back to article US govt bans Intel from selling chips to China's supercomputer boffins

The US government has blocked Intel from shipping high-end Xeon processors to China's supercomputer builders – and other American chip giants are banned, too. Intel confirmed to The Register last night it was refused permission to sell the chips to the Middle Kingdom's defense labs and other parts of its supercomputing …

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Pint

'Merica destroying itself from within

Can't wait for the Chinese to make their own processors and for them to become the dominant force in the market. Intel can then thank Uncle Sam for destroying their business.

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Since those chips are already made in China...

I don't think it'd take too long before we start seeing "Entel Zeon Fi" chips coming out of the same fab as Intel's...

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Re: Since those chips are already made in China...

I was thinking that. You can only export them once they are actually in America, surely.

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Holmes

Re: Since those chips are already made in China...

Maybe my info is outdated, but my understanding is that the Intel wafer fab in China (Dalian) is a 65nm plant, mostly used to make motherboard chips. If they are producing any Xeons, they would have to be 9-year old models or older. Not very likely.

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Re: Since those chips are already made in China...

These models are not. These models along with special purpose CPUs like Cavium, radiation resistant PPC, etc are the reasons why there is still fab capacity in the USA and Eu.

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Anonymous Coward

Re: Since those chips are already made in China...

No, this is all about delaying a specific consignment of chips destined for a scheduled upgrade to China's (the world's) most powerful computer. Someone lurking within the US gov. bureaucracy appears to have decided that the country needs a propaganda boost and that the best opportunity to achieve this is by sabotaging the Chinese while attempting to grab a moment at the top of the supercomputer tree. Pathetic really.

Shirely EVERYONE can see this!... even the beeb seems to have managed to get the tone about right: http://www.bbc.com/news/technology-32247532

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I wonder...

The sheer ...stupidity.. of this makes you wonder if this is not a side effect of a deeper power struggle somewhere in the mazelike layers of US bureaucracy.

Ah well, if the US ticks off China hard enough the chinese can always simply decide to no longer fund their pet hobby. How much did the US owe China nowadays again?

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Re: I wonder...

You owe the bank $100,000, you have a problem.

You owe the bank $100,000,000,000, the bank has a problem.

The US national debt is a problem for China not the USA.

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FAIL

Re: I wonder...

"How much did the US owe China nowadays again?"

More than it would be worth to collect as the act of collecting would destroy China's biggest market. Not saying China won't ever try, but it'll be fun to watch the footgun competition between the US and China...

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Anonymous Coward

Re: I wonder...

This news might have something to do with that debt. I'm also wondering if China is not in favor of this blacklist as well. Remember how X amount of cotton was shipped to China from the USA to be fabricated, then sold back to the USA? Maybe this is ultimately to stop the fabrication of the chips in the USA, to start fabrication in China. It would yield China a higher profit margin off the USA (yet again).

I seriously doubt this is anything other than a primer to shift currency to China to make some dues on our trillions we owe them. It's one thing when it's 2 or 3 players, but when an entire industry is cut off, then it looks like we are yet again exporting our number 1 export...jobs!

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It isn't "debt" in the sense many people seem to think

China doesn't hold an IOU from the US, they hold treasury bills and corporate bonds. You can't demand immediate payment on that any more than your bank can call you up and demand you pay off the full amount of your mortgage tomorrow.

The only leverage China has is to quit buying more bonds and other US assets in the future, and over the years as the bonds mature they will hold less and less. They aren't the only market interested in US debt, so while it might raise interest rates a bit, it isn't going to be the end of the world for the US as some people seem to think.

China would have to do something with the money they would otherwise hold in US dollars. Are they going to hold Euros? Doesn't sound too smart to me until they get their Greek house in order. Are they going to hold pounds? There aren't enough pounds in circulation for that. Are they going to hold gold? Same problem. I suppose they could waste their excess money building megacities where no one lives and other malinvestment...oh wait, they're already doing that or else they'd have even more money they needed to do something with!

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Childcatcher

Re: It isn't "debt" in the sense many people seem to think

The only leverage China has is to quit buying more bonds and other US assets...

T-bills can be cashed in early, but there is a penalty. On the face of it, this would seem to hurt only China to do this as they would take a loss, but it could actually hurt the US too if enough of them were cashed in at the same time. Both they and corporate bonds may be resold which may be used to drive down prices of both. This would in turn weaken the US' ability to raise funds.

These are two fairly simplistic examples of what China might do. That they do not would seem to indicate that they do not view it in their best interests to do so, not that they do not have any tools in the bag besides not purchasing more assets in the future.

These two economies have become intertwined over time. Many would argue that this is a good thing in as much as it proves a disincentive to start a shooting war. Plus, lots of people on both sides get rich. Don't knock it.

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Re: I wonder...

>>"The US national debt is a problem for China not the USA."

Kind of. I'm familiar with the joke about owing the bank a million dollars and it's still funny and still contains truth. But it's not that simple. Both the USA and China have constraints on them due to the size of the debt. China can't just call it all in and sink the US economy without hurting themselves (and they wouldn't be able to anyway, due to all the safe-guards and options built into such loans). But whilst they can't choke the USA to death, they can put the squeeze on in any number of ways. The USA should take care with this.

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Anonymous Coward

Re: I wonder...

But whilst they can't choke the USA to death, they can put the squeeze on in any number of ways. The USA should take care with this.

They already are by initiating moves to remove the automatic default to US dollars as energy and reserve currency. For a start, they can now trade in their own currency with the Worldbank, and the last energy deal they did with Russia didn't involve a single dollar. With that, they are chipping away at two of the 3 pillars that keep the US dollar afloat.

They won't cause the US economy to fall, that would be a case of MAD (mutually assured destruction), but they sure are moving to lessen US influence.

You may want to look up on Youtube "Day of the dollar" by the Dutch channel VPRO. It's subtitled in English where required.

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Anonymous Coward

Re: I wonder...

If China wished to annoy the US financial system, they should oscillate their Buy and Sell with a period equal to the policy adjustment reaction time of the US. Things would be bouncing off the stops after some number of cycles.

Canada should have done exactly this in their Softwood Lumber dispute with the USA. Freeze exports, wait, flood market, wait, repeat. Resonate their wood market until they beg for mercy.

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Anonymous Coward

Re: I wonder...

If China wished to annoy the US financial system, they should oscillate their Buy and Sell with a period equal to the policy adjustment reaction time of the US. Things would be bouncing off the stops after some number of cycles.

Canada should have done exactly this in their Softwood Lumber dispute with the USA. Freeze exports, wait, flood market, wait, repeat. Resonate their wood market until they beg for mercy.

That's the problem with nations plagues by ethics - don't forget that whatever markets do, it eventually ends up with the little man in the street paying the price for it (heaven forbid a banker/trader will ever be held responsible - the system would collapse overnight).

So many opportunities, none of which are taken because they're actually not really the decent thing to do. As far as I can detect that's not a US affliction, but it is possible that other nations at some point decide that being Mr Nice Guy only means they get shafted yet again. There is only so much abuse people can take, and they're seriously stretching it thin. With a debt clocking upwards, it is a time bomb - that's why I see the likes of China slowly divesting. Slowly, because doing it fast will drop the value, but I would be interested to see monthly figures of overall foreign holdings. Only the debt keeps this up, otherwise I suspect it would be trending downwards pretty sharpish.

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Excellent

Should lead to a whole new set of breakthroughs as china invents its own line of chips instead of just buying Xeons.

Like when we banned US companies from launching satelites on Chinese rockets and so the chinese built their own satelites.

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Re: Excellent

Well done, sir or madam, you called it:

http://m.forums.theregister.co.uk/forum/containing/2486427

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Re: Excellent

They already have: the Godson / Loongson chips[1]. They even built a pretty decent Super out of them too.

[1] https://en.wikipedia.org/wiki/Loongson

[2] https://en.wikipedia.org/wiki/Dawning_Information_Industry#Dawning_6000

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Re: Excellent

Or the embargos on Israel and S Africa which forced them to develop their own technology industries.

It is ironic that after blaming Japan dumping cheap technology for the decline of US industry you then try the opposite plan to destroy chinese innovation.

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Re: Excellent

Maybe a Chinese consortium would like to put in a bid for AMD. The company has always had a lot of talent and has always suffered through lack of cash. They would also make an astronomically better starting point for a chip designer than starting from scratch (or trying to re-implement Intel technology without assistance).

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Re: Excellent

Should lead to a whole new set of breakthroughs as china invents its own line of chips instead of just buying Xeons.

Like when we banned US companies from launching satelites on Chinese rockets and so the chinese built their own satelites.

It's very nice of them to stimulate other economies, really. They denied Russia decent computers, so the Russians became *very* good at efficiently eking the last erg of power out of what they had. They denied the Japanese a sufficient allocation of IP4 addresses, so they are now over a DECADE ahead in the use of IPv6.

Well done, very generous of them.

</sarcasm>

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But you forget

America has all knowledge. Thus none can possibly duplicate what America can do. And it owns all the patents. That is sure to stop them........

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WTF?

WTF?

I'm not even in IT, and I can see this is stupid. If the Chinese don't have cpu fab already (they probably do)

they certainly will sooner rather than later. And then they will compete with us. Intel will lose sales and typically reduce employment. Eldest son worked for Intel in Chandler. AZ. Good gig...

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Gimp

Re: WTF?

...

What the hell are you doing here?

You don't belong here,

you don't belong here....

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Oh dear

So, the US blocks China from buying high end Xeon (and naturally, block North Korea). China retaliates and brings out awesome chips, as fast (or faster) than Intel, in both the server and consumer market, for 1/2 the price, with the US unable to say "yo, don't ship them high grade chips to North Korea".

Let's face it, everything is made in China these days, so no one will think twice about buying much cheaper x86's from China.

Next up, US blocks China from importing their chips into the US because they are a threat to Intel.

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Pint

Re: Oh dear

"China retaliates and brings out awesome chips, as fast (or faster) than Intel, in both the server and consumer market, for 1/2 the price... "

...but without Intel® AMT/vPro™, the CIA/NSA's "magic screwdrivers", etc. presumably. More of the "blowback" they're referring to? Awesome. Can't come fast enough.

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Re: Oh dear

In the 80/90s the US blocked Toshiba from importing LCD screens to the US to protect the US LCD screen industry .

Instead Toshiba built and imported entire laptops - how is the US laptop industry doing these days?

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Israel can sell Xeons to China without any competition now

Next step to destroy US tech industry, make it illeal to sell to the world's biggest customer! Only Israel is allowed to do that.

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Anonymous Coward

Sanctions Reductio Ad Absurdum

In the same way that freely accessible resources like petroleum can become a curse for the countries that inherit them, sanctions and other forms of deprivation force the target country to adapt in order to survive.

In the years ahead plenty of books will be written surveying the long-term damage to American competitiveness caused by the culture of sanctions. Witness the apparently recent realization by the U.S. defense establishment that apparently Russia didn't just sit around and whine when hit with economic isolation but instead developed its own technologies.

The situation in Iran is similar - decades of sanctions have forced the population's creative energy into developing asymmetric technologies that don't require money or imported materials, namely cyberweapons. The tools we read about in the Snowden docs are just the starting point for whatever digital weapons and doctrine are now being developed domestically in Iran.

We ain't seen nothing yet of this blowback.

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They're still at it

Back in the 80s I ran into several examples of this idiocy. One of them was restricting the export of Motorola 68000 processors which at the time were being made in Scotland. Another was making it difficult to buy US made microwave gear -- no problem, just get it from Japan. Perhaps the most ludicrous was the requirement to get a US export license to move Japanese made memory packs from England to Belgium (the UK authorities, as now, always were enthusiastic brown nosers of the Americans). That was also the time when they used to prosecute companies for moving their minicomputers between offices without a (US) export license.

The people behind this idiocy are a consistent thread, the same names pop up over and over again, be it working on self-defeating embargoes, planning invasions of middle east countries or just generally creating mahem. They're a nuisance but because they've always worked behind the scenes as policy advisers and the like they're not subject to the open scrutiny that political figures are.

Anyway, that's all we need -- give the Chinese the incentive to invest in high performance processor design. I'd guess these Cold Warrior retreads don't realize that Chinese people are quite capable of doing this (since a lot of their countrymen are already doing so in the US).

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Anonymous Coward

Re: They're still at it

The big thing the US bully boy has is control over the world's banking system. The rest of the world needs to pull their head out of their ass and fix that.

Signed: a sickened and concerned Merkin.

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Re: They're still at it

How? Bad as it looks now, the US is STILL a huge sight better than any other country on offer. Including China, or they would've ALREADY demonstrated self-sufficiency (they carry a cultural impetus) which proves they can successfully cut off the US.

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Anonymous Coward

Re: They're still at it

Bad as it looks now, the US is STILL a huge sight better than any other country on offer.

Only if you don't look past the illusions. Hint: national debt. The US is a grade A example of the "too big to fail" principle.

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Control over the world's banking system

> The rest of the world needs to pull their head out of their ass and fix that.

Already in play: BRICS New Development Bank. Islam also has an alternative banking model, one that does not levy compounding interest on loans. What in the West is often framed as a clash of cultures is really a war about the right to create money and levy a never ending burden of compounding interest on its use. We send our young men off with patriotic fervour to fight for our enslavement and the enslavement of future generations to a handful of wealthy banking families in Europe and the US. The US is as much a victim of privately issued debt based fiat money as the rest of us and its schizophrenic actions are not only those of a global thug but also the desperate flailing about of a drowning person attempting to find anything they can to pay off one more days debt and avoid foreclosure.

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Re: Control over the world's banking system

Quite so, GrumpyOldBloke, and how long before IS, and the likes of IS entities, concentrate their activities on that handful of wealthy banking families and their HQs into the enslaving of future generations?

Whenever the IRA targeted the City of London, things changed practically virtually overnight ....... One bomb... £1bn devastation

And don't forget that Uncle Sam openly supported on their home soil, the funding of the IRA. They certainly did nothing to stop it, that's for sure, so what does that say about a supposed ally and the "special UKGBNI relationship" which is touted as existing and vital?

Who and/or what is the real and virtual enemy for engagement?

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Re: They're still at it

>Bad as it looks now, the US is STILL a huge sight better than any other country on offer. Including China, or they would've ALREADY demonstrated self-sufficiency

Unless there was no need to, until now.

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Re: Control over the world's banking system

" Islam also has an alternative banking model, one that does not levy compounding interest on loans."

No it doesn't. So-called Islamic Banking is verbose bullshit wrapped around the same old model. "We don't charge interest on our mortgages, we just part-own your house and you pay rent on it. What's that, you say you end up paying exactly the same as if we lent you then money? Pure coincidence!"

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Anonymous Coward

Re: They're still at it

>How? Bad as it looks now, the US is STILL a huge sight better than any other country on offer.

Oh look another American who has never spent more than a week in another developed country. You know like the vast majority of them (coming from an American who lived in Europe for several years). America might be better for some things (or even most, no place like home) but a huge sight better don't think so. American exceptionalism is a steaming pile of horse shit propaganda that does more to undermine our own security than anything else.

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I guess I should hang my head in shame, but I'm in agreement with Hayden... former NSA boss... I need to wash my hands, I feel so dirty about this.

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Angel

#MySmartGovernment

I don't get to say that often! Thank you #MySmartGovernment.

China: Criminal Nation. Boohoo to yoo.

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Anonymous Coward

Re: #MySmartGovernment

You forgot #sarcasm..

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Considering that these chips are probably intended for nuclear warhead simulation, or other military research e.g. submarine screw design, a better idea would have been to allow the sale but ensure the chips are sufficiently degraded to give false results.

Coupled with Concordski-style technical deception the mod edit - Chinese could have been led up a total blind alley

mod note: Racially-loaded terms for other nationalities are not acceptable here.

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yes because deliberately selling faulty chips won't cause a business to totally lose its reputation

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I'm sure they can clearly ID your xenophobic redneck logic as faulty since you're probably also unable to wrap your head around the whole trusting trust issue, assuming you understand what that is. Perhaps a review of the names on quite a few of the chip design patents that Intel has might elucidate things for you.

Oh, y'all might want to stay in the shade there boy, that red neck o' yours is about ready to burn clean through son. Don't worry, as red as your neck is your skin headed brethren is still mighty proud of ya and you can take this Nip's word on that.

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@ Eddy Ito

you need to take that turnip out of your mouth when you speak: you sound like its still covered in cattle manure

FWIW you need to be careful: too much crap in the soil makes root crops "bolt" and go to seed. You'd look stupid with that coming out of your mouth.

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>>"you're assuming the Chinks can ID them as faulty.........not necessarily an accurate assumption."

If the chips give faulty results, I can tell that they are faulty. If I can't tell that they're giving faulty results, then they're not. Reason being, it is straight-forward to design tests to determine if they're faulty or not.

Go ahead and give it a try: post a way that the chip could be deliberately faulty and I'll tell you how it could easily be detected.

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a better idea would have been to allow the sale but ensure the chips are sufficiently degraded to give false results.

Err - it's Intel you're talking about. That occasionally happens even by accident. :)

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