Phytium portrays itself as a commercial company striving to become a global chip giant like Intel. It does not disclose its links to the research arms of the People’s Liberation Army.
The hypersonic test facility is located in the China Aerodynamics Research and Development Center (CARDC), which also obscures its military connections, although it is run by a PLA major general according to public documents and the former officials and analysts, many of whom spoke on condition of anonymity to discuss a sensitive matter.
Hypersonics refers to a number of new technologies that can drive missiles at more than five times the speed of sound and potentially avoid current defenses.
The Trump administration was set to place Phytium and a handful of other Chinese companies on an export blacklist late last year, but ran out of time, according to former U.S. officials. Such a list would block technology of American origin from flowing to these companies. And experts say it will slow progress with China’s hypersonic weapons program, as well as other sophisticated weapons and more powerful surveillance features.
The designation package is now awaiting action from the trade department.
Phytium did not respond to repeated requests for comment.
U.S. companies generally claim that export controls hurt their profits, while encouraging China to relocate and develop its own industries. But analysts note that United States policy is that U.S. technology should not help the Chinese military, and that reducing future progress from the PLA is worth paying for in lost business.
The Phytium case also highlights the dilemma of Taiwan, a self-governing liberal democracy strategically located between the United States and China. Taiwan is relying on Washington for defense against the invasion of Beijing, which US officials say is a growing risk. But Taiwan’s companies are dependent on the Chinese market, which accounts for 35 percent of Taiwan’s trade.
As tensions between China and the United States deepen, there are also questions about the right boundaries for American and Taiwanese companies trading with China.
Reach the goal in minutes
Semiconductors are the brain of modern electronics that enable advances in everything from clean energy to quantum computing. They are now China’s largest imports worth more than $ 300 billion a year and a key priority in China’s latest five-year national development plan.
In January 2019, Chinese President Xi Jinping visited Tianjin, 70 miles from Beijing and home to Phytium, and proclaimed the company’s importance to the country’s “original innovation” efforts. Today, Phytium boasts that it is “a leading independent nuclear chip provider in China.” The company markets microprocessors for servers and video games, but its shareholders and main customers are the Chinese state and military, according to government records.
Phytium was founded in August 2014 according to business registration records in a public government database. It was set up as a joint venture between the state-owned conglomerate China Electronic Corp. (CEC), National Supercomputing Center in Tianjin and Tianjin Municipal Government according to the records.
The National Supercomputer Center is a laboratory run by the National University of Defense Technology (NUDT), a leading military research institution whose current president and immediate former president were PLA generals.
Phytium’s ownership has changed hands over the years, but its shareholders often have links to the PLA, records show.
“Phytium operates as an independent commercial company,” said Eric Lee, a research assistant at the Project 2049 Institute, a think tank in northern Virginia that focused on strategic Indo-Pacific issues. “Its leaders wear civilian clothes, but they are mostly former military officers from NUDT. ”
In China’s rugged hinterland lies Mianyang, a city in southwestern Sichuan province that is a center for nuclear weapons research. It is also home to the country’s largest aerodynamic research complex: CARDC.
According to former US officials and US and Australian researchers, the CARDC, which says it has 18 wind tunnels, is heavily involved in research into hypersonic weapons. Its director, Fan Zhaolin, is a major general, but he is pictured in civilian clothes on the center’s website.
Since 1999, the center has been on the U.S. trade list – called the “unit list” – to help “spread missiles.” In 2016, Commerce further tightened the restrictions on the facility.
The CARDC, said Tai Ming Cheung, director of the University of California San Diego’s Institute on Global Conflict and Cooperation, is “a beating heart of Chinese hypersonic research and development.”
The Research Center and the Tab did not respond to emails seeking comment.
China’s large investment in hypersonics is a major problem in the Pentagon.
“The only way to reliably see a hypersonic vehicle is from space, making it a challenge,” Mark J. Lewis said until recently, the Pentagon’s director of defense research and technology. If it travels at hypersonic speeds – at least a mile per second – it gives a missile defense system very little time to figure out what it is and how to stop it, he said.
Hypersonics is a critical, growing military technology, said Lewis, executive director of the National Defense Industrial Association’s Emerging Technologies Institute. China could target naval ships and air bases in the Pacific, he said, adding that a conventional cruise missile would take an hour or two to reach its target, while a hypersonic missile could do so in minutes.
“It’s a huge concern,” he said.
One million trillion calculations
In 2014, the U.S. Air Force released an unclassified report on air warfare technology that included hypersonics. “Anyone could download this document,” Lewis said. “Then we basically took our foot off the gas. There was no feeling of busyness, of sadness. ”
Meanwhile, the Chinese read the American research. Their researchers began appearing at American conferences. They started investing. “They saw that hypersonics could give them a military advantage,” Lewis said. “And they traded.”
Unlike the United States, China has provided a hypersonic weapon: a medium-height hypersonic slider.
Hundreds of thousands of different configurations of heat, vehicle lift and atmospheric draft must be analyzed to make a hypersonic missile work that would be too expensive and time consuming through physical testing alone, said Iain Boyd, director of the Center for National Security. Initiatives at the University of Colorado, Boulder. “If you did not have supercomputers, it could take a decade,” he said.
In May 2016, CARDC unveiled a “petascale” supercomputer that would help the aerodynamic design of hypersonic missiles and other aircraft. A petascale computer can handle one trillion calculations per second. Second.
In 2018 and 2019, CARDC researchers published papers that showcased their supercomputer, noting that their calculations were performed with Phytium’s 1500 and 2000 series chips, although the papers do not discuss research into hypersonic weapons.
CARDC, Phytium, the military university and the supercomputer laboratory in Tianjin are currently developing an even faster computer – capable of handling “exascale” speeds of one million trillion calculations per second. Second. The supercomputer, dubbed Tianhe-3, is powered by Phytium’s 2000-series chips, according to Chinese state media.
To produce such chips, Phytium requires the latest design tools.
Although CARDC and other PLA entities are under U.S. sanctions, the Chinese military is still able to access U.S. semiconductor technology through companies like Phytium.
One Silicon Valley company that counts Phytium as a customer is Cadence Design Systems Inc., which awarded Phytium at a conference in 2018 to present the “best paper” on how to use its software for high-performance chip applications. Another is Synopsys, headquartered eight miles from Cadence in San Jose, California.
“In my decade in China, I have not met a chip design company that uses either Synopsys or Cadence,” said Stewart Randall, a consultant in Shanghai who sells electronic design automation software to top Chinese chip makers.
Synopsys declined to comment. Cadence did not respond to repeated requests for comment.
Phytium’s microprocessors are manufactured in shiny factories outside Taipei by the Taiwan Semiconductor Manufacturing Company, which now manufactures the world’s most advanced chips after surpassing the United States.
TSMC, the largest of several Taiwanese chip manufacturers, is in the unusual position of making chips “that end up being used for military purposes by both the United States and China,” said Si-fu Ou, a fellow at the Department of National Defense and Security Research. a think tank co-founder of Taiwan’s Ministry of Defense.
For example, the company manufactures chips used in advanced American weapons, including Lockheed-Martin’s F-35 fighter jets. TSMC announced last year that they would build a $ 12 billion factory. Dollars in Arizona in response to the Trump administration’s concerns about security in the semiconductor supply chain.
“These private companies do business and do not consider factors such as national security,” Ou said, adding that Taiwan as a small country lacks leverage and willingness to adopt export bans. “The United States has a relatively complete set of export control measures and regulations, while Taiwan is relatively loose and has several loopholes,” Ou said.
The TSMC said in an email to The Washington Post that it complies with all laws and export controls.
TSMC has a “robust assessment and review process for transfers to specific devices subject to export control restrictions,” said spokeswoman Nina Kao. “We are not aware of any product made by TSMC intended for military end use as claimed in your email.”
The final phase of Phytium chip design is handled by another Taiwanese company, Alchip, which deals directly with TSMC’s factories on behalf of Phytium.
Alchips CFO Daniel Wang said Phytium signed an agreement that its chips are not for military use. Phytium has told Alchip that its clients are civilians and that chips in the 1500 and 2000 series are made specifically for commercial servers and PCs, Wang said.
However, a 2018 press release from Alchip notes that the company has been working with the “China National Supercomputing Center”, which at the time had been on the Commerce blacklist for three years for involvement in “nuclear explosive activities.”
Mark Li, an analyst at Sanford Bernstein, said unless Phytium is subject to sanctions, TSMC is unable to cut it. “It is not TSMC’s job to be a police officer for the United States,” he said. “It is the decision of the politicians. China is the largest semiconductor market. If you give it up when the company is legally allowed, you can not explain it to the shareholders. ”
Shih reported from Taipei, Taiwan. Pei Lin Wu of Taipei contributed to this report.