In the chip war, China is not as powerless as the United States imagines

Latest update time：2021-04-07

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"China is by no means powerless in the chip war." Germany's Handelsblatt published an article on April 2, pointing out that although the United States is trying to force China to surrender by restricting semiconductor exports to China, this goal is difficult to achieve. Handelsblatt further called on the Biden administration to abandon this confrontational approach and engage in dialogue with China, because related U.S. industries have paid a high price.

Germany's Handelsblatt: China is by no means powerless in the chip war

"The United States hopes to force China back to its position by cutting off the chip supply of its biggest geopolitical competitor." The article analyzes that it is China's shortcomings in chip manufacturing that have given the United States an opportunity to suppress China, and China has indeed been affected by the US actions. However, the article immediately issued a reminder that Biden should end the confrontational line of his predecessor Trump, and the price paid by related US industries is too high, because in the semiconductor competition, China is by no means as powerless as some Washington strategists imagine.

In September 2020, the 48-megapixel silicon-based liquid crystal digital light field chip and circuit were exhibited at the Beijing Trade in Services Fair. The Paper

For this reason, the Business Daily gave two main reasons, firstly mentioning a recent acquisition that failed due to failure to obtain Chinese approval .

According to the Nikkei Chinese website on the 30th, Applied Materials, the world's largest supplier of semiconductor equipment and services, announced that it had stopped acquiring KOKUSAI ELECTRIC, an international electric company under the former Hitachi Group (now owned by the US investment fund KKR), due to failure to obtain approval from China's antitrust department. Due to the failure of the acquisition, Applied Materials will pay KKR a termination fee of US$154 million. Applied Materials' market revenue in mainland China is as high as US$1.576 billion, accounting for 34% of total revenue, making it its largest market.

According to international antitrust laws, if the acquired company has business in a certain country, the transaction needs the approval of the country's antitrust regulatory department. In other words, if Applied Materials wants to successfully complete the acquisition, it must obtain approval from all business countries.

Nikkei Chinese reported on the 30th

The Business Daily commented that although both the buyer and seller in the acquisition case are in the United States, ignoring the attitude of the Chinese government is obviously not a good option. "The Chinese market is so important that companies don't want to give it up. Even after waiting for almost two years, they would still rather give up the acquisition."

Ju Long, global vice president and president of China for the Semiconductor Industry and Equipment International (SEMI) revealed on March 17 that the global semiconductor equipment market grew significantly by 18.9% in 2020, with mainland China's growth rate reaching 39%, making it the world's largest equipment market for the first time.

The report predicts that China may continue to block acquisitions by US semiconductor companies, especially US chip company Nvidia's plan to acquire British chip design company ARM for US$40 billion, which is likely to be affected.

In addition, the article also believes that the United States' "choke point" on China in the field of chips will not only fail to make China surrender, but will also continue to stimulate China to build its own competitive semiconductor industry. Although this process takes time, in the fields of solar energy, trains and automobiles, China has proven that it is fully capable of catching up.

For these reasons, Business Daily urged the United States to start a dialogue with China as soon as possible. It is not unrealistic for China and the United States to reach an agreement, and both China and the United States, as well as Europe, will benefit from it.

Source: Guanchazhe.com

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