That's a good argument /explanation. However, based on the equipment cost they mentioned (half a million $) I assumed they wouldn't be doing VLSI chips. As you said process reliability and efficiency is king there. I very much doubt you can do VLSI chips with alibaba equipment for $0.5million. My impression was they would be making rare chips with few tens of transistors tops (perhaps analog ics etc.). Even with few dozen transistors there should be many chips they could sell. Simple(obsolete) logic no one makes, but required to service old military equipment. Other simple IC's. If they could pull off a process to produce few K of transistors efficiently (an equivalent of 1980s tech) they could make microcontrollers etc(flash is another story). This is coming into VLSI territory, but it is still extremely far from a powerfull TPU chip. Look at google's edge TPU. I bet they sell them so cheap only because they had some unused wafer space left near the edges when making their proper TPUs. So they squeezed in some of those edge TPUs almost for free. How can anyone with alibaba equipment compete with that?