The two major companies making and selling chips using the x86 instruction set are some
of the most prominent in the tech community: Intel and AMD.
In 2020 Intel sold $20 billion worth of processors to China. AMD had $2.3 billion. Both figures
are on par with or higher than what those companies make from the United States. China
is a massive market for these two. And China knows it too. So it is interesting to see
some Chinese companies coming out with home-grown x86 processors of their own.
Is a domestic swap in the works? How did China acquire x86 technologies in the first place?
The whole thing is worth looking into, to say the least. So I thought to do a video
about it.
We hear it a lot. And we are hearing it a lot more now with Apple releasing their own
chips. There are "ARM chips" and "x86 chips". Even “RISC-V” chips. They are different.
But in what way?
I don't want to go too deep into this but x86 refers to a family of instruction set
architectures or ISA. A chip design company takes an instruction set like x86 or ARM and
implements it to create a CPU microarchitecture. That then can lead to a family of chips.
Different companies can share instruction sets, but still end up with radically different
designs. Intel's and AMD’s x86 implementations are different and thus perform very differently
despite using the same instruction set. Likewise, Apple's self-developed ARM chips perform differently
from other chips using the ARM instruction set.
Intel first developed and popularized x86 but for various reasons had to license it
out to other companies for second source and anti-competitive reasons. AMD is the most
famous of these companies with a core license, the subject of many years of legal battles.
ARM the company on the other hand follows a different paradigm and is in the business
of licensing out its IP to other companies. Those companies can then make and sell chips
of their own for use in devices. Often those devices are smartphones, IoT gadgets and more.
As of today, most of the CPUs for PCs, game consoles, and servers are x86 CPUs. They have
a reputation for handling compute-intensive tasks and drive 481 of the world's top 500
supercomputers. Though only 1 of the top 5.
Regardless, they are a shining example of an American technology now made the global
standard. And that is China's problem with it.
China has long been interested in developing domestic alternatives to American technologies.
Lately more so. There are a number of reasons for this.
First, the Edward Snowden revelations with regards to American spying on foreign allies
and competitors set off a lot of alarm bells around the world. People are looking a lot
harder at implementing American technologies in critical use cases.
Second, the recognition of increasing competition between itself and the United States. In the
wake of the Sino-Soviet Split, the US and China opened up to each other. This age has
now passed. Now there is increased tensions between the two countries.
Third, the desire for China to have homegrown national champions in critical points of industry
like high speed rail, solar, space, and now computer chips. It is a point of national
and patriotic pride, of which China has a healthy dose. The country has founded various
initiatives to take the lead in those areas. Some areas they have succeeded. Others, the
jury is still out.
And lastly, the Trump administration's move to cut off some national champions like Huawei
from access to American technologies have spurred on the country's worst fears.
So China is looking to have domestic, homegrown x86 chips at their disposal to supply their
massive user base if that worst case were to happen.
There are two distinct lineages of x86 homegrown chips available in the Chinese market: Zhaoxin
(兆芯) and Hygon. The two owe their existence to different circumstances.
Zhaoxin is the older of the two lineages, and probably the one with better future prospects.
They have been releasing CPUs since 2014, marketing them as being domestically made.
Zhaoxin is a fabless semiconductor joint venture between the Shanghai municipal government
and a company called VIA Technologies. VIA is a Taiwanese company affiliated with chemicals
titan Formosa Plastics. They make chipsets, motherboards, and CPUs.
VIA is one of those rare companies with an x86 architectural license. They got it with
the 1999 purchases of Cyrix, then the microprocessor subsidiary of National Semiconductor, and
Centaur Technologies.
When VIA acquired Centaur, which at the time was losing millions of dollars a month, they
kicked off a long patent battle with Intel that ended with a ten-year cross license in
2003. In 2013, they got a three year grace period. That grace period should have been
up by now, but I have not been able to dig up anything afterwards. A little strange.
The Zhaoxin architectures are into their sixth generation now and are direct descendants
of Centaur Technology’s work. WikiChip believes that 2015's third generation ZX-C or Zhangjiang
architecture is identical to Centaur's Isaiah II.
They have done tests of the latest Zhaoxin generation of SOCs available on the market
which are, as of this writing, the sixth generation Lujiazui. Those tests find that performance-wise,
the chips are about 4-8 years behind the latest American-designed contemporaries.
Power usage-wise, they use less power than a traditional desktop chip, probably reflecting
their mobile and IoT roots. All in all, good enough to serve China's needs on the low-end.
You can probably stick it into a pre-M1 MacBook Air and not skip a beat!
Foundries matter in this regard too. Zhaoxin, a fabless company, fabbed Lujiazui on TSMC.
For the same national security reasons, Zhaoxin has been trying to switch away from TSMC to
a mainland alternative like SMIC. This is likely causing some delays and performance
loss.
Zhaoxin has also recently announced their intention to move into the discrete GPU space.
That is interesting and worth keeping an eye on in the near future.
The second of China's x86 joint venture initiatives comes at the behest of the other big x86 license-holder,
AMD.
In 2015, AMD formed a joint venture to provide the Chinese market with a version of its Zen
1 x86 chips that can properly be called "Chinese". At the time, AMD was on its back heels. Its
stock was at $3 and it carried a substantial amount of debt. The JV would have paid them
something north of $200 million.
But the company knew the value of its IP and structured the joint venture in a way that
it thought would best control the crown jewels while at the same time allowing the Chinese
to call the chips home-grown for their big press release.
They did this with a two-layer joint venture - collectively called Tianjin Haiguang Advanced
Technology Investment Co. Ltd. or THATIC. The Chinese partners in the joint venture
are a number of Chinese private and public organizations like Chinese Academy of Sciences.
The first part of THATIC, a joint venture 51% owned by AMD, called Haiguang Microelectronics.
The second was Chengdu Haiguang Integrated Circuit Design Co or Hygon. AMD only owns
30% of Hygon. The way the transfer of technology and knowledge between HMC and Hygon was set
up allowed AMD to navigate between the many requirements of the various parties.
First, AMD created IP for a special x86 server chip that was handed off to HMC, which is
the 51% owned subsidiary. AMD has majority control, so technically within regulations.
And a lot of the workers working there on the tech are AMD employees.
HMC takes off certain sensitive elements and then hands what is left to Hygon. Hygon makes
changes and updates of their own including designing the top level architecture for the
chip.
The chip is then handed back to HMC - and thus AMD - who approves of it, finishes it
off and then sends it to GlobalFoundries for fabbing. After that, they are given to Hygon
for packaging and sale.
The Wall Street Journal did a story about this event that got a whole lot of pushback
from the semiconductor community. AMD had said about that story that they briefed the
Department of Defense, Commerce and other arms of the US Government and got the green
light to go ahead.
That might be, but the story does note that while the Treasury Department ultimately agreed
with AMD, the Department of Defense did not. AMD told the US government that the chips
would be used for strictly commercial purposes. But in China, job postings and press interviews
imply that the chips will go into new exascale supercomputers.
And it is a complicated system. While it seems to have been designed in such a complicated
manner so to allow the Chinese their PR headline, its complexity can also make detecting inadvertent
technology transfers more difficult. So it is understandable that people can have their
suspicions.
For what it is worth, my opinion of this setup is that it seems to adhere to best practices
in managing foreign technology joint ventures. Keep the best and most valuable parts away
from the partner. Give them only your older technologies.
Some semiconductor tech articles have tried to make it seem that there’s nothing to
worry about though, thanks to this joint venture system. I wouldn’t go that far.
In 2019, THATIC was placed on an entity list and AMD agreed not to enter into any more
technology transfers. AMD has long ago moved on and is now selling its fourth generation
Zen 3. Chinese consumers are right now able to buy a far better x86 processor off the
shelf. And they likely will, so long it’s available to them.
THATIC still has the original IP from the original joint venture, but that looks to
be all for now. Wccftech says that the design would be hard to “steal”. In other words
backwards engineering the technology or porting it to a foundry other than US-based GlobalFoundries
would not be practical. But let's see what happens down the line.
x86 still holds a strong place in the tech industry. And Intel leveraged that to its
great benefit. It is interesting to me that in their Foundry 2.0 announcement, they said
that they might be opening up x86 IP to foundry customers. I am curious to see where they
are going with that. Will Chinese fabless companies be allowed to create x86 chips using
Intel Foundry 2.0? Will the Americans let them?
Considering x86's perceived value and the importance of technology transfer to national
catch up strategy in China, Korea, Taiwan, and Japan, I think it is natural for Americans
to see these Chinese x86 chips with some alarm.
If you're not American then I bet you do not care and are probably just stoked to buy cheap
Chinese x86 chips. Feel free to comment so below.
I suppose if you are Intel and AMD, there is some concern to be had. After all, these
are direct competitors. But if your anxieties were centered on the loss of American semiconductor
leadership to Asia. Then I am not so sure those concerns will come to fruition through
x86.
For there is something also to acknowledge when it comes to x86 - it is not so heads
and shoulders above the crowd as it used to be. ARM is starting to make headway in areas
once considered to be x86's sole domain, including desktops and servers.
And more importantly. In China, x86 development is a niche industry within China's indigenous
semiconductor efforts. Whatever Chinese companies make in that area is for its own consumption.
Those chips likely can’t be exported abroad for fear of litigation and aren’t competitive
anyway.
For China, ARM is where it is at. Today, it is estimated that 95% of computer chips designed
in China are ARM-based.
And if it isn’t ARM then it’s RISC-V, the new open source instruction set. Development
for that is backed by major players like Alibaba Cloud. HiSilicon too has been doing some interesting
things there, having released its first chip of that type.
So the sum of it. x86 matters and these Chinese chips are very interesting. But in the end,
they still lag many years behind their American-made competitors. And I doubt these chips are going
to be a massive deal. So long as Intel's and AMD's chips can still be found on Chinese
shelves, that is. And of course, that can not always be a given.