China's SMIC sounds alarm on price wars from silicon surplus

Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC) is the latest to warn of a potential oversupply in the global market, saying there is an increasingly fierce price war for less advanced silicon in its domestic arena. The pure-play foundry outfit, often styled as China's TSMC, said that chipmakers …

[martinusher]

Predictable

The effect of politicians clumsily inserting themselves into global supply chains isn't quite what they anticipated. They have rather simplistic notion of control -- they can beat down the opposition by starving them of essential parts, bending them to our will etc. etc. (whatever that actually means), a view that may well work when the country is tiny compared to them. Once they start screwing around with countries that are many times their size then the other lot are going to react, and they'll react by filling the gaps. (This may take a few years, its a process, not a singular event.) Suddenly you've got all the production that we used to sell to this market surplus and to compound the problem that once large market is now making parts for sale to everyone else.

Personally, I put is down to a surplus of lawyers and accountants in US decision making. They haven't a clue how things work, they're just used to issuing orders and things happening ("or else"). Too bad real life doesn't always obey the paperwork.

This article is worth reading, its about cars but there's a deeper message:-

https://insideevs.com/features/719015/china-is-ahead-of-west/

[Anonymous Coward]

Re: Predictable

And yet another pro-CCP post from martinusher.

[williamyf]

SMIC and other sanctioned companies do not have to worry

The CCP can always edict that SMIC, Huawei, YMTC et al sell most of their p[roduction inside china (i.e. quotas), to sanctioned and non-sanctioned entities (please remmeber that SMIC is under sanctions, not as strict as Huawei, but sanctions).

Meanwhile, non-sanctioned entities must sell most of the production OUTSIDE of china, flooding the external market, but not the internal one, and lending a lifeline to the sanctioned companies.