Karma is now working against the USA semiconductor
industry, which has been described as facing a 'death spiral'. What is
the point of expanding production in the USA without a big enough market
to sell to? And that is not just the problem for USA domestic
semiconductor manufacturers like Qualcomm, but the same problem for TSMC
and Samsung. They have been dragged into the sewers by following the
USA.
What follows now is that the China market will eventually
be out of reach for those companies ramping up production in the USA.
They can sell chips to McDonalds, LOL, which itself is facing mass
closure of outlets, especially in the Muslim countries due to boycott
over the Israel/Hamas war.
China's domestic market will be
dominated by Chinese semiconductor manufacturers. Even those foreign
chip makers with manufacturing facilities located in China, and
competing inside the Chinese market, against Chinese manufacturers will
face stiffer competition. Chinese equipment manufacturers are the
biggest consumer of semiconductors for EVs, washing machines, TVs,
computers, drones, electric bikes and these are fueling the demand for
legacy chips that Chinese manufacturers are able to provide domestically
and some even having in-house semiconductor manufacturing facilities,
like BYD and Huawei.
Elsewhere, it has been reported that Foxconn
has been bypassed by Apple, with a US$50 billion order given to BYD.
Now there are two competitors in China, Luzshare Precision and BYD
competing against Foxconn for the same Apple pie in China. Foxconn is
facing big problems in China going forward, which probably gives Tim
Cook the message that he better hedge his bet not to rely too much on
Foxconn alone in China.
Now, I believe this is also Karma
working against Foxconn. With business being decimated, Terry Gou can
forget about his too big to fail mindset in China as Foxconn's survival
in China is starting to be questionable.
Anonymous
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