Western Chipmakers Fear Huawei Ban Could Lose Them $200 Billion Chinese Market to Homegrown Rivals

China is roughly one half of the global $400 billion semiconductor pie

Qualcomm, AMD and Arm worry the ban is only good for their Chinese competitors

American and European semiconductor companies are shunning China’s Huawei Technologies to abide by Washington’s blacklist, but they worry that the resulting supply gap will only propel Chinese technologies to advance and eventually dominate their massive home market.

Such sentiment was on vivid display at a recent information technology show in the Taiwanese capital. “All business leaders would like [global trade issues] to be resolved as soon as possible,” Advanced Micro Devices CEO Lisa Su told reporters at the Computex Taipei, one of Asia’s largest tech events.

Su did not sound happy about having been forced to stop supplying the Chinese company. “Huawei is a customer of ours. They’ve done some very nice PCs,” she said.

Executives from Qualcomm and Arm Holdings also stressed their desire to resume dealings with Huawei at the event.

“The hard-line approach by the U.S. has thrown their strategy for taming China off course,” said an industry source in Taiwan.

Looking to take on China’s $200 billion semiconductor market — roughly half the global total — the three companies each formed a joint venture there with local partners between 2016 and 2018. Tougher rules on dealing with Huawei and other key Chinese clients would deal a blow to their ambitions.

Chinese authorities shut out Google and other foreign internet platforms, allowing homegrown alternatives like Tencent Holdings to dominate the Chinese market. The country still relies on overseas players for semiconductors, but some think the same thing could happen in that sector as well.

For example, U.S.-based Synopsys, one of the market leaders in electronic design automation, has suspended transactions with Huawei. “A disruption in supply could encourage Chinese players to develop alternatives over the medium term,” a Taiwanese chip researcher said.

Chinese President Xi Jinping is calling for self-reliance in order to offset the impact of U.S. regulations. Mainland players are aggressively poaching talent, leaving outside companies scrambling to match their offers, Lee Pei-ing, president of Taiwanese chipmaker Nanya Technology, said in May.

Semiconductors lie at the heart of China’s push to bolster its advanced manufacturing sector. It remains unclear whether the U.S. tariffs will push Beijing into a corner or simply encourage the rise of China’s own chipmakers.

Source: Nikkei Asian Review

  1. Godfree Roberts says

    Chinese authorities shut out Google and other foreign internet platforms, allowing homegrown alternatives like Tencent Holdings to dominate the Chinese market. ‘

    No, they did not.

    Facebook is blocked in China because of the 2009 Urumqi Riot, a racial/religious riot that killed over 200 civilians and injured thousands more. Obviously, if a guy says, I’m pissed and I’m going to take my kitchen knife to the street, it wouldn’t have resulted in so many people dead or injured, right? So it had to be a coordinated act by a group of people. Well, it turned out that the coordination was done through Facebook. So the Chinese Government went to Facebook, and asked them to cooperate with the Police. Facebook said, “Meh, freedom fighters. Those dead women and children are just unfortunate collateral in the fight for freedom.

    The Chinese Government said, you have a week to change your mind.

    Facebook said, forget it, we’re not changing our commitment to free speech and China said, bye-bye.

    Google issued an ultimatum to the Chinese Government on January 12, 2010, by announcing that it was no longer willing to confirm to China’s censorship laws, publicly: “We have decided we are no longer willing to continue censoring our results on Google, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all.”

    The Chinese Government was totally blindsided and, for a time, it looked like the Government was going to cave. It was trying to think on its feet, given the short time window Google issued. All sorts of rumors were flying everywhere.

    But the timing of this public showdown couldn’t be worse. Just 6 months earlier was the Urumqi Riot, with hundreds dead and thousands injured. And the US companies such as Facebook publicly supported the “freedom fighters”. So when push came to shove, the Chinese Government said, we’d be sorry to see you go, but all companies operating in China must follow Chinese Laws. So Google left.

    The riot is the reason that not only Google and Facebook, but also Twitter and Youtube, got blocked in China. Mind you that 7 years prior to this massive riot, 22 Uyghurs were captured at an Al Qaeda training camp in Afghanistan by the US, where they vehemently proclaimed that their training was only meant to be used in China, and that they would never use this training against the US because they were counting on the US support.

    The position of the Chinese Government, to put it bluntly, is that they can operate in China but they can’t be an instrument to starting a civil war or a “regime change”. That’s the position of the Chinese government, and it’s just not going to change, you know.

    1. BillA says

      and such is their perfect right

    2. Tom Tremaine says


      For telling the truth ….

  2. JustPassingThrough says

    “but they worry that the resulting supply gap will only propel Chinese technologies to advance and eventually dominate their massive home market.”

    how come this worry only sets in after the deed is done?
    is everybody braindead in the u.s.?
    or maybe they’re watching the dem debates.
    now that is braindead. lol

    1. Tom Tremaine says

      Q said it would be like this.

      Rockefellers own Google and


      They are being removed

      From the word economy …

    2. gtiger says

      It’s clear that the Trump administration acted rashly, just like it has done with many other international decisions.

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