All errors should be reported to DonSurber@gmail.com

Wednesday, June 09, 2021

Red China's incompetence threatens the world

Amid a world shortage of semiconductor chips, a polysilicon plant in Shihezi City, Xinjiang, China, exploded and caught fire today.

Seeking Alpha reported, "The report is so far unconfirmed by western media outlets, but if confirmed it could have implications for the global semiconductor industry, which already is in a severe shortage."

While Red China's prowess in cornering the market is remarkable, its ability to meet market demand is highly suspect. Plant explosions are fairly common in Red China, particularly in the chemical industry. And thousands of miners die in explosions, fires, floods, and cave-ins each year.

Look up "China chemical plant explosion" at the South China Morning Post, and you will find a score of such incidents in the last, oh, 5 or 6 years.

Red China also suffers the worst air pollution and water pollution in the world.

Disregard for safety and pollution reflect a disregard for efficiency. Pollution, after all, is a waste of raw materials.

John D. Rockefeller saw that in producing kerosene from oil, they were pouring away a highly volatile byproduct into the Cuyahoga River. He decided to use that byproduct to run the internal combustion engines that ran his refinery.

Decades later, when electric lights replaced kerosene, that byproduct -- gasoline -- saved the oil industry.

Red China lacks entrepreneurs, who innovate. What it has are bureaucrats, who push pencils. We are not sure if Red China deliberately unleashed its covid 19 biological warfare weapon. Given the bozos in charge of Red China, an accidental discharge is possible.

For many reasons, Red China is unreliable. Incompetence is an often overlooked reason.

Economist Michael Snyder wrote this week, "Outsourcing The Production Of Virtually Everything Has Brought Us To The Brink Of A Nightmare Scenario For The U.S. Economy."

We put our future in the hands of Maoists who have no clue how anything works.

He wrote, "The global chip shortage has been a very painful reminder of how exceedingly dependent we have become on technology, and it has also shown us how unwise it was to outsource production of most of our chips to Asia.

"Back in 1990, the United States produced 37% of all computer chips in the world.

"Today, that number has fallen to just 12%."

And demand for these chips has soared because we must computerize every daggone thing in the world.

And that is not all.

Snyder asked, "Did you know that 60% of all apple juice that is sold in this country now comes from China?"

This is bad for two reasons. The first is the obvious reason that we are relying on an adversary for everything.

But the second and perhaps more frightening is that we put our supply chain in the hands of a feckless, lazy, and inexpert government that employs nobody but the progeny of CCP members.

Zero Hedge rightly mocked the story, "Biden Administration Announces 'Supply Chain Disruptions Task Force.'"

ZH began its report, "I'm from the Government and I'm here to help."

But the supply chain already is run by a government -- Red China's.

That is even worse.

Which explains why we have a shortage of computer chips, a shortage that will last for 3 years or 12 more fatal plant explosions in Red China, whichever comes first.

33 comments:

  1. Biden should scrap his infrastructure plans and just push critical manufacturing relocation program instead - everyone would go for it. Hell, Trump had pretty much started doing just that. everybody wins.

    He could maybe even get re-elected.

    hmmm.. how long can we last in a chip shortage. Might want to wait for DeSantis to do it instead.

    ReplyDelete
    Replies
    1. You said "He could maybe even get re-elected"...Biden wasn't elected, he was fraudulently put in office.

      Delete
    2. biden will be a total vegetable by 2024

      Delete
    3. Biden needs to take two weeks off the off himself.

      Delete
    4. "everybody wins"

      You've just pinpointed the problem. Authoritarian Socialist Democrats only believe in a system where they win, and everyone else loses. Biden has shutdown even programs that demonstrably help Democrat constituencies. Anything that Trump did, Biden's team is intent in undoing, regardless of the results. He would never do a "win-win", unless he con'd you on the part where you win, as the Democrats did when they rolled Reagan on the amnesty program. The part Reagan wanted, that they agreed to, enforcement, border security, etc., Congressional Democrats never authorized once the had their amnesty signed into law.

      That's just how these people are. Neither the Constitution, the Law, nor the electorate can stop them. Only brute force backs down tyrants.

      Delete
  2. Just to back up Don's contention, a few examples.

    It's mand-made islands are sinking.

    Northern China is turning to desert.

    And there's its financial bubble (Potemkin cities), demographic problems, and so on.

    ReplyDelete
    Replies
    1. Blah, blah, blah, and American-build cars are like cr@p when compared to German, Japanese, and now even Korean-built cars.

      I’m all in favor of American Patriotism, but not fact-free nonsense.

      Delete
    2. Susie - I don't know about the islands. The other items are pretty much occurring. If we consider our banking debt bubble of 2008-10, the Chinese bubble is anywhere from 5 to 10 times that large, without the financial wherewithal to dig out of it as we did. When they tried to float the Yuan as a tradable commodity and open up their financial sector a few years ago, their wealthy caste rushed to get the currency converted into mostly dollars - the CHinese had to close it up quickly. Most experts agree China has overstated their annual GDP numbers upwards of 30% annually consistently since they joined the global trading system 20-25 years ago.

      They are old and poor without the ability to project force much more than 500 to 1000 miles away. This means they cannot protect their supply lines for energy and food, of which up to 80% they import. Hence the silk road project.

      They are pretty much screwed. And now with the COVID truth escaping they have few if any friends. The administration here is - but most of the congress is not. And the next GOP president with a GOP congress (which is a scant 3 1/2 years away) will make doing business with China almost unbearable.

      Delete
    3. Jeffery's sock puppets want us to know Don is wrong about how wonderful Red China is and how suddenly the Demos are on our side.

      If you buy that, I have a bridge in Brooklyn for cheap.

      Delete
    4. The Island issue is interesting, they are not viable in the long term one good Typhoon and no one fires a shot
      They are figurtivley
      and literally built on sand...
      Paper Dragon.

      Delete
    5. edutcher - facts are hard things sometimes. If you know anyone in the DC lobbying world, they will tell you China is not well loved. It does not mean they do not have influence (they do), but that is not as widespread as you may think. Obviously the Biden's have been completely purchased, as have a few specific members in legislative leadership positions - McConnell and Pelosi for instance. And they are essentially buying Wash Po and NYT media influence. But overtly, nothing will happen in congress to their benefit in congress. They are fighting a delaying action, and they are starting to lose in individual states, which will eliminate whatever lobbying advantage they may have in DC.

      Yes, China is a bad guy; and they have assets in play. I am merely telling you that where it matters, their influence is waning. Even Hollywood is beginning to have second thoughts.

      Delete
  3. Unless it has changed, their QC/QA is a joke. I worry about the meds I take in that respect; something few talk about.
    I several decades go saw x-rays of piping welds on spools purchased from China that revealed voids which we found to be sand filled. This in 1200# steam piping that ran over the control room.
    Some years ago steam piping failed that ran over a plant's control room and people died. I have wondered if a Chinese piping failure was the case.
    We found the problem of the sand only because of the weld x-ray overlap. We were very fortunate, and me very much so, because if the piping failed during testing, I would have been fried.
    I wonder how much risk still exists from Chinese components, chips and other parts. I sometimes wonder about that when I fly.

    ReplyDelete
    Replies
    1. The new Oakland Bridge is made of Chinese
      Steel and concrete.

      Delete
    2. San Francisco's new Transbay terminal also had a huge steel beam crack right before the grand opening. Pretty sure it was made in Virusland

      Delete
  4. Globalization is another liberal idea proven to fail

    ReplyDelete
  5. There was a saying in the old West-"Not a chinaman's chance." Mining and Railroad accidents. Still that way in
    China.

    ReplyDelete
  6. In this instance you are way off base Don. Two points.

    First, in China they do not value human life as highly as we do in the USA. In many respects the Chinese have it right and we have it wrong.

    In the USA today, no significant construction project can be completed quickly, unlike in the USA of 100 years ago.

    Quick Don, how many men died building the Hoover Dam? Or the Verrazano Bridge (counting just the workers who died on the job; not including the victims the Mafia dumped in the cement pilings while the bridge was being built)? How long did it take to build these structures Don?

    Now as you well know Don, these structures can’t be built in modern-day Snowflake America let alone within the same timeframes.

    Besides the overwhelming concern for human life in Snowflake America (except for the lives of the Grannies and Grandpas in Nursing Homes when Democrats need them to die in mass numbers simultaneously for the Democrats to gin up pandemic fear and steal an election); Snowflake America can’t build squat because doing so may harm a snail darter, a wildflower, or disturb sacred and ancient “First and Only True Americans” burial grounds.

    Second Don, while I realize from your tone in this post this may shock you (you may need to sit down before reading this), but fires, explosions, accidents, mass killings (even beheadings; though no crucifixions recently to the best of my knowledge) continue to occur in Snowflake America’s factories, manufacturing plants, mines, and other workplaces, even today.

    Hell, last time I checked the few miners still employed in West Virginia remain at high risk of dying on the job and going to Heaven.

    There’s no doubt Don that more fires, explosions, and accidents occur in Communist China’s factories, manufacturing plants, mines and other workplaces than in the USA. Just as more fires, explosions, and accidents occur in the USA’s factories, manufacturing plants, mines and other workplaces than in the nation of Belize. The question is why?

    Do you know why Don? Do you really know? You may need to sit down again Don to handle this dose of truth.

    It’s not because Communist China is significantly more incompetent than the USA; or because the USA is significantly more incompetent than Belize.

    It’s because there are many more factories, manufacturing plants, mines and other workplaces in Communist China than there are in the USA. Just as there are many more such workplaces in the USA than there are in Belize.

    Do the math Don. Seriously, do the math like a real journalist rather than a pompous fact-free pontificator.

    Face it. Communist China is kicking the USA’s hindquarters all over the place; and Communist China then pays off the USA’s traitorous elite (paging Hoover; paging raging coke-addicted Hoover Biden) with less than 10 percent of Communist China’s ill gotten gains to continue and expand their bludgeoning of the USA and its citizens.

    Face it #2 — Demented Biden* and the Obozo brain-trust didn’t steal the election — the Communist Chinese with their embed Tony Faucisun, with an assist with the terribly weak VP Mike “Please like me” Pence (who abdicated control over the Coronavirus Task Force to the Communist Chinese embed Faucisun (and let’s be honest, President Donald Trump for delegating this tremendously significant responsibility to the terribly naive people-pleaser Pence), stole the election.

    ReplyDelete
    Replies
    1. Face it - you have zero idea what goes on in US factories - so perhaps you should just be quiet.

      Stick the topics you know about, we'd all be a bunch happier.

      Delete
    2. Tofu construction is legendary in China, the corruption would make a Chicago alderman blush, it is a whole different world there.

      Delete
    3. Jeffery's sock puppets are having an argument to convince us he knows all about capitalism which is why communism is better.

      Delete
    4. We are building 2 nuclear power generating stations in GA as I type. We still build large installations, however in the past there wasn't the EPA and other government organizations that seemly do their best to stop construction as well as the special interests that sue.

      Delete
  7. Let's be a little careful here; this is a business I know pretty well.

    o It's a plant for polysilicon - which is NOT the silicon used in silicon wafers; poly is used as a conductive material (and for other things), but is less-used in more advanced manufacturing processes (smaller geometries). As the article notes down a bit, the main industry to be harmed by this is the solar-panel industry (they use LOTS of polysilicon), and since that's a fantasy subsidy-harvesting industry, oh boo hoo...

    o As for "... outsource production of most of our chips to Asia..." umm, there's more to "Asia" than just China, Mr. Snyder. When you look at the three biggest IC manufacturers out there these days, none of them are PRC companies, and two of them are indeed in Asia - Samsung (Korea) and TSMC (Taiwan), both friendly, allied countries. And both have large amounts of their IC manufacturing in the US.

    o I've mentioned this before, but the IC business is NOT like most other "manufacturing" businesses - which generally are vertically-integrated - e.g., you can't have an auto-making company without manufacturing facilities, but you can have an IC-making company without manufacturing facilities; the reason for this is something that comes out of Moore's Law and such - the manufacturing technology is so flexible that one manufacturing process can be used by scads of different design groups to design many, many different products; this made it worthwhile back c. 1990 to disaggregate the business into purely-design companies (very low costs and very low barriers to entry) and manufacturing-only foundries with their very flexible (i.e., multi-use) manufacturing processes; this was pioneered by TSMC, and it was TSMC that made the success of all the US-based fabless companies possible; Qualcomm is a good example of this - and the high margins and high IP content is in the fabless companies. (Keep in mind that this unique business ecosystem of the IC realm is made possible by Moore's Law, which is a technology-specific fluke - which flies in the face of the usual law of diminishing returns). If you forced companies like Qualcomm to have their own manufacturing, they would not exist (which would be bad).

    o Finally, I must note that much of the decline in the US % of "chip manufacturing" has been due NOT to dark michael-moore-like "forces," but due to horrible mismanagement. Much like the auto industry in the 1970s, everything internally got taken over and run by the "marketing people" - who abandoned good technology work ("Why spend money on R&D when we can make me-too cr*p and get people to buy our cr*p through more-clever marketing?") for destructive pop psychology. The list is long, but I'll note that the one US entry on the semiconductor Big-3, Intel, was once a great company but seems to be rapidly going down the marketing toilet too. (Even Boeing seems to have done the same thing.) I don't want to bail out marketing-ruined "American" companies - they need to fix themselves.

    (N.b. - I had this figured out 25+ years ago. I could go to TSMC and get better silicon at half the price as compared to the "American" suppliers - and I built my first successful business on this. Let's not use faux-patriotism to prop up entitled losers who try to con us into supporting their overpriced cr*p "for our own good" (there's that phrase again!).)

    ReplyDelete
    Replies
    1. Yeah, mismanagement of corporate businesses is typically the fault of the CFO - not marketing. CFO's make sure junk gets produced when they have too much control. It is a flaw in the US industrial model. The reason your US chips cost so much was because of how the CFOs distributed cost.

      I did not know the difference of the chips in play here, but yes, CHina made a huge play to take over the solar panel manufacturing industry and make a bunch of the stuff. Essentially drove everybody out of it. Glad to see that particular type of chip plant go up in flames as opposed to a more critical type.

      Delete
    2. What I've heard is that China is trying to make the high quality chips but they have failed so far, in fact a lot of the start ups are scams.

      Delete
    3. (Reply for "BlackJEM" above.)

      Actually, it's not a "chip plant" but nearly a raw material supplier (for polysilicon). The best analogy I can come up with off the cuff is that of a maker of synthetic rubber that is heavily (but not exclusively) used for making tire treads... that loss would percolate through the tire makers up to the auto makers.

      Sometime back in I think it was the 1990s, there was a huge fire at a plant in Japan that made... the glue that was used to fuse the packages (of silicon ICs) together; they supplied something like 75% of the glue for IC packages, and the loss of a "raw material" like that for a few weeks was devastating to all the IC makers.

      Agree on CFOs, but that often happens after "marketing" metastasizes. I really don't hate "marketing" on first principles (in a properly-run organization it is a key player, but emphasis on PLAYER), but marketing (particularly in large organizations) became the place-of-choice for shysters who not only believed that they could b.s. their way to anything... but also regarded themselves as paragons of creation. Soon, pretty much only "marketing people" get into the executive ranks, and they make it clear down the pyramid that you have to act and talk and think like them to get ahead... and pretty soon even the engineering ranks are dominated by people who find it easier to spout marketing b.s. (raises! promotions!) while the people who try to do things right ("We can't ship that! It doesn't work!!") get nowhere (or worse).

      Delete
    4. (Reply for "Mikey NTH" above):

      China has tried, but success has been limited - it's difficult to do these sorts of things right, and in terms of things like fabless companies, well, collectivist culture doesn't play well in situations like that. Outfits like Qualcomm and Cisco saved our tech industry from being pulled under by the marketing-b.s.-ization of so many once-great American technology companies (a disease that keeps on spreading).

      China also has tried to cheat its way into the front tier - but with a lot of this stuff, if you steal it but don't know what to do with it, it won't get you anywhere. If you want to see one of the more egregious instances, just do a search on "tsmc smic litigation" and be amazed...

      Delete
    5. Oh - I don't mean to absolve marketing hacks at all. But if you have sit in on cost review meetings where all the detail the pricing decisions are based upon are discussed, corporate finance ensures your products are as expensive as hell.

      Delete
  8. About 15 years ago was at dinner with TJ Rogers, founder and CEO of Cypress Semiconductors. He said Kalifornia did not want them to build chip plants in the US - too many chemicals, heavy metals, gasses, etc - the cost to build a chip plant in the US was $2 billion MORE due to environmental rules, building delays for environmental studies, compliance, etc. He said their engineers would stay in US, but could not justify the extra cost to his shareholders. They built chip plants in Singapore and other Asian countries where all of the components are made, for a few billion$ less to boot.

    ReplyDelete
  9. Whatever China touches turns to crap. Kinda like the democrats.

    ReplyDelete
  10. A polysilicon plant in Shihezi City, Xinjiang, China, exploded and caught fire today. The third on that site, the first one just sank into the swamp. So the CCP built a second one. And that one sank into the swamp. So the CCP built a third, but today that burned down, fell over, and then sank into the swamp.

    ReplyDelete
  11. "Red China lacks entrepreneurs, who innovate."

    But what it does have is a population which spies and steals so what it can't invent, it steals from those who do. Their "students" are sent here to spy and steal. How many Chinese have been arrested because some quisling leftist hired them to work within the American government?

    Here's the incredible irony:

    Red China is MADE IN AMERICA.

    ReplyDelete
  12. Chinese the greatest copycats and bribers.

    ReplyDelete