Why chip language matters

Hi, this is Jane in Taipei. The tech industry has a chronic language problem that’ll soon have to be resolved. But first...Three things you [View in browser]( [Bloomberg]( Hi, this is Jane in Taipei. The tech industry has a chronic language problem that’ll soon have to be resolved. But first... Three things you need to know today: • AI hype takes a breather and [Taiwan stocks take a hit]( • But AI is also supercharging the memory industry, [according to Samsung]( • Aggressive price cuts by EV leader BYD [hurt its profit]( Naming nonsense “They’ll construct a second fab here in Phoenix to build chips, 3 nano chips — the 3 nano chip — chips that are 3 nano. You know what I’m saying,” quipped President Joe Biden in December 2022 during Taiwan Semiconductor Manufacturing Co.’s tool-in ceremony in Arizona, to a big laugh from the crowd. “Nano, nono, I don't know.” Yeah, this semiconductors stuff is complicated, but the president’s jibe touches on one of the challenges in talking about chips: marketing guys have really messed up in how they name generations of the tech. And that’s important, because global trade policymakers in the US and other nations use this wrong language to set export controls and other sanctions. The chipmaking race to build integrated circuits at the smallest scale has been measured in nanometers — the smaller the better — but companies have taken liberties with that. Several executives in recent times have told me to avoid using the word ‘nanometer’ in my writing. “There is nothing in a chip these days that is 5 nanometers,” one of them said a few years ago. That’s even truer today, as more sophisticated micro-architectures obviate the old nomenclature. International sanctions on China’s access to advanced chipmaking and machinery [refer to nanometer-measured advanced technologies](. When Huawei Technologies Co. broke through US sanctions, we all talked about [its 7-nanometer chip](. These metrics are all, to a certain extent, misleading. But there’s hope for improvement. The world’s most important chip manufacturer, TSMC, is branding its next technology A16. Sure, it’s still based on a measurement — the A stands for angstrom, a tenth of a nanometer — but at least it’s less literal and we can treat branding terms like what they are. TSMC’s A-something tech should only gingerly be compared to Intel Corp.’s something-A labeling of chips, which started earlier. In 2021, when Intel realized it was calling its chip Intel 10 while TSMC was calling a comparable technology N7, it traded in the Intel 10 label for Intel 7, and soon moved to Intel 4 — all to track the industry better. How did we get into this muddle? In the early ‘90s, as the pace of chip development started slowing, a committee of experts — dubbed the National Technology Roadmap for Semiconductors — got together to set out a plan for how the industry should advance. That’s according to Dan Hutcheson, who was a member of that group and is a chip economist for TechInsights. As a way to measure progress, they created the concept of a “node” to refer to semiconductor manufacturing processes and the number was the length of a gate in a transistor — the basic functional unit of a chip. The smaller the transistors, the more you can put on the surface, the faster the computing power. For the most part, measuring progress in shrinking numbers adequately represented the improvement of new chips. But nearly 20 years later, after we reached 28nm, things started going haywire. A new type of 3D transistor called FinFET went into mass production and the numbers lost their technical merit, says Daniel Nenni, a chip expert with 40 years in the field and founder of SemiWiki.com. The transistor gate length no longer encapsulated the performance gains, and the measuring of anything inside a chip has been reduced to “a marketing term now.” Good for a president’s talking points, perhaps, but not really something to base policy decisions on. Among less tech-inclined observers, the something-nanometer branding still reads as an indicator of quality. Decades of established practice are hard to shake. It got to the point where Intel Chief Executive Officer Pat Gelsinger did a whole spiel about refreshing the lexicon when his company switched labels: “These days, the various naming and numbering schemes don’t tell the full story of how to achieve the best balance of power, efficiency and performance,” he said. Still, the message hasn’t gotten through to much of the industry. TSMC executives use the words “3 nanometer” interchangeably with its technology called N3 — its most advanced chip fabrication in mass production today. These companies have grander issues to wrestle with, but maybe if Samsung Electronics Co., the other top logic chipmaker, also shakes off the old ways, we can at least move on to mark next-generation chips in a more abstract manner. If you want your reputation to be built on your obsession with precision and exactness, shouldn’t your language live up to those standards too?—[Jane Lanhee Lee](mailto:jlee3854@bloomberg.net) The big story The US push to ban TikTok marks a new phase in its approach to data security that could eventually impact everything from EVs to health care, [reshaping trade relations between the world’s biggest economies.]( One to watch SoFi CEO Stays Conservative on Rate Hike OutlookSoFi shares fell after the online bank reported second-quarter revenue and earnings that missed analyst estimates. SoFi CEO Anthony Noto joins Ed Ludlow and Caroline Hyde to explain why the firm is still being very cautious about the economy and what the Federal Reserve will do when it comes to rate cuts. He is on "Bloomberg Technology." SoFi CEO Stays Conservative on Rate Hike OutlookSoFi shares fell after the online bank reported second-quarter revenue and earnings that missed analyst estimates. SoFi CEO Anthony Noto joins Ed Ludlow and Caroline Hyde to explain why the firm is still being very cautious about the economy and what the Federal Reserve will do when it comes to rate cuts. He is on "Bloomberg Technology." 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