The “Economics” of Atomic Bombs and Chips

Is it easy to build an atomic bomb or to build a chip? The answer to this question reflects whether a person has common sense of economy. It is definitely not a trivial matter, so I intend to talk about it, especially since I have seen many netizens discuss this issue, and I am even more worried.

Let me talk about the answer first: it is definitely easier to make an atomic bomb than a chip. why? The following is the analysis.

The first is the phenomenon-in this world, there are definitely more countries that can build atomic bombs than we thought. Apart from permanent members of the Security Council, it is also very easy for some small countries to build. For example, Israel has always been nervous, because several Arab countries in the Middle East have directly or indirectly expressed that they “will build” or “are building” nuclear weapons.

Outside the Middle East, other small countries also often use “I want to build” or “I am building” atomic bombs as a means to coerce big powers and the international community to gain benefits. Why is this technique so unsatisfactory? The reason is-they can really be made.

The manufacturing technology of the atomic bomb is no longer a secret. It has only two barriers: one is raw materials, and the other is courage. For the first one, the international community generally restricts it through a raw material embargo. For the latter, everyone uses pressure or benefits to resolve the problem. Of course, there are also nuclear facilities like Israel that go directly to bombing enemy countries.

In short, the atomic bomb is not difficult to build. In contrast, the chip is obviously much more difficult. The core reason is that the two have different requirements for international cooperation. It can also be said that the length and width of the industrial chain are different. The chip industry chain is much longer and wider than the atomic bomb. It requires an international division of labor. It is basically impossible to have a 100% independent chip industry, and it is extremely uneconomical.

Here, it is necessary to make a simple analysis of the industrial links of the chip. There are at least four links: one is IP copyright, the other is design, the third is manufacturing, and the fourth is packaging and testing.

Chips and atomic bombs are two different types of species, and they belong to different eras. To some extent, the atomic bomb can be done behind closed doors, but the chip is definitely not good, it must be done in an open environment.
Take the mobile phone chip as an example, the forefront is the IP solution provider. In this field, the British ARM (Chinese translated as An Mou) ranks first. The second link is the brand business (also called the designer). Samsung and Huawei HiSilicon are all involved in this link. So, what is the difference between solution supply and brand design?

Generally speaking, the difference between the two is that the solution provider provides a smart design with intellectual property (IP), that is, a common chip template is designed. The template does not have a physical entity, but an intangible intellectual property. Solution vendors sell their intellectual property to brand vendors, and the former generally do not produce their own branded chips.

After the brand owner buys the solution, on the basis of this template, according to the needs of their target customers, they independently carry out “re-creation”, and finally complete the design and development of the chip. Huawei HiSilicon is the brand owner, and it holds the chip brand. Other brands include Samsung, Apple and Qualcomm.

The third link is the manufacturers in the production link. Major manufacturers include TSMC, Samsung, SMIC and Hua Hong, etc., which undertake manufacturing outsourcing from brand manufacturers. The “soft underbelly” of mainland China lies in this link. TSMC once occupied more than 50% of the global share in this link. It has the top technology and manufacturing process. Huawei HiSilicon’s chip foundry is the best choice. It is precisely because of this that some politicians in the United States put pressure on TSMC and forced it to cut off the supply of Huawei.

The last link is packaging and testing. Its technical requirements are relatively low. Many A-share companies with chip concepts are located in this link.

In addition to the “depth” of the above four links, the chip industry chain also has a “breadth”, that is, manufacturers in each link also need the cooperation of other high-tech suppliers. For example, in the manufacturing process, the lithography machine is the core equipment, and its main manufacturers are the Dutch ASML company, as well as some Japanese and American companies. The ASML company was praised very godly, and it is indeed very godly.

The complexity of the chip industry chain is far more than that. Chips and atomic bombs are two different types of species, and they belong to different eras. To some extent, the atomic bomb can be done behind closed doors, but the chip is definitely not good, it must be done in an open environment.

Who is easy to make? This is a simple question, but also a very complicated question.