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China’s semiconductor industry has always been the Achilles heel of the country’s booming tech sector – and the US is now exploiting it with tariffs and blacklists that threaten to drag Chinese innovation in 5G, AI, and supercomputing to a halt. While China scrambles to ramp up development of indigenous semiconductor capacity, telecom giant Huawei, blacklisted from almost all business interactions with US tech firms, is already running low on their preferred chips for 5G technologies and may have to start utilizing their own, lower quality components by the end of this month. While self-sufficiency will be a long-term positive for Chinese tech, nobody knows exactly how rocky this road may become. Additionally, investors should also be prepared for the recoil effect US chipmakers might feel in coming quarters if trade tensions do not subside.

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