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Mostrando postagens com marcador The Atlantic. Mostrar todas as postagens
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sexta-feira, 15 de maio de 2020

Brazil’s Pandemic Is Just Beginning - Uri Friedman (The Atlantic)


Brazil’s Pandemic Is Just Beginning


https://cdn.theatlantic.com/assets/media/video/upload/Brazil.mp4

The United States is clearly ground zero for the coronavirus outbreak at the moment, but the next one may already be emerging 4,500 miles south.
“Brazil is probably the next epicenter of the pandemic in the world,” Luciano Cesar Azevedo, a physician who has been spending his days and nights treating COVID-19 patients in intensive-care units in São Paulo, the country’s largest city, told me this week. “I think Brazil is going to get close to 100,000 deaths.” On the day we spoke, Azevedo noted that ICU beds in the city’s public health-care system were at 90 percent occupancy. He said Rio de Janeiro, whose health-care system is already seriously strained by the outbreak, could become Brazil’s New York
Tom Inglesby of the Johns Hopkins Bloomberg School of Public Health notes that the country reported 3,700 new daily cases on April 23. Less than two weeks later, on May 6, new daily cases had more than tripled, to 11,896. The developments in Brazil “are really concerning,” Inglesby told me.
The nation of more than 200 million people has so far recorded fewer than 10,000 deaths from COVID-19, a small fraction of America’s death toll. But confirmed cases and fatalities are rapidly growing, each day leading to dismal new records and rendering Brazil the hardest-hit country in Latin America and one of the worst-off in the world. Flu season hasn’t even arrived yet (the Southern Hemisphere is heading into winter), and a dengue outbreak in the country may peak just as the coronavirus outbreak does. Inadequate testing means that Brazil’s official case count, which is already well over 100,000, could actually be as much as 10 times higher, according to Azevedo, who is also a professor of critical care and emergency medicine at the University of São Paulo, which runs a public hospital, and the head of education at Hospital Sírio-Libanês, a private facility. Brazilian President Jair Bolsonaro, one of the world’s leading coronavirus deniers, is pushing to ease social-distancing restrictions and reopen the economy, which could accelerate the spread of the virus. “We are only at the beginning,” Azevedo said.
Just as it has in countries such as the United States, the virus is also mixing toxically with Brazil’s ugliest underlying conditions—most significantly, its status as one of the most unequal countries on the planet. If COVID-19 initially seemed like an egalitarian affliction, upending the lives of everyone, everywhere, it has with time revealed itself to be a plague that often hitches a ride on social inequities. It disproportionately torments poor people who don’t have the luxury to social distance, to adhere to lockdowns, in some cases to even wash their hands, and who are more prone to the health risks associated with the virus. The cruel irony is that in several countries, including Brazil, the wealthy first brought the disease there, before retreating into self-isolation as it began ravaging the poor.
In Brazil, “the first wave of people infected were better off, with high purchasing power, who traveled abroad and returned with the virus,” Maria Laura Canineu, the Brazil director for Human Rights Watch, told me. “They were mostly white people who have access to tests and to private hospital services. But more recently, we’ve seen increasing numbers of infections, hospitalizations, and deaths among black people in the same manner that you guys have seen in the U.S.”
Black Brazilians are concentrated in poor, crowded urban neighborhoods, including the sprawling favelas in Rio de Janeiro and São Paulo, where Canineu is based. Many who live in these areas lack proper sanitation such as access to clean water, let alone soap or hand sanitizer. So the simplest and most consistent advice during the pandemic—wash your hands—isn’t necessarily practical for them. Some families live with 10 or 12 people in a single room, which makes social-distancing impossible. Many work in Brazil’s large informal sector (as, say, construction workers or street vendors) and must leave home to earn money, presenting them with an awful choice: Risk your health to protect your livelihood, or risk your livelihood to protect your health. These “are the perfect conditions for the spread of the virus,” Canineu said.
Residents of favelas, where about 13 million Brazilians live, also largely depend on the public health-care system, which is being battered by coronavirus cases. Chronic diseases such as diabetes, tuberculosis, and high blood pressure are especially prevalent among this population, putting them at higher risk for serious complications from COVID-19.
Gilson Rodrigues, the president of the residents’ association in São Paulo’s Paraisópolis favela, told me that public policies on COVID-19 don’t yet include “guidelines that take into account the reality of favelas.” In the absence of those, he helped found a national network of favelas that has hired its own doctors, enlisted its own fleet of private ambulances, manufactured its own masks, provided accommodation for those who can’t otherwise self-isolate, organized food deliveries, and offered financial assistance to self-employed professionals who have lost their jobs.

In Manaus, the capital of Amazonas state, the public health-care system is reeling from a surge in COVID-19 patients. Speaking about the bleak situation recently, Manaus’s mayor burst into tears on television. “Videos circulating on social media have demonstrated the desperation of families seeking urgent care, while bodies pile up next to patients in understaffed hospitals in Manaus,” Jocelyn Getgen Kestenbaum, an international-human-rights expert at Cardozo Law in New York, wrote in a recent analysis of Brazil’s predicament.
This “perfect storm” of public-health vulnerabilities, as Kestenbaum described it, is descending on Brazil just as it struggles with political paralysis at the highest levels of government. Bolsonaro, keen to jump-start the economy, is battling local officials and the courts to relax lockdowns. (“Some people will die,” he said. “That's life.”) The president is also mired in a scandal that could lead to his impeachment.
In a country where a quarter of the population lives in poverty, and one that is still recovering from a major recession even as it hurtles toward another economic collapse, the poor are being hit hard every which way—by the coronavirus and by efforts to contain it. As Brian Winter, the editor in chief of Americas Quarterly, memorably put it to me, “Street vendors can’t work from home.”
Kestenbaum argued that the Brazilian government’s actions are also indicative of the nation’s underlying inequities. Policy makers who can easily socially distance and have access to proper health care assess risk differently from “most of the individuals living in the country,” she told me. She argued that the only reason Brazilian officials have had to resort to such severe lockdown measures is because the government was so slow in rolling out testing and contact tracing to contain the outbreak. “Right now, we have to make sure that everyone stays healthy,” she said. “Healthy people equals a productive workforce, right?”
Canineu noted that millions of poor Brazilians have not been able to access a government benefit of about $100 a month to help tide them over, because of a lack of good internet, a lack of information about how the process works, or hiccups with the process itself. That includes her manicurist, an informal worker with two kids, who downloaded the necessary app and registered to receive the relief, only to be told for nearly two months now that her case is “under analysis.”
She “cannot go to work” and therefore “doesn’t have money to do anything,” Canineu said. “She is desperate.”
We want to hear what you think about this article. Submit a letter to the editor or write to letters@theatlantic.com.

quarta-feira, 19 de fevereiro de 2020

5G da Huawei: a luta de retaguarda dos EUA (NYT, The Atlantic, Asia Times)

Aqui o conjunto de três artigos selecionados por meu amigo e colega de carreira Pedro Luiz Rodrigues sobre a tentativa dos EUA de impedir que outros países aceitem e contratem a tecnologia 5G da Huawei.

The New York Times – 18.2.2020
Huawei Is Winning the Argument in Europe, as the U.S. Fumbles to Develop Alternatives
Germany seems poised to follow Britain in letting the Chinese maker build next-generation networks, despite last appeals from the United States.
David E. Sanger and David McCabe

Washington - America’s global campaign to prevent its closest allies from using Huawei, the Chinese telecom giant, in the next generation of wireless networks has largely failed, with foreign leaders publicly rebuffing the United States argument that the firm poses an unmanageable security threat.
Britain has already called the Trump administration’s bluff, betting that officials would back away from their threat to cut off intelligence sharing with any country that used Huawei equipment in its network. Apart from an angry phone call between President Trump and Prime Minister Boris Johnson, Britain appears to be paying no price for its decision to let Huawei into limited parts of its network, under what the British say will be rigorous surveillance.
Germany now appears ready to follow a similar path, despite an endless stream of cajoling and threats by Secretary of State Mike Pompeo, Defense Secretary Mark T. Esper and other U.S. officials at a global security conference in Munich last weekend.
In public speeches and private conversations, Mr. Pompeo and Mr. Esper continued to hammer home the dangers of letting a Chinese firm into networks that control critical communications, saying it would give the Chinese government the ability to spy on — or, in times of conflict, turn off — those networks. The security risks are so severe, they warned, that the United States would no longer be able to share intelligence with any country whose network uses Huawei.
 “If countries choose to go the Huawei route,” Mr. Esper told reporters on Saturday, “it could well jeopardize all the information sharing and intelligence sharing we have been talking about, and that could undermine the alliance, or at least our relationship with that country.”
Yet officials sense their continued drumbeat of warnings is losing its punch in Europe, so the administration is shifting its approach. The United States is now aiming to cripple Huawei by choking off its access to the American technology it needs and trying to cobble together a viable American-European alternative to compete with it.
The Huawei fight is just one part of a bigger U.S.-China battle, as Washington tries to contain Beijing’s influence and power and ensure that the world’s second-largest economy does not come to dominate advanced industries that could give it an economic and military edge. That includes the next-generation telecommunications networks that Huawei is building, known as 5G. Those superfast networks will control communications, critical infrastructure and, most worrying for American officials, the “internet of things” devices that are already controlling factories, autonomous vehicles and the day-to-day operations of military bases.
The United States is also trying to limit China’s access to American technology more broadly and is considering restricting sales of microchips, artificial intelligence, robotics and some types of advanced software, along with preventing tech companies from teaming up — or even sharing research — with Chinese firms.
Last week, the United States turned up the legal pressure on Huawei by announcing new charges of racketeering and theft of trade secrets, including allegations from more than a decade ago. The new charges were added to a sweeping indictment filed in 2019 that accused the company and its chief financial officer, Meng Wanzhou, of fraud and sanctions evasion. As part of that case, the Trump administration has been pressing Canada to extradite Ms. Meng, who was arrested in late 2018 in Vancouver at the behest of American officials, so that she can face charges in the United States. Ms. Meng is the eldest daughter of Huawei’s founder, Ren Zhengfei.
This month, the administration is expected to try to squeeze Huawei even further by closing a loophole that has allowed the firm to continue buying parts and products from American companies, despite a Trump administration ban on selling to Huawei. While the Pentagon initially opposed the effort, fearing it could hurt defense suppliers, it has now reversed its position amid pressure from other administration officials.
But the effort to handicap Huawei has been complicated by the lack of an alternative to the company, which offers low-cost telecom equipment partially subsidized by the Chinese government. Right now the only real competitors are Nokia and Ericsson, two European firms that claim they have deployed more 5G networks than Huawei, but are clearly struggling to match its prices or keep up with the Chinese firm’s research and development.
That has sent the administration scrambling to present European and other nations with another option. Over the span of 10 days, Attorney General William P. Barr, Vice President Mike Pence and other officials have offered differing American strategies to build a credible competitor to Huawei. Yet at times, they have contradicted one another’s ideas, often in public.
In private meetings, Mr. Trump has been urging American firms to get into the competition themselves. But the administration is deeply divided internally over whether the United States needs to invest in the technology or leave the market to sort it out.
Mr. Barr further confounded things with a speech this month where he called for American acquisition of Nokia and Ericsson “through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies.”
“We and our closest allies certainly need to be actively considering this approach,” Mr. Barr said.
American officials have gently walked back Mr. Barr’s comments. Asked about the prospect of a “controlling stake,” Robert Blair, an assistant to Mr. Trump for international telecommunications policy, told The New York Times that “we are focused more on putting everyone in the tent than putting U.S. taxpayer dollars in the midst.”
Mr. Pence, in remarks to CNBC, said the best response to Huawei was to free up airwaves for use in 5G networks operated by American carriers.
Frustration with America’s anti-Huawei campaign is building. Speaking in Munich, Mr. Esper trotted out the same security warnings the United States has been using for more than a year, telling a packed conference hall of European diplomats and business leaders that the People’s Liberation Army and Chinese intelligence were trying to extend their authoritarian state and that Europe must fight back.
“Huawei and 5G are today’s poster child for this nefarious activity,” he said. “Let’s be smart. Let’s learn from the past and let’s get 5G right so we don’t regret our decisions later.”
Yet his audience remained skeptical.
“Many of us in Europe agree that there are significant dangers with Huawei, and the U.S. for at least a year has been telling us, do not use Huawei. Are you offering an alternative?” asked Toomas Hendrik Ilves, Estonia’s former president. “Are you going to subsidize Nokia and Ericsson? I mean, what do we get? What is it that we should do other than not use Huawei?”
Huawei has proved increasingly effective at pushing back against the United States. After U.S. officials said last week that they had long ago found a “back door” that would allow the company to siphon information off any network, without American telecommunications firms knowing it, the company called it “impossible” and demanded evidence. But none has been declassified.
Andy Purdy, a former homeland security official who now works for Huawei, said the company has suggested a way around security concerns by offering to license its technology “so the Americans or Europeans can build it themselves.” The United States has not responded to the offer, Mr. Purdy said.
The fight over Huawei has put many European countries in a no-win position, forcing them to either rebuff a key intelligence ally’s warnings and risk their key alliance, or alienate China, a critical trading partner. Further complicating the decision is the lack of definitive U.S. intelligence showing that Huawei has ever gained access to data that flows across its networks during the two decades it has provided telecommunications equipment to Europe.
Fear of Chinese retaliation has gripped Chancellor Angela Merkel of Germany and her government. While Germany’s intelligence chiefs have largely joined the American assessment of Huawei’s national security dangers, Ms. Merkel is focused on the effects on German exports to China, especially after Chinese officials have hinted that Volkswagen, BMW and Daimler, the maker of the Mercedes-Benz, would bear the brunt of retaliation.
“I have always been more concerned about the possibility of network manipulation,” Norbert Röttgen, the chairman of the German Parliament’s foreign affairs committee, said at the Munich conference. “You don’t even have to actually take that step, if you control the network. The knowledge that you can is power in itself. How free would we really be in our choices with respect to protecting human rights and other issues if we know that the functioning of crucial parts of our economy depends on the good will of an external power?”
Yet European officials say Germany is likely to mirror Britain’s decision to use Huawei and engage in strict monitoring. Germany, like Britain, is expected to keep Huawei out of the most sensitive parts of the telecom network but allow the firm to provide equipment and software for the radio networks that control cell towers and base stations around the country.
That decision will still be a huge loss for the United States. Germany and Britain are America’s closest intelligence-sharing partners, and both nations sit atop critical points along fiber-optic cables that are key to intercepting communications from Russia to the Middle East. American officials, including the National Security Agency, have expressed concern about the Chinese government’s ability to infiltrate those communications.
The United States has had some success in keeping Huawei out of other networks. Australia has flatly banned Huawei and Japan has done so indirectly. Poland, eager for a deeper American alliance, is likely to keep Huawei at bay. Italy, lured by the promise of a $3 billion Huawei investment in its telecommunications system, at first announced it was giving Huawei a major contract to build its “radio networks,” the base stations and antennas that connect to cellphones and internet-of-things devices. Then it suggested it would review each of those deals, but has been murky about how.
In the absence of a cohesive U.S. strategy, a group of major wireless carriers has considered another approach that would allow more companies to challenge Huawei. The group is pressing for a common architecture for the software and hardware that run 5G networks — an idea that has gained traction with some U.S. policymakers.
Such a system would allow smaller companies to make individual pieces of networking equipment that interact with one another, breaking Huawei’s market dominance.
Mr. Barr, in his speech, said the idea is “just pie in the sky.”
The proposal has gained traction among others in Washington and the administration. The two top lawmakers on the Senate Intelligence Committee, Richard M. Burr, Republican of North Carolina, and Mark Warner, Democrat of Virginia, introduced a bill in January that would allocate at least $750 million to research and development of such an open system. It also allocates $500 million to “accelerate the adoption of trusted and secure equipment globally.”
Larry Kudlow, the director of the National Economic Council, recently told The Wall Street Journal that the United States was supporting efforts to use software to undercut Huawei.

*

The Atlantic, Washington D C – 19.2.2020
America’s Allies Are Unconvinced
Uri Friedman

In the contest between the United States and China over who gets to shape the world in the coming century, America seems to be playing to win. But it’s running into a big problem. Despite the global network of alliances Washington has built up, it’s been unable to convince those allies to hop aboard the “great-power-competition” express and leave China behind.
U.S. officials are learning just how challenging it is to persuade friendly nations that America is a reliable partner capable of providing them with viable alternatives to what China has on offer—that the rewards of drawing closer to Washington outweigh the risks of alienating Beijing. That’s in part because of the mixed messages from the American president himself: He’s notoriously iffy about his commitment to allies, even as he often expresses his adoration of the Chinese president (notwithstanding the ongoing U.S.-China trade war).
The consequences of all these doubts have been especially evident in the past few weeks, as America’s closest ally in the world (the United Kingdom) and one of the most pro-American countries in the world (the Philippines) have essentially declared, “We’re good, thanks.”
In not following America’s lead, these allies have set precedents for how countries caught between the superpowers could act in the future. They have also signaled that international relations today are too intertwined, and Chinese power too magnetic, for them to enlist in a U.S.-led coalition and usher in a Cold War–style bifurcated world. If the United States is intent on reconstructing that world, it will likely find itself largely isolated. If the United States wishes to not be isolated, it will have to develop compelling alternatives for allies to stick with it instead of China.
The countermovement against a U.S.-China cold war gained strength in late January, when British Prime Minister Boris Johnson announced that the United Kingdom would allow the Chinese telecommunications company Huawei to provide equipment for Britain’s next-generation 5G mobile network.
This was a slap in the face to the U.S. officials who had spent months lobbying their British counterparts to ban Huawei because of alleged security risks associated with its connections to the Chinese government. The Trump administration reportedly went so far as to share classified intelligence with the United Kingdom indicating that Huawei could potentially spy on and disrupt foreign networks—a claim Huawei denies.
Ultimately, the U.K. chose to split the difference between China and the United States. The British government said it would keep Huawei technology out of the most sensitive parts of the country’s new 5G network, but it won’t follow the United States, Australia, and Japan in outright prohibiting the provider.
But the fact that the U.K., which famously enjoys a “special relationship” with the United States, went with that option—with intelligence sharing and trade talks with Washington on the line after Brexit, no less—emboldened other allies. The European Union and France swiftly disclosed similar plans, and Germany looks poised to do the same. Other conflicted allies, such as India and South Korea, are undoubtedly watching the cascade.
For these countries, the benefits of partnering with Huawei—the dominant player in the global 5G market, and also the cheapest because of Chinese government subsidies—are obvious while the costs are more opaque, if no less real. As Johnson put it, “If people oppose one brand or another then they have to tell us what is the alternative, right?”
U.S. Attorney General William Barr has recognized this weakness in America’s message to allies, proposing that the U.S. government quickly offer a “market-ready alternative” to Huawei by taking a controlling ownership stake in Huawei’s European competitors Nokia or Ericsson.
But Barr also acknowledged that the Trump administration’s grievances with Huawei are about more than security risks—amounting to a battle over which superpower will dominate the backbone of the future digital economy, with trillions of dollars in new opportunities in play. This is true, but it’s also an admission that is likely to strengthen allies’ suspicions that the United States’ position is really about maintaining America’s technological leadership, not securing partners.
Hence the transatlantic divergence. While the Trump administration claims that a rising China poses an existential threat to American preeminence, my colleague Tom McTague has written, “London appears to have already calculated that China is a land paved with gold it cannot afford to stay away from.”
Many countries around the world are now caught between the United States as their main security ally and China as their top trading partner. And this past week one of those countries, the Philippines, a former U.S. territory, began backing out of its decades-old security alliance with Washington.
President Rodrigo Duterte, a critic of the United States ever since coming to power in 2016, served notice that his government will terminate an accord that governs the rules for U.S. forces participating in joint military exercises and training in the Philippines. The parties may still find a way to salvage the pact before the termination takes effect in 180 days. And even if they don’t, other elements of the military alliance, such as a separate mutual-defense treaty, may endure.
But Duterte’s decision nevertheless constitutes the gravest threat to the alliance in years and jeopardizes the U.S. military’s efforts to deter Chinese aggression in the region. As the Asia scholar Brad Glosserman has written, Duterte’s move was in part motivated by his doubts about America’s commitment to the Philippines’ defense and concerns about antagonizing an ascendant China. In fact, the country’s military chief has suggested that the Philippines could broker new military-cooperation agreements with China despite their maritime territorial disputes. Even if this is just a troll of the United States, it’s working. As Defense Secretary Mark Esper noted, the Duterte government is heading “in the wrong direction.”
But one U.S. official who doesn’t seem especially concerned is Esper’s boss. Asked about Duterte’s announcement, Trump told reporters that he was “fine” with it and even thanked the Philippines for saving the United States “a lot of money.”
It’s the kind of gripe from Trump that countries that share long-standing military alliances with America have grown accustomed to. But now they’re also concluding that despite what administration officials say, Trump himself thinks about competing with China in the narrow terms of not getting fleeced on trade rather than in the broader terms of contending with the Chinese geostrategically as a superpower.
His administration is also torn between the impulse to scale back America’s investments abroad and prevailing over a China that is ramping up its own investments. While China is investing more than a trillion dollars in Belt and Road infrastructure projects across Eurasia, the Trump administration’s 2021 budget proposal suggests setting aside a relatively measly $800 million to provide an alternative to “predatory Chinese international lending.” Similarly, Secretary of State Mike Pompeo is currently on a trip to Senegal, Ethiopia, and Angola that is intended, as one State Department official briefing reporters phrased it, to emphasize America’s interest in “dramatically increasing U.S. trade and investment” in these and other African countries. But all three countries have close ties with China, whose diplomatic and economic investments in the region far outweigh America’s.
More broadly, allies are less inclined to side with the U.S. now that they’ve witnessed how major foreign-policy initiatives are no longer likely to carry over from one administration to the next. This is the case even with what is arguably the most bipartisan belief in Washington these days: that competition between a rising China and a dominant United States will define the 21st century. During a recent visit to London, for example, Pompeo described the Chinese Communist Party as “the central threat of our times.” Matt Duss, Bernie Sanders’s foreign-policy adviser, told me around the same time that a Sanders administration would consider climate change “the number-one security threat” facing the United States, which would make China, as the world’s largest greenhouse-gas emitter, a crucial partner. Why go out on a limb and pick a side when one U.S. election could scramble the sides?
In a new report on U.S. policy toward China, the Center for a New American Security noted that while U.S. partners generally don’t want to be part of a new international system led by an authoritarian China, they also cannot ignore Beijing as a mammoth “economic opportunity and geographic reality.” Any American strategy needs to recognize that, the authors advised.
The guidance also came with a warning: “Attempts to construct an explicitly anti-China alliance will fail.” On the day the report was released, the United Kingdom announced its Huawei decision.

*


Asia Times, Bangkok – 20.2.2020
Can US export controls on chips stop Huawei?
Trade restrictions might push the company to accelerate the use of advanced chip-making techniques
David P. Goldman

The world’s semiconductor industry is struggling to understand reports from Washington that the Trump Administration may try to block sales of chips to Huawei Technologies if they are manufactured with American equipment.
It isn’t clear that the United States has the technological clout to make export controls work. The result might be to push Huawei and other Chinese companies to speed up the adoption of more advanced chip-making techniques that American companies do not offer, producing faster and more efficient chips.
The Wall Street Journal reported Feb. 17, “The Trump administration is weighing new trade restrictions on China that would limit the use of American chip-making equipment, as it seeks to cut off Chinese access to key semiconductor technology, according to people familiar with the plan. The Commerce Department is drafting changes to the so-called foreign direct product rule, which restricts foreign companies’ use of US technology for military or national-security products. The changes could allow the agency to require chip factories world-wide to get licenses if they intend to use American equipment to produce chips for Huawei Technologies Co., according to the people familiar with the discussions.”
In a separate action, the US Department of Defense reportedly suspended its opposition to a plan to block sales of components to Huawei if 10% of their value is derived from American technology. In January, the Pentagon reportedly blocked a Commerce Department proposal to impose a 10% threshold because it would harm US technology companies, and White House economic adviser Larry Kudlow said that the proposal was rejected because “We don’t want to put our great companies out of business.”
Taiwan Semiconductor, the world’s leading foundry and Huawei’s biggest supplier, has told the industry press that its most advanced chips embody US content under the proposed 10% threshold. “According to TSMC internal assessment, its 7 nm uses less than 10% of US technology thus it will have no issues. However, its 14 nm supply to Huawei may face some problems,” Gizchina reported on Dec. 23.
Taiwan Semiconductor already manufactures 7-nanometer chipsets for Huawei’s subsidiary Hsilicon – the Kirin 980 and 990 sets for 4G as well as 5G broadband. The chip architecture stems from Britain’s ARM, a subsidiary of Japan’s Softbank.
ARM declared last October that its technology was not of American but of British origin and therefore exempt from US controls. Huawei’s Ascend 910 Artificial Intelligence chip for high-speed servers also uses 7-nanometer fabrication from Taiwan Semiconductor. TSMC has been producing 7-nanometer chips since 2016 with what the company claims are acceptable yields. In October 2019, the Taiwanese firm announced that it already was delivering 7-nanometer chips to customers in “high volume.”
The 7-nanometer process requires Extreme Ultraviolet (EUV) lithography, which etches billions of transistors onto the chip’s surface. The denser chips provide 20% more processing capacity with lower power consumption than older chips. In 2020, TSMC promises to introduce 6-nanometer chips with yet another 20% gain in efficiency.
According to Huawei, the Ascend chip design is a game-changer in artificial intelligence. The company markets the Ascend chipset with its proprietary AI software framework Mindspore, and claims that the new development framework doubles the efficiency of developers through the use of natural language processing that requires fewer lines of code.
Most of Huawei’s products still use 14-nanometer chips, but the Chinese national champion can source the older chips on the Chinese mainland, Taiwan News commented Dec. 25: “In the event the US does go ahead with its plans, Huawei could either choose to buy 14-nm chips from China’s Semiconductor Manufacturing International Corporation (SMIC) or switch to 7-nm or even 5-nm products from TSMC.”
Speaking on background, a senior Huawei executive said, “We, as do others, have plans to produce chips below 7 nanometers, to 5 and below over the course of several years. This is clearly the direction of all chipmakers. The important thing isn’t who gets there first, as long as you have your own independent capability.”
There are several technologies that can produce 7-nanometer and under chips, but the most promising is extreme ultraviolet lithography (EUV), now employed by TSMC as well as Samsung, the second-largest chip producer.
Although American companies like LAM Research and Applied Materials are the largest providers of chip-making equipment, the only producer of EUV lithography equipment is the Dutch firm ASML. Last year the United States persuaded the Netherlands to delay the sale of EUV equipment to China’s SMIC, but Taiwan’s TSMC has already purchased 30 lithography machines from ASML. Presumably, chips manufactured by TSMC for Huawei using Dutch equipment would not be subject to American controls.
Huawei started preparing a year and a half ago for intensified US sanctions, Nikkei Asian Review reported last September in a cover story headlined “Insight Huawei’s Secret Plan to Beat American Trade War Sanctions.”
According to reporters Cheng Ting-Fang and Lauly Li:
In the first few weeks of 2019, 20 engineers from Huawei Technologies arrived in the riverside town of Jiangyin in eastern China on a secret mission. They took up stations at the state-backed Jiangsu Changjiang Electronics Technology, China’s largest chip packaging and testing company, where they went to work upgrading the facilities and increasing the site’s capacity, ahead of a production surge in the autumn.
“These Huawei staff are on-site almost seven days a week, from day to night, nitpicking and reviewing all the details … demanding strictly that the local company meets global standards as soon as possible,” one chip industry executive familiar with the situation told the Nikkei Asian Review. “It’s honestly like preparing for wartime.”
All across Asia, companies in the computer chip industry were receiving similar messages from Huawei: Boost your production, and we will buy your product. In a slowing global market, Huawei made a commitment that was impossible to resist: The company guaranteed up to 80% utilization rates for the next two years to potential and current suppliers.

In April 2018, the United States punished the second-largest Chinese telecommunications company ZTE by suspending sales of US chipsets for its smartphone handsets, effectively shutting the company down.
President Trump intervened to allow ZTE to pay a multi-billion-dollar fine and accept American monitors in return for the restoration of chip sales. By December 2018, though, Huawei Technologies surprised the world by launching its own Kirin chipset, which competes with Qualcomm’s Snapdragon offering.
The speed with which China reached self-sufficiency in chip design surprised the United States. Washington has escalated its attempts to deny Huawei access to critical technology, including the April 2019 announcement that all component sales to Huawei would require special licenses from the Commerce Department. Through domestic substitutes and Asian suppliers, Huawei quickly produced handsets as well as 5G telecommunications equipment with no US components.
The trouble is that the United States stopped investing in high-tech manufacturing after the 2000 tech stock crash, which in part was occasioned by excessive investment in telecom hardware. Investment in physical production of electronics rapidly shifted to Asia. In 2019, virtually no venture capital commitments were assigned to manufacturing, as US investors preferred software.
After nearly two decades of neglect of the US high-tech industrial base, so much capacity and know-how have shifted overseas that the US may lack the clout to deny access to Chinese companies.