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Chip Sector Faces Major Uncertainty as World Trade War Intensifies

The semiconductor sector is dealing with a “profound” threat from geopolitics, based on the president of industry association SEMI China, Lung Chu.

The sector is already seeing a production amid challenges such as inventory problems, slowing demand for smart gadgets, and falling memory chip prices. Now, the spats between the U.S. and China threaten to worsen the scenario.

Washington and Beijing have been locked in a trade conflict for over a year now.

In May, Washington put Huawei on a blacklist that bans American companies from doing selling components to the Chinese telecommunications behemoth without approval. Shortly after, the U.S. offered Huawei a 90-day reprieve and allowed U.S. companies to proceed to sell limited merchandise to the Chinese telecom. That deadline was prolonged by another 90 days in August.

This week, the U.S. Commerce Division reportedly received over 130 applications from firms requesting to sell U.S. goods to Huawei — no licenses have been granted yet, the report stated.

In the event that it’s denied access to U.S. companies, such as Qualcomm and Intel, Chu noted: “The slowdown will get worse.”

Huawei is the third-largest chip buyer on the planet, Chu said, adding that harm could extend to the U.S. itself, as American companies dominate the semiconductor sector.

In the long term, this could wind up benefiting non-U.S. corporations if they don’t follow Washington’s restrictions, Chu said. Huawei already conducts its internal growth and will likely speed up the course.

Nonetheless, Chu expressed hope of seeing a return to a global partnership.

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Gary Johnson

Gary writes about the main industry, and that is the semiconductor industry. He has worked on-field in the semiconductor industry and hence knows the facts about it. He mainly highlights the progression and also the backdrops of this sector and how this sector will benefit the economy in the near future. His way for writing has attracted many users to go through his articles.

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