27 Oct 2022 -

Will US tech controls on China hurt American semiconductors?

nvidia and intel

Fears the Biden administration’s latest tech controls on China threaten to accelerate a US semiconductor revenue decline and throw the global semiconductor sector into disarray are emerging across the news.

Specifically, the new measures block sales of semiconductors critical to the development of artificial intelligence, supercomputers, and other advanced technologies, unless companies receive exemptions. It also expands an existing ban to sell advanced chip-making equipment to Chinese firms, reports Yahoo News. In a broad escalation, the Biden administration’s actions also restrict US firms and citizens, including permanent residents, from supporting China’s development of advanced chips.

“Technology export controls can be more than just a preventative tool,” said National Security Adviser Jake Sullivan, ahead of the administration’s announcements. “If implemented in a way that is robust, durable, and comprehensive, they can be a new strategic asset in the US and allied toolkit to impose costs on adversaries, and even over time degrade their battlefield capabilities.”

The US has long been a global leader in semiconductors, commanding roughly 45% to 50% market share. However, that leadership has been built on global demand for its products, with China consuming roughly 75% of semiconductors sold globally. In the quarters following the Huawei export ban in May 2019, top American chipmakers reported a median revenue decline of 4% to 9%, according to Yahoo news.

“If China really wants to be as aggressive as the US and retaliate, there could be a lot of impact for other companies in the US,” said Edith Yeung, Race Capital General Partner, in an interview with Yahoo Finance Live (video above). “This is beyond impact on revenue for Intel or Qualcomm or NVIDIA.”

To avoid electronics supply-chain disruptions, you may also wish to consult an expert in electronics component supply. With more than three decades of supply-chain expertise, Astute Electronics is ideally placed to work with you on your daily component requirements.

For more help with looking at supply chain options, contact Astute Electronics

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