Agree. However , you seem to underestimate US hostility towards China as China grows stronger and more powerful each year. They will come a point where the US might act even more irrationally than today. It’s to be expected as the balance of power equalizes more and more. So to expect the US to accept the current status of not banning some certain products would be the biggest mistake Chinese companies can make. I can actually guarantee you that a few years from now even these things will be call for concern by us lawmakers and they might also come under a ban . lol don’t forget that the us recevntly banned even DJI commercial drones and even microphones /gadgets that have zero threat
Chinese semiconductor thread II
- Thread starter vincent
- Start date
I'm generally not going to concern myself with stuff that hasn't happened yet. In the scenario that happens, all these chip designers will just need to work with SMIC and Huawei. In a couple of years, SMIC and Huawei will have so much N+2/3 capacity that these won't even be concerns anymore. Given where we are with domestic fabs, I think we can generally be more relaxed.
Wingtech CEO says that Nexperia China now has full ability to operate independently. It has fully realized closed-loop supply chain for its MOSFET and Logic IC product lines and anticipates completing the closed-loop supply chain for its Bipolar Transistor product line within 2026. It is restoring its capacity & delivery capabilities.
See, the problem with being irrational is you can also over-estimate your own importance while fail to notice your vulnerabilities.
Evidently US market is simply not big enough for China to care, Chinese auto sells zero cars in the US and already easily dominante global auto industry, it's the same for everything else. US simply isn't as rich as they think they are. As for TSMC, that's actually an American problem isn't it? After all Taiwan is a Chinese province and that detail can rapidly become very real if US does anything really "irrational".
US hostility is a given, what actually matters is their capability, US simply don't have the capability to defend their access to TSMC if China choose to cut them off, they have no capability to defend their access to all Asian semiconductor if China cuts them off. US has no ability to compete with DJI or Chinese EVs regardless of their hostility, they don't have a market big enough to affect DJI or BYD sales with or without a ban.
The irrational card only matter when you have other cards, US has already played all their cards, they started and lost the bio-war, started and lost the trade war, started and lost the tech war, they even started and lost their Iran war card and now everyone knows they can't even defend their own access to ME oil.
So it's not really about underestimating US hostility or their potential for more irrationality, it's the fact that China and Chinese companies are already fully capable of handling it.
The US is also run by western capitalist. The level of ban is dependent on how much money these capitalist has in that company and how much control they have in the board. Huawei was mostly China owned/private hence it got the most severe. Bytedance has alot of western capital which allowed it to run many years and only reorganized the us subsidiary . Unless there is open warfare, its unlikely these public companies will get the full Huawei treatment. These companies can use tsmc for now, but it would prudent to also hedge with local fabs when that capacity comes.
The current US leadership (all of them really) generally doesn’t learn until they get boinked. The problem is, any market disruption is still a market disruption. There is entirely a possibility where firms are hobbled because US decided to do something.
Like the affiliates rule in September, 2025 that triggered the rare-earth sanctions.
Companies did not like any of that nonsense by the way and damage was done even if it was all resolved relatively quickly.
Anyway, my point is that companies should absolutely take thier redundancies seriously, but I also know that companies fight for every margin, meaning that some operate assuming that they wont be cut off from TSMC.
It’s not “irrational” to miscalculate or to not have full control. The affiliates thing I mentioned earlier, some reporting suggested that Trump didn’t know what happened or wasn’t fully aware of the effect it would have or how Beijing would perceive it.
In any case, this is a hostile trade environment and companies need to take this seriously. This is exactly why China has emphasized self sufficiency and domestic alternatives, but companies have to do their part as well. They need to be ready to harmoniously transition into Plan B and Plan C if the trade situation abruptly changes. Otherwise a disruption will cost even more money in the long-run if they are caught unprepared.
TSMC is a massive choke point and risk. All that foundry capacity can’t come online soon enough.
It must also be mentioned that Huawei can only survive in a large market like China. After being banned, only China's large market could sustain Huawei because there were enough patriotic people to accept inferior compute tech for indigenous products. And it was only China's scale and depth, that Huawei could justify creating a brand new OS for 20% market share in China. China would be wise to preserve this scale and depth of market that no country has right now.
Just as I said before with SRAM scaling issues, this is actually going to become a big deal since SRAM is going to become an ever larger portion of logic die surface area due to HBM shortage issues and the actual superiority of having large SRAM in AI inference.
So if Huawei's 3D folding of SRAM becomes really effective, then I see AI ASIC coming out in China with large SRAMs
But it looks like Bytedance (parterning with Shanghai InnoStar) is attempting to use RRAM instead of SRAM like Groq/Cerebras
RRAM is only in R&D right now and hasn't been used in mass produced AI chips yet. Could be a big game changer if Bytedance can get RRAM to work. Doubao UX is much better than competitors due to its speed; if they can get RRAM chips to work, it would allow them to keep a huge UX moat by making the response of even thinking models much faster..