I personally fail to see the downside of any manufacturer selling forever at a loss, except for the manufacturer itself.

You become dependent on the supplier.

The downside in general is that other countries lose production capacity in steel, heavy industry, semiconductors, machine tools etc - industries that took decades to build and can't be easily replaced.

Also they gradually lose the ability to meaningfully innovate in those sectors because there's no grounding against production reality anymore.

This has geopolitical consequences further down the line.

> The downside in general is that other countries lose production capacity in steel, heavy industry, semiconductors, machine tools etc - industries that took decades to build and can't be easily replaced.

That's not really what happens though. You don't actually "lose" capacity, you just move to higher-valued special niches within the overall industry because (1) you can afford to, while low-cost competitors can't and (2) you can no longer expect to be the lowest-cost supplier for the bulk of the market. That's a win-win development and something to be encouraged.

> You don't actually "lose" capacity, you just move to higher-valued special niches within the overall industry

That's not what people mean by "lose" capacity.

Suppose DRAM companies expand capacity because prices are high, then demand levels off, the price crashes, and they all go out of business except for the one in China which gets a government bailout. That's fine, right? We're not interested in making DRAM, that's a fungible commodity, we want to make iPhones or something. (They make those too anymore, but never mind that.)

What happens now if China restricts what you can buy to give an advantage to their own companies who are trying to displace you in the higher-valued special niches? Or just raises the price for you and not them? What if there's a trade war? Or a conventional war?

When you still have a domestic industry, you go to them and have a source for the commodity. If only one country becomes the sole global supplier and that country isn't even particularly friendly, that's bad.

The domestic industry is still there, only instead of mass-market DRAM it has started making higher-valued varieties of the same stuff. If there's a trade war, they can easily reconvert to making the mass-market stuff, just at much higher cost. You can't expect more than that, since they never really were as big or as low-cost as the lowest cost suppliers can be in normal times. That's not "losing" capacity, it's just acknowledging that you can't create capacity out of thin air.

No, the domestic industry stagnates (at best) or disappears (at worst).

You can't just spin up a 2nm wafer fab when the latest you've been running is a 300nm process.

Compare: US shipbuilding industry to China or SK.

We don't want to spin up wafer fabs because, historically, they had a tendency to turn into Superfund sites. That's why the more modern approach is to build the fab in the middle of a frickin' desert.

Historically, but likely not anymore. You wouldn't be allowed to casually poison the ground in a Western factory anymore and we have the technology to keep the environment mostly clean. I don't even see it being very expensive compared to other fab costs. Have a sealed floor and proper waste / exhaust processing, don't spill in the first place. Things must be extremely well controlled anyway.

> If there's a trade war, they can easily reconvert to making the mass-market stuff, just at much higher cost.

"easily" is doing a lot of work in that sentence. Depending on the good and what they switch to making, this may neither be easy nor quick.

> If there's a trade war, they can easily reconvert to making the mass-market stuff

Factories, tooling, supply chains, and engineering knowledge aren't fungible in the way they would need to be for your statement to be true.

Different types of DRAM can literally be made from the same already-etched wafer. The DRAM bits themselves don't change at all. What's different between DDR4, DDR5, and HBM is the IO interface to the chip. Changing this does not require significant retooling or relearning.

Does that mean CXMT is one inch away from also eating into the DDR5 market?

They will eventually eat everything while they laugh at us. Why would you build a rail network if it isn't profitable? Why build anything if it isn't profitable? Why would you even house people if the profit isn't guaranteed to be as big as other sectors?

Everyone wanted denarius then escudos then guilders then pounds then dollars and soon yuan. They make stuff over there, you can buy it with yuan.

I think India might come after that but Africa is sure to follow. Give it a few hundred years.

They're still at somewhat of a process disadvantage, but they have demonstrated an ability to produce DDR4 on older processes than it's typically been produced on. So it stands to reason that their process disadvantage will not stop them from producing DDR5 at scale. Their DDR5 will just use a little more silicon, and squeeze the jigglyness from a few more electrons, but in this market, who cares if RAM cost 15% more to make and was 15% less efficient to run, if it's available to purchase at all.

> The DRAM bits themselves don't change at all. What's different between DDR4, DDR5, and HBM is the IO interface

That's not completely accurate - since the bw between these are different, the routing and therefore propagation delays for DDR4 won't allow it to magically be used as DDR5 or HBM.

If you design for the most strict timings, then sure.

> Different types of DRAM can literally be made from the same already-etched wafer.

The assumption here is that you would stop making DDR5 but continue to make DDR4 so that you could start making DDR5 again without too much trouble. But the older chips have even lower margins than the newer ones. Most of the fabs and equipment for making DDR4 were created when it was current and then they stay in operation as long as there is still enough demand for it.

If you don't make DDR5 and DDR6, what happens to your DDR4 fabs when DDR4 is where DDR2 is now? They close because nobody wants it anymore. And then you're not trying to get to DDR6 from DDR4, you're trying to get to DDR6 from an empty desert.

Higher valued varieties, or just higher priced varieties, that no one wants to buy?

If the domestic industry had the capability of competing with China on mass-market goods at a profit but just chooses not to in order to pursue a higher-profitability niche, why not simply grow and do both at the same time, instead of yielding the mass market to China?

In my mind, if it can't do that, then it can't make the volume that China does at the cost that China does, which means it really isn't as capable as Chinese industry.

Perhaps at one time it could have, but those muscles have atrophied.

Because by pursuing a more profitable niche, you can grow quicker and make more profit. If you really want to do both, you enter the mass market from above, with only slightly higher quality products than what the market leader offers. And you do that after your position in the more profitable niches has long been secured. It's silly to do it any other way.

> which means it really isn't as capable as Chinese industry.

But this was always true. There was never really a time when Western industry was producing as much and as cheaply as China is today - that's the whole point. It makes more sense to diversify away from that, because non-trivial real-world markets will always reward increased variety.

The way I see it, China has leverage once you arreive to that dependency situation. That leverages goes away the moment they restrict exports and every country scrambles to create local production once again.

We are seeing that with some rare earths, even tho china is back into exporting them (except to japan, I think?) everyone is looking for alternatives already. They may have killed their industry 10 years down the line for playing with the export lever a bit too much.

Just like how markets punish the ram cartel creating a chance for cxmt and ymtc to enter. It would create a chance for western companies to do the same if china messes with the markets they have "cornered".

> The way I see it, China has leverage once you arreive to that dependency situation. That leverages goes away the moment they restrict exports and every country scrambles to create local production once again.

The first problem is that it doesn't go away instantaneously, so even if you could recover in ten years, you still get screwed immediately.

The second problem is that it's leverage. They can threaten to do it if they don't get what they want, and if you then do what they want (which often gives them even more leverage) they don't have to do it. But then they keep their leverage and you have to keep doing what they want.

> steel, heavy industry, semiconductors, machine tools

the question is if single country can carry all these industries at loss for prolonged period of time.

Another approach is to rely on international supply chain and speed of innovation, we can't produce steel domestically profitably today, fine, we may buy it from diversified international supplier network, and rebuild it fast tomorrow if needed using new tech, and focus on many other high margin verticals, instead of putting many billions of resources into infra which could be obsolete tomorrow.

This is fine as long as the supply chain is, in fact, diversified.

sure, looks like more analysis is needed to check which verticals are diversified and which are not, instead of throwing blanket list of everything.

Agree, worth analysing what is genuinely commodity.

There are more elements to it though which can be sort of hard to explain.

There are whole cultures and ways of thinking built around production. The children of engineers who worked on xyz v1.0 have a genuine advantage when its time to work on xyz v2.0. There is a lot of tacit knowledge in these engineering fields and you have a huge advantage in knowledge retention if you can maintain unbroken chains of succession.

You can't achieve the top levels of ability (decades of experience, generational knowledge) if you are whip-sawing production to and fro across the globe every 10 years.

There are also cross pollination effects. Being in the same community with as many related fields as possible (co-located) is what drives cross-pollination and mobility of ideas and people between industries.

Think how many countries have tried to copy "silicon valley" and failed, and _why_ they failed.

What I'm saying is that technology is built by _people_ and there are human reasons why having local capacity is beneficial for all the related industries in the area.

> The children of engineers who worked on xyz v1.0 have a genuine advantage when its time to work on xyz v2.0.

my point is that other children with no extremely heavy investments into perl v1.0, will have some skills in c++ v1.0 and python v1.0, and will have advantage in adapting Tensorflow v1.0, which is more valuable than skills in perl v2.0. Heavily investing in one industry you sacrifice some flexibility.

So, this is multifactor analysis, lets say wise American people will elect me as next president, I would create list of industries, assign metrics (national security importance, potential revenue in 5y from now, impact on other industries, potential margin, risks of failure, etc), then build some formula which aggregate those metrics into single, and base on final metric allocate weighted funds to support N top industries.

Blame China.

As though moving production to China wasn’t something the West did intentionally.

And now continues to push manufacturing out of Western countries by, for example in the UK and Germany, and Australia too, making electricity and gas so expensive it becomes cost prohibitive to manufacture much at all.

You forgot to mention embargoes against it. The US is free to sanction firms for their exports to China, but then shouldn't be surprised when China builds out domestic competitors.

the currency eventually collapses

I don't know if it's still a thing, but China was getting a lot of heat about a decade ago for purposefully devaluing their currency to make their exports more attractive.

They kind of had to do this, because their large amount of exports were pushing the value of it up compared to others.

If you actually believe this, then what is your explanation for a manufacturer to do this?

Do you think they are just stupid?

Microsoft gave away Internet Explorer at a loss, and what happened to internet standards?

First, they're not selling at a loss; the huge price increases have allowed them to push aggrssively in the legacy markets. They're making "slightly smaller" profits than other manufacturers (of which there are now very few).

Second, they can drive out all competition and then have a captive audience for whatever prices they want, as the barriers to entry in these markets are very high. This is essentially what's happened with all higher-end manufacturing in the west over the past 30+ years.

Because it's never forever. It's until the corporation substitutes the market, at which point you are at their mercy.

You're always at someone's mercy in any industry with significant barriers to entry, you might as well pick a low-cost supplier.

That is such a defeatist position... How about regulation?

Ask the EU how that regulate everything policy is going for local manufacturing.

Is the answer to bad regulation to not regulate at all? How EU is regulating isn't the only way to do it. And is bad regulation that much worse than monopoly by the billionaires? There is no distinction. At least with bad regulation you always have the chance to vote better next time. Good luck dealing with oligarchs.

I wish we could regulate the oligarchs away, but it seems to me that is precisely the right amount of regulation that allows for oligarchs to thrive.

If you regulate to protect IP owners, and basically make them rentists, you create IP based monopolies and olygarchs. If you also regulate to prevent consumer, worker and industry sector abuse, you end up with a very stagnant economy a la europe.

If you don't regulate at all... I don't know what would happen, but it sure seems interesting to me.

I have the opposite impression. They thrive where regulation lacks. And I'm not in the very least interested in no regulation because we know precisely what happens. It's another 29, dot-com bubble, housing crash waiting to happen.

Edit: of course regulation isn't a panacea. If the government is already ran by an oligarchy chances are laws will favor them. I'm talking about the kind of laws produced by functional democracies. So we also need to talk about how to make democratic institutions stronger first, then we can rely on regulation.

It's funny that you call this an "very aggressive dumping strategy" while AI vendors are doing the same but with even greater losses and on a much larger scale.

It's all simply a fight for market share.

The original sin is the existing DRAM vendors selling their entire (spare) capacity to the likes of OpenAI.

No one sold their capacity to OpenAI. The vast majority of DRAM is transacted in what is essentially a quarterly auction.

"RAM is going to AI: OpenAI has secured up to 40% of the market."

https://globalcio.com/news/16062/

You're maybe talking about the spot market, but companies are free to make any sort of supply contract.

AI slop article

Ok here's a different analysis:

https://www.tomshardware.com/pc-components/dram/openais-star...

Can we please stop with this irritatingly persistent myth? AI companies, at least the big ones, do not sell inference at a loss - far from it. This has been debunked and explained many times and yet it keeps being repeated.

The numbers aren't public but most guesses I've heard are that Anthropic's markup is around 50% on average, and that if considered in isolation, most models are profitable overall. The constant losses are instead due to training the next models, which will also eventually recoup but later, and forward capex investment.

This idea that big AI companies are normally and systematically selling inference at a loss as some kind of market share strategy is just not supported by the facts.

You talk about myths and then quote vague guesses of 50% without sourcing.

Yes, because it can't be sourced. These are private companies. That doesn't mean that anyone's guess is as good as anyone else's.

The CEO of Anthropic, for example, has publicly stated multiple times that if their individual models were companies in and of themselves, they'd be profitable. I have no reason to think he's lying.

Chinese investment has not been unproductive. It gave them independence so that the US could not cut them of- see Cuba.

> It is wise for these Chinese fabs to eventually use a very aggressive dumping strategy to price well below cost push out other players forever, especially in DRAM.

Crucial's departure from the consumer market left such a gaping hole, that CXMT doesn't even need to push other players out to gain a footing.

It's more like everyone else abandoned the market, and CXMT realised it was free real estate.

CXMT was already an option for consumers via brands like Kingbank and Asgard.

There's Kingbank DDR5 using CXMT modules starting to become available in Australia https://www.techpowerup.com/346479/hardware-unboxed-examines... including from mainstream retailers like Mwave https://www.mwave.com.au/memory/pc-ddr4/kingbank https://www.mwave.com.au/memory/pc-ddr5/kingbank

How's it dumping below cost when hey can simply sell for 100% margins instead of western makers selling for 400%.

Because only western companies are allowed to make massive profits at the expense of entire nations, it's not greed when they do it apparently.

Is it not the case that they're raising price in response to demand? Ie. if they kept the price low, they'd be perpetually out of supply?

No, they raise price because they can and demand isn’t showing signs of stopping despite increased prices. This won’t affect whether there’s a shortage or not, besides we’re not talking direct to consumer float product, they inked commitments.

If they didn’t have a documented history of running cartel price fixing schemes for LCD/OLED display tech, NAND, and DRAM, I’d maybe agree with you but we have the history. They cry every time about China ‘dumping’ for not going along with the racket.

Can chose to increase production or embrace the scarcity. The later might look delicious on paper. More profit, less effort, less short term risk. All you have to do is ignore the whale in the room.

They are increasing production. Fabs take multiple years to come online. The modern semiconductor industry moves only very slowly and at very great cost.

There is no point in increasing production for a memory standard that will be phased out next year unless you're Chinese.

They're raising prices in response to the same demand it has ever been.

If they kept the price low they could still afford to make RAM.

It's easy to misread, but they're not arguing that. Note the "eventually" and "but right now".

It's amazing what can be achieved when you can plan 5 years in advance, instead of just making the line go up for the next quarter.

Not five, but likely twenty-five. Not specific plans but attention: situation changes all the time, but the interest remains.

History is littered with the corpses of those slaughtered in the name of great leader’s 5 year plans.

And you don’t think short term profit chasing has a death count?

That's the most obvious example of failure of Chinese central planning. That and one child policy were abysmal failures that resulted from shoddy science coupled to effective central authority.

Look at the 12/13/14th 5 year plan (the most recently passed). Do you think they achieved their goals?

If your headcanon is that the CCP is inept because they caused crop failures 60 years ago... you could stand to take a look at what they're doing today.

I guess the summary is as simple as: Good five year plans are great, bad five year plans are terrible.

There are sooo many variables in how one could go about making and executing five year plans. They must have figured out a couple of things that tend to work.

If your headcanon is "5 year plans are great because some chinese supplier has cheap DDR-4", I would submit a gentle introduction to history is helpful (i.e. we took a couple irrational great leaps forward from cheap DDR-4 => China owns the RAM market => 5 year plans are the way to go)

I think it’s at least valid to conclude that a nation-level commitment to taking over a specific industry can work. You can gut your competitors and then dominate. It’s the Uber strategy applied at the geopolitical level.

If you could figure out how to get your country to dominate the world economy without also allowing your leaders to commit campaigns of mass-internment and extermination, then maybe you’d have a decent political system.

It's not the Uber strategy, because there's a physical limit to how efficiently a human can drive another human around the city. The Uber strategy was to push out competitors then bring pricing back up.

Chinese PV isn't going to get more expensive. The massive subsidies seen by Chinese PV companies from 2005-2024 account for a whopping 3.2% of solar firm incomes. [1] Over that same 2004-2024 period, solar cells prices have fallen to about 4-5% of 2024 prices. Not a typo. It's not the Uber model if they win by actually making the product at a fraction of the cost.

[1] https://www.oecd.org/en/publications/subsidies-and-the-solar...

You can only "gut" the competition if you're genuinely able to supply at lowest cost in a sustainable way. Selling at a loss and trying to make it up in volume is not a very good strategy. The Uber strategy was betting on having robotaxis everywhere, and then raising prices when they found out that this wouldn't be a viable solution in the near term.

The current memory prices are many times higher than the costs. Last month I was forced to buy some memory and it was more than 3 times more expensive than last summer. Moreover, this was in Europe, where currently computers and related products are cheaper than in USA, unlike in the previous years. The same memories that I have bought in Europe were much more expensive on Newegg.

If you can make memories, selling them at half the price demanded by Micron and the like is not selling at a dumping price, but it is selling with what in normal times would have been considered as a huge profit margin.

Studies of the 20th century manufacturing learning rate suggests that creation of arbitrary goods drops on the order of 15-20% every time you double production volume. This is before general purpose robotics and AI! Just interchangeable tooling, Taylorism, Ford style assembly lines, Toyota's supply chain ideas.

Selling at a modest loss and making the volume happen eventually means you're not selling at a loss anymore.

> I think it’s at least valid to conclude that a nation-level commitment to taking over a specific industry can work

From ONE supplier having cheap DDR-4 currently?

What is impressive is that this has happened despite the great efforts of USA to sabotage the Chinese semiconductor industry in order to eliminate the competition for Micron.

The second wave of "sanctions" (after those against Huawei done to eliminate the competition of Qualcomm) have been enacted when Chinese companies were ready to take a dominant position on the SSD market. Even Apple had decided to use the Chinese SSDs in their products.

Without the so-called "sanctions", the market of memory devices, both for SSDs and for DRAM would have looked extremely different today and we would have not been hit by this shamelessly huge increases in the price of memory modules, SSDs and HDDs.

The so-called US "sanctions" have never been true "sanctions", because they have never been tied to any kind of political demands. They were just measures taken to destroy the competitors of certain US companies, which were implemented through various kinds of blackmailing methods that are available, for now, to the US government.

This comment makes several claims that don't survive scrutiny.

"Sanctions to eliminate the competition for Micron" — The October 2022 export controls and YMTC's Entity List designation were part of a sweeping national security policy targeting advanced compute capabilities, not a protectionist carve-out [1]. Multiple allied governments (UK, Australia, Japan, Netherlands) independently reached similar conclusions and imposed their own restrictions. If this was "for Micron," it backfired spectacularly: China retaliated by banning Micron from critical infrastructure projects in May 2023, costing Micron ~25% of its revenue [2].

"Huawei sanctions done to eliminate the competition of Qualcomm" — Huawei's CFO was indicted for bank fraud related to Iran sanctions violations [3]. The Five Eyes intelligence consensus on Huawei infrastructure risk predates the Trump administration by years (flagged since at least 2012) [4]. Reducing this to "helping Qualcomm" requires ignoring criminal indictments and an entire allied intelligence assessment.

"Chinese companies were ready to take a dominant position on the SSD market" — YMTC's global NAND share didn't reach ~10% until Q3 2025, three years after sanctions [5]. In 2022 they were a small player with single-digit share. Samsung alone held ~35% [6]. "Ready to take a dominant position" is not supported by any market data from that period.

"Even Apple had decided to use the Chinese SSDs" — Apple was in an exploratory testing phase and dropped YMTC in October 2022 before the Entity List designation in December, amid political scrutiny and its own risk assessment [7]. No Apple product ever shipped with YMTC memory. "Had decided" is doing a lot of heavy lifting here.

"This shamelessly huge increase in the price of memory" — This is the most egregious misattribution. The 2024+ memory price crisis is driven by: (1) Samsung/SK Hynix/Micron massively reallocating wafer capacity to HBM for AI accelerators, which requires far more wafer area per bit than conventional DRAM [8]; (2) deliberate production cuts in 2023 after the oversupply glut (Samsung posted its worst quarterly profit since 2009) [9]; (3) structural AI demand consuming enormous DRAM/NAND capacity [10]. Chinese memory companies at single-digit market share were nowhere near large enough to have prevented Samsung and SK Hynix from chasing the vastly more profitable HBM market. That's the price driver, not sanctions on YMTC.

The monocausal "US sanctions to protect Micron caused expensive memory" narrative requires overstating China's pre-sanctions market position, mischaracterizing Apple's exploratory talks as a commitment, ignoring the documented reasons for the sanctions, and attributing a price crisis driven by AI demand to restrictions on companies that held single-digit share.

[1] https://americanaffairsjournal.org/2024/11/the-evolution-of-...

[2] https://www.bbc.com/news/business-65667746

[3] https://www.justice.gov/opa/pr/chinese-telecommunications-co...

[4] https://www.cfr.org/backgrounder/chinas-huawei-threat-us-nat...

[5] https://biz.chosun.com/en/en-it/2026/01/30/5RWQ5BS2H5H4HAYM6...

[6] https://gizmodo.com/chip-china-semiconductor-1849354820

[7] https://www.pcmag.com/news/apple-decides-using-cheap-chinese...

[8] https://spectrum.ieee.org/dram-shortage

[9] https://techcrunch.com/2023/04/06/samsung-cuts-memory-chip-p...

[10] https://en.wikipedia.org/wiki/2024–present_global_memory_sup...

> Huawei's CFO was indicted for bank fraud related to Iran sanctions violations

This is the official US justification. This does not mean that is also true.

The Huawei sanctions happened immediately after Huawei had shown their next generation CPU for smartphones, which was better than the next generation CPU shown by Qualcomm, and also immediately after market surveys announced that Huawei will become in a few months the world leader in the smartphone market, in front of Samsung.

When something like the US sanctions happens, what matters is who is the beneficiary, not which is the official explanation. The beneficiaries have been mainly Qualcomm, Apple and Samsung. The US sanctions were exactly what they needed, the only thing that could stop their competition.

The accusation of dealing with Iran and the blackmailing of Huawei by arresting the daughter of the CEO in Canada, are probably based on true facts, but they have probably been known for many years and they have only been exposed at that time in order to legally justify the sanctions, but due to the timing and consequences of the sanctions it is completely implausible than the old deals with Iran were their real motivation. After all, USA has also made deals with Iran, when they had the interest to do this, and they have not sanctioned themselves in such a way that would affect world economy in unrelated markets. When USA forces citizens of other countries to lose money by buying more expensive smartphones, because there is lower competition, how exactly does this hurt Iran?

The sanctions against the makers of memory devices did not have any credible "national security" motivation, despite the official claims.

> "Ready to take a dominant position" is not supported by any market data

I am too lazy to search now for quotations, but some time before the announcement of the US sanctions there were published prognoses for the future market share of YTMC, which was projected to grow very fast, after they had announced a new generation of more dense SSDs, which they were willing to sell at lower prices, to get market share. The fact that Apple has stopped their plans to use YTMC as supplier, a short time before the announcement of the sanctions, does not prove anything, except that the Apple management was probably already aware of this outcome.

> "This shamelessly huge increase in the price of memory" — This is the most egregious misattribution.

I agree with what you said about the present causes of the memory price increases. However, that has nothing to do with what I have said, which did not contain any misattribution.

What I have said is that if an increased competition on the memory market would not have been prevented by the US government, today we would have had more vendors and more diverse vendors on this market. In such a market, a deal like that of Altman and the other deals for exclusive contracts with the memory vendors would have had a much less impact. So great price increases would not have happened, because the other vendors would have been eager to step in and increase their market share. The memory market would have been much more stable. Now, in markets with 2, 3 or at most 4 vendors that matter, just a few exclusive contracts are enough to destabilize the market.

I appreciate the detailed response, but I think several of your arguments actually undermine your own case on closer inspection.

tl;dr: "Who benefits is what matters, not the official explanation" is how you prove anything you want. Boeing benefits when Airbus has problems, that doesn't mean Boeing sabotaged them. And even on its own terms: Qualcomm collected royalties from Huawei on every handset sold (per their 2018 licensing deal), so Qualcomm had direct financial incentive for Huawei to sell more phones, not fewer. The "cui bono" doesn't even bono the right cui.

On "cui bono" as proof of motive:

"When something like the US sanctions happens, what matters is who is the beneficiary, not which is the official explanation" is a general-purpose conspiracy epistemology that can prove anything. Boeing benefits when Airbus has production problems, that doesn't mean Boeing sabotaged Airbus. Cui bono is a reason to investigate, not a reason to conclude.

But even on your own terms, the timeline doesn't work. You say the Huawei sanctions happened "immediately after" Huawei showed their next-gen CPU. The Kirin 980 was announced at IFA in August 2018 [1]. The Entity List designation came in May 2019, nine months later [2]. In the semiconductor industry, nine months is not "immediately after." The Snapdragon 855, which benchmarked significantly faster than the Kirin 980 in CPU and GPU, shipped in December 2018 [3]. If Qualcomm needed government protection from an inferior chip that launched earlier, that's not a very compelling story about competitive threat.

You're right that Huawei was on track to overtake Samsung in smartphone shipments. They hit #2 globally in 2019 [4]. But Huawei's strength was in price-competitive handsets in emerging markets, not in chip design threatening Qualcomm's licensing business. Qualcomm's revenue model is based on patent licensing across the entire industry; Huawei's rise in handset volume actually increased Qualcomm's licensing revenue, since Huawei paid Qualcomm royalties on every handset sold (they signed a patent license agreement in 2018). Qualcomm had financial incentive for Huawei to sell more phones, not fewer.

On "they knew about Iran for years":

You concede the Iran dealings are "probably based on true facts" but argue the timing was convenient. The actual timeline: HSBC's internal probe of the Huawei-Iran transactions began in late 2016, the DOJ investigation built on HSBC's disclosures throughout 2017-2018, and the arrest warrant was issued in August 2018 [5][6]. Criminal investigations of this complexity involving international banking, foreign defendants, and extradition treaties routinely take years. The idea that prosecutors had a ready-made case sitting in a drawer and deployed it at an opportune moment isn't how federal criminal prosecution works. Grand jury proceedings, evidence gathering, and extradition requests have their own institutional momentum and timeline.

Also: "USA has also made deals with Iran and they have not sanctioned themselves" is a non-sequitur. The sanctions against Huawei aren't for "dealing with Iran" in the abstract, they're for bank fraud, i.e., lying to HSBC about the nature of transactions to evade sanctions that were in force at the time. The US government conducting foreign policy with Iran through official channels is categorically different from a private company deceiving banks to circumvent sanctions law.

On YMTC's projected dominance:

You say there were "published prognoses" for YMTC's rapid growth. I don't doubt that bullish analyst projections existed. But even the most optimistic 2022 forecasts projected YMTC reaching perhaps 8-10% of NAND by 2025 [7], which is roughly what actually happened despite the sanctions [8]. "Dominant position" means something like Samsung's 35%. Single-digit-to-low-double-digit share, even at aggressive prices, is "credible new entrant," not "dominant position."

On Apple: You say Apple dropping YMTC before the Entity List "doesn't prove anything, except that Apple management was probably already aware of this outcome." This is unfalsifiable. If Apple dropped them after sanctions: "they were forced to." If Apple dropped them before: "they had inside knowledge." What evidence would you accept that Apple made an independent commercial/reputational risk decision?

On memory prices:

I actually think you have the kernel of a legitimate argument here, and I should have engaged with it more carefully. You're right that the memory market is a tight oligopoly with a documented history of anticompetitive behavior: Samsung, SK Hynix, and Micron have literally pled guilty to DRAM price fixing, paying $731 million in criminal fines in the 2000s, and faced renewed price-fixing allegations in 2018 [9]. More vendors would structurally improve this market.

But the distance between "more vendors would be good for competition" and "US sanctions on YMTC caused the current price crisis" remains enormous. Even in your restated version, the counterfactual requires YMTC to have grown large enough by 2024-2025 to serve as a meaningful alternative when Samsung/SK Hynix pivoted to HBM. Given that YMTC actually did reach ~10-13% NAND share by late 2025 even under sanctions [8], and prices still spiked, the evidence suggests the HBM reallocation would have overwhelmed any competitive pressure from a mid-sized Chinese entrant. The structural problem is that three companies control >90% of DRAM, and YMTC doesn't make DRAM at all, they make NAND. CXMT's DRAM operation is far smaller and wasn't even targeted by the same sanctions.

The memory price crisis is real, the oligopoly is real, and more competition would help. But attributing the current crisis primarily to sanctions rather than to AI-driven demand reallocation and the inherent fragility of a 3-player oligopoly (which existed long before any Chinese entrant) conflates a contributing factor with the primary cause.

[1] https://www.gsmarena.com/huawei_announces_the_kirin_980-news...

[2] https://www.federalregister.gov/documents/2019/05/21/2019-10...

[3] https://www.tomsguide.com/us/snapdragon-855-benchmarks,news-...

[4] https://www.theverge.com/2020/1/30/21114885/huawei-overtakes...

[5] https://thefinanser.com/2021/06/usa-v-china-or-huawei-v-hsbc...

[6] https://www.cbc.ca/news/meng-wanzhou-huawei-kovrig-spavor-1....

[7] https://newsletter.semianalysis.com/p/2022-nand-process-tech...

[8] https://www.reddit.com/r/hardware/comments/1q3qln3/ymtc_rock...

[9] https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal

The big difference recently from the past is instead of philosophers its scientists who are making the plans and decisions in China so are willing to course correct instead staying the course despite bad out comes.

I don't know if that tracks, senior leadership was heavily influenced towards implementing the one child policy by the works of Song Jian, who came from a rocketry background and presented a model whereby the population would grow to an unsustainable level unless corrective control was applied.

I think it is unlikely philosophers would have suggested to treat population growth like tuning a PID controller.

UN birth rate projections have also been consistently wrong for the past decades.

I think even most experts did not expect fertility rates to follow the trend that it has been following for the past few decades.

> I don't know if that tracks, senior leadership was heavily influenced towards implementing the one child policy by the works of Song Jian, who came from a rocketry background and presented a model whereby the population would grow to an unsustainable level unless corrective control was applied.

The problem wasn't the idea of modeling itself, it was to not be aware of what we know today from Africa - with more wealth and especially less child mortality, reproduction will drop in about one generation, even without punitive governmental intervention. Even 60 years ago, people tended to have anywhere from 3 to 5 children, just because the chance was so high that at least two would simply die before reaching adulthood.

But thanks due to better maternal healthcare, vaccinations and OSHA, that mortality rate dropped significantly, and so people adapted on their own - and that's before getting into women being able to control fertility on their own or housing/cost of living exploding in the same timeframe.

A good read in this area is Dan Wang's book - Breakneck

One could probably summarize it as having engineering leaders solve engineering problems is good, but they can very efficiently implement very bad social policies. Likewise having non-STEM leaders in charge of things like agricultural planning is also bad.

That said modern China is less socialist/communist than a weird state capitalism machine with a dictatorship.

One big difference to modern China vs USSR for example is instead of having 1-2 car companies churning out the cars the state demands, you have more of a competitive local government subsidized market. So they have 50+ car companies all competing in the local marketplace for sales, and eventually some good car companies have surfaced. This was never going to happen with Lada.

> a weird state capitalism machine with a dictatorship.

That's not a completely new model, either - Japan, Taiwan, South Korea and Singapore all went through remarkably similar phases. Countries have tended to become freer and more democratic as they grow wealthy enough to build a sustainable middle-class and a genuine civil society that enjoys some basic independence from government.

Yes, and thats where the west ended up going wrong in our line of thinking. The assumption was if we facilitated their transition into middle class economy / rich world standards via trade deals and offshoring.. they'd follow the same path as our now allies - JP/TW/SK/SG/etc.

That is - the assumption was democracy/civil liberties would follow wealth. This has not held up. And the promotion of Xi to supreme leader probably for life has if anything pulled them further away from that path. Things like the great firewall have helped him in that effort.

China is very far from genuine rich-world standards though, especially if you look at the less developed inner provinces. The relatively tiny middle class they do have clearly lacks the incentive to demand any sudden change at present - they'd have way too much to lose. So we're still very much in the "authoritarian phase" of this whole dynamic.

That is actually bullshit fed to you all democracies that have been brought down in the last 60-70 years democracies have been brought down by the west. And most dictatorships propped up by them unless they threatened Israel or were perceived a threat to Israel. It was not civil liberties or any such reason that any moves were made it was about capitalism vs socialism or Israel. West capitalists have no interest in civil liberties or democracies hence they bring down any socialist democratic party or leader which has bring about fascists in power in the west.

>I think it is unlikely philosophers would have suggested to treat population growth like tuning a PID controller.

We are talking about Marxist philosophers. These weren't some scholars of Christianity, who would have insisted on the inherent worth of human life and the injustice of state intervention deep into personal lives, these were the same "philosophers" who justified extermination programs based on the insufficient revolutionary spirit of the exterminated.

>treat population growth like tuning a PID controller.

Treating human resources like resources because 100s of millions of bodies ultimately subject to statistics. "Libtard" philosophers from small countries don't truly have to reckon with Malthusian pressure and law of large numbers.

And PRC family planning wasn't wrong, averted ~300m births, and bluntly PRC still left with ~400/1400m surplus mouths trapped in low-end farming and informal economy. Otherwise they'd have 1000m/1700m, more than 400+300 because every family with more kids is one that can't concentrate surplus/resources on tertiary/skill uplift. Now PRC left with TFR problem, but averted developmental doomsday scenario of too many subsistence peasants, aka where India trending towards.

One child policy has brought a demographic problem today but has solved an existential problem in 70s

Notice the go-to for capitalists against communism is "Look at how many people they killed!!!"

No such metric is available for capitalist countries. Thats because its *always* an individual failure in capitalism, not political/societal.

You CHOSE not to have healthcare. (You work 1099, or work a job that doesnt provide healthcare, due to tying job and health.)

You CHOSE to go with UnitedHealthCare that denies 30% for baseless reasons. (The company chose your plan, you have no real choice here.)

You CHOSE to be homeless. (You can't force companies to interview or hire you.)

You CHOSE to eat the only food nearby (You live in a food desert).

Just from Hepatitis C, the company that makes Solvaldi makes a cure. Costs $84k, $1000 a pill for 84 days.

But we see more and more deaths from Hep C. But this is a "personal failure", not a systemic one in a capitalist country.

"Under capitalism, man oppresses man. Under socialism, it's just the opposite"

Deaths in the Great Leap Forward were heavily concentrated as compared to the Industrial Revolution but the death tolls from IR-related famines weren't really all that far off. Industrialization was messy everywhere.

The Irish Potato Famine alone killed 15% of Ireland vs the GLF killing 5% of China.

That's not a reason not to plan 5 years in advance... is it? Any more than the Potato Famine is a reason we should't have capitalism.

I can't say that I've ever heard the argument that a plan led to a famine therefore we should never make plans, when we have great counterexamples that not planning also led to famine. Feels like learning the wrong lesson here.

[edit] I also think it's worth pointing out that America's response to the Dust Bowl was the Farm Bill, which it could be argued is one of the largest-scale examples of central planning in history. It continues to this day, and is part of the reason Americans pay less as a share of their spending on food than any other country on earth.

People say everyone remembers the hits, nobody remembers the misses - but that is the opposite of true for government. Everyone remembers the misses, nobody thinks twice about the hits.

The Irish Potato Famine was a constructed starvation by England to Ireland. All of their real foodstuffs were being stolen by England to run world-level wars everywhere, and the Irish grew what they were permitted to. Potatoes.

Then the disease hit.

OP's point exactly: the Great Leap Forward is the classic example of society murdering people to make the line go up every quarter, no matter the cost or the truth.

History is littered with corpses. For those willing to see them.

Great leaders use human resources as resources, that's historically why they're great, acquire territory, build state capacity, both at expenditure of regenerating resources - lives. A few 5 year plans that traded a few million lives to save more millions later. And by million we mean low single digit percent, i.e. historic rounding error that isn't remarkable nor worth the fixation except by muh liberal value types.

There's a reason there was persistent Chinese famines before GLF, and none after, because early industrial policies sorted out land resource management via massive rural mobilization/infra/industrial efforts, i.e. why PRC industrialization % and lifespan was vastly higher than developing peers in 70s... that's all because GLF broadly worked, adding about cumulative 200 milliion lives in terms of extended lifespan and likely ~100m+ in terms of averted famine deaths. Most historically competent Chinese leadership is return to farseeing utilitarianism, willing to trade lives for progress, which always sucks for the people during time of upheaval, but ultimately net good.

Don’t forget all the times those plans fail because the world did not turn out to be what you thought it would.

But, we do plan 5 years in advance. Cloud, VR, Crypto, and now AI. All glorious five year plans from the Silicon Valley Planning Bureau comrade.

The CEO reads the WSJ and their McKinsey report and says “We must leverage AI to keep up and accelerate innovation!” Each division’s executive vice president sets a current year goal to use AI to increase productivity and simultaneously decrease cost. The VPs below them are given a goal to increase their department productivity by 30% by the end of Q3. The middle managers require line managers to train all individual contributors on AI (specifically LLMs) by the end of Q2 to get their bonus. Line managers email their direct reports links to LinkedIn courses and set a deadline by the end of Q1. When the end of the year comes AI has not raised productivity by 30% and AI spending has increased costs. To make Wall Street happy 10% of employees are laid off.

For decades the economic planners of the west have used the most effective tool at their disposal: the business class inflight magazine. Only recently surpassed by the VC telegram group chat.

Most importantly it's amazing what you can achieve if you can cut the red tape.

This has nothing to do with 5 year plans, but with having a functional and competent government enable to enact a coherent long term policy.

In western countries every couple of years we elect a new clown show, which then proceeds to destroy whatever the last clown show tried to accomplish. That has happened again and again for decades, truly awesome "our democracy".

Also amazing what could be wasted when you can plan 5 years in the wrong direction. Remember USSR computers? They also been planned years in advance.

If CXMT new what was coming 5 years ago, they could've bought NVDA stock and 14x their investment.

> It is wise for these Chinese fabs to eventually use a very aggressive dumping strategy to price well below cost push out other players forever, especially in DRAM.

It's not dumping, it's the opposite.

Sam Altman's stunt has created massive amounts of fictitious demand (OpenAI isn't using those wafers it's ordering) and triggered massive panic-buying from everyone else.

Prices are arteficially high, this has turbocharged China's fab and R&D budgets as you observe.

> is about to pay off with some industry dominance soon.

They're not looking to dump the semiconductor markets. They're looking to invade Taiwan.

All this buildout in their semiconductor industry is to detach themselves from the western semiconductor industry that will either sanction them if they invade Taiwan, or in the case of TSMC, suffer major damage in the ensuing conflict.

That the collapse/destruction of the Taiwanese semiconductor and electronics industries will utterly ruin the western tech industry is somewhere between a happy coincidence and acceptable collateral damage to them. No dumping required.

> utterly ruin

I realize Intel has done some serious ball dropping over the past two decades but you do realize the US has on shore cutting edge fabs, right? It's only luxury consumer electronics and the highest end corporate gear that use cutting edge nodes to begin with.

Disruption of the cutting edge would certainly wreak havoc on the pricing and specs of high end luxury electronics but that would hardly be the end of the world. I still use a desktop with DDR3 on a daily basis (granted the GPU is much newer with GDDR6) and my laptop is from the early era of DDR4 ...

> but you do realize the US has on shore cutting edge fabs, right?

No they don't. Even the US partnerships with TSMC aren't cutting edge.

TSMC and arguably Samsung have cutting edge fabs, no one else.

The Intel CMOS process 18A, which they have launched a few weeks ago, is the first after almost a decade that is somewhat competitive with TSMC and Samsung.

Good for Intel: their new manufacturing process has demonstrated a much better energy efficiency than the TSMC "3 nm" process that was used to make Intel Arrow Lake and Intel Lunar Lake.

Unknown: TSMC now has a "2 nm" process and the first products using variants of this process are being launched. It is unknown how TSMC "2 nm" compares with Intel 18A, but it is almost certain that the TSMC "2 nm" is better.

Bad for Intel: they had difficulties to achieve high clock frequencies in Intel 18A in comparison with TSMC "3 nm", so most Panther Lake models have lower clock frequencies than their Arrow Lake counterparts. Moreover, it is also pretty certain that for now Intel 18A has much lower fabrication yields than even the latest TSMC "2 nm" process.

> I realize Intel has done some serious ball dropping over the past two decades but you do realize the US has on shore cutting edge fabs, right?

We could squabble about the finer details of Intel's fab capabilities. They have advanced nodes, but it's irrelevant. They simply do not have the capacity to support the entire demand that is currently supplied by TSMC.

It is not just "high end luxury electronics" that have modern CPUs. It's every bloody server in the cloud. (Have a look at who makes and distributes the mainboards. Same story, substitute Intel for Supermicro.)

The economic impact on this field would be a disaster. Compute becomes much more expensive, SaaS prices will follow, and with that a massive drop in demand.

Not to mention you can kiss the entire AI industry goodbye if the price of GPUs spike.

I don't think that's an accurate prediction. Currently less than 10 year old hardware gets recycled for pennies on the dollar. That's effectively due to the combination of how cheap and how much better the cutting edge hardware is. If it suddenly became more expensive it would just see slower adoption.

Case in point, this very comment section. The major suppliers have discontinued DDR4 production because it's "obsolete" meanwhile capacity for that exact same technology is coming online in China. What makes sense just depends on context.

Why would they bother to invade Taiwan when they’re winning economically and diplomatically?

Public opinion in Taiwan is rapidly changing towards peaceful re-unification and no one anywhere on earth trust the US will help them with anything.

China economic numbers don't have a winning tune to the in the least. I don't think taiwan could ever be taken by force, but that doesn't matter as Xi Jinping seems to think it's doable and is taking steps towards it (developing landing ships, purging the military of oppsition and pacifists, building a fleet and bombers...)

It would be very surprising to me that taiwan people think a reunification is feasable while the CCP still exists, just see how things are going in HK to see what would be waiting taiwan if they reunite.

> Why would they bother to invade Taiwan when they’re winning economically and diplomatically?

They are hedging their bets. If Taiwan refuses to accept re-unification, China wants to have the option of a military annexation.

They have been planning this for quite a bit longer than the current US administration. They're not going to bank on Donald Trump forever, he's not getting any younger and healthier, and November 2028 is sooner with every passing day. A military conflict is not off the table, and so it is considered and prepared for.

> It is wise … to price well below cost push out other players forever

I challenge you to name a single successful example of this that isn’t state enforced.

Uber

Amazon?

Amazon was wildly profitable on a unit cost basis from relatively early on. They didn’t show profits on paper because they reinvested everything into their capital buildout to reduce costs even more.

I thought Amazon was selling quite a few items at a loss to undercut competition early on?

They did in some instances, not all.

A notable example where they ate $ millions in losses is the Diapers.com story [1] [2].

[1]: https://slate.com/technology/2013/10/amazon-book-how-jeff-be...

[2]: https://arstechnica.com/tech-policy/2020/07/emails-detail-am...

All VC funded companies that release free or underpriced products and services, capture market share, then raise prices or enshittify?

The entire business model of VC funded tech?

Typically, VC funded firms are inventing new markets entirely.

Simply overcoming startup capital costs is not the argument being made when folks claim dumping.

They are? Most of what VC funded companies do has been done before at a smaller scale, often with less polish and at a higher price.

VC money is used to scale up, cut costs with scale, capture markets, and then usually prices go up later depending on the economics.

The Chinese state is basically just acting as a big VC fund for Chinese manufacturing industries. A VC fund with a sovereign currency and the ability to sustain burn-mode for decades.

It doesn’t always work. There are some absurd examples of Chinese waste produced this way like “ghost cities.” But when it works it works, and at tremendous scale, and they can just dominate entire industries.

It's questionable whether the ghost cities truly exist though. I was under the impression they were a product of China's bizarre savings and investment market, and that a lot of them have since filled up?

They were a product of forward-looking planning. Those cities were empty when built, but have since all filled up.

Meanwhile in the west we don't build anything and then are surprised when we run into insane housing shortages.

Dumping is when you sell things for below cost. It is not dumping when you charge a 500% markup instead of a 1000% markup, even if the market is currently selling at that markup.

I thought the same but when I googled, the results disagreed with this point of view.

https://en.wikipedia.org/wiki/Dumping_(pricing_policy)

All the laws listed there define dumping as something being sold below the "normal price" and there being some quantifiable harm being done to local industry of the country being exported to.

So it has nothing to do necessarily with the cost of production, and based on this it could be considered price dumping.

That's merely the marginalists at the WTO struggling to fit their beliefs that value is subjective and unkowable into the reality of commodity production.

Okay, so what official sources do you base your definition of price dumping on? Nobody is asking for your opinion on what you think price dumping is. This is a legally recognised thing, not just some random talking point.

The normal price is not the same as the market price. The normal price is what we had last year. The market price is higher than normal, due to a sudden demand spike and production shifting to HBM.

More manufacturing capacity coming online to return the price to normal is not dumping, it's how markets are supposed to operate.

Dumping would be e.g. if China used subsidies to sell DRAM at a price below what unsubsidised manufacturers can sell at, in an effort to push them out of the market.

Normal price is a technical term I assume. Is it just a historical price, or is it knowable without market based price discovery?

It's more that definitions are made with an assumption of normal market conditions but what's happened in the DRAM market is extreme. Production of conventional DRAM package types has evaporated, while the demand is unchanged or increasing, because of new demand for HBM which is even more profitable.

So some common sense is required: yes under normal circumstances selling below the market price is dumping, but when the market price looks like a vertical line because of a sudden shock then you can't really take the market price too seriously. Mostly the price of DRAM is not set on the open market but is negotiated via contracts between the major players so there isn't really one price of DRAM at the moment. If you're a big customer like Apple you can get a price that is completely different from what you or I can get fighting for scraps on eBay.

I find people tend to miss the productive aspects of Chinese state led investments because they don't consider their value at scale. Take the HSR system, it has been derided time and again as being wasteful, and too expensive, and so on. Yet, now it's become a key artery for trade and commerce across China. It allows goods to move at an incredible speed, boosts tourism, and helps overall development of many regions which otherwise wouldn't see much economic activity.

Is China doing to DRAM what Amazon did to bookstores?