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Trade War Has Damaged U.S. Chip Industry

nytimes.com

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Re: Trade War Has Damaged U.S. Chip Industry

#21

Post by benj111 »

cinquemb wrote: post #14

What has damaged the US chip industry is the overeliance upon old IP for "new" products, combined with lack of investment in industries that would benefit from more cutting edge tech, thus enabling state owned manufactures in china to eat their lunch in asia in this upcoming decade. You'd have to be really on the pipe to ignore the declining sales volume of derivative products the past couple of years (masked quite n…

"overeliance upon old IP", "lack of investment".

What are you referring to here? The amount of capital required to develop new nodes means theres only 2 companies left actually competing at the cutting edge. And I would suspect the half life for chip IP is shorter than just about any other manufacturing industry.

Re: Trade War Has Damaged U.S. Chip Industry

#22

Post by gambiting »

bhouston wrote: post #16

I am pretty sure that China is going to take a temporary hit but in the end they will emerge stronger than ever. I think China will also redouble on their efforts to be full self-sufficient in all high tech areas, even if they have to open up for a sanction relief deal, their population will so favor local competitors, that it won't matter. China's rise will continue and dominant until their demographic bubble bursts…

Yes, I'm curious what might happen if China gets to a level where they have the best tech, but are not interested in sharing it.

Re: Trade War Has Damaged U.S. Chip Industry

#23

Post by bryanlarsen »

ThomPete wrote: post #18
pjc50 wrote: post #9

This is the thing that economists have been pointing out for decades: at the country scale, allowing free trade provides productivity benefits to both sides, and restricting it affects both sides. You can't have a trade war without domestic casualties. What's crazier is that the strategy of economically integrating China with the world was a Rebublican economic-liberal one to start with. The plan was to make the rest…

There was not free trade before though. We allowed China access to our markets, they didnt return the gesture. So econmists are wrong. You can have a perfectly unfree market and still posper, all you have to do is to convince other other nations to ignore the obvious mafia like behavior. This is both a democrats and republican making. Trump is right about this war even if it will cost some, in the long run we are bet…

"We allowed China access to our markets, they didnt return the gesture."

I would argue that China opened access more than the US did. During the Mao era, it was basically impossible for US goods to enter the Chinese market. The converse was not true: Chinese goods could enter the US market. So during liberalization the Chinese opened up more than the US did simply because they had so much further to go.

Re: Trade War Has Damaged U.S. Chip Industry

#24

Post by wrong_variable »

bhouston wrote: post #16

I am pretty sure that China is going to take a temporary hit but in the end they will emerge stronger than ever. I think China will also redouble on their efforts to be full self-sufficient in all high tech areas, even if they have to open up for a sanction relief deal, their population will so favor local competitors, that it won't matter. China's rise will continue and dominant until their demographic bubble bursts…

Tin Foil Level = Expert

China is preparing to allow massive amount of immigration from neighboring Muslim countries.

I have been following local news in Pakistan, Afghanistan, Malaysia.

The Chinese leadership is well aware of their demographic cliff problem, this is why they relaxed their one child policy.

A single generation ago they were freaking out about over population, so they are not anywhere near running out of people.

The Muslim reeducation camps are trail runs for future policy to bring large numbers of Muslims living in proverty today into china, to work in their factories.

This may be 20,30 years down the line though.

Re: Trade War Has Damaged U.S. Chip Industry

#25

Post by leptoniscool »

bhouston wrote: post #16

I am pretty sure that China is going to take a temporary hit but in the end they will emerge stronger than ever. I think China will also redouble on their efforts to be full self-sufficient in all high tech areas, even if they have to open up for a sanction relief deal, their population will so favor local competitors, that it won't matter. China's rise will continue and dominant until their demographic bubble bursts…

Maybe they will invest in cloning technology

Re: Trade War Has Damaged U.S. Chip Industry

#26

Post by geogra4 »

seren wrote: post #19

I believe this not only affecting the US. I still have not quite understood the deal around ARM, that will stop cooperating with Huawei. This is a UK based company, owned by a Japanese conglomerate, Softbank, but they were still affected because they have a development center in Texas. The logical conclusion would be that if you are a global company and want to keep selling to China (or to whoever will get a trade ba…

I think your last paragraph is very much missed by trump and his team.

Re: Trade War Has Damaged U.S. Chip Industry

#27

Post by yoz-y »

gambiting wrote: post #22
bhouston wrote: post #16

I am pretty sure that China is going to take a temporary hit but in the end they will emerge stronger than ever. I think China will also redouble on their efforts to be full self-sufficient in all high tech areas, even if they have to open up for a sanction relief deal, their population will so favor local competitors, that it won't matter. China's rise will continue and dominant until their demographic bubble bursts…

Yes, I'm curious what might happen if China gets to a level where they have the best tech, but are not interested in sharing it.

It seems to be already happening in genetics research.

Re: Trade War Has Damaged U.S. Chip Industry

#29

Post by gorio »

ptah wrote: post #11
pjc50 wrote: post #9

This is the thing that economists have been pointing out for decades: at the country scale, allowing free trade provides productivity benefits to both sides, and restricting it affects both sides. You can't have a trade war without domestic casualties. What's crazier is that the strategy of economically integrating China with the world was a Rebublican economic-liberal one to start with. The plan was to make the rest…

i think from china's perspective "providing markets for American companies" is a form of colonialism which they try to mitigate by forcing IP transfer

Colonialism tends to imply a shift of influence. A government bending to the will of foreign companies to keep their power. This is more foreign companies bending to the will of the Chinese government so they can keep their profits.

Re: Trade War Has Damaged U.S. Chip Industry

#30

Post by cinquemb »

benj111 wrote: post #21
cinquemb wrote: post #14

What has damaged the US chip industry is the overeliance upon old IP for "new" products, combined with lack of investment in industries that would benefit from more cutting edge tech, thus enabling state owned manufactures in china to eat their lunch in asia in this upcoming decade. You'd have to be really on the pipe to ignore the declining sales volume of derivative products the past couple of years (masked quite n…

"overeliance upon old IP", "lack of investment". What are you referring to here? The amount of capital required to develop new nodes means theres only 2 companies left actually competing at the cutting edge. And I would suspect the half life for chip IP is shorter than just about any other manufacturing industry.

I'm trying to find an interview someone from Horseman Global gave with Real Vision sometime in the past couple of months that went into the percentage of profits from semiconductor companies that came from lines released pre-2000 vs after (not sure on the exact dates) but it followed the 80-20 rule.

And I don't think there is a lack of investment in general, just a lack of (successful) investment in companies that could use some of the newer stuff. Obviously they still have their R&D, but it means very little if they don't have successful (profits/revenue, not VC investment zombies like Magic Leap) companies buying their latest and greatest.

It would also have been extremely negligent of such companies to have ignored the monetary/economic security aspects regarding Chinese incentives. Last year, China imported about $270 billion worth of foreign semi-conductors, a lot of which came from the US or at least on US patents. Them solving that alone with a domestic industry by any means would increase their asset-liability spread to the USD by nearly 30%, and free up USD to put to work stabilizing their banking system.

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