U.S. Sanctions Against China Could Hurt Own Domestic Industry: SIA:
While the Semiconductor Industry Association (SIA) — the organization that represents 99% of chip companies in America — understands how important national security is, it believes that curbs against potentially hostile nations could hurt the U.S. semiconductor industry as a whole.
After the U.S. government imposed strict sanctions against Chinese chip and supercomputer sectors, various semiconductor companies lost some $240 billion of stock value nearly overnight. Among those who suffered are various companies, including developers of electronics design automation (EDA) tools, chip designers, wafer fab equipment (WFE) producers, and chipmakers themselves. Without money from Chinese clients, the U.S. semiconductor industry will certainly live and prosper, but with them, it would develop quicker, SIA notes.
"U.S. semiconductor companies are dependent on a "virtuous cycle" of innovation that includes large investments into research and development and access to global markets," a press release by SIA reads. "Historically, U.S. semiconductor companies have consistently invested about one-fifth of their revenues in research and development, among the highest shares of any industry."
China is a big business for all parties involved. Here are some examples.
Cadence supplies thousands of Chinese chip and motherboard developers with EDA tools, Applied Materials sells boatloads of WFE tools to entities like SMIC and Hua Hong, whereas Nvidia sells boatloads of artificial intelligence and high-performance computer accelerators to companies like Baidu. Finally, U.S. citizens working at Chinese companies earn hefty paychecks while serving in executive roles. Yet, all of them were affected by the strict curbs imposed by the U.S. government.
SIA makes several points in its press release, which are explained quite well in the more detailed filing with the U.S. Department's Bureau of Industry and Security (BIS). One of those is job cuts at Lam Research: some 1,300 people will be cut (however, some of this appears to be due to outsourcing tool production to other countries). This only seems to be beginning, American WFE companies like Applied Materials have yet to release their reports, yet the expectations are not good.
While the Semiconductor Industry Association (SIA) — the organization that represents 99% of chip companies in America — understands how important national security is, it believes that curbs against potentially hostile nations could hurt the U.S. semiconductor industry as a whole.
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Used or new, does not matter:
As the U.S. government is gearing up to put even stricter constraints on the Chinese semiconductor sector, China-based chipmakers are accelerating their purchases of wafer fab equipment (WFE) to ensure the continuous operation of their fabs. However, Chinese companies prefer to keep these transactions under the radar as some violate U.S. sanctions, reports DigiTimes.
Companies like SMIC, HuaHong, Nexchip, and Silan Microelectronics are buying everything they can, including second-hand tools, according to the story that cites anonymous industrial sources. Some of the WFE they procure cannot be shipped to China as this would violate the U.S.-imposed sanctions, which is precisely the reason why parties prefer to keep such purchases low profile.
Interestingly, even Huawei — which is under severe sanctions by the U.S. government and legally cannot procure anything containing advanced U.S. technology without permission — is stepping up purchasing wafer fab tools. Perhaps, as it is prepping to build a fab with SMIC, it wants to get as many tools as possible.
Previously: U.S. Sanctions Against China Could Hurt Own Domestic Industry: Semiconductor Industry Association
Related:
- Netherlands Refuses to Summarily Agree to US Export Restrictions on China Over Silicon Chips
- Huawei Patents EUV Lithography Tools Used to Make <10nm Chips
(Score: 2) by Immerman on Wednesday February 01, @08:08PM (8 children)
What? Starting a trade war with our primary trading partner from whom we get the overwhelming majority of everything from shoes and clothes to semiconductors could hurt us too?
How could that be? We're American's damn it! We are entitled to get unlimited amounts of cheap shit no matter what sort of bullying and trade barriers we impose on the people actually producing it!
/end sarcasm
Seriously, starting the trade war is one of only a handful of things I think Trump did right(-ish). Probably for the wrong reasons, but it's politics, the reasons are almost always wrong, it's the results that matter.
But a trade war by its very nature is almost guaranteed to screw you at least as badly as it does your "opponent". That's why it's called a trade *war* and not a trade "offer they can't refuse". Everyone gets screwed, and normal people on both sides get screwed most of all.
(Score: 1, Interesting) by Anonymous Coward on Wednesday February 01, @08:58PM (2 children)
Not true. Like in all wars, somebody will profit. Always look at the beneficiaries as the instigators of war.
Ah, well, that's true, but "normal" people aren't doing much to help themselves
(Score: 2) by Immerman on Thursday February 02, @05:43PM (1 child)
Well, sure wars wouldn't happen if there wasn't money to be made.
However, that money rarely goes to either the countries involved or the citizens. The number of people who benefit is so small as to be statistically irrelevant, making "Everybody loses in war" one of the most the most accurate uses of "everybody" you're ever likely to see.
(Score: 0) by Anonymous Coward on Thursday February 02, @08:29PM
Doesn't matter, those are the people that make the decision to go to war. To them, aside from its propaganda value in selling a war to the public, "countries" and "citizens" are irrelevant. Money and territory are all that matter
(Score: 2) by JoeMerchant on Wednesday February 01, @10:45PM (3 children)
Isolationism: it's actually the primary negative incentive when international sanctions are applied to "bad actor" states. So, if you've been bad and want to punish yourselves...
Україна досі не є частиною Росії Слава Україні🌻 https://news.stanford.edu/2023/02/17/will-russia-ukraine-war-end
(Score: 2) by mcgrew on Thursday February 02, @04:52PM (1 child)
Isolationism is one of the factors that caused the Great Depression, although political and business stupidity were the main culprits.
Carbon, The only element in the known universe to ever gain sentience
(Score: 0) by Anonymous Coward on Thursday February 02, @08:38PM
Oh please! The depression, and every other economic "crisis" we suffer to this day, were and are caused by pure financial malfeasance, fraud, theft, and extortion... The people that caused it and profited from it were/are hardly stupid
(Score: 2) by Immerman on Thursday February 02, @05:53PM
Yep. Or if you're being destroyed anyway by a serious trade imbalance, or perhaps an inability to produce environmentally responsible goods at a price that can compete with destructive imports, then it may be worth the short term pain to convince your trade partner to play ball.
Of course, one of the biggest factors in who *wins* a trade war is the relative scale of your trade with each other. If they buy 20% of your exports, while you buy 80% of theirs, they're likely to be hurting a lot worse that you, and give in to your demands.
I'm not sure the U.S. actually has such an advantage with China... At least not without getting, e.g. the E.U. to join us, which might be possible IF we were actually fighting for more environmentally responsible manufacturing regulations or something.
(Score: 2) by DeathMonkey on Thursday February 02, @10:05PM
So we all get screwed and the trade war was started for the wrong reasons. Yet you agree with it.
What will this accomplish that will justify the widespread screwing?
(Score: 4, Insightful) by RamiK on Wednesday February 01, @08:11PM (12 children)
Everyone is laying off due to old inventories flooding the market [semianalysis.com] and then the USG passes rules telling them not to trade with their biggest client... All the while, everyone is sending money China's way: https://edition.cnn.com/2023/01/10/investing/asia-stocks-bull-market-china/index.html [cnn.com]
I swear someone is doing this on purpose.
compiling...
(Score: 1, Insightful) by Anonymous Coward on Wednesday February 01, @08:45PM (4 children)
That was China a couple of weeks ago. This week their cities are hopelessly in debt and people are freezing without heating assistance -- from your same source, CNN.
https://www.cnn.com/2023/01/31/economy/china-local-governments-basic-services-debt-crisis-intl-hnk [cnn.com]
Is this the second half of a pump and dump cycle?
If the Chinese population isn't doing well, they aren't buying, and their home market doesn't sound very likely to bump their economy? We (USA) are still buying mass quantities from China, but I believe a little less than in the past as various manufacturing start to be "re-shored".
Personally, I'm a conservative investor, investments in China (or China-related) look pretty risky to me.
(Score: 2) by RamiK on Wednesday February 01, @10:08PM
In general, some local government debt aren't enough to affect the markets otherwise the US and Japan would have been completely paralyzed. More specifically:
https://www.bloomberg.com/news/articles/2023-01-30/china-stocks-set-to-enter-bull-market-on-return-from-holidays [bloomberg.com]
https://www.reuters.com/markets/wealth/chinese-investors-pivot-stocks-bonds-recovery-hopes-funds-report-2023-02-01/ [reuters.com]
Like, just look at SMIC: https://finance.yahoo.com/quote/0981.HK/ [yahoo.com] . Does it look like their investors give a damn to you?
compiling...
(Score: 0) by Anonymous Coward on Thursday February 02, @04:22AM (1 child)
Let's also factor in China is fuuuuucked by global warming, and by population inversion. So much for the long game.
(Score: 2) by Immerman on Thursday February 02, @06:04PM
Oh? Seems to me that China, like Russia and most the rest of Asia, is mostly frozen wastelands that are only going to become more accessible and productive as they thaw. Why do you think Russia doesn't give a %$#@! about global warming?
Of course, they'll be losing their reliable glacier-melt powered rivers, but most of China's current population and infrastructure is along the coast, where desalination is a viable option. Especially with recent advances in the technology.
Population inversion *is* likely to become a problem... then again, you want an actual *motive* to go with the "China created COVID 19" conspiracy theories? Regardless of its origins it's looking like life expectancy may be dropping worldwide, and without access to effective vaccines China's elderly population will be especially hard hit. By the time they deal with their 4th or 5th wave the age inversion may no longer be a problem.
(Score: 2) by DeathMonkey on Thursday February 02, @10:10PM
It's hard to tell with the pandemic but the long term trend since the 90's looks downward to me.
GDP growth (annual %) - China [worldbank.org]
(Score: 0) by Anonymous Coward on Wednesday February 01, @09:06PM (1 child)
Yes, the purpose of sanctions is to manipulate financial markets, to move money. As always, before anything else, you must ask, cui bono
(Score: 1, Funny) by Anonymous Coward on Thursday February 02, @04:24AM
Fine thanks for asking. Half past two.
(Score: 2) by mcgrew on Thursday February 02, @05:00PM (4 children)
It becomes more clear when you realize that the rich assholes who run these corporations have no morals, let alone patriotism. Look at how the oil and coal industries have no problem with destroying civilization itself.
The industry has that opinion because they don't give a rat's ass about America, which is what's wrong with corporations today: cocaine. It makes its user a selfish, greedy, amoral bastard and it removes all of its user's empathy. Note that the corporate evil started with Reagan's Air America, read Robert Reich's Saving Capitalism.
Carbon, The only element in the known universe to ever gain sentience
(Score: 2) by RamiK on Thursday February 02, @11:32PM (3 children)
I've read a few of Reich's articles. One stands out for being on the topic of discussion: https://www.theguardian.com/commentisfree/2021/jun/20/the-uss-greatest-danger-isnt-china-its-much-closer-to-home [theguardian.com]
Another (and most recent) doesn't discuss China but is focused on the underlying issues of the national debt and the trade deficit that spur the trade war: https://www.eurasiareview.com/01022023-robert-reich-the-biggest-story-youve-never-heard-about-todays-federal-debt-oped/ [eurasiareview.com]
So, with those in mind, while I overall agree with him that a US-China rivalry could have been a positive force for competition as it could have led to education and tax reforms, in practice, all I'm seeing is layoffs, no tax reforms and an irrational attempt at cutting China off the semiconductors supply chain at a time when the fabrication process development has slowed down and is nearing its theoretical limits (on performance rather than yields) meaning in 10 years we'll look back and say "Why didn't we just sell it off when it still have value? How stupid were we?".
compiling...
(Score: 2) by mcgrew on Friday February 03, @08:06PM (2 children)
The point I was making from his book was that until Reagan, wages increased with productivity, while after his administration wages stayed flat and corporate profits soared. I blame cocaine because of Iran-Contra and Air America and Reagan's "war on drugs" which was actually only a war on marijuana. "Got any weed, man?" "Naw, it's really dry. Want to buy come coke?"
Reich pointed out in his book that before Reagan, heads of corporations felt they had equal responsibilities to the stockholders, workers, and home city and state. After Reagan, they only felt they owed the stockholders and nobody else. Cocaine causes greed, selfishness, and a lack of empathy, which explains why today's workers are fucked.
Carbon, The only element in the known universe to ever gain sentience
(Score: 2) by RamiK on Saturday February 04, @04:07AM (1 child)
As long as you discount the gilded age or the oil and railroad barons, that came before that... Sure. Lets blame cocaine and Reagan. That makes perfect sense.
compiling...
(Score: 2) by mcgrew on Saturday February 04, @04:32PM
Cocaine was perfectly legal back then, and before the 1900s its use was encouraged. It was outlawed in 1914, alcohol was outlawed five years later and legalized again in 1933.
Carbon, The only element in the known universe to ever gain sentience
(Score: 3, Interesting) by Snotnose on Wednesday February 01, @08:47PM (9 children)
China wants Taiwan, if it tries to git-r-done who knows what will happen. They are also building islands in their territorial zones, then occupying them, thus increasing their territorial zones. Not to mention they get royally pissed off when the USA sends carrier groups through previous international seas China now sez "mine!"
I suspect, as someone who looks years into the future instead of the next quarter (see also: why stock buybacks should be illegal), we should shut China off everything, much like we did Russia after the Ukraine invasion. Yeah, it will hurt short term. But China has a ton of internal issues to deal with already, a sudden drop of Amazon orders will leverage those issues to the max.
I just passed a drug test. My dealer has some explaining to do.
(Score: 0) by Anonymous Coward on Wednesday February 01, @09:41PM (1 child)
> China has a ton of internal issues to deal with already, a sudden drop of Amazon orders will leverage those issues to the max.
Real shame that is. Real shame.
(Score: 0) by Anonymous Coward on Thursday February 02, @04:29AM
But who will do the 3rd-rate science paid for by US taxpayers if we don't have a flood of untrained workers with fraudulent degrees filling all the science jobs nowadays, degrading science and academic institutions in general with their authoritarian backward cultural norms????
(Score: 2) by JoeMerchant on Wednesday February 01, @10:49PM
>much like we did Russia after the Ukraine invasion
Except, that isn't really living up to the level of "total withdrawal of western corporations" that it was initially billed as...
Україна досі не є частиною Росії Слава Україні🌻 https://news.stanford.edu/2023/02/17/will-russia-ukraine-war-end
(Score: 3, Insightful) by jelizondo on Wednesday February 01, @11:28PM (5 children)
Really? How would the US react to a Chinese fleet sailing between Florida and Cuba? It is international waters after all...
I seem to remember it didn't went well for the Russians back in ´62 [gwu.edu]
(Score: 2) by gawdonblue on Thursday February 02, @01:50AM (3 children)
So the US Navy fired on a Soviet submarine in Cuban or international waters - including depth charges - and the US is shocked that it might have fired back?
FFS
(Score: 1) by khallow on Thursday February 02, @12:44PM (2 children)
With a nuclear tipped torpedo and nobody bothered to tell the US how close that was to happening. The problem here wasn't merely that there were near misses. The problem was that the near misses were secret. Not a great environment for learning from your mistakes.
(Score: 2) by gawdonblue on Thursday February 02, @08:58PM (1 child)
How about don't attack other nations? Then there won't be these misunderstandings.
(Score: 1) by khallow on Thursday February 02, @11:08PM
It was the Cold War. There was a lot of this sort of thing.
(Score: 2, Informative) by Runaway1956 on Thursday February 02, @07:10PM
Been there, done that. Every US ship close enough to respond will be shadowing the Chinese fleet, just as fast as they can get there. We did it during the Cold War, when a Soviet sub was spotted in the Florida Keys. In that particular case, a P3 Orion got there before we could, flushed out the sub, and the sub hauled ass to deeper waters. All we ever got, were a few pings spread out over ~18 hours that we thought might have been the sub we were looking for.
I really don't think the Navy would be any less aggressive with Chinese ships in our back yard, than Soviet ships.
Abortion is the number one killed of children in the United States.
(Score: 4, Interesting) by Runaway1956 on Wednesday February 01, @10:59PM (3 children)
"Some of us are losing money due to the trade war, and the rest of us are making less money than we should be making. It's time to end the trade war!"
It has nothing to do with helping or harming the United States, or even a US industry, it's all about money. The best way to deal with that "loss" of money, or decrease in revenue, is to invest in US manufacturing. You can't lose by investing in America. Make money circulate here at home, instead of shipping it overseas by the truckload.
Abortion is the number one killed of children in the United States.
(Score: 4, Interesting) by Immerman on Thursday February 02, @06:13PM (2 children)
America can't lose by corporations investing in America.
Corporations *definitely* can. Why invest here, when you can invest somewhere with minimal environmental regulations and starvation wages to greatly increase profits and executive bonuses?
We created (and continue to passionately support) a system where money is embraced as the ultimate virtue - pretty hypocritical to then complain when the psycopaths that inevitably raises to power say "Fuck y'all, we can make more money elsewhere". They are after all doing *exactly* what we told them to do.
(Score: 2, Interesting) by Runaway1956 on Thursday February 02, @07:01PM (1 child)
Can't really argue with you, except, I am not part of the "we".
Actually, I'd like to get an MBA alone, in a quiet corner of a bar, so that I can tell him that I once put a roof on an old lady's home, well below cost, just because I have a bit of humanity in me. Then, watch him as he had a massive coronary infarction. That would be fun, I think. If that didn't do it, I could dig out some other stories . . .
Abortion is the number one killed of children in the United States.
(Score: 3, Informative) by Immerman on Thursday February 02, @07:33PM
Good for you.
But unless you completely avoid purchasing products produced or sold by corporations, you're supporting the current system.
And unless you're out their campaigning hard for revolutionaries in the primaries (it's usually already too late to even send a message by the time of the general elections), then you're implicitly endorsing the status quo.
It's fucked, but the nature of the status quo is that either you fight it, vehemently, or you endorse it. There is no middle ground. And the people in charge are counting on that. They just have to make sure most people only have time for work, sleep, and a minimum of relaxation, and they convert the masses to an army of inertia maintaining their empire.