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Donald Trump has helped Chinese chip production like no other in the world
Billions in injections and government programs in China have failed to do what only one person has done in a little over a year — the current President of the United States Donald Trump. He solved the clear task of suppressing the Chinese semiconductor industry, in which one can say he succeeded. But Trump was guided by short-term goals, but in the long term everything is not so simple. If you don’t break your opponent right away, over time he will get stronger and give back.
Huawei products at one of the exhibitions in China. Image Source Imaginechina / AP
According to analysts, the opinions and arguments of which are cited by the Japanese Internet resource Nikkei, to accelerate the national production of semiconductors in China, Donald Trump did more than the current head of the Celestial Empire Xi Jinping.
The main blow of the year can be considered the law on licensing the activities of American and not only technology companies that would like to trade with Chinese companies and Huawei in particular. In the same vein, the suspension of the supply of SMIC equipment, for example, ASML EUV scanners, can be considered. This is done with one goal — to stop technological progress in China and to establish the eternal dependence on American (allied) suppliers.
But these steps predictably provoke a backlash, which in the conditions of China’s limitless internal market, the mass of talent, resources and a planned budgetary economy can generate something that will eventually level up and even surpass the persecutors. Trump does not consider such consequences of his pressure on China, and this worries experts.
In China itself, there is a growing understanding that it is necessary to strengthen the focus on the domestic market. The same Huawei company allegedly began to build its own chip production line relying on national manufacturers of equipment and raw materials without any involvement of American companies or technologies. So, by the end of this year, a semiconductor line with a 45 nm technological process is expected to be launched, and next year a 28-nm line will be launched. And everything will not stop there, although the path forward does not promise to be easy.
Moreover, local investors forgot about government incentives and themselves rushed to invest in businesses related to domestic semiconductor companies in China. There has never been such a private sector enthusiasm, analysts say. Investment transactions in the hardware, raw materials and software sectors increased 200% year on year and reached 60 billion yuan ($ 8.92 billion) in the first seven months of 2021. This figure is expected to reach 100 billion yuan ($ 14.87 billion) by the end of the year, three times more than last year.
The question is not whether China will be able to build the world’s most advanced semiconductor production or not, but when this will happen, experts summarize.