China has banned the use of iPhones by its government employees due to concerns about western spying through iPhone "always-on" microphones. Within 24 hours of that ban, APPLE lost $200 Billion in stock valuation.
Imagine if the US starts a war in the Taiwan Straits. Not only APPLE's $3 Trillion market value will evaporate, but much of the US Stock Market that's worth $45 Trillion.
Taiwanese based chipmaker TSMC is the crown jewel of chip-making. The US may go to war to stop China from getting it.
In one simple move, China basically proved that the enormous years-long efforts the US put to destroy both Huawei and the Chinese semiconductor industry have been defeated.
Chinese phone maker Huawei this week revealed an advanced chip, the Kirin 9000s, made by China's Semiconductor Manufacturing International Corp (SMIC). Huawei's "Mate60-Pro" phone runs on this chip.
According to research firm TechInsights, the processor is the first to utilize the latest 7nanometer(nm) SMIC technology, and proves the Chinese government is making some headway in trying to create a domestic chip ecosystem.
APPLE's current iPhones are built on 4nm chips and next week, it will introduce a new iPhone powered by a 3nm chip.
Last year, the Biden Administration, by imposing export controls, attempted to curb China's effort to gain access to 14nm chips, which is about eight years behind the most advanced technology. The US also blacklisted (i.e. "Sanctioned" Huawei and SMIC.
But now China has demonstrated that it can produce at least a limited number of chips that are only 5 years behind state-of-the-art, and thus moved closer to its goal of self-sufficiency in the critical area of semi-conductors.
ANALYSIS
In typical Chinese fashion - words are cheap in China, you prove yourself with deeds - they didn't make any announcements about it. Huawei didn't even communicate on the product launch, the phone just showed up in their store. And that was coincidentally on exactly the same day as the visit of US Commerce Secretary Gina Raimondo, who had vowed to "slow China's innovation rate". Talk about symbolism!
People had to look inside the phone to find out it is equipped with Huawei’s in-house Kirin 9000s processor, which is made by Chinese semiconductor firm SMIC using a 2nd generation 7nm-class fabrication process. Less than one year ago, when the US introduced its sweeping set of sanctions against the Chinese semiconductors industry, "experts" vowed it would kill the industry or at least freeze its technological progress at the 28 nm chips China were at back then. Fast forward to now: China can evidently mass-produce 2nd generation 7nm chips entirely indigenously. The iPhone 14 Pro has 4nm chips so China is now almost on par, maybe just 1 or 2 years behind but catching up at an insane speed.
So what has the US managed to do? They've transformed Huawei into an incredibly more resilient company and have made China build an entirely indigenous semiconductors ecosystem, which wasn't the case at all before the sanctions, and which I am sure will prove to be a formidable competitor to other semiconductor companies out there.
Because other countries have been paying attention here. They now know that it's super dangerous to source semiconductors with Western firms as the US won't hesitate to weaponize the industry for geopolitical ends. So they'll turn to Chinese firms...
What about Huawei's new phone? You can absolutely bet Huawei will end up eating a significant market share from Apple - as was the case before the sanctions. Especially in China where patriotic Chinese will undoubtedly rush to buy the phone, now a symbol of China's technological might.
So it's lose, lose, lose for the US. Much more loss than if they hadn't done any of their aggressive actions against Huawei or China's chip sector.
Which again goes to show just how utterly pointless this new "cold war" is. Had the US decided to remain in engagement mode instead of "extreme competition" mode (as they call it), they'd have been much better off.
In a word: hubris
