Can't carry it anymore? The three major chip giants in the United States speak up together, and the People's Daily is right

Recently, American chip giants such as Intel and Micron experienced a significant decline in sales in the first quarter of 2023, and the news of huge losses shocked the global industry. Originally, this is closely related to the escalating "chip wars" between China and the United States in recent years, and the frequent sanctions imposed by the US on Chinese companies such as Huawei

Recently, American chip giants such as Intel and Micron experienced a significant decline in sales in the first quarter of 2023, and the news of huge losses shocked the global industry. Originally, this is closely related to the escalating "chip wars" between China and the United States in recent years, and the frequent sanctions imposed by the US on Chinese companies such as Huawei. Faced with a "water loo" style fiasco, American chip giants such as Intel, Qualcomm, and NVIDIA urgently pressed the White House to relax export restrictions to China. Is that really the case? Can the Chinese chip industry "counterattack" in the Sino US chip war? Let's wait and see.

Upgrading the US Chip Industry to an Unprecedented Dilemma in the Sino US Chip War

In recent years, with the escalating trade war between China and the United States, the competition in the chip field between China and the United States has also become increasingly intense. The US government frequently imposes various sanctions on top Chinese chip companies such as Huawei and SMIC, while also imposing various restrictions on domestic chip companies in the United States, prohibiting them from selling sensitive technology and products to China. This "win-win" approach directly led to an unprecedented dilemma for the US chip industry in 2022.

At the end of 2022, American chip giants such as Intel and Qualcomm successively released annual financial reports, and the news of significant losses shocked the outside world. Among them, Intel's net loss was as high as $17 billion, making it the deadliest year in the company's history. Industry analysis shows that Intel's main customer Huawei has been sanctioned by the United States, resulting in Intel losing a huge share of the Chinese market. In addition, Intel's data center business revenue has significantly decreased due to manufacturing process issues.

A similar situation has also occurred in storage chip companies such as Micron and Heidelberg. In 2022, due to the inability to ship to Chinese customers, Meguiar and Heidelberg's revenue significantly declined and their profits almost halved. This indicates that the loss of the Chinese market will have a devastating impact on American chip companies.

It can be said that against the backdrop of the escalating Sino US chip war, the US sanctions policy not only failed to bring down China's chip industry, but also severely impacted the US's own chip strength. The US chip industry has suffered a "water loo", while Chinese chip companies have seized the opportunity and are poised to take action.

Intel, Qualcomm and other chip giants are frantically lobbying the White House to relax export restrictions to China

Faced with such a cruel reality, American chip giants such as Intel, Qualcomm, and NVIDIA realize that if they "decouple" from the Chinese market, the consequences will be unimaginable. For this reason, the executives of these companies personally came to Washington and engaged in crazy lobbying against the Biden administration.

Intel CEO Patel directly warned the White House that if Intel loses the Chinese market, its revenue may halve. He emphasized that the Chinese market is indispensable for the chip industry, and if it is "decoupled" from China, it will cause the United States to lose its technological leadership advantage.

At the same time, Qualcomm CEO Cristiano also stated that banning exports to China could result in Qualcomm losing over $8 billion in revenue. He insists that continuing to cooperate with China is in the fundamental interests of the US economy and security.

In addition, NVIDIA CEO Huang Renxun bluntly told the White House that if products cannot be exported, NVIDIA's AI chips will also lose contact with Chinese customers, thus losing their leading position in the field of artificial intelligence.

It can be seen that in the face of the industrial crisis, American chip giants have put down their positions and are willing to bow to the White House. Intel, Qualcomm, and others are aware that if they do not relax their export controls to China, they may lose completely in the Sino US chip war. These giants hope that Biden can take back his fate and avoid the US chip industry falling into a more terrifying situation.

China Counterattacks US Chip Industry with Rare Earths, Adding to the Frost

In stark contrast to the pessimistic expectations of American chip giants, China has not stood idly by despite frequent crackdowns from the United States. At a critical moment, China has used its trump card - to restrict rare earth exports to the United States.

As is well known, rare earth metals such as gallium and tantalum are crucial raw materials for chip manufacturing. Due to the concentration of gallium ore reserves in China, China has long held an absolute advantage of over 80% in global rare earth production and exports.

At the end of 2022, the Chinese government suddenly announced that it would strictly restrict the export of rare earths such as gallium to the United States. This unexpected move immediately led to a surge in global rare earth prices, directly hitting the US chip industry. Companies such as Intel and NVIDIA are facing a shortage of raw material supply, resulting in production paralysis.

Meanwhile, countries such as Japan and South Korea have also complained about China's export restrictions. They can only be forced to find other supply channels to make up for the shortage of rare earth imports from China.

It can be said that in the game of the trade war between China and the United States, China fully utilized its advantages in the rare earth field, forming a strong blow to the US chip industry. The rare earth move directly exacerbates the situation in the US chip industry, and the already declining performance may experience an avalanche of decline.

Despite difficulties, China's chip industry is still steadily rising

Unlike the struggling chip industry in the United States, the Chinese chip industry, which is struggling to survive in the midst of the Sino US trade war, is also achieving steady development amidst various difficulties.

Firstly, with policy support, the technological level of China's chip industry is steadily improving. The Chinese government has established the National Large Fund and proposed in the "Outline for Promoting the Development of the National Integrated Circuit Industry" to increase funding and policy support, which provides strong support for the development of China's chip industry. With the assistance of all parties, the technological level of Chinese enterprises such as SMIC International and Changxin Storage is catching up with international advanced nodes.

Secondly, Chinese enterprises are continuously increasing their efforts in independent innovation and research and development. For example, Huawei has invested heavily in independently developing advanced chips such as the Hongmeng system, gradually breaking away from its dependence on the US supply chain. At the same time, China is also vigorously developing third-party chip design companies to make up for the shortcomings of its own chip design.

Once again, the strong demand in the Chinese market also provides broad development space for local chip companies. As is well known, China has the world's largest smartphone market, which has also led American chip industry giants such as Qualcomm to flock to the Chinese market. In this context, domestic chip companies in China can also rapidly grow in scale.

In summary, despite starting relatively late, the Chinese chip industry is still achieving steady development in various difficult situations. Under the dual effects of policy support, independent innovation, and huge market demand, the Chinese chip industry is poised to achieve significant breakthroughs in the chip field.

The upgrade of the Sino US chip war has led to difficulties in the US chip industry, but Chinese companies have also risen amidst various difficulties. In the short term, the United States may have to relax its export controls to China, otherwise its chip industry may face a disastrous fate. But in the long run, both China and the United States need to rationally view the development of the chip industry, transform strategic concepts, and seek win-win cooperation, in order to achieve better and more sustainable development of the global chip industry.

Finally, the editor has several questions:

1. Faced with the escalation of the Sino US chip war, where should the US chip industry go?

2. Can China's chip industry achieve breakthroughs in difficulties?

What do readers think? Welcome to leave a message for discussion!

The content of this article comes from the internet. If it does not match the actual situation or there is infringement, please contact to delete it. The final interpretation rights belong to this platform

Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])