Chip Industry facing karmic retribution

 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