 drone: The tiny devices only exist today because of the way this new technology (along with the parallel revolution of lithium-ion batteries ) allows us to move objects in undreamt-of with cruise missiles in the 1970s, this innovation promises to change the way future wars will be fought. Consider Ukraine's bold drone strike on Russia's long-range bomber fleet earlier this by culture wars over the energy transition, America is doing far too little to close this technological gap. Its military needs for rare-earth magnets, as we've written, have been pretty much met at minimal cost. Compared to the hundreds of billions that China is pouring into chips , the Pentagon has built a rare-earth supply chain since the start of 2020 with $439 million in grants and is the way lithium-ion batteries are falling victim to politics. The looming repeal of Biden era clean-energy subsidies and the resultant collapse of the electric-vehicle supply chain may reduce the output capacity of US battery manufacturers in 2030 by about 75%. That would halt almost every plant not already under construction, and ensure the country can only produce enough cells to power about a fifth of annual car sales. America will be left more dependent on China, both for auto batteries and the host of more crucial niche applications for lithium-ion the golden age of semiconductors, the US instinctively knew that its strength as a great power lay in its determination to remain at the bleeding edge of innovation. When the might of the state forces technology to submit to ideology, though, the consequences can be disastrous. That's the road the US is heading down, however, in letting China take the lead in rare earths, solar panels, lithium-ion batteries and the other clean electrical technologies of the American troops find themselves on some future battlefield without the critical minerals and batteries to match the swarms of drones deployed against them, they'll rue the day Washington turned its back on the future.
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Business Standard
16-06-2025
- Business
- Business Standard
Chips won the cold war, but rare earth magnets could decide the next
In the first major US-China trade dispute of Trump's second term, Beijing was able to use its control of rare earths to force Washington to a deal last week Bloomberg In retrospect, the symbolism of the moment was foreboding. On May 15, 2019, President Donald Trump signed an executive order banning US firms from doing business with Chinese telecommunications companies, including Huawei Technologies Co. Five days after that first broadside in a brewing trade-and-technology war, President Xi Jinping was photographed touring a factory producing rare-earth magnets. Such devices, his visit seemed to imply, could be a geopolitical weapon for China quite as potent as advanced semiconductors are for the US. Six years later, those battle lines are hardening. In the first major US-China trade dispute of Trump's second term, Beijing was able to use its control of rare earths to force Washington to a deal last week. The magnets produced from them are essential for the lightweight, powerful motors driving everything from automated car seats to guided missiles. After the US imposed its first round of tariffs in April, China started limiting export permits, causing US manufacturers to warn of imminent shutdowns. 'FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA,' Trump said in a social media post Wednesday, announcing the trade deal had been finalized. Beneath the all-caps boastfulness there's a worrying note of desperation. America has been caught napping. Beijing's response to being frozen out of the microprocessor ecosystem was an all-out drive to bridge the technological gap. State-owned chip foundry Semiconductor Manufacturing International Corp. has deployed $33.5 billion on capital expenditures, and $4 billion on research and development, since the middle of 2019. Huawei spends 180 billion yuan ($25 billion) on R&D every year, founder Ren Zhengfei said in a recent interview. Just 12 months ago, the government created a separate $47.5 billion semiconductor investment fund. The US chip fortress still looks pretty impregnable, barring an unexpected DeepSeek moment. Although Huawei is reported to be developing a 3-nanometer chip to match the most advanced non-Chinese processors as soon as next year, Ren said its best designs still 'lag behind the US by a generation.' A lesson of asymmetric warfare, though, is to exploit your enemy's weaknesses, rather than attempt to match their strengths. That's where rare earths come in. A technological conflict is simply a disguised version of a real flesh-and-blood battle. As Chris Miller's 2022 book Chip War explains, the US advantage in semiconductors was a crucial factor in winning the Cold War. By making processing power incredibly lightweight and error-free, it enabled America to build a far more fearsome military machine. Cruise missiles guided by tiny onboard computers could destroy targets with pinpoint accuracy, rendering them more deadly than Soviet missiles that perennially veered off course. Rare-earth magnets promise to replicate that processing-power revolution in mechanical power — making motors smaller, stronger, cheaper, and more efficient. It's an innovative leap perceptible to anyone who's used a $25 drone: The tiny devices only exist today because of the way this new technology (along with the parallel revolution of lithium-ion batteries) allows us to move objects in undreamt-of ways. As with cruise missiles in the 1970s, this innovation promises to change the way future wars will be fought. Consider Ukraine's bold drone strike on Russia's long-range bomber fleet earlier this month. Blinded by culture wars over the energy transition, America is doing far too little to close this technological gap. Its military needs for rare-earth magnets, as we've written, have been pretty much met at minimal cost. Compared to the hundreds of billions that China is pouring into chips, the Pentagon has built a rare-earth supply chain since the start of 2020 with $439 million in grants and loans. Worse is the way lithium-ion batteries are falling victim to politics. The looming repeal of Biden era clean-energy subsidies and the resultant collapse of the electric-vehicle supply chain may reduce the output capacity of US battery manufacturers in 2030 by about 75%. That would halt almost every plant not already under construction, and ensure the country can only produce enough cells to power about a fifth of annual car sales. America will be left more dependent on China, both for auto batteries and the host of more crucial niche applications for lithium-ion technology. In the golden age of semiconductors, the US instinctively knew that its strength as a great power lay in its determination to remain at the bleeding edge of innovation. When the might of the state forces technology to submit to ideology, though, the consequences can be disastrous. That's the road the US is heading down, however, in letting China take the lead in rare earths, solar panels, lithium-ion batteries and the other clean electrical technologies of the future. Should American troops find themselves on some future battlefield without the critical minerals and batteries to match the swarms of drones deployed against them, they'll rue the day Washington turned its back on the future.
Bloomberg
12-06-2025
- Business
- Bloomberg
US Says Huawei's 2025 Output Is No More Than 200,000 AI Chips
A senior Trump administration official projected that Huawei Technologies Co. 's output of its Ascend AI chip will be at or below 200,000 for 2025, responding to US lawmakers' concerns that China is gaining ground in production of advanced semiconductors. 'It's critical for us not to have a false sense of security, to understand that China is catching up quickly, but that is our projection for this year,' said Commerce Under Secretary Jeffrey Kessler, who oversees the agency's export control programs. 'We shouldn't take too much comfort in the fact that China's production of these advanced chips is relatively small, because we know they have global ambitions.'
Time of India
04-06-2025
- Business
- Time of India
Apple can inch toward India and Vietnam, but it can't leave China, with or without tariffs
HighlightsApple Inc.'s technology transfer to China has significantly contributed to China's emergence as a leading global tech power, as detailed in Patrick McGee's book. The manufacturing ecosystem that Apple built in China, characterized by skilled labor and efficient production, is unlikely to be replicated in the United States despite political pressure from former President Donald Trump. Apple's reliance on China for high-tech manufacturing poses a strategic challenge, as the company faces increasing competition from homegrown firms like Huawei Technologies Co. During US President Donald Trump 's first term, he famously toured a Texas factory and claimed credit for bringing Apple Inc . production back to America. Except the plant had been running long before he took office. And it was an 'unmitigated fiasco.' Workers in China had to be flown in to help fix the mounting manufacturing issues encountered in the US heartland. This telling anecdote from Apple in China, a gripping read by former Financial Times journalist Patrick McGee, shows how the tech giant became beholden to America's biggest geopolitical adversary. Up until this point, the book recounts how Apple flew engineers from California to China to train and collaborate with local workers to manufacture its most iconic products. Now, it seems, the tables have irreversibly turned. McGee argues that the technology transfer facilitated by Apple to China, via small decisions compounding over decades, ultimately made it the biggest corporate investor into Made in China 2025, President Xi Jinping's bold plan to end reliance on Western technology. 'Here was America's most famous tech giant volunteering to play the role of Prometheus, handing the Chinese the gift of fire,' McGee writes. Yet the overarching argument of the book — that the US company made China into the tech behemoth it is today — begs the question of why Apple didn't make the same kind of investment in the US. And amid Trump's second term, when he has repeatedly threatened tariffs on the company if it doesn't onshore manufacturing, this query has new urgency. But the reality is that Trump's nagging will never be able to recreate the ecosystem that local governments in China, with the help of Taiwanese suppliers such as Hon Hai Precision Industry Co., created to lure Apple. A simplistic answer from a scholar early in the book is that China was a 'low wages, low welfare and low human rights' nation. Suppliers could exploit a massive underclass of migrant workers, and local authorities could quickly suppress any labor unrest or media reports of it. If there were any voices I wanted to hear more of in the book, it wasn't the dozens of Cupertino, California, engineers but these Chinese workers who turned Apple into the $3-trillion-dollar company it is today. (Apple has publicly called claims in the book untrue and full of inaccuracies.) But if there's a lesson for Trump — or American consumers — here, it is that electronics manufacturing jobs can come at a high cost for workers. It's hard to imagine that these are the kinds of positions Trump's base is hoping for, in an area where automation would be welcome. China is hardly a low-wage manufacturing base anymore. Apple Chief Executive Officer Tim Cook acknowledged this before, saying that his company produces in the country not because of labor costs but because of its legions of skilled workers. McGee argues that this upskilling is now being used to fuel innovation at homegrown tech giants such as Huawei Technologies Co. — and a direct result of Apple's investments. While the iPhone maker was chasing short-term profits, savvy suppliers in Asia were playing the long game. We've all heard about the legendary union between founder Steve Jobs and designer Jony Ive that made the iPhone a unique product. But the partnership that made it a revolutionary one, owned by more than a billion people, was between Cook and 'Uncle Terry,' McGee argues. Terry Gou, the founder of Hon Hai (better known as Foxconn), was the hyper-efficient manufacturing genius who brought the iPhone to the masses. Gou was described as obsessed with cutting costs — even if that meant diluting hand soap in factories with increasing amounts of water. One source in the book described him as worth billions in 'nickels and dimes.' But Gou recognized the value of working with Apple wasn't just profits: It was the tacit knowledge that he and his team would receive from the engineers shipped over from California to help set up and run the factories. This learning was invaluable, Gou understood, and made even losing money to get Apple orders worth it. Ultimately, the high-tech manufacturing ecosystem built up in China took decades, marked not just by the factories producing its iconic goods but by the creation of sub-suppliers nearby and an army of skilled engineers. It will be nearly impossible for Trump to try to recreate this during his four-year term. The US could start by focusing investments in vocational education and engineering, but policymakers should recognize that catching up now requires a strategic long game. And all the years it took to develop a reliance on China means it's not Trump's tariff threats that pose the biggest existential threat to Apple. It's Beijing. Uncoupling too fast risks angering local authorities, but not doing so quickly enough makes it even harder for it to inevitably be done. As this book convincingly argues, Apple can inch toward India and Vietnam, but it can't leave China anytime soon.
