"NEW YORK – The Biden administration’s unprecedented package of bans on chip and chip equipment sales to China announced on October 7 could not have come at a worse moment for the global semiconductor industry..

The damage to capital investment and R&D in the Western semiconductor industry will exceed Washington’s modest subsidies for the chip industry by a factor of five or more.

The US measures won’t affect China’s sensors, satellite surveillance, military guidance and other strategic systems because the vast majority of military applications use older chips that China can produce at home. But it may postpone autonomous driving, cloud computing and other efforts to digitize China’s economy.

It will also elicit an all-out Chinese effort to replace American chip-making and design technology. CapEx and R&D will shrink drastically in the US semiconductor industry while China allocates a massive budget to the sector.

On a five- or ten-year horizon, America’s technological edge in semiconductor design and fabrication is likely to vanish. As capital budgets collapse in the Western semiconductor industry, the damage to the US and other Western economies is likely to be greater than the harm inflicted on China.

The Biden administration meanwhile proposed a 14% budget cut for the Defense Advanced Research Projects Agency (DARPA), which is a much larger cut after inflation. Starving US high-tech industry of public as well as private funds is a strange way to conduct a strategic rivalry with China.

The incipient global recession turned the chip shortage of 2021 into a glut, reflected in a collapse of the Philadelphia index of semiconductor stocks (PHLX) by nearly half during 2022. NVIDIA, the leading US chip designer, has lost 68% of its market capitalization so far this year.

The industry had already cut capital investment plans from about US$200 billion to $160 billion for 2022. US restrictions on exports of semiconductor equipment, design tools and high-end chips to China will shrink revenues further, putting an air pocket into R&D and capital expansion. The world’s dominant chip fabricator, Taiwan’s TSMC, planned $44 billion in CapEx just six months ago but on Wednesday announced a cut to $36 billion.

The Biden administration’s $50 billion, five-year subsidy for onshore chip fabrication will help firms that use older technology to supply the US defense industry, which mainly buys chips five to seven generations behind the cutting-edge semiconductors targeted by the new round of US sanctions.

Smaller American fabricators like GlobalFoundries and SkyWater Technology, who make chips for the US military several generations behind the present state of the art, will benefit from the Biden subsidies. But companies with the most advanced technology have the most to lose, including American manufacturers of chipmaking equipment."

https://asiatimes.com/2022/10/china-chip-ban-a-us-exercise-in-extreme-self-harm/

On Friday, October 14, 2022 at 6:24:26 AM UTC+8, ltlee1 wrote:
> "NEW YORK – The Biden administration’s unprecedented package of bans on chip and chip equipment sales to China announced on October 7 could not have come at a worse moment for the global semiconductor industry.
>
> The damage to capital investment and R&D in the Western semiconductor industry will exceed Washington’s modest subsidies for the chip industry by a factor of five or more.
>
> The US measures won’t affect China’s sensors, satellite surveillance, military guidance and other strategic systems because the vast majority of military applications use older chips that China can produce at home. But it may postpone autonomous driving, cloud computing and other efforts to digitize China’s economy.
>
> It will also elicit an all-out Chinese effort to replace American chip-making and design technology. CapEx and R&D will shrink drastically in the US semiconductor industry while China allocates a massive budget to the sector.
>
> On a five- or ten-year horizon, America’s technological edge in semiconductor design and fabrication is likely to vanish. As capital budgets collapse in the Western semiconductor industry, the damage to the US and other Western economies is likely to be greater than the harm inflicted on China.
>
> The Biden administration meanwhile proposed a 14% budget cut for the Defense Advanced Research Projects Agency (DARPA), which is a much larger cut after inflation. Starving US high-tech industry of public as well as private funds is a strange way to conduct a strategic rivalry with China.
>
> The incipient global recession turned the chip shortage of 2021 into a glut, reflected in a collapse of the Philadelphia index of semiconductor stocks (PHLX) by nearly half during 2022. NVIDIA, the leading US chip designer, has lost 68% of its market capitalization so far this year.
>
> The industry had already cut capital investment plans from about US$200 billion to $160 billion for 2022. US restrictions on exports of semiconductor equipment, design tools and high-end chips to China will shrink revenues further, putting an air pocket into R&D and capital expansion. The world’s dominant chip fabricator, Taiwan’s TSMC, planned $44 billion in CapEx just six months ago but on Wednesday announced a cut to $36 billion.
>
> The Biden administration’s $50 billion, five-year subsidy for onshore chip fabrication will help firms that use older technology to supply the US defense industry, which mainly buys chips five to seven generations behind the cutting-edge semiconductors targeted by the new round of US sanctions.
>
> Smaller American fabricators like GlobalFoundries and SkyWater Technology, who make chips for the US military several generations behind the present state of the art, will benefit from the Biden subsidies. But companies with the most advanced technology have the most to lose, including American manufacturers of chipmaking equipment."
>
> https://asiatimes.com/2022/10/china-chip-ban-a-us-exercise-in-extreme-self-harm/

Self-harm by US in banning chip sales to China will be obvious in one year's time as China will have counter measure to obliterate the harm on them. By then, it will be non-reversible for US to retract its course of measure enacted on China. It will be irreversible of self-harm by US forever and forever. This is because it is a unforgivable defacement on China's face. China will make no mistake in defacement on US for an eye for an eye retaliation.

Make no mistake, US companies even with the most advanced technology will have the most to lose in the defacements. They will be begging China at the China's doorstep for mercy and help. China will obliterate them in one go. China will not listen to their crybabys merciful cries from them. If US companies are clever they should now exit US and registered them in China as Chinese-owned company instead.