This is one of the key reasons you need to give the right incentives and compensations to your employees. I have seen too many tech companies failing at employee retention.
The loss of talent will have a medium-long term impact on the company. And, many of their future competitors are going to be created by your current unhappy employees.
I have seen an increasing trend in tech-companies to be more employee-friendly beyond eye-candy perks. But, there is still a long path to walk.
> This is one of the key reasons you need to give the right incentives and compensations to your employees. I have seen too many tech companies failing at employee retention.
(Disclaimer - I speak from a neutral standpoint, I'm not a politics person.)
It's not so black and white. There's also nationality at play. Chinese employees can be very nationalistic in times of war, especially, if they live in and around ASEAN. The moment something bad happens (to China), they will view it as China being the victim and do things others wouldn't normally do.
Case in point: Remember the Huawei ban? A lot of my ex-colleagues and friends (who are Chinese) dumped their iPhones at ridiculously low prices and exchanged it for a Huawei to show support for China (despite being outside of China). I saw this with my own eyes and I was blown away. I mean, convincing an Apple user to switch to Android is a billion dollar problem that Google is trying to solve for years now and just like a snap of a finger, nationality is reason enough for them to make the switch, irrespective of their personal consequences (switching clouds, etc).
Likewise, incentives alone isn't enough, there's not much you can do if the employees view this as a nationalistic issue.
Do you think nationality is the only reason, or do you think they could also genuinely disagree with Huawei's treatment, for reasons that are reasonable if one accepts a different point of view?
I am not Chinese and do think that the amount of accusations is much larger than the body of evidence to support them, I'd guess there are others of similar opinion, some of them Chinese, others not.
What I dislike is people generally assuming that I somehow agree with every single thing Huawei, or the CCP for that matter, has ever done.
I am looking for extensive evidence that they backdoor their equipment and feed data to the CCP. As far as the "intellectual property" goes, it is used by the winners to kick down the ladder they themselves climbed.
The U.S. used to steal from Europe while it was developing, now suddenly IP matters a lot.
The Japanese used to steal quite a bit of IP, yet Nintendo is now super hawkish to protect its own.
Chinese companies will get overly protective of its own IP once they sufficiently develop.
All in all, is a well known circle that may signal it's time to rethink how IP is currently structured and enforced around the world.
Would you mind pointing me to some specific cases of US technology companies stealing IP from European companies as the US was industrializing, or Japanese technology companies (including Nintendo) stealing IP? It is often more informative to speak about specific cases, rather than generalizing based on inexplicit information.
Businesses use IP laws to protect their own property rights. Whether you call the property owners "winners" is up to you, but that doesn't change the spirit or letter of IP laws.
>The ship carrying Francis Cabot Lowell and his family home from England in the summer of 1812 was intercepted by a British war squadron, which held the passengers and crew for some days at the British base at Halifax, Canada. Lowell’s baggage was subject to several intensive searches, for his captors had been warned that he may have stolen designs for power textile weaving machinery, a serious crime in England. Lowell, indeed, had done just that — but, aware of the risk, had committed the designs to memory.
Wait, weren't the US and England at war in the summer of 1812? Wartime hardly seems like a reasonable comparison. Britain had been impressing American navy personnel (making them slave soldiers) for years by that time.
Interesting paper and I think anyone should read if only for the stories told, but if the only cases happened in the 1800s, then I don't think this is particularly relevant for deciding whether we should enforce consequences on foreign companies for IP infringement or not. The US also permitted racial slavery in that era - we ceased commerce both voluntarily and in an official manner with South Africa over their racially stratified society in 1990. Why would we treat China differently than Apartheid South Africa because of something that happened 200 years ago?
The US has been dominant economically since the late 1800s, when their incentives switch to protecting IP. If the theory of the above poster that IP is used to pull the ladder up is true then it does make sense.
Incidentally, US Foreign policy (as well as that of any nation) even in 2020, when you take justifications, stunningly aligned with US national interest. Make of that what you will.
The US has become a very developed market since then, though certainly not the "dominant market", but regardless should we as actors in the current legal system advocate for something that gives preferential treatment of Chinese businesses OR an entirely different system with very little protections for IP?
I don't think so, and would actually prefer we take on something closer to the Chinese approach of leasing land in the same way we encourage people to put ideas in the public domain for a guarantee of a period of market monopoly. Though there are many reforms about current US IP law that I would love to see.
>US Foreign policy (as well as that of any nation) even in 2020, when you take justifications, stunningly aligned with US national interest.
I disagree - most nations advocate for their self-interests, otherwise we would be the United States of the World right now rather than the United States of America. Similarly, many countries have a foreign policy favorable to China because of economic incentives with a voluntary relationship between them. Are all countries or localities as equally 'autonomous' as China or the US when deciding with whom their most beneficial economic relationships are? No, though I don't think "dropping IP law" is a particular benefit to increasing that autonomy either.
Asides from Afghanistan and Iraq, are there any states you can name that are advocating for almost objectively US aligned policy?
I meant that most nations action's align with their interests, not their rhetoric or ideology.
I'm not making a claim as to what we should do, I'm just saying that our current IP system has nothing to do with morality and everything to do with Western power and interest.
Personally I think a system such as the one you described is preferable too, but I'm just explaining the Realist (and by extension Materialist in the Fuerbachian sense, and thus Marxist, and thus Chinese) perspective on why laws are the way they are (which is incidentally correct), by contrast with the Idealist narrative that States tend to use to justify their interests.
> our current IP system has nothing to do with morality and everything to do with Western power and interest.
Property rights are neither a question of morality nor a question of realpolitik. They are an economic construct. Property is the only so-called natural right that does not exist at birth. We are born with life, and we are born with liberty, but we are not born with property.
I never understood this line of argument. Economics is 100% inextricable from realpolitik. Whether you have a socially constructed economic right or not is 100% a question of realpolitik.
Also, private property simply isn't a natural right, not even by the definition of Hobbes. The right of exclusion of something you don't use is neither natural nor universal in most early human civilizations, it just simply isn't a natural right.
And intellectual property in particular is perhaps the opposite of a natural right.
Locke ran with Life, Liberty, and Estate but even the American founding fathers went with the idea that Estate is an socioeconomic construct for the purpose of "freedom".
I’m sure a lot of normal employees are CCP members too. CCP has 90 million members after all. Statistically, 1 in 5 Chinese has family members that are CCP member. So I’m not sure what you’re getting at. Are you proposing that we ban 20% of the Chinese population?
Am not sure the party membership works the way you seem to imply. Just because someone is a member of the CCP doesn't mean they'll steal tech, spy for China or even agree with the CCP on many issues for that matter. I'd guess it's more like getting some sort of a certificate that makes you more prestigious?
so if people want to work outside of china, better not get that certificate if you don't want to be held accountable for supporting an authoritorian government. Easy.
As for the spying: it's relatively common knowledge that the chinese government really likes to use the fact that someone might have relatives in mainland china to convice people that they should spy for them. So my guess is that people doing this just for the "prestige" don't even need this kind of stuff...
> so if people want to work outside of china, better not get that certificate if you don't want to be held accountable for supporting an authoritorian government. Easy.
The U.S. government killed thousands of civilians in the Middle East over the last decade with taxpayer money.
So if you don't support killing civilians, stop paying taxes?
Sometimes it's not as easy.
> So my guess is that people doing this just for the "prestige" don't even need this kind of stuff...
I get your point, but maybe "prestige" isn't the right word. If it's easier to function in society if you're a member and does not require you to commit anything immoral (at least not directly), would you join? My bet would be on yes.
wait, first it was a "prestigious certificate", now it's mandatory. ok.
And yes, maybe handling certain people on both sides of the aisle as what they are (e.g. war criminals) is indeed what foreign people should do. In theory, the domestic issue in the US could be solved by voting for a non-drone-killing executive – in China: good luck voting!
> would you join?
like I said, we had this with the nazi-party. People joined, afterwards they knew nothing, which might be true in their view because of domestic propaganda. Maybe we should wake up and tell the people clearly that they are supporting a 21-st century government actually building concentration camps. And yes, if you tell them that you have a problem with that side of things (e.g. you are only targeting politicians vanity not "the economy"), in a country as big and dense as China (they've always had their purges, yet always some opposition rose) opposition would eventually form.
> wait, first it was a "prestigious certificate", now it's mandatory. ok.
It's not mandatory. But lots of things are not mandatory. You staying overtime when your team does. It's not mandatory, but is strongly implied that maybe you should stay too.
All am saying is that being a member of the CCP probably should not be the (sole) deciding factor when you're letting someone in. In fact I'd think that spies would explicitly make sure to NOT be members.
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The truth is that the HN community is diverse and divided, with plenty of people on all sides of this issue. Attacking people personally (let alone nationally, ethnically, or racially) simply because they disagree with you is the epitome of what we don't want here. This is not a China issue, it's a Hacker News issue, an internet issue, and frankly a human issue.
This is already known. Yes, they might have expropriated technology from 30 years ago, when they first started out. So what? They were caught, and they paid up the price for their malfeasance. They settled outside of court with Cisco.
Cisco doesn't even complain about this anymore, since they got a pretty penny from Huawei for it.
And they are not the only company that started out doing something shady. There are plenty of other examples of American companies that have done things in their past that are also shady.
Why don't you start with something more recent? Like, their 5G technology? Unless of course, your premise is that they also have a time machine and traveled into the future, and stole this 5G technology from Cisco as well.
Tha fact those ex-colleagues and friends who bought and use iPhone in the first place indciates they are not generally a nationalist person. The reason they bought Huawei is because they realized when the US is banning Huawei, while China is not banning Apple, that is simply not fair, the US is not what it claims to be, or what they thought it to be. To be clear, I don't think it's fair either.
But every major US tech company is banned or blocked from competing in China, isn’t it? and has been for a decade or more. Apple is the one exception. In which direction do they think the current situation is unfair?
(to be clear, I’m not sure whether I agree with it or not, but it seems like a strange thing to focus on exclusively)
>But every major US tech company is banned or blocked from competing in China, isn’t it?
Nope, Microsoft operates in China, so does IBM, Uber did before the Chinese branch was acquired by Didi (they weren't banned, just outcompeted).
China is funnily enough even facebook's second largest market by revenue (about 5 billion) from Chinese advertisers.
Google probably could operate in China and I guess doesn't because it fears American backlash.
Doing business in China is arguably more complicated for American tech firms than the other way around, but American companies are most definitely not blanked banned or anything.
I'd say more like every websites large enough that won't censor contents towards the liking of the Chinese government for their service within China got banned. It's not an action against companies, but rather websites (as a form of media). Those companies can and are doing business in China, Facebook have sales agencies, Google have multiple offices and sales agencies, while the US quite literally banned Huawei as a company from doing business with anyone in the US.
google, facebook and twitter and any free speech platforms are banned, but non-chinese companies can set up manufacturing I think as long as there is part local control (I think I remember 50% for car companies)
Or they could have been worried about not being seen as nationalistic to their peers and bosses, even if they aren’t that nationalistic themselves. A lot of nationalism in China is derived from social and peer pressure.
Peer pressure from other Chinese still exists especially outside of China, but it is more likely they felt nationalism since they were abroad and it wasn't being forced down their throat everyday. The best way to make kids hate Mao is to force them to take a class on him.
You don't need to assume patriotic sentiment for this. The Chinese are paying a lot more than other companies, and the project is clearly fantastic. Even I would be interested if this was happening in my industry.
Plenty of my friends switched from iPhones to Huawei, they're not Chinese though it's just since iPhones got more expensive when you drop them a few times you just decide to go for something cheaper and Huawei hits all the points they look for in iPhones.
The value prop of the iPhone just isn't there anymore if you are not stuck in the ecosystem.
I'm confused. Are you saying that mainland Chinese feel -more- nationalistic if they live in the ASEAN region, i
e. outside of their home country? Or are these employees from an ASEAN country but are just Chinese in ethnicity?
Dumping Apple isn't the best example, since Apple is a luxury product that is more about signaling status than about a great computing power-vs-cost value proposition.
>since Apple is a luxury product that is more about signaling status than about a great computing power-vs-cost value proposition
this isn't a universal phenomenon, funnily enough in China the brand appears to have the opposite effect[1]. It's more seen like a vanity purchase akin to I guess something like a Gucci bag.
"Apple iPhone users in China are generally less educated, hard-up and with few valuable assets, compared to users of other mobile phone brands such as Huawei Technologies or Xiaomi, according to a report by research agency MobData.
The Shanghai-based firm also found that most iPhone users are unmarried females aged between 18 and 34, who graduated with just a high-school certificate and earn a monthly income of below 3,000 yuan (HK$3,800). They are perceived to be part of a group known as the “invisible poor” – those who do not look as poor as their financial circumstances."
I agree with the sibling comments about technical superiority, however, I see a flaw in your logic. If people are buying apple for signalling, then it would make sense for them to similarly ditch it in favor of another signal which better fits their identity.
Not everybody buys lates ridiculously overpriced iPhones. Some of us buys Apple because Android has unbearable UX. Older models or SE models are perfectly fine.
Nothing different here from the patriotic sentiment in America. One should not be so surprised with something that is already so common in a particular Western country.
Appropriate compensation is important, sure, but it’s impossible to stop talent sniping like this. There’s a fundamental asymmetry.
You are TSMC and have 50k employees, of which say 5,000 are experienced engineers, the top 10%. A competitor wants to hire away 100 of them and offers them an enhanced salary. They only need to offer that to 100 people, but to stop them getting any of those 5000 employees you have to offer a competitive package to all of them. Any you don’t offer it to are vulnerable to getting hired away. So for every $1m they are willing to spend on enhanced packages, you need to spend $50m in enhanced salaries to block them. If they decide to cut it down to hiring away only 50 engineers, now for every $1m they spend you need to spend $100m.
As head of resourcing at TSMC, at what point do you stop the defensive salary inflation? Bear in mind your not competing with the financial resources of just another chip company, you’re competing with the financial resources of the Chinese state.
> A competitor wants to hire away 100 of them and offers them an enhanced salary. They only need to offer that to 100 people, but to stop them getting any of those 5000 employees you have to offer a competitive package to all of them.
I don't think this is true as (I think) you're assuming that all 5000 employees are equally skilled and desired. More realistically, the poaching company wants the more senior/experienced so TSMC only has to watch out for these. Still not an insignificant number nor amount of money.
Long-term, the solution is probably for companies to focus more on building their culture and focusing on the non-financial perks (e.g. ala Google) so employees will think twice about leaving.
This 5,000 is the top 10% of TSMC employees, and the article says China is hiring engineers at all levels in the company, so I’m already tilting the deck quite a bit.
> Bear in mind your not competing with the financial resources of just another chip company, you’re competing with the financial resources of the Chinese state.
But you have the resources of the other Chinese state (Taiwan) at your disposal because, TSMC and the Taiwanese semi industry work hand-in-hand with the government as well.
Does Taiwan have 50x to 100x the financial resources of mainland China though, and does it make sense to even get in that competition on those terms on the first place? It’s not a path to a viable business.
There is a good reason why I've been at my current employer as long as I have, they actually give salary and benefit increases that attempt to reflect how you contribute to the company and how much they want to keep you around.
Unfortunately, there are other factors that you need to maintain that keep employees around and we have lost a few people that really hurt the overall skill level of the team which had nothing to do with compensation.
At first, I thought raising price would do the Job, Wafer is still relatively cheap, It is the Design / Up front cost that is expensive. Higher Revenue > Higher Profits and in turns can paid Engineers a lot better.
But then there is Samsung, which has its foundry business partly funded by NAND and DRAM. i.e TSMC cant exactly dedicate the price as much as everyone think they could.
True, but the people allocating compensation at TSMC say a few dozen steps away from the western money (which itself is at a disadvantage compared to an authoritarian regime when it comes to allocating large sums of money to arbitrary things) whereas the hiring manger for the other guys is only a couple layers of the org chart below someone who can personally direct the CCP money fire-hose. It's not like TSMC can just raise prices overnight to cover the expense. They'd have to get the money through some back-channel. Getting "state aid" from other states like that is something that is ridiculously tricky to pull off politically. TSMC is definitely at a disadvantage here.
OK, so 100k at most per engineer for "over 100" engineers, and those are just the ones that jumped ship, never mind the thousands staying behind. Is that significant?
Considering the average TSMC engineer makes 50k-60k, a 100k increase would probably be taken quite well.
Taiwan has such a big surplus of engineers and physicist that they don't really make much. Unless you are part of the club that knows TSMC special sauce in which you will be ridiculously well paid even by American standards, but that's not a large group.
> If central planning were a good way to run an economy, the Soviet Union would not have collapsed.
The Soviet Union put the first man into space and had severe shortages of food and consumer goods at the same time. Because that's what central planning does. It causes priorities to be distorted. Whatever the central planning committee is focused on happens and everything else withers and suffocates.
On net it's a massive catastrophic loss, but the places where resources are directed, get them in abundance. (This is also why it's extremely susceptible to corruption and favoritism.)
I'd say it was a data point. There is probably more concrete lessons to be learned before giving up on (admittedly complex and fraught) central planning
Especially given the fact that we have, in theory, the order of magnitude of computing power necessary to calculate an economy. But to implement it well would certainly be the most complex and titanic project in the history of computing, and even then it might fail for some unknown reason.
Worse yet, a failure where the wrong people accumulate wealth will just look like planned corruption to the masses. Sadly one reason why central planning often is accompanied by censorship
It has often occured to me that one of the rationale to start a colony in Mars is that wealth (at least on Earth) is mainly distributed among the wrong people, which is why so many short-sighted decisions have been made collectively by us who dominate the planet. And real innovations and progressive things are super rare. And they are often accompanied by (unnecessary) tragedies or sufferings that don't have to be that way. Theatres and facades are the norms.
But I now have come to the realisation that wrong is perhaps only in the eye of the beholder.
And there will always be censorship in a society as long as you look hard enough for it. Probably a feature not a bug though.
Maybe it just demonstrates this is the best we get collectively with neural circuitries like ours.
I have lamented that a model of censorship is equivalent to free information consistently cherry-picked. In terms of censoring misinformation, there is potential benefit. It needs a system of public trust, however
Central planning is 100% an engineering problem. Mises didn't call it the "Calculation Problem" for nothing. As long as economic complexity grows slower than processing power, there will be a point where central planning will be doable.
Of course, there is also the problem of incentives, but in the Soviet Union the problem of incentives was really only relevant as far as higher-ups reporting data, Soviet workers worked as hard and as well as any.
That is not to say that central planning directed by a centralized Leninist state is something that I think is desirable (or even something that would be theoretically desirable), but massive computing power is a quantum shift in the possibility of centralized and decentralized planning. The fact that it worked as well as it did in the USSR through pencil and paper is stunning.
Computers can’t determine economic priorities. In a free market demand does. In a planned economy politics does.
Computers are essentially useless for a planned economy. All they can do is provide quicker orders for factories to produce the wrong things in the wrong quantities.
The free market does not determine economic priorities. People, making choices with limited resources and having to priorities, determine economic priorities. The free market is then able to compute, using billions of people making operation to optimize in exchange for profit, what is the most optimal way of organizing production, which actualizes prices, which allows consumers to actualize demand. This process is prone to massive inefficiencies such as the business cycle, and has a cost to the consumer which is profit. If one was able to reproduce it without recessions and depressions, and with a rate of profit of zero, the economy would have much higher efficiency and growth.
In a planned economy, consumers, be it governmental consumers or average workers, make choices with limited monetary resources about what should be purchased. If there is too much demand, then you end up with a shortage, until the next 5 year plan in which the central planners of the politburo look over the shortage and surplus, do some predictions, and re-allocate supply as well as actualize prices. This is an issue, because there is a 5 year updating period, and planners are prone to error as well as erroneous information.
If your planners had accurate real-time information, and were able to re-calculate the economy every day or so, then the issues of over-supply or under-supply, "orders for factories to produce the wrong things in the wrong quantities" would be fixed.
Maybe this stems from a misconception according to which, in a planned economy, there is no money or no consumer, no buyers and sellers. It is not so. Planned economies have money, they have sellers and buyers, and so on. What is being replaced is the role of the investor and capitalist, which decides where to allocate resources. Therefore, the issue is not in calculation of end-consumer demand, that is the same as in capitalism, the issue is in organization of production. A Marxist would formulate it by saying that the Soviet economy has not abolished the commodity form.
If the Soviets were able to make a 5-year plan every day, and had instant and perfectly accurate supply information, the vast majority of economic inefficiencies would have disappeared. Or, in other words, the factories would have quickly updated orders to produce the things the people want in exactly the quantity they want it.
Very intriguing! Thanks for putting these ideas in such neat words. I somehow felt enlightened reading them. It is as if what you are describing is not just economy but the whole notion of "cost structure" in the philosophical sense and how the universe and all living things come to be. Wow.
When Gorbachev took over, they realized the government actually had no mathematical model of how the economy of USSR worked. Politicians had been basically been allocating resources blind for decades. They tried to shift to a more data driven approach toward the final years of the USSR, but it was way too late to have an effect.
Basically USSR collapsed for trying to match USA by overspending. Do you realized that is going on with China as well. Given their wastage is several magnitude higher than most western countries, go check what is happening to their reserve in the last 3 years. Also, seems like mother nature is compounding those wastage as well. Maybe we get to see Chernobyl 2 and Agfhan like what happened to USSR?
Perhaps that has something to do with having lost millions during WW1, revolution and WW2. Eastern Europe and China were hit the hardest during WW2 and didn't have the massive US economy (which was unharmed in both WW1 and WW2) to help the rebuild (marshal plan). The young people who died during WW2 would otherwise have contributed to the economy during the 50s, 60s and 70s. In fact, you can still see the damage of WW2 in the Russian demographics today.
Of course it didn't help that the soviet politicians constantly mismanaged the economy at the same time. Also interestingly, Mao was constantly screwing up the economy with his uneducated policies that he was hugely unpopular internally with the CCP. However Mao was hugely popular with the common people that the CCP had to just put up with and put out the fires he starts. (reminds me of Trump today...)
That's super false. They went from a backwards agricultural society with actual serfs to an industrialized world power in 3-4 decades despite a nazi invasion killing 20 million russians.
That sounds like decades of economic success to me.
Every first world country went from a backwards agricultural society to a far more advanced one during that century. Look up the dust bowl or even better the state of US agriculture during the early 20s.
Without central planning, the people’s of the Soviet republics would not just have been free, they would have grown wealthier
> You forgot the tens of millions killed deliberately by the USSR itself, fir one example.
Please keep in mind that the current, mainstream political Western discourse is seriously contemplating whether or not we should re-open, sacrificing a few million people on the altar of economic growth.
This really put the discourse in perspective for me, but I suppose we've made decisions like this every so often in the course of governance for a few decades now. I hope we continue to pursue all fundamental rights described by "Life, Liberty, and the Pursuit of Happiness".
Russia has an economy the size of New York state. In a country of over 140 million people, that is no one's definition of success. Soviets didn't leave them much beyond a decaying nuclear arsenal and bunch of ugly buildings.
>> Russia has an economy the size of New York state.
According to Wikipedia it is 2.6 times more than New York state:
- New York's gross state product in 2018 was $1.7 trillion.
- Russia has a GDP of $4.519 trillion in 2020
>> In a country of over 140 million people, that is no one's definition of success.
It's half GDP per capita of USA, but USA has half of GDP per capita of Macau or Qatar. Ireland or Norway have a better GDP per capita than US.
And if there was no wealth transfer between "rich" US states and "poor" US states, those would be much poorer, and would become comparable to Russia.
You're taking PPP figures instead of nominal figures. That's not necessarily wrong but it should be mentioned and explained. Based on nominal figures both new york state and russia are around 1.6-1.7 trillion.
PPP is incredibly misleading and is often useless as a comparison mechanism. The same car in the USA isn’t somehow cheaper in China (quite the opposite, Russia also), a lot of adjustments made in PPP are straight out differences in quality of life expectations.
Introducing modern technology into an economy can do that. Look at all the East Asian nations such as Korea. On the whole, Russia's communism seems to have been a big drag on progress.
Lots of countries have developed. South Korea went from bombed-out wreck to one of the richest countries of the world. There's nothing impressive about Soviet development.
I can't believe that in 2020 there are still people defending a regime that murdered over 50 million people and ultimately collapsed due to an inherently flawed economic philosophy. And the argument is that the USSR was "too capitalist", and that's why it failed.
I get trying to move the Overton window, but this is too much. I'm hoping this is sarcasm on overdrive and I just missed it.
I'm talking about resource allocation, not central planning.
If Pooh Bear decides tomorrow that China will learn how to build pool floats then China will learn how to build pool floats. Everyone falls in line. If the leader of a western democracy wants to do something similar they have to convince people to want to do it and that takes time, policy carrots/sticks and propaganda/indoctrination.
The US military budget for 2020 is 720 billion dollars. That doesn't even include DHS. Most of it's going to bullshit, like Abrams tanks that the army doesn't even want.
Our problem isn't that we're too free and liberal, our problem is that we're too crooked and stagnant.
Granted...my cynical side is tempted to say, this is a backhanded way to get proper economic stimulus injected into the economy from fiscal conservatives...but graft is graft and in general is less efficient that a proper stimulus.
> a disadvantage compared to an authoritarian regime when it comes to allocating large sums of money to arbitrary things
Please. The US has never had an issue allocating arbitrarily large amounts of money to random things- either as military spending or moonshot projects. The Apollo program costed the equivalent of about 150 billion in today's money.
TSMC isn't a US company. The US can't just pump TSMC full of money without causing geopolitical problems and a overcoming internal political opposition (also true for US companies). When there's a perceived need (e.g. the Soviets beating us to space) and a huge majority approves or wants it the US can spend tons of money but this issue isn't to that point.
The US just forced TSMC to stop doing business with Huawei, even though Huawei was TSMC's 3rd biggest customer or so. Didn't seem like US got a lot of pushback from that.
CCP state-sponsored hiring of top talent from TSMC is plenty of pushback.
An ASEAN-EU-US alliance to directly source cutting-edge research from TSMC like the defense industry sourced from Silicon Valley in the early days when it was just a bunch of scattered suburbs among fruit orchards for example, would pump sufficient money to increase retention via pay and benefits. Lots of problems with that approach, of course. But options exist in Cold War II.
Yep. US political and MIC leadership are trying to finagle Americans into a Cold War II with Russia and China, when all that is needed is business and economic disengagement if the regimes are really all that odious. The US itself lives in a glass house so it shouldn't be so eager to throw rocks.
I'm not a fan of top-down interventionist policies, they appear too brittle in a fast-moving innovative environment like we find ourselves in today. So if the US wants to stay on top of the semiconductor/AI/quantum/etc. heap, then the nation will have to find a way to make it attractive again for talent around the world to bring their families to live there. Starting with a well-educated population that uses rational cognition and fact-based decision-making would be good...
at high grow stage new competitor can offer at least 2x salary and 10x stocks (also convince them that stock will grow more). for that reason they get billions of investing which they can truly spend for anything. how can you compete with such offers?
Think about millionaires who joined Snap, Uber, Lyft, Pinterest at the right time like this
But there is real demand for cutting edge semiconductors in China... Do you think people will be satisfied with 14nm SMIC chips forever? Paying $140K salary is peanuts compared to what experienced software engineers at Facebook/Google get, their junior positions pays that much. Or hell $400K salaries at some financial firms.
Their semiconductor industry will not be solely made up of TSMC engineers, the vast majority are going to be Chinese juniors who will learn from them and eventually replace them.
The market reality is that the source of the chips can vanish at any time due to political reason, that's not a market problem anymore, it's now a political problem.
Not feasible. You’d have to offer ‘everything’ to every single one of your employees to prevent them being head hunted, but the opposition only has to make a better offer to a few of them to get the inside track info they need. That massive asymmetry makes it almost impossible to stop the brain drain.
Underpaying your critical employees is not a good strategy long term, even though it might look good on the balance sheet short term.
Let the free market decide. At some point, other, less tangible factors would start playing, such as individual freedoms, quality of the environment, family friednliness, etc.
It’s not a matter of under paying them. There isn’t a market for thousands of TSMC engineers at 2x or 3x salary in China so that really isn’t the market rate. There’s only a market for 100 of them, but it mostly doesn’t matter so much which 100.
TSMC wouldn’t have to just offer say 4x salary to 100 of their engineers to prevent the brain drain, they have to give it to several thousand engineers, and then a China would just up their offer to 5x because their ability to pick off a subset of people gives them 10x or even 100x leverage over TSMC. There’s just no way for TSMC to compete on salary like that. The most they could do is make it costly enough that the Chinese only hire away fewer engineers, at crippling cost to themselves, but they can never cut it down to zero.
There are other factors for these engineers to consider. This outflow may be temporary: once the Chinese side decides that their immediate goals have been met, they either force the Taiwanese engineers to leave, or accept Chinese citizenship, or some other unpleasant thing.
What I am saying is that the "free market" is not always limited to money. There are other things that play the role. TSMC must find ways to keep the essential engineers, or they are going to lose. This applies to anyone: you have to adjust to the changing environment, or die. Find something that will keep the best ones that other companies can't offer. Or die, like the rest of the manufacturing industry (look, American manufacturing is too expensive, let's make it in China! look, American programmers are too expensive, let's open a dev center in Bangalore!).
On the other hand, I think this is a welcome outcome - the knowledge spreads out and levels the playing field. From a very simplistic and idealistic view, it is better to have multiple industrial and knowledge centers than have everything concentrated in one place or country.
Semiconductor technology are like the new nuclear weapons, of the upmost importance to national security. Not having access to this technology will greatly affect the economy of a nation. The sooner everyone plays nice, the better it is for everybody. The Huawei ban is dumb and actually hurts Taiwan's leverage over China in the long term.
I would probably disagree on nuclear weapons: the lack of access to the latest semiconductors cannot wipe the humanity out, it merely retards the development of indigenous industries (other than semiconductor).
Huawei ban is a message to the Chinese government about explicit spying - and will probably get reversed pretty soon. You can spy, but don't make it so obvious.
Interestingly, I think these bans might have another, unintended, consequence: they might trigger acceleration of locally developed alternatives. We might see more of the Chinese-developed processors and IP in general in the future.
But I do agree that the sooner everyone plays nice, the better it is for everybody. The problem is that there are plenty of forces that benefit from chaos and suffering.
Sometimes your opponent can outspend you at every step and is possibly more motivated to achieve its goals. For China this is a far more pressing matter than profit, you might even see it as desperation. So this is like wrestling a bone from a hungry dog's mouth.
On the other hand TSMC is a publicly traded company. There's a limit to what expenses they can justify in front of the shareholders. China can lure engineers away with 3x the salary probably because that was the limit TSMC settled on, not because that's the limit of what China is willing to pay.
I agree with you and I don't understand how salaries are exempt from the normal capitalism dogma about supply and demand.
If I go into a supermarket and the bananas are too expensive then I can either pay or not eat a banana. If salaries are increasing companies can either pay market rate or no.
(They can also train internally but that doesn't seem fashionable nowadays)
> salaries are exempt from the normal capitalism dogma
A nation state devoting their trillions to outbid companies is the exact opposite of capitalist dogma. (Even less capitalist than a monopolist conglomerate abusing their dominant market position to outbid/undercut you.)
Should the market also be protected from other unfair things, like venture-capitalist backed startups that operate at a loss poaching key employees from established firms?
It might be rare, but right now those engineers are super valuable, and are getting paid for it.
demand and supply.
you see the same thing happen with self driving engineers commanding million dollar packages because they were in such high demand and supply was so low.
They are super valuable now but their value will decrease as the Chinese semiconductor industry catches up, so it's not like TSMC will have to pay 2x the salary forever. However I know many people (not at TSMC) who would take a lower salary to work on green field projects.
What we're discussing is that it's hard for a company to pay the market rate when the competition is the CCP itself. The CCP would pay the equivalent of $20 million if it needed to - and what then?
I get the point that everyone is making, including the point that you're trying to make. But if I just take your question at face value, isn't the answer simple: from billions in profit they make per quarter.
So you want to drain your profit to match the salary? I would think it would cause issue with the shareholder and when you want to pay for other future non salary expense, but fine lets ignore that. But what if China simply offer more salary again ? Remember, china has way more money than TSMC or even the whole Taiwan.
Salary isn’t everything. I would pick a nicer place to work over one with the highest salary. Salary just has to be good enough so you don’t feel cheated or don’t get the opportunities you want in life.
this is a nation state vs a private albeit important company. 'compete' isn't a word i'd use here no matter the multiplier as it implies the game is fair.
It doesn't matter. There will be an oversupply of capacity and talents down the road. When the inevitable downturn comes you will see even more outflow. You are basically trying to fight entropy here.
The entire fricking world except Intel gets their cutting-edge (read: profitable) chips made by TSMC. There is quite frankly a lot of latitude for them to raise prices.
Specializing in hardware design is really a poison pill despite how interesting the field is. You spend more than a decade in school to gain the skills needed to work at the chip level, which often requires a PhD. Then it turns out that there's only a handful of companies in the world with the equipment or supporting personnel needed for the field, and your skills are worthless outside of these specialized environments. No wonder pay is so low despite the years of schooling needed. After going through those considerations, I ended up dropping out of a PhD in RFIC design and fell back to embedded systems. More companies hiring and versatile enough to slide into general software or web programming if necessary. Chip design is still fascinating, but all traps look nice on the outside.
Also, for any aspiring undergrads wandering this way that thought RFIC design was fascinating because they picked up a copy of Razavi's "RF Microelectronics" or something similar and couldn't help but read it cover from cover, the textbooks lie. The analytical equations in a chip design textbook are not reflective of what the actual process is like. While you're still in college, try and get a professor to give you a student addition of Keysight ADS or Microwave Office AWR, along with an SDK from a fab. Then spend a few months of simulation time to see for yourself how much simulated results diverge from analytical models and how painstakingly slow it is to optimize those simulations especially once you start moving into EM simulations. And keep in mind these are simulations, chances are the physical chip will diverge even more due to process variations, unknown parasitics, or even bad simulation models from the fab. If the lack of precision, simulation time, and general drudgery doesn't kill your enthusiasm when compared to your textbook learning, then by all means proceed.
It's still a fascinating subject. Every so often when I need a break from code I'll take out my old RFIC textbooks and read a chapter or two. But you really don't want to know how this sausage is actually made.
I spent my teens looking up to microelectronics career, and actually self-studied a year, or two ahead for entrance to Nanyang, or NTU semi.eng. programs.
I almost accidentally met two ex-TSMC engineers who worked for Chang almost since his first days at ITRI, and they were very good mentors, and seriously warned me about "a decade+ grind ahead." In the end it were my parents who stonewalled the idea, and sent me to a business degree mill in Canada. And this is all was when I had 2 early admission letters from both Nanyang, and NTU on my desk...
> If the lack of precision, simulation time, and general drudgery doesn't kill your enthusiasm when compared to your textbook learning, then by all means proceed.
Semiconductor foundry is the current bottle neck of China. The agreement with U.S is lethal for mainland chip manufactures and will potentially grind the electronics market down to a halt. 4 of top 10 pure-play companies in the world is in Taiwan. IMO this move too obvious and weak to attract talents from these companies. Few people would join the 'chase up to the frontier of technical know-how' just because of better salary packages. It's possibly a 'worst case' scenario type of planning.
Just the same that you can know for sure that your boss won't place a hit on you if you leave. The consequences for China to do that are too high, so it is not in their interest.
The "Big Semi" salaries are notoriously low for the amount of effort one needs to put into his education, and early career.
A physics, or engineering PhD. is a minimum to be allowed anywhere near actual work on the process, and those guys only get $50k-$60k a year in Taiwan after 5+ years.
A regular "technician," or a PhD interns can get as little as $2000 a month.
Of course, the few real know how holders are kept loyal at just any cost, and I heard rumours of 7 digit incomes for those few. This is by far the biggest "carrot" that keeps luring people into RnD work in Semi.
Rumors of huge payoffs would be cheap to start. I can't speak to the situation in Taiwan, but in the US it's dismal.
The rumors I heard from disgruntled relatives and postdocs I met in nanofab class prevented me from going down that path despite the strong allure and good match to my interests and skills.
My current job is nowhere near as interesting, but it pays me with actual money, and though that decision felt overwhelmingly cynical when I initially jumped ship, a quick survey of the others in my cohort who didn't jump ship leaves me with few regrets. They work a multiple harder than I do, on things a large multiple more important than I do, and they get paid a fraction what I do.
As a reward for taking the high road, they are likely to lose their jobs as the United States continues shipping semiconductor manufacturing and engineering abroad.
For brain-power-application Vs Payoff, Web Software already overpays. I chatted with crossword designer a few weeks back, and it was fairly heavy brain work for little pay. Similarly, there are lots of people, including electronics engineers who put in fairly more brain work and make little out of it.
Software outside Web dev is somewhat similar too. You don't get paid that much.
"Overpays" is relative, certainly there are no shortage of examples compared to which it underpays, but it does seem to be a trend that smarter (and physically harder) jobs have poorer pay. I wasn't even including the FAANG/SV premium and that's still true.
It's a pity. I would love to apply more brain power in my day job, but there's such a negative incentive for doing so that I can't stomach the cost. So I've got a hobby. Oh well.
I take it that's 60K USD per year, but not adjusted for PPP? Adjusting for PPP that's $140,000 per year.
> Of course, the few real know how holders are kept loyal at just any cost, and I heard rumours of 7 digit incomes for those few.
That's pretty true across any industry. These nominal-to-PPP adjusted salaries are roughly in line re: base compensation for what I would expect a good tech job outside the bay area to pay. If you got a job at the upcoming TSMC fab in the US, $140K would be about right.
Converting using exchange rate isn't the right way of comparing compensation as you're not trying to buy something in the US with your Taiwanese compensation. You're trying to determine a compensation figure in the US that gets you as much in the US as the Taiwanese salary gets you in Taiwan. This is when you use PPP.
Based on anecdotal evidence (interactions with people at MOSIS, Qualcomm engineers, etc.), $140k is quite a bit more than you'd get for 5 years experience, even for a high COL area like Southern California. It's an industry that's got the emotional appeal of gaming due to its cutting edge and impactful nature but the monopolistic economics of telecom due to the investments required, so you either work for the salaries they dictate or you go find another career. The same is largely true for electrical engineers and firmware developers in general.
On the other hand, anyone with enough experience in any of those fields can go off as a consultant and make absolute bank - mid to upper six figures relatively easily. The utility of experience grows superlinearly because the risks and capital involved in each project are so large. Someone with 20 years experience who has seen 5+ successful projects is easily worth 5 to 10x someone with only a few years.
PPP becomes meaningless when you try to buy international standard products or services which are almost always priced in USD, irrespective of purchasing parity.
This also holds true for products and services which are needed for professional skill development and their upkeep. The massive disparity between some countries’ PPP and nominal revenue/income is foolishly portrayed by some economists as a good thing, but at an individual level it’s a huge disadvantage.
Where it is relevant is groceries, fully local services and products.
> PPP becomes meaningless when you try to buy international standard products or services which are almost always priced in USD, irrespective of purchasing parity.
And it becomes meaningless too in light of TSMC being industry's biggest employer. And Taiwan pulling more than a half of semi engineers globally.
Intel is or course bigger in total number as a company, but their actual microelectronics side is still quite much smaller than TSMC.
I seriously dislike PPP calculations for salary numbers. I feel like it disingenuously masks the real event that’s happening - employers arbitraging history and geopolitics to get labour at a suppressed cost.
In a way, I guess that's true, in a more practical way, how do you account for the fact that $10000USD in one country buys you a car, and in another it buys you a house -- without using PPP?
PPP is one thing. You also don't have to worry about healthcare or tuition costs for your kids or (depending on country) pension. 60K is absolutely plenty of money if you don't have to worry about all of this.
Exactly. "Purchasing power parity (PPP) is a measurement of prices in different countries that uses the prices of specific goods to compare the absolute purchasing power of the countries' currencies." [0]
The Big Mac Index is a more approachable way of looking at it (and also shockingly accurate). For instance, in this case a Big Mac is $5.71USD in America. However, a Big Mac in Taiwan costs 71NTD ($2.44USD). This means that your $60,000USD salary in Taiwan will go ~2.34X further in Taiwan than a $60,000USD salary in America. So a 60K USD salary in Taiwan is roughly equivalent to a 140K salary in the US. [1]
Using market exchange rates only makes sense when you earn in one country and you're planning on buying something from a different country. If you earn and spend in the same country (for instance, looking at moving from Taiwan to the US), you want absolute purchasing power, not relative, so PPP compensates for that.
It’s also representative of a basket of commodities, between the wheat, lettuce, beef, sesame, salt, pepper, tomato, cucumber. These are basic commodities and a decent proxy all things considered.
Isn't TSMC's operating margin something obscene? Like ~40%. They could afford better comps. People mentioning PPPs and local standard.. that's all bs if your workforce can and will move globally with ease. Tell them their comps are good for Taiwan while they're packing.
But on the other hand going too far beyond local levels can put a lot of pressure on your hiring process. You might end up with a workforce consisting mostly of experts in appearing very hireable and little else.
$50k~$60k USD is relatively high compare to local living expensives, and average wages. By US standard, or rather Silicon Valley standard, most jobs in most places have extremely low wages. That's not how it works. The currency conversion only works when you go purchase imported goods or export stuff. Use it to compare living standard is only useful when both countries relied heavily on imported goods for essential need, which is not true.
Considering how H1B are getting treated, let's not pretend we live in a world where talents move freely across border without restrictions. This is true for people from Taiwan coming to China for work though, there is almost zero friction besides a plane ticket and some paper work.
I mean, in the US in 2017 after condensed matter Physics PhD where I did nanofab I could go work for intel/asml/lam and get like 110-140k starting. Or I could do data science/more SWE related and get 140-250k. The choice wasn't very hard. The lowest software job paid as much as the highest hardware job despite me being a specialist in the nanofab/hardware. Also, the opportunities for growth/future earnings/work life balance/etc are all better with software related jobs.
China considers Taiwan a province of its own. People from Taiwan legally can work in China with about as much effort as someone can move from Kansas to California for work. As with Silicon Valley, you’ll find people tend to move where there are bigger salaries.
This is good for silicon engineers and tech industry in general. This will make the entire sector more competitive. Unfortunately HN can't see that and would rather have silicon engineers be paid lower wages than to have them go to China.
When workers fall for nationalistic rhetoric in the media it's the workers that suffer.
Every competitor aims for dominance. Engineers should be paid more, telling them not to accept money from firms from authoritarian governments is laughable.
You should be encouraging western firms to be competitive not blaming China for being authoritatian or seeking dominance. I suppose it's easier to blame others than encourage western firms to improve though. So much for democracy.
Disagree. I believe what they are after is "tech independence" not tech dominance. They are afraid America will cut them off.
Honestly, it's probably a very interesting opportunity for hardware engineers. It's not super often that an entirely new fab, architecture, and industry are set up from scratch. It might be a way to get out from under various legacy assumptions and try something new.
Dominance in a specialized field like that, I can buy. AI is important, but it's also under-delivering on the hype (though what it has delivered is impressive).
Who stated it is CCP goal for "AI dominance"? Western media? Sure everyone want to be at the top of the food chain, but calling it dominance is just pure scaremongering.
>Who stated it is CCP goal for "AI dominance"? Western media?
After a moment of Googling I found the answer, I don't think HN really benefits from presumptuous statements against a poster - presume good faith.
>Sure everyone want to be at the top of the food chain, but calling it dominance is just pure scaremongering.
"Market-Dominance" is a current tenet of PRC AI strategy, or at least in the words of a document published by the PRC detailing the country's AI strategy.
Two hits: "Market-Dominant" and "the dominant role of the market in allocating resources". The second one is obviously about being dominated by the market, not dominating it... and the first one as well: "Follow the rules of the market, remain oriented toward application, ..." It's about investing in AI technologies that already have some success in the market rather than pie-in-the-sky projects without application potential.
Bonus: ctrl-f "dominate": "dominated by the market"
Second link:
Two hits, "give markets the decisive role in allocating resources, strengthen the dominant position of enterprises," and "Strengthen the dominant position of enterprises in the market". While that may sound like the government picking winners, within the context of market reform in China it actually refers to strengthening the position of enterprises as opposed to the government. Repeating this slogan ("强化企业主体地位") signals that the government does not intend to return to a command economy (where the government was in the "dominant position") even when it comes to funding strategic development projects.
Googling for policy documents and then ctrl-f'ing for keywords is a good first step, so props to you for doing your own research, but it doesn't help much if you lack the background knowledge to interpret what you find.
I strongly doubt anyone will ever catch up with TSMC or Samsung at this point. Intel might still have a chance, but it seems to be waning.
Semiconductor manufacturing is very unique in that it is easily the hardest thing we do right now. Even if China snipes all the talent, tools, and process designs, they still need mountains of precise parameters that are unique to the specific installation of each tool at the specific site. Tuning these parameters relative to the process technology can take years and requires the kind of long term, open collaboration & innovation sessions that the CCP seems fundamentally incompatible with.
There are simply so many reasons this type of thing is virtually impossible to steal. If you were to ever physically tour a fully-automated semiconductor factory & experience the depth of the system engineering required to tie everything together, you would realize there is nothing as complex as that system anywhere else in the discipline of engineering.
We are not talking about stealing here. They are hiring senior people with the know-how, both engineers and executives, by offering them huge compensation packages. They are hiring from both Taiwan and South Korea btw.
Huawei does the same in mobile. Their know-how comes from hiring good people. They have R&D centers outside China where they employ people they hired from Qualcomm, Nokia, Ericsson and others to design their new 5G SoC and mobile technologies.
> They have R&D centers outside China where they employ people they hired from Qualcomm, Nokia, Ericsson and others to design their new 5G SoC and mobile technologies.
Then it is time to kick Huawei out. Dissolve or nationalize their local entities, ban banks from dealing with their money.
China does not allow foreign companies to operate in China, so why should Western countries do the same? It's either a level field for all - or no field at all. The Western world has appeased China for too long in the hope China would democratize itself. This has evidently failed, it's time to pull the plug.
Apple operates in China. ARM operates in China. Tesla operates in China.
Even Facebook operates in China. Their social network is banned (for refusing to comply to censorship laws), but the company is still allowed to do business. Facebook has quite a few advertisement deals in China.
Heck, walk down the street in China for 10 minutes and you'll see more McDonalds and StarBucks than you've ever seen in your life.
Since 2014 legal reforms, many foreign companies are no longer required to form joint ventures in China, and so own 100% of the shares (and technology).
Saying that "China doesn't allow foreign companies" is... unnuanced, to say the least.
Nobody plays by the "level playing field" rules. The US likes to pretend it does, but as soon as there's an industry where it's not competitive (like agriculture for example), that goes out of the window. And IMO for good reason. Unfettered markets work in some cases. But in many cases they have lead to "winner takes all scenarios" where a single player (or 2/3 players) become dominant and the market is no longer competitive. We need a system that works against this over the long term, and some level of protectionism seems like a decent way of doing that.
Well I was thinking of agriculture subsidies, which are substantial in both the US and the EU. The US also puts significant subsidies into the Oil&Gas and Aerospace industries.
Right. When the 2010 Haiti earthquake hit, it wasn't a natural disaster that killed. It was an infrastructure disaster that killed. For a country that went from self-sufficiency in food to having its domestic agriculture wiped out from dumping from subsidized US agricultural products.
Then there are the more overt attacks like on Alstom, Toshiba etc.
Agriculture isn't the best example. Agriculture provides for people's livehood. It's the actual industry that national security depends upon. Which is why so many countries subsidize agriculture, it's not a economical decision at all in any regard.
Technology isn't the best example. Technology provides for people's livelihood. It's the actual industry that national security depends upon. Which is why so many countries subsidize technology. It's not an economical decision at all in any regard.
You literally die without food in at max 21 days. Suppose food supply chain got cut because of war or pandemic, you have to be able to supply food locally.
This is not a pure economical issue because it's not about efficiency, it's about have some redundancy so when things get hard, one won't just be starved to death. Afterall, it takes time for the market to adjust itself and without food, there won't be time.
If we are talking about End of the World level conflict, then yeah no preparation would mean anything, but that's not the case for most of the conflicts, if any since WWII, aren't they?
And TBH, following that reasoning, that there is nuclear bomb, ground force should be cut to save cost and tax money too.
Yes, if you are a country that only wants to protect their homeland, cutting your ground forces as a result of nuclear bombs and ICBMs is perfectly rational.
Say that you are a citizen of a country endlessly threatened by invasion from a foreign power. Is it more important for you that your country has the nuclear bomb, which means your likelihood of being turned into glass falls from 50% to 0.1%, or that your country has greater control of agricultural production, meaning that in case of disaster you won't have to pay fortunes for imported food and cut your consumption? I'd say in this case the nuclear bomb is more important.
Also, we didn't see End of the World level nuclear destruction of any country because all the great world power developed the Nuke. The US Army very seriously considered using nukes in the Korean War as well as had plans for the invasion of the USSR (See : Operation Unthinkable and Operation Dropshot). The only reason these plans weren't carried out is because the USSR and China sacrificed very heavily in order to develop their technology and achieve technological parity with the West.
Tell that to the Lebanese. After the Beirut explosion took out the nation's largest grain depot (half of it got blasted to shreds by the explosion, the other half was contaminated) and the entire infrastructure of their dominant port, they're squarely fucked.
Agricultural subsidies are the clearest form of theft from consumers there is. There is zero chance of monopolies in an unrestrained agricultural, oil, or gas markets.
Your better example is Aerospace, but there is no proven reason we need those colossal companies, and a big part of the merger drive that created them us to monopolize access to government contracts. ULA is a perfect example of that.
I think what you miss here is that in addition to efficiency, resilience is important in agricultural (and arguably other industries). Depending on foreign supply is all well and good until there's a shortage. Then you're screwed.
Arguably China have just found this with semiconductors. It was all well and good depending on TSMC, until the US blocked their supply.
Microsoft has R&D centers in China where they employ graduates of China's top universities to work on cutting-edge research. https://www.msra.cn/
Kicking Huawei out because they fund research in Western countries would be just as stupid as China kicking out Microsoft because they fund research in China.
Pardon my ignorance, but has MSR China produced something good? I have seen a lot of interesting stuff come out of MSR but mostly it has been from the US.
Also, are top talent joining MSR China? From what I know, many Chinese companies beat MS in compensation easily and these new companies will have the lure of quick growth as well.
Evidently they managed to hire the top talent behind that work at some point. Looks like Kaiming He works at Facebook now, though. http://kaiminghe.com/
1. That's a bold assertion you make about the CCP. I don't like them, but they have proven quite resourceful.
2. You say this as someone knowledgeable with other high tech industries? Here in IT we tend to pat ourselves on the back quite a bit, how do you know you're not falling into the same trap?
when it involves oppressing people...truly generative processes? nah...it gets done when they start utilizing markets but otherwise it's fundamentally doomed
that's what I'm saying: chinese prosperity is largely happening when they use markets, but the popular idea that there's some unstoppable, ultra-powerful chimera of totalitarianism and capitalism - I think there's a huge burden of proof that it isn't fundamentally still organizational folly like much of totalitarian states/communism
Of course they will catch up. It's impossible to maintain a lead forever in a field that is slowing down as a whole. It will take some time, but they will definitely get there at some point. There is no magic sauce that makes TSMC or Samsung better at this than China can ever be. So better plan for that.
Also, China gets things done incredibly quickly when state motivation aligns with technology. See: three gorges dam, national fiber optic network, mobile coverage, HK-Zhuhai-Macau bridge, 100% contactless mobile payment and instant messaging penetration, high speed trains, electric vehicles, etc. All of these examples are from the last 20 years.
I would restate that as a more general advantage, possibly only when operating at China's immense scale: relative cognitive freedom in creating solutions due to a broader pool of options. Because the sum total of available regulatory, fiscal, environmental and other resources necessarily exceed that of private actors, courses of action that would be untenable in other systems or require difficult and expensive public-private-partnerships are certainly feasible. This is why, for example, the 'super app' did not emerge in a western economy and China is one of the only countries improving its forest cover.
There was a period when many scientists and engineers were convicted on some bogus anti-soviet charges and jailed. Then Stalin realized that many of those were world class people with unique talents and knowledge and they were allowed to work in their area of expertise but in jail like but somewhat softer conditions. In 1953 after Stalin's death the practice was eliminated (took few years).
"I strongly doubt anyone will ever catch up with TSMC or Samsung at this point."
What timeline are we talking about here? 1 year? 5 years? Forever?
Yes, of course people will "Catch up" to Samsung and TSMC, both of which are relatively recent leaders in this field. There are are loads of foundries around the world, all of which have virtually equivalent level of complexity, but it is small (literally small) advances that give one foundry or another a competitive lead. And those small advances are certainly stealable, quite aside from independent orthogonal advances.
They probably don't need to "catch up" in the traditional sense.
By that, I mean that if someone was starting from nothing and trying to make the same stuff and enter the same market as them, then yes, they will have a massive uphill battle and would likely fail without legislative help. If they did something different but in the same space then that's another matter.
Remember, a short while ago it was all about x86 where Intel had the distinct advantage. AMD cut some of that down and is now gaining rapidly on them.
Nowadays it's all about ARM but in 10 years time it may be something else and if you get in early enough and your predictions are correct then who knows...
One thing I am convinced of is that if Microsoft embrace ARM wholeheartedly (I mean port everything across and let x86 go to hell) then Intel (and AMD for that matter) are in trouble.
The goal is not exclusively to conquer the consumer chip industry.
Ability to manufacture strategic chip industry is also very important.
Remember the sanctioned big Chinese facial recognition companies?
They do not really need 5nm chip for their product, I think 14nm can also work (albeit performance penalty).
Also, PLA, if they ever need to manufacture AI chips for whatever reason, they need to manufacture them in mainland for supply chain security.
It depends on how you want to compare them. You could look at it from a funding perspective. The total cost of ITER through 2013-2025 is expected to be 20-65 billion.
Samsung just revealed they are investing 50 billion to build an EUV foundry. This is on top of all the knowledge and assets they already have. It does not include the R&D to get to the point where you can just buy EUV machines, etchers, atomic layer deposition, etc.
> open collaboration & innovation sessions that the CCP seems fundamentally incompatible with.
The Soviet Union had managed to surpass the US in constructing nuclear bombs in a relatively short matter of time (I'd say that by the 1960s they were already in front), even though they were not as "open" and they didn't have as many Nobel laureates working for them as the US had.
That's not accurate [1]. In the 60s and for most of the 70s, the Soviets were far behind in bombs and delivery systems. Many sources say that the US vastly overestimated the size of the Soviet arsenal at that time - and hence was very cautious. Some sources say that the US did have a fairly decent estimate, but they overstated the threat to get more funding.
Once you know how to chain thermonuclear stages, you can obtain arbitrarily high yield without further advances in technology. The Americans pioneered this technique, they just didn't bother building as big of a chain.
At a certain point bigger yields are less desirable than more, smaller yields. Picture an enormous spherical fireball, then picture chopping it up and using the "useless" slices that were at high/negative altitude to instead cover more ground. Once it became clear that they were past the regime of yield scaling, the Americans moved on to developing smaller warheads that could do just that: pepper targets and deliver more devastation per pound than a corresponding single warhead of high yield.
Vanity metrics are always more important to the second place player, and that's what Tsar Bomba was.
That's why the USSR did it. Tsar Bomba is still serving its purpose 60 years later!
The USSR's followup actions give it away, though: they stopped pursuing higher yields, even though there was no theoretical or engineering limit prohibiting them, and instead chased the USA down the path of miniaturization. SLBMs and MIRVs were the future and everyone knew it.
Everyone stopped pursuing them because the massive falloff of effectiveness at higher yields. The explosions got large enough that the difference in air pressure at higher altitudes meant that more and more of the energy released was going straight up rather than directed at the ground.
It's an engineering limit to effectiveness but not an engineering limit to higher yield. I think we agree and are just nailing down the terminology here.
how do you think the missive Tsar bomb was going to be delivered? It would need a bomber which is a vastly inferior method of delivery compared to ICBMs.
The Tupolev Tu-95 is a very nice piece of machinery [1]. Speaking of ICBMs, I also think the Soviets were better at this compared to the Americans, their military had a dedicated Army branch for it, unlike the US.
The framing that I’ve typically seen (from a Western, US-based background) is that the Tsar Bomba was the quintessence of the USSR’s overcompensation for their relatively inferior delivery systems. Bluntly, it doesn’t matter if you’re a mile off target if you create a nuclear fireball a couple miles wide.
The “overcompensation” framing may be true, it may be a bias I’ve picked up from my society, or both or even downright false. In any case, the Soviets established a way to build and demonstrate a weapon that established the threat they wanted. And maybe the CCP will do similar, and get what they want from a path that we in the West will turn up our noses at—but that will still be effective.
TSMC’s advantage is an order of magnitude more engineers of high quality handling yield issues, the machines used to make cutting edge transistors is the same.
With China doing this, TSMC’s advantage will decrease.
I don't get where the logical disconnect is happening. Or maybe it's just an industry trend that isn't explicitly addressed.
Comments here say that silicon engineering is one of the most difficult things that you need very specific education for. Yet salaries are flat and/or not very impressive for that education level, in this industry.
That says to me that there's a surplus of people interested in such jobs, or the current job market shrank compared to what used to be required to innovate and operate all these fabs.
And if there is a surplus of labor, it's cheap for anyone, not just China, to siphon off willing talent.
Well, maybe another way to put it is that it's a business where the costs and value are absolutely clear. And it's a pure physics/technology catchup business. So margins get competed very thin.
Versus what you call "scammy" industries, where people attach emotional value, social value, network effects, irrational likes/dislikes -- there's a lot of margin that can be milked out of stuff like that.
The expensive part isn't getting the labor, it's building and operating the facilities - and then the profit margins aren't even that great.
The existing chip manufacturers are sufficient to supply global demand, creating more competition there is pointless from an economic perspective. It only makes sense from a national security perspective.
And from the perspective of the labor, what good are your highly specialized skills on a million dollar machine if you don't have a million dollar machine? Your only choice is to work for the few companies that own one and take whatever pay they offer you to try and make up for the decade+ of lost income from grad school.
It’s probably been undervalued for a long time. Not just fabs , hardware comp used to on par or higher than SW many years ago. Now it’s fallen behind on average. But eventually shock (eg trade embargo) will cause a correction
Honestly that would mean there's ample room for competition considering what's happening especially with Intel, Nvidia, and AMD. Though I imagine the barrier to entry is high.
I think the answer to OP is in the combination then? High barriers to entry means there are fewer competitors for talent - leading to stagnating wages. It might all change with news like the above shaking things up..
I could imagine a collaboration effort from companies like Google, Intel, Nvidia, and Amazon that would reduce the risk to each individual company and result with big benefits. There's been a lot of talk lately about TSMC not being able to produce enough chips for demand. Sounds like the time to take the risk is better than previously.
(I'd also argue that there are benefits to having a fab lab closer to these companies headquarters)
Playing catch-up is a lot easier than innovation. I'm not sure I buy the claim that another company couldn't catch up. The reason being because if you took all the employees from TSMC and put them in another company (and you weren't worried about IP claims) what would be different? We've seen several companies make up a lot of ground in a short period of time (AMD as an example). But also, 10 years isn't that long.
Actually the major problem for most fabs (Intel/GloFo/Samsung/etc) is not that they can't make 7nm chips, it's they can't make it cheap enough (in high enough yields) to compete with TSMC. However in this case, China can subsidize SMIC to produce at a loss until they eventually catch up compared to the open market.
Ultimately I think this will be a good thing, so long as TSMC doesn't lose so much talent that it can't remain competitive. We've just seen a wave of consolidation in the fab industry. New players means more competition, and that's good for market competitiveness.
The article isn't clear about this, but when they say "China hires" are they getting hired in Taiwan or moving to mainland China? What kind of package makes it appealing to cross the Strait?
> What kind of package makes it appealing to cross the Strait?
In software and consumer electronics, it's been a while that salaries in mainland China are a lot more competitive than in Taiwan. My friends from Asus, HTC, BenQ... are now making 3x their previous income at companies like Huawei, Oppo, OnePlus, Microsoft, Apple.
It's probably a bit harder to lure people from the industry's current best, but in my experience there's always plenty enough of mid-level managers and senior engineers who think they could do better if they were given more ownership. And here there's almost no language or cultural barrier.
In a free market economy wouldn't this lead to salaries rising in Taiwan as well?
Granted that Taiwan has less domestic consumption potential, but for export its companies have done well and Taiwan is more developed as well. It should be able to compete with salaries across the strait.
If we assume state interference by state funding this out of its pocket, then I guess Taiwan might find hard to compete on its own.
Crossing the Strait is not expensive, and Chinese government is already offering residents of islands near-same treatment as their own citizens few years ago.
Maybe the article was changed out but it at least partly answers your questions:
> TSMC was uncomfortable when QXIC began operating a research and development base not far from the Taiwanese company's most advanced 5-nanometer plant in south Taiwan, one of the people familiar with the matter told Nikkei.
> "Hongxin offered some amazing packages, as high as two to 2.5 times TSMC's total annual salary and bonuses for those people," said a source familiar with the matter.
I found quite interesting that QXIC could just open an R&D centre in Taiwan in order to poach talent.
But then, Taiwan is heavily invested on the mainland as well and, I suppose, cannot afford to face a backlash if it banned mainland companies.
Cross-straight relations are complex.
Edit: This reminds me of the many period dramas on Chinese TV: plenty of spies, double agents, etc. on both sides (and often on 3 sides, because of the Japanese)
Mainland China isn't a bad place to live if you have a good income and an "untouchable" status with regards to the government. That's how most western foreigners lived in China up until about 2012 when things changed somewhat.
> "Hongxin offered some amazing packages, as high as two to 2.5 times TSMC's total annual salary and bonuses for those people," said a source familiar with the matter.
> TSMC was uncomfortable when QXIC began operating a research and development base not far from the Taiwanese company's most advanced 5-nanometer plant in south Taiwan, one of the people familiar with the matter told Nikkei.
A couple weeks ago: integrated circuit major upgrades to first-level discipline in China. Previously IC studies was organized under different disciplines and funding was not streamlined.
There's going to be an oversupply of Chinese IC talent in 5-10 years, Taiwanese talent can see the writing on the wall. 100 TSMC engineers + 3000 chip engineers from Taiwan over last decade (10% of their industry?) is <1% of need, but provides valuable skill. There's still 90% left to poach, I wonder if US new IC fund will compete, whether there's language barriers that prevents Taiwanese engineers from moving to Arizona, and how Taiwan would feel about that.
SMIC head recently said the roadblock was talent not hardware or sanctions, implying obstacles like ASML EUV is surmountable. I'm not expert enough to judge, but China is graduating an Taiwan's worth of semi specialists every 15 months while poaching whoever they can, stealing whatever they can to catch up. The various anecdotes / sentiment from industry experts do not seem super doom and gloom. There's get tons of frank appraisals from Chinese analysts about how _massive_ the military gap between Chinese and US is in specific domains, but so far Chinese semi success seems to be like forgone conclusion. Kind of like ballpoint pen situation, which ppl misconstrue as lol China only learned to make ball point pen recently, when really it was Premier LiKeqiang politicized importance of precision manufacturing for national security, and 2 years later Chinese industry figured out how work with tungsten carbide for advanced munitions. But here's a cute ballpoint pen article to distract laowais.
> The two projects are aiming to develop 14-nanometer and 12-nanometer chip process technologies, which are two to three generations behind TSMC but still the most cutting-edge in China.
I think it's less about overtaking TSMC and more about hedging for a situation where China is completely cut off from chip imports. RIP if have to put out new phones and computers which are worse than the previous year's.
The specific process node isn't important. Once they figure out how to do EUV and other manufacturing techniques that limit their domestic industry's advancement, China will be able to compete at the smaller process nodes too.
Western governments can stop ASML from shipping an EUV machine to a Chinese customer, but they can't stop China from developing their own technology.
Don't forget 12 nm is still the best Intel can fab, it might not be world class currently but it's certainly very capable. Imo it's very threatening, especially if they also keep grabbing talent like they seem to be capable of doing.
that's crazy, and news to me. So now a unit of length is a marketing term. This is even more misleading than branding the word "real" so you can advertise "contains Real(tm) cheese" on food products.
10nm Intel CPUs exist. I have seen them with my own eyes. Reading the tea leaves from public statements and articles like that, the yields seem to be crap right now.
I am typing this reply from a Lenovo Thinkbook 14-IIL, that has a 10nm CPU, also known by its codename Ice Lake. It's not a desktop CPU, it's a mobile CPU, but it's enough to counter your claim that "Intel doesn't yet have 10nm".
SMIC is already manufacturing 14nm. The goal is to vertically integrate the entirety of the process, and thus gain independence as well as a future advantage.
Smaller means, smaller package, more transistors/sq and less power-consumption. But if you can afford to build a bigger chip to have the same transistor count, and you are ok with the higher power-consumption you have in theory the same performance, sometimes you don't even want 'too' small transistors, an example is radiation-hardening.
Yeah I can unfortunately see that. Given such a country scale strategic imperative throwing a couple million at people is basically a rounding error. I bet China wouldn't even flinch at an extra zero on top of the 2-2.5x salary offers if that's what it took.
It's not just TSMC. There've been stories of Chinese companies hiring retired Japanese engineers for years now. Due to the system in Japan, people are forced into retirement at 60. Some are allowed back on rotating yearly contracts at a hugely reduced salary. Often, these people might still have a remaining mortgage and college fees for their kids.
So what's one to do when they're offered a lucrative salary for a cushy 'consultant' position?
It's interesting that how Intel lost its leadership and "state of the art" in chipmaking now belongs to TSMC and to a lesser extent Samsung. Given how aggressively China is trying to invest into it, there's a potential for a future situation where China directly or indirectly controls the means of producing world's most advanced chips and US companies are denied access and can only rely on US-based Intel, which is several generations behind.
If I were US government, I'd be very concerned with this development right now.
All this gets solved quite easily, you add all the new hires to a sanctions list. Those people will be unable to bank and use any modern financial institution. Very easily fixed problem, now how moral it is, that’s up for debate.
I think he was commenting on the fact, as to how a lot of rich Chinese have properties, money saved abroad as a backup option. If you cut off that, they will feel more suffocated.
Being placed in such a list means you can’t touch any finance institution outside of say mainland China.
Means you’re stuck to using cash or supposedly crypto. The cash you can’t store anywhere, and you’ll be given large bags of it bi-monthly.
Means you can’t go travel because you’ll be forced to explain why you’re taking large bags of money around. I doubt a hotel in Paris takes Yuan for a simple room. They might if you were a whale though.
The $2000 I would need for a nice weekend away in Paris would totally fit in my jacket pocket.
The rest of my money would be in a sturdy safe back home, guarded by someone who thinks their job is to keep people from vandalising my quite nice house and doesn't know I store my cash in the basement.
Assuming for a second its USD $2k, that is all you would take as a person presumably with a family/partner to Paris from Taiwan? What are you talking about? You would need a couple grand just to be safe and cover the basics then you would need a couple more for the hotel in a presumably nice place.
Then when you're likely going to have to declare the cash youre taking (probably $5k+ just for yourself) at both airports and if you don't you'll be committing some crime or be harassed / delayed for it.
It no longer becomes enjoyable or feasible for a regular person to do this type of thing. Now if you had millions of dollars and could book own private jet I'd agree with it just being a small detail.
Right... At which point lets assume its a married man with a family, "Hey honey, lets move to mainland China where I'll get twice the salary but we'll never come back here and we will for sure become enemies to Taiwan."
Why would they become Taiwan's enemies? Because the US says so? And getting second identity issued by China in order to make life easier does no eliminate the old one. Maybe some inconvenience but if the money is right ...
You can't invest your savings, which means that your pile will shrink at the pace of inflation. If you have a lot savings (say you're close to FIRE), the money lost this way can be a nontrivial portion of your compensation.
If you aren't allowed to leave your job, no matter the justifications, it's slavery, yes. If the South Korean OLED engineers aren't allowed to leave it pretty much is.
But to a state at war official with you? Try to go to Iran from USA said
The question is if they do not share the profit people run.
For #ccp, I think innovation and voluntary sacrifice for gain (whatever it is) is hard. But forced. Grouped. Or simply copy and mass production. So far they can do it quite well. That is a problem to humanity. And its liberty. But Athena falls. In fact if they lay low or USA continue to sleep I fight but they might win.
Many dark ages exist in humanity. And in chinese history.
Is there a nimble approach to making high-performance chips? Something along the lines of 100 times more expensive, requires 1000 time less capital and time?
Is it simply a case of a Chinese private company poaching talent? Or is the chinese govt explicitly providing incentives to the aforementioned pvt company which they're using to poach employees?
If it's the former, there's not much to see here, move on. Just capitalism at work. If it's the latter, I don't see how any pvt company can compete against an actor with such deep pockets.
Yeah, I'm fully aware that any large company based in China has involvement/influence from the Chinese government at least on the board-level. Even so, I find it bordering on misinformation to frame it as "China does [x]", which is a general trend in Occidental/Japanese/Korean media.
When Microsoft did their release on considering acquisition of TikTok, explicitly stating it was after conversation with the POTUS, I never saw it framed as "The USA to acquire TikTok".
We need to be able to have more nuanced headlines because frankly this amount of reduction is hurting more than it's helping in making readers understand the situation. As much as there is issues in the intertwine of corporate leadership and government, the PRC is not quite on the same level as the DPRK.
Also true in the US. Different in structure and rhetoric, but still basically true.
If Boeing hires a German, it doesn't get framed as "US poaches from Germany", with a subheading of "a US-backed aerospace project" like in this article. They'd just say Boeing.
The article mentions "Two Chinese government-backed chip projects". Of course there's nothing wrong with it, if the US government is messing with the market for geopolitical reasons, the Chinese government has all the interest and the legitimacy to intervene on the other side.
Sadly their planning is coherent and logical. This move will in turn support its goal of AI leadership by 2030.[0]
I don't want to live in a world where such a dictatorship has a technological advantage so large they become the new superpower.
Unfortunately authoritarian governments are less impacted than liberal democracies by everything from social media polarization, to covid, to long-term planning shortcomings.
Yeah, like in case of SK, before 90s(when it was mostly under dictatorships) it recorded double digit GDP growth in about half of the years. In contrast from 90s onwards they recorded > 10% GDP growth rate just in 2 years out of the 30. Though in fairness, they had less of a ceiling to grow in.
Yup, and social liberalization has followed economic success for SK and Taiwan. A lot of people thought it would happen to China as well but it's been resistant.
I find OP's assertion a bit comical because trying to tie governance model to economic success in Asia would mean that you should definitely pick military dictatorship over democracy if you want economic success. (and if you do pick democracy, pick an authoritarian flavor with state involvement like Singapore or Japan)
I don’t know where this “China did not change” narrative comes from. 40 years ago, Chinese people could not choose where to work, what to wear, where to live, what to study, where to travel. During the Cultural Revolution, neighbors could rat you out for “colluding with the enemy”, whatever that means. All of that has changed. Hundreds of millions of Chinese travel abroad every year, and nearly everybody returns willingly. What part of this great change looks like “China did not become more free”? It isn’t even some footnote fact, it’s a huge boulder staring in people’s face, and people can’t see it.
The mainstream view in America has been that political liberalization necessarily means "one person one vote democracy". Most can see China's economic progress, but early on there was hope that economic progress would lead to social reforms too.
Speaking of people not being able to see it...
Lee Kwan Yew gave a pretty fantastic speech to journalists where he basically covered, from first principles, why his country had different laws around freedom of press and how other channels of accountability exist in Singapore to compensate. Then the journalists proceed to ask pretty dumb questions framed as "singapore is a dictatorship because it has no free press".
Well not commenting on the difference in systems, you only need to look at the founders of these companies. The Taiwan / South Korea world top U.S univ graduates vastly out number the chinese ones. I doubt some even got a good education at all.
And outright theft. You have to wonder if those 100 engineers left with more than just their desk supplies, given it's been somewhat of a common scandal in the West for Chinese engineers to rather brazenly steal sensitive tech IP for the good of the homeland.
Hilariously they will pay a lot of money for trash talent as anyone worth keeping will already be well secured and compensated. No one in their right mind would move to China if they don't have to.
With enough party protection and money, you can live an insulated, coddled life in China, and your spouse and children will be well taken care of. The risk is the long-term (3-7+ year range) uncertainty in when you lose political protection, and whether you can expatriate your savings without punitive withholdings if/when you decide to permanently leave. Some echoes to US decamillionaires' (and up) decision matrix to renounce citizenship, but on a much more granular level where the CCP scrutiny is based upon an opaque criteria set, and can hit much smaller incomes if the political profile is high enough with a powerful enough party official.
For top talent with long financial time horizons, you're right, it will be challenging to lure the aware ones to China.
You can build generational wealth by passing down stocks, investments or money; anything but land. At the contrary, the fact that land cannot be bought assures, for the average engineer, that their children will likely not get priced out of their city.
Everything except land is fleeting, that is why the wealthy Chinese all buy land outside of China, they know that the things you listed could disappear in a night.
Even land is fleeting. Ever hear of property taxes? Owning land in many states is essentially a 50 year lease. The only thing that isn't fleeting are the skills and experiences you pass down to your kids.
Land has been passed down for many generations quite successfully, and property taxes are great, because there should be some societal cost associated with the ownership, i.e. being able to call on the fire department etc.
Maybe that is the mindset of the communists, and it would make sense that they want to manage how many babies exit women in case skills can’t be passed down as efficiently.
You're misunderstanding. Property taxes mean that in practice even in the USA you don't own the land, you have what is essentially a renewable lease - you have to pay the equivalent of the land value every 50-70 years. If you're in China, you are in exactly the same situation - you have to pay the value of the lease every 70 years (or less). At the end of the 70 year lease, you are automatically eligible for renewal, as long as the land is being used and is not being speculated upon.
The Chinese land system is literally functionally identical to a 1.3% property tax.
The goal of the system is to reduce land speculation, which worked because in China 90% of households outright own their houses. Essentially, the land is free, you only pay the property tax.
China's 70 year urban land leases are essentially the Chinese version of property taxes. As long as you pay for the lease renewal, you are allowed to automatically renew it. In exchange, you don't pay western-style property taxes. The building itself is excluded from the 70 year lease, you own it in full and in perpetuity, so it isn't subject to the tax.
In fact, many 70 or 20 year leases have been renewed.
In conclusion, it isn't a question of control, it's simply a way to pay into the budget of the local government - if they wanted you expropriated they have eminent domain. Additionally, it limits speculation on the price of land, because when the lease expires there is very strong incentive for the owner of the lease or someone in their family to be using it as a housing. This is part of why in China 90% of people own the house in which they leave. All in all, as a homeowner, a 70 year infinitely renewable lease from the CCP is not different from having to pay for the value of your land every 70 years because of property taxes. In practice, people have passed down land for multiple generations in China, and upon lease expiry have had it automatically renewed so that they may pass it on to their children too.
This is one of the key reasons you need to give the right incentives and compensations to your employees. I have seen too many tech companies failing at employee retention.
The loss of talent will have a medium-long term impact on the company. And, many of their future competitors are going to be created by your current unhappy employees.
I have seen an increasing trend in tech-companies to be more employee-friendly beyond eye-candy perks. But, there is still a long path to walk.