AMD and Nvidia Silicon Manufacturing Secrets Allegedly Stolen, Sold To China (pcgamesn.com)

According to a report on DigiTimes, a former TSMC engineer has been accused of stealing the secrets of their 28nm manufacturing process and taking them across the Taiwan Straits to Chinese rival, HLMC. "The Taiwan Semiconductor Manufacturing Company (TSMC) produce the chips for the great and the good of the PC hardware market, specifically Nvidia and latterly AMD," reports PCGamesN. From the report: The report claims the former engineer, known only as Hsu, has been accused of taking details and materials relating to TSMC's 28nm manufacturing process and handing them over to Shanghai Huali Microelectronics (HLMC) after being offered a job there. The engineer was arrested before he even had a chance to start his new job on mainland China. This isn't the first reported instance of potentially shady dealings involving HLMC. DigiTimes previously reported that the Chinese foundry had headhunted a team of up to 50 research and development engineers from Taiwan's first semiconductor company, United Microelectronics (UMC), to help them get their 28nm production process up to speed. DigiTimes also alleges that some Chinese memory manufacturers have been doing the same thing, headhunting Taiwanese talent to get their own fabs off the ground, and that Micron are taking legal action against some of their Taiwan partners for allegedly nicking their tech and handing it over to China-based RAM companies.

Comments

This keeps happening

[Anonymous Coward]

But we're all too willing to buy all kinds of Chinese shit.

Because cheap - and that's it.

Re:This keeps happening

[Anonymous Coward]

I'd rather say because expenssive - and that's it.

Western products are too expenssive to justify the amount of money to spend on them. Starting from the same chinese produced item, the cost is much higher here, sometimes double or even trible of what it costs at chinese online shops. Next is the fact that pretty much any product, you can't trust that paying more actually brings any quality improvements, quarantees are not respected (hello Apple) and consumer protection does not work.

Chinese products break, because they are produced as cheaply as possible, western products break because they are engineered to break.

I've lost all faith.

Re: This keeps happening

[fubarrr]

>Chinese products break, because they are produced as cheaply as possible, western products break because they are engineered to break.

No, no, no man. I once worked in electronics OEMs. I assure you, all shit requests to "strip the product to the last cent" come from Western buyers: HP, Best Buy, Dell (those guy have massively improved once Michael Dell kicked out flowchart warriors,) Bang and Olufsen, Google (their bundled usb chargers were some of the crappiest on the market tech-wise around 2012)

Chinese domestic makers are faaaaar more concerned with issues of high return rate since they don't have marketing power to run on high margins. For a factory that survives with single digit margins, a 10% return rate means they are in loss, some times in a tripple digit loss. No, they will better up-rate all components, and materials than risk having returns and potential blacklisting by QC agents.

Re: This keeps happening

[tomxor]

If that's true then it must not apply to the mass of knock offs that come out of china with even cheaper components and wire in place of fuses and diodes and sellotape in place of screws.

Re: This keeps happening

[__aaclcg7560]

Flowchart warriors?! I stilll have my flowchart template from my Introduction to Computers (circa 1993). Where do I sign up?

Re: This keeps happening

[ranton]

> Chinese domestic makers are faaaaar more concerned with issues of high return rate

Where do all these high quality products end up? They certainly don't seem to export them because all the non-Western or noname Chinese stuff I've had is even worse than the Western-branded ones.

If a type of product is made in both the West and China, the Chinese product is likely of lower quality. For both products to exist in the marketplace it is usually because there is a very small market for the more expensive product and a much larger market for the less expensive product. If there is a large market for the more expensive product, like iPhones for instance, it is likely still made in China but at the same high standards of quality you would expect from high-end Western products.

The GP is still correct that China makes products which can compete with the best and worst products in the world. It all depends on the specs they are given.

Re: This keeps happening

[Anonymous Coward]

I lived in China for a while. They are improving FAST, but while it's true that Western buyers will strip costs to the bone... many Chinese will strip it past the bone. This is changing, but it's where they're at. A lot of people have just started manufacturing stuff and are new to Capitalism, and some percentage of those think that if it looks passable enough to get paid for it before it falls apart, good enough. It takes more experience than a lot of them have to figure out that screwing people is not a good long term strategy.

Chinese people are WAY more tolerant of broken crap than Westerners are. They just return it, and hope the next one works. My assistant didn't want me to toss the box my fridge came in... he said I should wait a month to make sure it would work first. The entire reason I had a new fridge was because the one we took from work broke in transit. The new clothes dryer's main heater coil was broken from day one. The maintenance guy had to come repair my hot water maybe 4 times in 6 months. A relative came to take a shower one day because their hot water was out. It's just way more normal to work around equipment failures there.

The government is VERY keen to make China the best in the world at, well... everything... so there's a big push to improve. The way things work there, though, many things can get delayed through deals or favors... so it will take a while. There will be many large, signature, highly government monitored success stories.. the way forward will be shown... and the culture will change.

There's a lot of pride in China in what everyone's accomplishing. When producing quality products become a matter of national pride as well, the products will get WAY better. I expect this is simply a matter of time... very possibly not all that much time.

They're not there yet. My native partner there didn't want to buy Chinese... he wanted import equipment whenever possible. Strangely enough, I was the one pushing for domestic machines usually.

This is why I virtually never buy anything direct from China. The shipping agreements and China customs mean it's nearly impossible to return anything, so many Chinese sellers will sell complete crap, sometimes 100% fraudulent garbage, because they know you can't return it. There's a lot of good ones that will just refund you and say "keep/throw away the broken one", but there are enough bad seeds I just don't want my money going to perpetuating that. Really, even a lot of the "good" ones are just betting that you won't bother to even contact them about it.

Culturally, manufacturers there seem to hate throwing away product, hate waste, so much that they'll ship you crap knowing they screwed up just because they don't want to throw it away and start over. We had real trouble with machine shops shipping stuff that blew the specs with the hope that nobody noticed. I think this extreme aversion to throwing bad stuff away is some of why there's so much crap "knockoff" product out there. Sometimes it's real product that failed specs, so they sold it to someone who didn't care. I would also expect them to sell bad product to competitors looking to reverse engineer stuff.

My Chinese mother in law is staying with us for now, helping with the young ones. She loves gardening. Instead of asking for proper tools, containers, pots, etc... she'll cut up plastic juice containers for pots, old 2 liters are lying around all over filled with seedlings. She'll take string and rope from packages we receive to hold up the garden sticks she's got everything growing over. Oh, garden sticks? I meant to say leftover fence boards she asked me to cut lengthwise for the purpose as paying for $1 garden sticks would be a waste when you had perfectly good fence boards lying around. Waste is absolutely abhorrent.

Make no mistake. China is going to blow completely past everyone else and just keep going. All that "let the market decide" BS that's all the rage in the US is all China needs. The government in the

Re:This keeps happening

[Notabadguy]

I used to be involved in building nuclear power plants in the U.S. One of my key suppliers kept sourcing steel (bar stock) from China - not from third party suppliers, but from their Chinese foundries.

Then came the day when coupon testing of the steel showed some irregularities, and when we sent inspectors to China to see what was going on, discovered that instead of delivering LCC (impact tested, low temperature performing) steel, they were taking WCC (different steel), removing the "W" from the imprint, forging on an "L" and faking the CMTR (material chemistry) data sheets.

This isn't unique, it wasn't a one-off, and there's a reason that giant companies have sourcing restrictions in their RFQs and POs like "No Chinese-sourced parts allowed."

Re: This keeps happening

[guruevi]

Those type of products have to compete with the high-demand, high-margin, low cost products.

A device charger for example - Samsung's charger design isn't much better than the knock-off Chinese but the knock off is a magnitude cheaper because Samsung has a huge markup and they found out you will still buy them even for Apple products where the charger is twice as expensive as Samsung's OEM but significantly better designed.

On the other hand, Large LED panels, various SBC not only are done cheaper you can often get higher quality from the factory than buying it from a reseller in the US.

Re: This keeps happening

[Anonymous Coward]

I just started brain dumping and enjoyed it. Here's more, well past TLDR for many I'm sure.

A primary function of government in China is to make introductions. They meet everyone, figure out what's going on, and make introductions to help things along. Good government guys are extremely good at talking for hours about anything and everything over lunch/dinner. (Where business is done, really) They talk up the other guy and smooth over the rough edges. You also usually need to be pretty good at drinking.

Government is highly local. Localities, regions, etc all compete with each other. Government employees move up based on (well, who they know, but also) performance... which many times is measured by economic indicators or notable things they've accomplished. So, most everyone in government is competing with the town next door to improve the economy. That's a hell of a thing.

Now for a crazy story.

If you're a foreigner, BE CAREFUL if you go to any inner city that doesn't get many foreigners. I went to a lunch, there were some local government guys. We had drinks. "You drink well! I'll get my boss over here!" ... more drinks with the boss. "Hey, you drink well for a foreigner! I'll get my boss!" ... okay, crap... this is way more than I was planning to drink. "Wow, this is great! MY boss would like to meet you for dinner!" ... next think I know I'm drinking with a state-governor-level guy and probably pissing him off because I will probably literally will die if I drink more than two more drinks. Each time, I was trying to calibrate how much to drink based on showing respect. I was purposely throwing up alcohol in the bathroom to avoid alcohol poisoning. Ho damn, never... EVER again. My business partner later said I needed more wisdom concerning drinking... but he couldn't tell me a single thing I should have done differently. Drinking a "reasonable" amount is a major way to befriend people and make things happen. You can't drink LESS with someone's superior. I did, much too late, figure it out. Fake having some problem. I stumbled to the bathroom in highly exaggerated steps, pretending to need to grab on to chairs for balance. My assistants tried to make excuses for me as I (at their urging) basically hid out in a stall until he left... which didn't take long. Wow, that did not go well.

Hmm, enough for now. :)

Re: This keeps happening

[TheDarkMaster]

Very interesting history, thanks

Re:This keeps happening

[dbIII]

And that is why you don't cut corners and rely on your supplier to do all testing.
It's not just the Chinese who get up to those games. It's worth at least getting a small amount of one batch tested done to see what you are really getting.
While the above sounds complicated (impact tested, low temperature performing) all that really means is cutting out a little bar, putting a notch in it, soaking it for a while in something like alcohol cooled with carbon dioxide (or leave it to soak in liquid nitrogen if it's for a use that gets incredibly cold) and breaking it with an instrument that is really just a great big hammer on a pivot. If it's brittle it will barely slow the hammer down and it will swing up almost as far as it swung down. Parts of weld test plates get tested that way all the time.

Re: This keeps happening

[fubarrr]

MEN! Mod this guy up!!! I gave up my last mod point to return this post from negative score

Re: This keeps happening

[fubarrr]

Where do all these high quality products end up? They certainly don't seem to export them because all the non-Western or noname Chinese stuff I've had is even worse than the Western-branded ones.

Did you realize that under "domestic makers" I mean China's own OEMs? Foxconnies, CM, Flextronics, Namtai, Shitatron-Pegatron, Quanta-Schmanta, AML - they are all foreign companies.

Chinese domestic OEMs do not have luxury of working with biggest brands. Most of stuff they sell are made for small private brands that change manufacturers as frequent as Stevie-Aids-Jobs changed his "Johnnies."

You also don't need to look long for Chinese makers with own brands that do put up at least something under the words "brand integrity" . Those are pretty much all remaining Chinese manufacturers ran by private entrepreneurs: Chuwi, Smartron, GPD, Tronsmart ( those are two different companies,) Orvibo, Tenda, Coolpad, Onda, pretty much all and every small business who spams Western blogs with paid review requests (because these are the only marketing option they have money for)

Re:This keeps happening

[Gilgaron]

I used to work at a food QA lab and they had to run all the fruit juice through a gas chromatograph to make sure it was what they were trying to buy. I think any international business is more at risk for shenanigans because enforcement would be harder... worst case scenario you'd lose your contract with the buyer.

Re: This keeps happening

[fubarrr]

Here, people are conditioned through mostly fake news or individual anecdotes of stupidity to think the government is incompetent. China's government, at least, is FAR from incompetent. If my Chinese venture was ready for funding, it would have been funded. By the government, or with a funding company via government assistance in introducing everyone. It's a slick, well oiled machine. It's not always fair, but it REALLY works.

Ha! Like they are. What I see myself now is CCP declaring Jihad on China's manufacturing industry. Do you realize that the new mayor of Shenzhen has ordered 9000 to 10000 manufacturing enterprises providing jobs for MILLIONS to be closed and factories bulldozed to make way for garish hotels of Dongbei mafia? The previous mayor of Shenzhen did not want those guys to make his city a hooker parlor and this is why he was killed.

Government is highly local. Localities, regions, etc all compete with each other. Government employees move up based on (well, who they know, but also) performance... which many times is measured by economic indicators or notable things they've accomplished. So, most everyone in government is competing with the town next door to improve the economy. That's a hell of a thing.

Well, how do you get local contacts when they kill the few brainy people in the government? Previous mayor spoke fluent Russian and was instrumental in bringing tons of highly skilled Eastern European engineering cadres to the city. Now what a new guy does? He Hongkongizes the city, a land plot in Qianhai-Shekou costs more than land near Admiralty in HK or, say, downtown Monaco city. Whom he brought into the town? He brought fucktard property development mafia from all over the world. He is eager to bulldoze just anything for a kickback from property developers - he even managed to "redevelop" a residential district twice in 5 years! A few plots from near Qianhai were sold to a guy who wanted to put a mixed use condo complex there, he built the foundation, but got kicked out when the guy decided to resell the same plot to HK mafia just 3 years after the start of construction.

Re: This keeps happening

[fubarrr]

>What exactly is the Jihad about

Destroying China's light industries under all and every imaginable pretexts, from environmental protection to "enforcing transition to innovative economy"

>What do they want?

Steal land leases from factory owners, the same way lowlife village committee bosses steal land from private rural land owners all over China.

Thought, the higher order pretext for all of the above is the notion that "the South has become "excessively successful"" among bigwigs. This point arose right around the time of riots in Guangzhou over Cantonese marginalisation and the previously unthinkable vane belief/idle talk topic that Guangdong may secede from China popped up as a credible possibility

Re: This keeps happening

[jfisherwa]

I think what happens here is that the West learned that it's not worth cutting every cent at the risk of damaging a brand and dealing with excessive returns. They reevaluate and often ditch factories/suppliers and raise their US prices to compensate. Shoddy parts/processes left behind with these factories have to end up somewhere, and with the US raising prices to compensate, the Hong Kong/China conduit/trade consultants see an opportunity to release cheap and generically non-returnable products within that low-end pricing market.

.. But now you have a sea of HK consultants in a pricing war in this separate ultra-low-end market, keeping quality down and selling 1,000 units at a time on Alibaba.com.

Re: This keeps happening

[syntotic]

No, the REAL problem is if they kill the teams who know those secrets besides stealing them. THEN we have a lost secret and have to buy out of competition. Federal Government does not see we cannot just apply Market Economics when the market is threatened and they should be protecting specially new technology companies at least to the extent patents are protectable, I mean, against such company foreign threats.

Why the "free market" doesn't work on trade

[DeplorableCodeMonkey]

The PRC's government is massively supportive of this behavior. The only way to deal with this is to ask a hard question: what would it take to make Taiwan unnecessary here? Cut them and the PRC out of the loop as much as possible. Shift federal policy as hard in that direction as possible. Otherwise industrial espionage will continue to get the "we are so sorry, we'll look RIGHT INTO THAT..." response from some of our "trade partners."

Re:Why the "free market" doesn't work on trade

[Isca]

This is one area I used to be hopeful on with Trump when he was elected (we had to try to make the best of a bad situation, right?). I had hoped his promised rules on "Buy American" with regards to technology would include a significant amount of internal components of things to be included as well.

But the not actually existent yet rules seem to lean towards manufacturing includes being packaged/assembled only here.

Re: Why the "free market" doesn't work on trade

[fubarrr]

Not possible: all electronics is made in China, all parts for it are made in Taiwan.

China can't defeat Taiwanese in semi, and Taiwanese can't stop relying on mainland for cheap labour.

Re:Why the "free market" doesn't work on trade

[sheramil]

We could also train our corporations on how to combat espionage..

Do you want a cyberpunk dystopia? Because that's how you get a cyberpunk dystopia.

Re:Why the "free market" doesn't work on trade

[gtall]

You are missing the essentially property of "infrastructure". China has it for electronics manufacturing as does Taiwan. The U.S. is lagging. No amount of Trump enacting Ballmer's Monkey Dance is going to change that...and he's too stupid to figure this out as well.

Re:Why the "free market" doesn't work on trade

[Anonymous Coward]

Do you want a cyberpunk dystopia?

If it means I can have a pink and lime mohawk and some color-changing pants without actually drawing attention, maybe.

Re:Why the "free market" doesn't work on trade

[OrangeTide]

Money does not equate intelligence. For example, you can inherit your Daddy's money, but be a totally clueless tool. You can also be successful and talent in a very narrow aspect, like acting, but be ignorant of basic science or economics.

Re: Why the "free market" doesn't work on trade

[Brockmire]

Yeah, we keep hearing about how the NSA/CIA infiltrates Canadian tech and nuclear companies and steal their secrets. Oh wait, no, that's China.

The Chinese Method

[Anonymous Coward]

Saves a lot of money and time.

No need to bother with R&D when you can just wait for someone else to do it, then just steal it and improve upon it.

Re:The Chinese Method

[Megol]

You mean the European method, also known as the US method, the Japanese method etc?

Thinking this is unique for China is naive at best. The practice will decrease as the intellectual property market in China increases just as it have decreased in other countries/areas for the same reason.

Re:The Chinese Method

[secretsquirel]

I mean to be fair, in grade school we learned about the guy who stole the power loom tech from England as an American hero.

Stop framing this as "China steals from America"

[Anonymous Coward]

This has nothing to do with AMD, NVidia, or any other American companies. This was, supposedly, a Taiwanese engineer selling information on manufacturing processes used by the Taiwanese TSMC, to a company on mainland China.

Huali guys? Again? They simply don't stop.

[fubarrr]

I once worked right besides Huali's fab. Just a year ago, Huali's campus was a ghost town. They built factories worth many gigabucks, yet did not have anybody to run them. All Chinese process engineering grads are poached by Taiwanese fabs even before they graduate.

Western arrogance

[Anonymous Coward]

It's painful to watch all this oozing of western arrogance (and I say that as a Westerner, mind you).

Kids, you seem to have forgotten Uber has just pulled off that same thing on Waymo (ex-Google). It's standard operating procedure in industry, sadly. NSA/CIA are known to have spied on behalf of US industry, and if other states' intelligence agencies haven't done so, it's for lack of means, not will.

Just continue believing the Chinese are idiots until "they" own all intellectual property of relevance and turn the ever more draconian laws "we" have been sharpening all those years against us. Because by then, "they" will have better lawyers. You'll see who are the idiots, then.

Or alternatively, work hard to establish a "we" in which one's person well-being hasn't to be to the detriment of others, difficult as that may seem. It should be worth it.

Re:Western arrogance

[EmptyHead]

You're right, we do need our corporate and government sociopaths to wake up and see why we should protect ourselves a lot better. Giving our industrial secrets to such "gifted" foreign workers probably isn't such a good idea after all, who knew?!?

huh?

[edx93]

The Taiwan Semiconductor Manufacturing Company (TSMC) produce the chips for the great and the good of the PC hardware market... well, specifically Nvidia and latterly AMD.

Maybe this is early AM here, but what the hell does this even mean? I also found grammar errors including missing punctuation. Not saying that this source is incorrect, but it lost a shit ton of credibility here. Please, real news sources, guys!

AMD and Nvida secrets, no.

[Anonymous Coward]

TSMC is alleging that TSMC's 28nm process was stolen. What does AMD and Nvidia have to do with it? I thought AMD spun off it's Fabs to Global Foundries (not TSMC), and if Nvidia ever had a Fab I would be surprised. They are now 'just' TSMC customers. So are a lot of other people.

Oh. Those are the companies American people know, and some one wants to cause a ripple in their stock.
Got it.

Re:AMD and Nvida secrets, no.

[edxwelch]

You're right, it's just a silly click bait title. Nothing was stoled from AMD or Nvidia. AMD uses mainly Globalfoundries as a foundry, but also TSMC for some products.

Re:AMD and Nvida secrets, no.

[Guybrush_T]

+1. Come on Slashdot editors. You're on slashdot. People know TSMC.

You can mention some of their customers in the article, but the title should be "TSMC Secrets Allegedly Stolen .."

Re:AMD and Nvida secrets, no.

[cheesybagel]

TSMC is used to manufacture Apple and Qualcomm CPUs. They also manufacture AMD and NVIDIA's GPUs. Most AMD's CPUs are manufactured at Global Foundries yes.

Re:Waaaaah.

[Anonymous Coward]

> would be terrible for me and my buying choices.

It would actually. If AMD or nvidia go out of business because some competitor stole their tech your buying choices will be a thing of the past. There are no choices when there's only one supplier left.

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[account_deleted]

Comment removed based on user account deletion

Not AMD

[DrYak]

This has nothing to do with AMD

Even more so, as AMD doesn't use 28nm process anymore, neither on GPU (14nm FinFet), nor CPU (also 14 nm), whereas the chipset is still done with a coarser process AMD 990 (65 nm).

Nvidia also doesn't use anymore on their GPU (16nm).

Seems that 28nm was used back in 2010~2011 products.

So this stolen technology won't suddenly enable China to produce AMD/Nvidia GPU clones.

On then other hand, China's own home made Loongson CPU, is currently at 65nm, but some models are scaled down to 28nm (the Longsoon 3B).
So this is definitely going to help china produce their own CPUs locally, without needing to rely on some external 28nm-capable fab (currently Loongson are built by STMicroelectronics).

By adding 28nm capability to its portfolio, Huali Microelectronics would be in a position to offer to manufacture loongson locally - probably a worthy contract.

Re:Typical China company

[CeasedCaring]

China have cornered the market in "Made in..." stickers.

TPM

[Anonymous Coward]

TSMC built the TPM in my desktop. So that's comforting.

Re:TPM

[cheesybagel]

They're a chip manufacturer but they don't design chips. So blame whoever designed it and worse still whoever decided to put it in.

Re:Typical China company

[Moheeheeko]

Where I work we have daily hack attempts coming from China, We have seen Chinese people rooting through our garbage, and we even had some Chinese agents buy some of our stuff, and got caught at the airport with tickets to Beijing.

Our situation is a little different as by US law our stuff cannot be sold to/in China at all, but still shows the lengths they will go to to get what they want.

Re:H-1B looting

[wyHunter]

In other words, it's a management issue. It's a shareholder expectation issue. Mostly it's short term thinking.

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[account_deleted]

Comment removed based on user account deletion

Sold to China, or sold to a company in China?

[eric_harris_76]

Unless that company is owned by the Chinese government, it makes a difference.

Idiot headline writer? Or just hasty? Agenda-driven, perhaps?

Does it matter?

Are People

[Mybrid]

AMD and Nvidia Silicon Are Manufacturing Secrets Allegedly Stolen, Sold To China

---OR---

AMD and Nvidia Silicon Manufacturing Secrets Are Allegedly Stolen, Sold To China