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.
Anonymous