China declares war on American chips: how will it affect the market
5 December 15:40
China has decided to completely abandon American semiconductors and switch to its own production or at least to other suppliers. This was reported by Komersant ukrainskyi reports with reference to the Financial Times.
This week, four state-owned industry associations representing the main demand for semiconductors in China released coordinated statements. In them, companies are advised to reconsider purchases of U.S. chips, which three of these organizations consider “unreliable and unsafe.”
“Be careful when buying American chips,”
– the associations emphasized, urging their members to focus on Chinese or other foreign suppliers.
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Economic impact on the United States and leading American companies
China’s active actions could create serious problems for American semiconductor manufacturers. According to the head of a European chip company, Chinese customers have already started asking for confirmation that their products are not of American origin.
Chinese companies control about 40% of the global smartphone market and 23% of the computer market, including the largest PC manufacturer Lenovo. This gives them significant influence over the choice of suppliers in the global technology industry.
A reduction in supplies to China could significantly affect the revenues of American giants:
- Intel had 27% of its sales in China last year.
- Nvidia, which produces chips for artificial intelligence, generated 17% of its revenue in this country.
- Arizona-basedOnsemi says half of China’s electric cars run on its products.
- Qualcomm, the largest mobile processor maker, derives about half of its $39 billion annual revenue from the Chinese market.
Thus, China’s strategy to reduce its dependence on U.S. chips could change the balance of power in the global semiconductor market. At the same time, it is known that this strategy is largely dictated by the US sanctions policy. Another consequence of this process was the first Chinese smartphone running on its own operating system.
