America's Move to Block Chip Exports to China May Backfire, Analysts Say: It Will Encourage China to Develop Its Own Chips

Paris AFP, San Francisco, 19th - The Trump administration is attempting to prevent the export of strategically significant computer chips to China, but experts suggest this move may backfire, pushing Chinese enterprises to innovate and helping them seize global semiconductor market share.

J. Gold Associates analyst Gold said: "The reality is that the U.S. government is handing a major victory to China as it tries to develop its own chip business."

He told AFP: "Once they gain competitiveness, they will start selling worldwide, and people will buy their chips."

He also mentioned that when this happens, U.S. chip manufacturers will struggle to reclaim lost market share.

Silicon Valley semiconductor star company NVIDIA and its American rival AMD informed regulators this week that new license requirements for chip exports to China would cause substantial financial losses for both companies.

According to documents submitted to the U.S. Securities and Exchange Commission (SEC), NVIDIA expects the new regulations will cost it $5.5 billion, while AMD anticipates potential losses up to $800 million.

Independent analyst Endler predicts that Chinese chip manufacturers will accelerate efforts to claim market leadership.

Endler commented on the U.S.' tightening export regulations: "This will be a gift from heaven for China as it is vigorously developing its own microprocessor business."

"This could be one way for America to quickly hand over leadership in microprocessors and GPUs."

Gold stated that the Chinese government has abundant resources and motivation to develop the chip industry. He said that although President Trump might believe he can achieve his goals by 'bullying', "the global economy does not work like that."

On the contrary, Gold said, Trump's tariffs will drive allies further away, making them more motivated to buy chips from China.

Endler said: "Overall, this will create real problems for the competitiveness of American businesses."

Original Source: https://www.toutiao.com/article/1829929436464283/

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