Nvidia faces local competition for its 'China special' GPUs Nvidia has cut the price of special GPUs it makes for the Chinese market in the face of local competition from Huawei. The GPU giant developed new products last year for the vast, lucrative China market amid US restrictions imposed on the high performance accelerators it is allowed to export to the country. Yet as The …
Actually, Chinese customers will buy foreign chips if (1) they are better than domestic alternatives, and (2) they are available to be bought. And for decades, these two conditions were true. Hence, their domestic semi industry was unable to make much progress in spite of massive gov't subsidy. Everything changed when the Americans took away condition (2). Now the Chinese customers have no choice but to buy the best available domestic alternatives. And suddenly SMIC is able to make 7nm chips. This is an own goal by America.
There's an irony here isn't there.
I mean that's basically 'capitalism', buy the best at the best price.
It's such a shame the main proponent of it seems to have forgotten the rules.
(I mean sure... we could be taking advantage of this large and lucrative market, but paranoia and and over inflated sense of self importance are kind of preventing that at the moment...)
>I mean that's basically 'capitalism', buy the best at the best price.
No I think you have that wrong:
Capitalism is buying the product made by people who look most like you. With the most macho name and the most flags and with the ads with the loudest music. If this isn't financially viable then the government can cover any losses the company makes.
Communism is trying to buy the best product wherever in the word it's made irrespective of what it's called or what kind of raptor is featured on the logo.
>I mean that's basically 'capitalism', buy the best at the best price.
Actually that's not 'capitalism'. It might be a side effect but capitalism is all about getting the best return on investment for each dollar deployed and it doesn't care much about how that dollar is deployed. Initially this might include productive industry resulting in stiff competition but it very quickly settles down to a quasi-monopoly state with a relative handful of players dominating the market. Since the overall market eventually reaches saturation the search for more profits results in a squeeze on costs which inevitably leads to outsourcing, something that most of the time leads to things like Asian sweatshops churning out low cost product to be sold at a substantial markup. (This was the origin of the "Smiley Face Curve" of profitability that was popular in the 90s and 00s, the idea that all the profit in a product came from design, marketing and sales and not actually making it.)
Here the Chinese have rather deftly done an end run around us......they played the sweatshop game for a bit, built up their resources and infrastructure and Wham! -- we're suddenly unable to compete. Our equity markets can only operate on windfall profits (hence Nvidia being the darling of the markets this week) while capital looks to other sources for returns -- loans, of course (student loans were a good one because there's zero risk), real estate rental, anything that's got a captive market that can be squeezed every which way (bought an airline ticket in the US recently?).
We've screwed the pooch politically -- alienating a huge market of our principal competitor, that must rate as an all time 'greatest dumb move'. All we've got left is war (and its preparations) -- the good old standyby for stagnant capitalism.
And maybe, shockingly, China doesn't really care about that. They don't have it right now but after a possible invasion, nobody else will have it so what's to lose. Onto the other hand, US is already busy helping build those wafer fabs elsewhere which is not so good for Taiwan's future.
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