The chip war unleashed by Biden is, like the oil and gas
sanctions on Russia, going to backfire badly on the USA and other major
chip manufacturing entities.
The oil and gas sanctions is now
crippling Europe, while the chips ban against China will cripple
companies in South Korea, Taiwan, Japan and other major producers of
chips and chip manufacturing equipment. The USA itself will not be
spared. But Biden seems intent on sacrificing even his own
manufacturers, besides pulling down manufacturers in Taiwan, South Korea
and Japan among others, just to contain China. It will not succeed.
China
is the biggest market for chips, accounting for 70% of the world's chip
demand. The USA is already gloating about China going to suffer
immensely over chip shortages due to the chip war. They conveniently
forgot the other side of the equation, that of demand. If these
manufacturers are forbidden to sell their products in the China market,
who else is there to absorb all the chips being made?
No matter
now good the chips are, it means nothing without a big market like
China. Therefore, even before the ban starts, many companies involved in
chip making and equipment making, are against the ban and some could
eventually collapse. Now there are producers already having excess
inventories and some are cutting prices and dumping stocks. The signs
are already there and not good.
So, like the energy issue to
punish Russia that failed miserably. Russia did not collapse, and
instead Europe bears the brunt of the punishment. And likewise China
will not collapse because of the ban, but instead some USA allies in
particular will bear the brunt of the punishment.
The Evil
Empire is so evil, and besides starting wars, is now starting all kinds
of sabotage against countries just because it fears competition. And the
irony is that their action is hurting their own allies. Can I just
quote Kissinger's words -' To be an enemy of America is dangerous. To be
it's friend is fatal'. How apt.
Anonymous
If this chip war fails, what will Biden think of next?
ReplyDeleteThe energy sanctions on Russia failed. They then resorted to trying to take out the Nord Stream pipelines, for good, by sabotage, fearing the possibility of Europe going back to Russia in desperation.
Europe is not going to continue buying LNG at four times the price from USA, compared to pipeline gas from Russia. That is clearly unsustainable. Neither can Europe hope for increase production from OPEC+ now. OPEC+ message is clear. Europeans now know they have been dragged over the coals and thrown under the bus by the USA. Some EU countries, like France, are agitating their Governments to leave the EU and Nato. The formation of the European Political Community or EPC is an indication of what is coming and Nato will become obsolete.
Europe's energy dilemma is not just about this coming winter. It is more than that. Germany is facing de-industrialisation with manufacturing either starved of energy supply and will face opermanent attrition. Germany needs cheap gas to continue to run their industrial power base in Europe. They cannot compete globally with expensive energy from the USA, not just today, but years down the road. Those industries obviously cannot hope to stay the course.
Biden obviously has no control over Big Oil in the USA selling LNG at such astronomical price and raking in all the profits, or just masquerading. The Europeans are pissed off to know that they have been screwed. How does Biden hope to even try controlling OPEC+ or putting a cap on oil prices to thwart Russian exports, when he is even unable to do anything about Big Oil in his backyard. For all that is said and done, Biden may even be supporting the actions by Big Oil to sell expensive LNG to Europe. He is perfectly capable of doing that, but pretending not to see the problem.
The USA is giving China the push to become self reliant in chip dependence in time to come. What that will do to other chip makers in Asia and USA is left to be seen. It will not be rosy, you can be sure.
ReplyDeleteWhen that happens, they can sell their chips to MacDonalds, at fire sale price. LOL
China, having found out the real intention of the Enemy of the World, has already been preparing herself for the real challenge in the Chip industry.
ReplyDeleteFor all the high technology the Chinese are now able to compete at par. But for the super-chip, the Chinese still has a few years to go.
With this acceleration, China must now push herself to achieve the state-of-the-art in a few months instead.
That whatever chips, Taiwan, South Korea and Japan may produce, they are of no consequence to China, whatsoever.
Just wait for TSMC and Samsung to switch camp and join China. They know that once their factories are in the USA, they would lose control of everything and the US can just take over their factories at their whims and fancies just like seizing foreign assets and funds.
ReplyDeleteIt is throwing good money into a bottomless cesspool. Who would put hundreds of billions of assets and equipment in the USA know they could lose it any moment?
Are the top people in TSMC and Samsung that stupid? And the Chinese market is growing to double the size of the US market very soon.
Remember, anything made by man can be also be made by others. It is just a question of time.
ReplyDeleteThe should have learnt their lesson, prohibiting China from participating in their programs of space experiments on the ISS, space exploration, super computers, AI, rocket engines, jet engines and construction of aircraft carriers, warships and military equipment. What did China do? The did it on their own. Their landing a probe on Mars opened their eyes, asking how did the Chinese do that?
Five years from now, the Chinese will be thanking Biden for giving them the push that killed the chip manufacturers of other countries and made China self sufficient in chips. Having banned China from their high end chip technology and equipment, they cannot say that China stole their chip expertise. The whole world will laugh at them.
The USA even forced TSMC and Samsung to provide them with the blueprints for making high end chips after allowing them to build their factories in Arizona.
ReplyDeleteSo, what difference is this from China co-operating with USA companies and mastering their technology in various fields? China forced them to co-operate? If forcing TSMC and Samsung is not also using blatant force, what is it? It is also blackmail, however you look seriously at it.
At the moment China is buying 70% of the world's chip production. When China is self sufficient and not buying from the West, all their chip manufacturers and designers can close shop or operate like small town shopkeepers. And this is what they are doing to force China into this direction.
ReplyDeleteThey have lost 5G, 6G no need to say. Now they are going to lose the whole chip industry.
China already able to make 7nm chips. Working on 5nm. Soon would be competing for 3nm and 2nm.
When the USA fail to compete, it will invent all kinds of fabricated nonsense, like National Security issues, that were never proven, for example, against Huawei.
ReplyDeleteAnd the stupid poodles just buy into what they say and never spare a thought about it. Look at the stupid Europeans getting burnt over energy and not having a way out and just complaining about the expensive USA LNG. What is the point?