The CEO of ASML commented on this story in Nieuwsuur last Tuesday [1] (the interview starts at 22m35s). Caption file can be found here [2], which is not entirely correct in every sentence uttered, but translates pretty well.
Main points raised there:
1) This story is about four employees, who were not closely familiar to the core technology of ASML.
2) Looking at the circumstances, it seems far more likely that this was an action by ex-exployees with commercial motives, rather than government-sponsored spying.
3) ASMLs core technology simply remains in The Netherlands. An anecdote: 15 years ago ASML came with the most advanced lithography scanner of that time. It was copied in China to the last screw, but the device simply didn't work, because they lacked intricate knowledge on its actual operation.
As an addendum: The subtitles are really not to be relied upon for what he actually said. I regret pasting them. They were probably typed up on the spot and leave out the majority of the content.
Also, for example, he said "[people talk about] senior R&D employees", but it is subtitled as "a wave of employees".
This mirrors how open source hardware manufacturers can do a great job even with knock offs on the market. The Prusa 3D printer is open source, but all the clones are cheaper and lower quality. The expertise that goes in to building the Prusa is what makes them worth their higher price.
> Looking at the circumstances, it seems far more likely that this was an action by ex-exployees with commercial motives, rather than government-sponsored spying
Not sure, but wasn't China their biggest client? And they didn't want to offend them, I think.
'He probably refers to Samsung. That company would have "spoused" the spies to steal the software and start their own business, thereby creating a competitor for ASML. The software is needed to set up chip machines for optimum production of electronic chips.
In 2016, Samsung became a 30 percent shareholder in Xtal, and ASML subsequently lost Samsung as a customer for this software.'
>2) Looking at the circumstances, it seems far more likely that this was an action by ex-exployees with commercial motives, rather than government-sponsored spying.
Which doesn't surprise me, as that's practically ingrained in the Chinese culture, and is another factor to take into account when hiring Chinese people.
>and is another factor to take into account when hiring Chinese people.
I understand what you mean, but it's literally illegal to take any factor into account when hiring Chinese people (literal racism). It's literally a protected status.
Is there some other way to interview and test whether someone will steal your code and send it to China, other than the fact that they're Chinese?
If you can come up with an alternative test you give everyone, it's okay. Using nationality as a shortcut is not OK.
ASML is not a chip company. They are a chip equipment company. The machine they have designed is a wonder of science and engineering. It is also the only model by any company that is capable of printing the chip layers at state of the art nanoscale. Every high value chip produced in the world has its lithography steps in ASML tools.
The problem with chip IP theft is the theif only has the IP they stole, not the skill to further develop or extend it (usually). The Qualcomm => Intel IP Theft that Apple facilitated is a great example, or AMD's licensing of the first gen Zen architecture to a Chinese owned company.
Intel wasn't able to get their chipset working well despite a treasure trove of Qualcomm code and documents, even with the ability to question Qualcomm engineers via Apple.
Meanwhile, Hygon (the AMD/China joint venture) has produced the Dhyana, virtually identical to AMD's EPYC chips of a year prior.
The limiting factor for Hygon fulfiling its goals (home grown, performant cores) faces many challenges, as AMD is moving to 7nm at TSMC, while the bleeding edge at Chinese fabs (and nearly all other fabs) is 14nm. Even Intel hasn't been able to jump above 14nm and make a sizeable number of chips.
Even if Hygon were to steal AMD's newer design, they have no native fabs to manufacture it, and they likely won't for another few years. Permanent industry laggard puts you in the same position as VIA, never making good profit or breaking ahead of competitors.
I also fail to see the difference between Chinese corporate interests and Chinese government interests. Doesn't the government have its hands in all this stuff?
Is the semiconductor industry particularly vulnerable to China for some reason? I am obviously in a news bubble but it looks like it's always the silicon technology companies that have these issues.
There's probably plenty of bias, but a large part of the China2025 plan is to achieve dominance in semiconductors. Since the domestic chip industry needs to catch up and the intelligence services are not above IP theft, this isn't surprising to me.
By 2025 they might figure out newer processes than 14nm, but even Intel and Global Foundries has hit a wall at 14nm. Samsung, TSMC and IBM are the only companies with productive sub-14nm fabs.
Which is a fascinating lever from a global politics point of view. People theorize that the US might not come to Taiwan's aid, but how could we not? That fab seems too important a chess piece to surrender willingly.
It's not just technology. Every industry has suffered. All the steel recipes have been stolen costing smelters billions in R&D expenses and decades of time. Chemical Industry has suffered, Auto, etc. The end game is to dominate everything.
I suppose the best approach is to avoid doing business with them.
Perhaps the current US Administrations position concerning China warrants wide spread support.
> I'm getting really tired of Chinese-made screws and bolts that almost seem to be made of plastic.
Supposedly, in the cheapest Chinese-produced goods, it sometimes happens that screws are made not entirely from metal, but are just a metal casing around sand.
It's too late to do anything. Those at the top stand to profit by cooperating. There is no reason to expect them to act against their best interests.
I do think it's worth considering whether this will result in a better world overall. It's a loss for many Americans, but perhaps a net-gain for humanity as a whole? If China is able to drive the price of high-quality goods down on a global scale, that might be a good thing, right?
I'd like to be optimistic about all of this. I'm hoping that most of us on HN in the USA will ultimately benefit from us, for lack of a better term, losing.
Planned famines could be a part of that domination. I'd argue that they're easier to cause now than ever if you can disrupt supply chains, and that's easy to do if you control transportation routes and infrastructure.
No, IP theft issues have been affecting pretty much everybody with valuable IP. Mostly semiconductor news gets linked on HN though, so that's why there seems to be a skew in that direction. Most people here only seem to be aware of these, even if plenty of other companies are affected too.
Semiconductor technology is one of the most difficult to setup a manufacturing base for. It is the last piece of the advanced manufacturing puzzle that an industrializing country would pick up, and the one where trade secrets / IP would be most valuable.
Every cybersecurity guy I've ever met has at least one or two Chinese espionage stories--all ending with a bunch of C-level guys pleading to keep it out of the news, while being utterly unconcerned that company IP and sensitive customer information have left the building.
It could just be a case of pass-the-message, but the C-level guys often seemed so unconcerned that you'd have to wonder if they were also in on it. After all, the Chinese do have money, and everyone likes money.
It’s too late for western companies to stop the leakage. The Chinese regime planted their “spies” everywhere in academia & industry through multi-decade onslaught. The companies and governments just kept looking the other way and the chickens are coming home to roost.
I think the West could if it wanted to do so, but the West (a collection of States and companies) is not a centrally controlled entity like China (one state, which has more or less absolute control on how organizations within the state operate).
Western companies do not care about losing IP. They say they care but they don't really. It is just a cost of doing business. They know they are losing IP, but they are going for short term profit (either from the Chinese market or from cheaper manufacturing in China). When the chickens come home to roost the CEO will have been paid big bonuses and ready to move on. If the CEO did not save costs or expand into China, shareholders would have revolted and replaced the CEO anyway.
The West (USA + Canada, EU + UK, Australia) could circle the wagons, form a trading bloc, essentially negotiate with China as a single entity and start a trade war if China did not bend. But even if they wanted to do so, the cost would be high in the short term and voters would punish them.
What might stop China is if another large country such as India, Indonesia or Nigeria decided to position themselves as the ethical alternative: cheap labor and manufacturing without the rampant state sponsored IP theft.
> The West (USA + Canada, EU + UK, Australia) could circle the wagons, form a trading bloc, essentially negotiate with China as a single entity and start a trade war if China did not bend. But even if they wanted to do so, the cost would be high in the short term and voters would punish them.
China depends a lot less on trade than NATO countries, something like 3% of their GDP is making stuff for Western consumers. If there is a serious Trade War their main concern would be their own real estate market instead of selling plastic toys to US consumers.
China's secondary trading block are near Asian countries.
The "west" collectively have a population LESS than China, and they cannot even hold the "EU" together.
China also has major cards, in a situation that you describe above does happen.
- The first thing China will do is sell their treasury holdings,
creating enough shockwaves in the bond market to wipe of the retirement saving of most boomers, (remember that the median US national has no saving).
- They will unilaterally stop following any sanction / not officially , but unofficially they will sell whatever Iran / NK / Russia want to buy from them.
Iran alone has enough oil reserves to meet their energy needs, not to bring up the cozy relationship between Putin and Xi.
- 1970 style inflation in western countries that have outsourced all their electrial engineering work to China, the west doesn't have a collection of mega city that is the Pearl River Delta - China's greatest asset.
There is no way greater New York will be able compete directly with PRD.
It will require infrastracture spending at a level that would be unprecedented in US history comparable to WW2 - putting inflation pressure on resources. Not to mention major displacement of workers - who might not want to go back to working in a factory floor.
All this will be painful to both the "West" and China.
> What might stop China is if another large country such as India, Indonesia or Nigeria decided to position themselves as the ethical alternative: cheap labor and manufacturing without the rampant state sponsored IP theft.
Try starting a tea shop in India and then come back to me - I know I tried.
You will have to pay bribe to 3 government bureaucrats, 5 state bureaucrats, 2 local mafias leader, leaving aside politians who will come at our door if your business gets big enough.
India / Indonesia are democracies with all the mess that democracy involves. Most MNCs rather put their money in Saudi Arabia then invest in unstable democracies.
India / Indonesia will industrialize on their own terms and will mostly stay neutral since they dislike being pawns between great powers.
"Andy Wong, an export manager of Guanya Lighting, said that his company, which mainly sells desk lamps, is struggling to make adjustments to the new global trade reality, in which bulk orders for thousands, or even tens of thousands, of lamps from US and European retailers have disappeared, replaced by small orders from smaller buyers in “Belt and Road Initiative” countries in Asia and Africa as part of China's plan to grow global trade."
“We used to set a minimum order of 1,000 units. Now we take minimum orders of 20 units,” he said.
It is more like Chinese companies are now gobbling up trade share of US in the world. No longer smaller countries have to buy US branded Chinese goods. They can simply buy direct.
As someone living in Indonesia for almost 4 years from the US and no plans to leave any time soon, and having learned a lot of the realities on the ground and in the political scene:
- Indonesian's will never let the Chinese run over them like they have, like for instance, Sri Lanka, etc. Sure, they will buy cheap Chinese goods begrudgingly when something else better may be priced out of their range, but make no mistake, the government will continue to sink Chinese fishing boats encroaching into their waters and the people, if called upon within their religious communities (esp from groups like FPI which has fringe connections to not only the fmr general under the 30 years president [and some US 3 letter agencies through him]), many will go to every suspected Chinese house/business) and rob/steal/rape and kill (1960's and 1990's).
- In Indonesia, this is very much not the case how they perceive western governments (or people), though they very much want to pursue what is best for them on their own terms but the political establishment understands that needs to come from an economic standpoint first and foremost. One way they do this now is by managing foreign denominated liabilities through strict import policies.
If you haven't noticed, major manufactures in the world over the past 20 years have been increasing their operations in Indonesia…
Cant speak for India, but the biggest tail risk for any Indonesian government is the lack of ability to bring some of the economic wealth from the bigger cities and tourist attractions to those places that lack it because there are some pretty big logistical challenges with all of the islands and lack of incentives (outside of the gov partnerships with some western companies for natural resource extraction) for big corporate and political parties alike (they like to show up during elections and disappear until the next one) to do anything sustainable.
How is cheap labour where people commit suicide ethical in any way?
One of the reasons Chinese companies can manufacture so cheaply is the possibility of IP theft. The west want to pay their poor less to manufacture things cheaply. The Chinese want to pay the western rich less to use their technology.
Calling IP theft unethical in a sentence with cheap labour is oxymoronic.
China is no longer a cheap labor country. A significant amount of manufacturing is moving to India, Vietnam, and other SEA countries, with some assembly moving to Africa.
It was less than the national average, 14/million vs 22/million [0]. Nonetheless, they did have a problem with illegal overtime, abusive management, a lack of breaks and discrimination [1].
A lot has changed since then due to pressure from both Apple and the Chinese government.
Cheap labor is relative. The Indian minimum wage does not need to be the same as the Australian at this point in time. Outsourcing leads to employment overseas and its not in anyway unethical.
Companies have been moving both R&D and manufacturing out of China; more companies need to do the same, and faster. Then that's one less channel China can use to steal technologies.
I agree with you but that Amazon one is not really the same thing.
And "stop selling China goods" is a very weird way to word it, even though it's technically correct.
what they're doing is essentially closing their China branch due to low market share, but keep the "imported goods" portion because they still have some edge on that regard due to Amazon's global presence.
If you’re insinuating that every immigrant from China is a “spy” then a significant chunk of our tech infrastructure is built by these spies in the first place.
I don’t think you can lay claim what OP is intending to say unless you’re OP. The best either of us can do is share our interpretation, and others can feel free to pile on.
I’m happy to discuss how to maintain tech superiority in America as long as it doesn’t turn into a witch-hunt against immigrants. It’s far easier to fan fears than to calm them, this should be reflected in how we communicate.
Speaking argumentatively, I’d assert the audience controls your meaning more than you do; after all, meaning in communication is a negotiation between more than one powers. I think of a famous author angrily leaving a guest lecture when students don’t agree with the interpretation, or like with JK Rowling adding interpretation behind her characters after the Harry Potter books.
Yea I agree. You’re talking about meaning, which i assume to mean “what each person derives from your words”. And like I said above, I would define intent as “what meaning the author wishes for people to imbue”, if you want to get crisp.
They don't need to have 100% of them as spies. Even a few at AAPL can do the trick...or 0.00000...1% of total Chinese immigrants. The reality is that millions of Chinese people are embedded in key posts. What will they do when mother-ship calls?
Most of this "spies" are trying to escape China ! all the regime did was offer them more money / opportunity than what they went to the West to find.
China could have achieved it through "turing" normal white citizens too / but I guess they are the real patriots ? Mark Zukerburg learnt mandarin for god's sake.
Its a game among capitalists and most of us regardless of nationality will switch sides to whoever gives the most value.
> Most of this "spies" are trying to escape China ! all the regime did was offer them more money / opportunity than what they went to the West to find.
Your second sentence directly contradicts the first. The "spies" aren't escaping China - they're playing whatever side has more money to throw at them.
> Speak for yourself there. Not everyone is driven by money above all things.
Considering most people spend 8+ hours a day working for money, I'd say yes, everyone is driven by money above all things.
Just look at the millineals, I mean, excuse me, new college grads. They shit talk Facebook's ethics, but the moment they receive a $100,000 job offer from Facebook, their ethics go out the window and they accept the offer from this "shady-ass" company.
Facebook employs about 35,000 people. The millennial generation includes about 71,000,000 people. How the former can be used by you to represent the views of the later is a mystery to me.
Main points raised there:
1) This story is about four employees, who were not closely familiar to the core technology of ASML.
2) Looking at the circumstances, it seems far more likely that this was an action by ex-exployees with commercial motives, rather than government-sponsored spying.
3) ASMLs core technology simply remains in The Netherlands. An anecdote: 15 years ago ASML came with the most advanced lithography scanner of that time. It was copied in China to the last screw, but the device simply didn't work, because they lacked intricate knowledge on its actual operation.
[1] https://www.npostart.nl/nieuwsuur/16-04-2019/VPWON_1297076
[2] https://pastebin.com/Zg55qtYK