Huawei's Pura 70 smartphone uses a chip that is 9%
faster than that used in the Mate 60. And more components are found to
be sourced domestically than the Mate 60. And with each successive
launch, the more domestic components are going to be used and that is
affecting even more foreign made parts that will put pressure on those
foreign makers.
According to Kevin Wamsley of 'Inside China
Business' the semiconductor sanctions by the Chips Alliance was to
prevent China from having access to high-end chips now used in the two
phones that Huawei put on the market recently, within six months of each
other, and Huawei was not supposed to have that ability to do so. Even
the Mate 60 launch months ago was thought only possible a couple of
years down the road. Huawei cut short the time frame for catching up and
is sending the Chips Alliance into a tailspin.
It looks like
the semiconductor war with China is not succeeding as envisaged. And
with that, what are TSMC and Samsung hoping to achieve frantically
building facilities in Arizona, if not to counter China. What is even
worse is that China is going all out with its chips production mindset,
and even building lithography machines to counter the Chips Alliance and
ASML. The whole plan of creating the Chips Alliance to stifle China is
backfiring.
The whole problem with the USA and its leaders is
that they do not see beyond their noses. They make decisions based on
ego boosting and on the spur of the moment, and do not factor in the
consequences before doing so, and in the process killing the enthusiasm
of their partners and supporters. That those partners still fall for all
their ploys is indeed mind blowing. Lessons are seldom learnt, and
history keeps repeating itself.
Anonymous
1 comment:
There is no way the USA is going to win the Chips war.
The backfiring is almost immediate, with Chipmakers in the 'Chip 4 Alliance' of USA, Japan, Taiwan and South Korea already losing market share and much money and achieving little. Two Companies, Huawei and SMIC, are already too hot to handle for the Alliance, and there are many others like them in China. Huawei is not an 'exceptional' company in China, just an ordinary company in China, according to some. Chinese technology companies are in an era of explosive innovation.
Biden can continue to push subsidies to those companies like TSMC and Samsung to continue their building programs in Arizona, but it does not solve their long-term problems. Suffice to say, it is even unsure whether such subsidies trotted out by Biden are in fact just benefiting USA chipmakers like Intel, Micron and AMD rather than TSMC and Samsung.
China still controls certain major semiconductor raw materials and refining facilities. Gallium is one element that China controls about 80 to 90% of its production. This alone is one big problem for the USA and its Chip Alliance to sort out. China has not yet banned completely its export of Gallium, but just enacted export controls over it.
As frequently pointed out, there is the Chinese market for Chips that is also going to play an important part for the Chips Alliance. Domestically, more and more Chinese products are using locally made chips. What does this hold for those foreign companies trying to sell in China?
With China putting all hands to the pump in trying to be self-reliant, what does the future hold for the Chips Alliance? Like the Europeans following the USA blindfolded against Russia, the Chips Alliance members will suffer the same sad fate. Do not mess with China is the best policy.
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