This week Trump admin banned all American firms from supplying to ZTE, a huge Chinese telecom equipment maker second only to Huawei. That’s a catastrophic blow to ZTE because that means it can’t buy chips from American companies like Qualcomm or Intel.
There is speculation ZTE can’t even use the Android system because it comes from Google. That’s American tech dominance in full display and a rude wake up call for the Chinese. China doesn’t have the chips, literally, to wage trade war with US. Silicon is a key strategic weapon.
Chinese semiconductor stocks actually rose on the news, figuring the Chinese government will redouble its effort to catch up.
I read a big report on China’s semiconductor tech yesterday. They are nowhere close. SMIC, China’s biggest and most advanced fab, is still struggling with 28nm. That’s 3 generations behind. DRAM and NAND also way behind, NOR is OK, nothing on CPU and GPU. China needs to spend 10x more on R&D to even have a shot at catching up.