How Restricting Trade with China Could End US Semiconductor Leadership
Restricting sales to China could break the scale-funded R&D cycle behind US semiconductor leadership, turning trade policy into a threat to industry competitiveness.
Summary
The authors explain that US semiconductor leadership, with a 45% to 50% share, rests on a virtuous cycle in which access to global markets provides the scale to fund very large R&D budgets. China accounted for about 23% of global chip demand in 2018. Since the trade war began, median revenue growth of top US chipmakers fell sharply, and restrictions on sales to Huawei were followed by revenue declines. They warn that tighter curbs on technology
Editor's opinion
A relevant geopolitical-strategy mechanism, but the specific 2020 figures on US-China chip trade are now stale.
Key concepts
Semiconductor export controls · Virtuous innovation cycle · Scale-funded R&D