German media: The crumbling chip industry and China's leading rare earths

The Dutch government forcibly took over NXP Semiconductors from Chinese shareholders, a rare move that has worried the German newspaper Handelsblatt, which is concerned that the global chip industry is splitting, which will inevitably increase the cost of all goods. The newspaper Welt continues to focus on a new round of trade wars triggered by China's restrictions on the export of rare earths, believing that China, which is becoming increasingly self-reliant in the chip sector, is likely to be the ultimate winner.

The German newspaper Handelsblatt, published in Düsseldorf, titled its commentary "Taking over NXP Semiconductors - Only Losers in the Chip War," pointing out that after the Dutch government forcibly took over NXP Semiconductors (Nexperia) from Chinese shareholders, it was entirely expected that the Chinese government would be enraged, and this dispute may soon affect many companies around the world.

The author noted that after the Dutch government took over NXP Semiconductors due to concerns about technology loss, the Chinese government has imposed an export ban on chips produced by the company within China, and many companies around the world, including German automobile manufacturers, are customers of NXP Semiconductors. "This incident is the most severe case of division in the technology industry. Export restrictions have long been in place. For example, China has repeatedly stopped the export of important raw materials for the semiconductor industry, while the United States has refused to provide China with the most advanced AI chips from NVIDIA and AMD. However, it is unprecedented for a government to seize a company."

"The global public will experience the consequences of decoupling. In the short term, certain chips will continue to be in short supply, and supply shortages will appear in many products such as coffee machines and cars. In the long run, this will lead to increased chip costs, thus causing the prices of final goods to rise as well. Everyone will feel this in their own wallet. The semiconductor industry has long operated with high efficiency, with highly specialized factories distributed around the globe. These factories, which often require investments of several billion euros, can only be profitable when operating at full capacity."

"But this situation has now ended. No one can continue to assume that chips from the other side of the globe will always be delivered on time, or more precisely: allowed to be delivered. To ensure the reliability of the supply chain, semiconductor production lines must be established at home, which necessarily requires a lot of investment."

"There is another issue to worry about: in the future, chip companies' customers will no longer always be able to buy the most innovative solutions or the best products on the market. The chip war between the East and the West is hindering the development of the industry, so both sides in the NXP Semiconductors takeover case are losers."

No Chinese rare earths, the West can only eat dirt?

The Berlin-based newspaper Welt, titled "Steps Toward World Domination," published a commentary stating that Beijing's measures to restrict the export of rare earths seem to be a response to the U.S. government's restrictions on the supply of advanced chips and the imposition of higher tariffs, but it is also an important step toward becoming the new global hegemon; because Chinese high-tech companies have gradually developed the ability to replace American chips, while Western countries are unlikely to obtain rare earth processing technology.

"Western countries often only consider the next election, while socialist China looks to the long term. As early as 1987, then-leader Deng Xiaoping said: the Middle East has oil, and China has rare earths. Since then, China has massively expanded rare earth production. 70% of the world's rare earths come from China, and the share of global rare earth processing is over 90%. More specifically: 98% of rare earth magnets in the EU come from China. Without them, we cannot manufacture robots, wind turbines, or electric vehicles."

"Theoretically, rare earths are almost everywhere. But the process of mining rare earths is complex and not particularly environmentally friendly. Because the importance of protecting beetles and frogs exceeds defending freedom, we have left this important future area to socialist China. Now, it is almost impossible for us to catch up with their leadership. Mining rare earths takes many years, and China holds a large number of rare earth processing technology patents. This means that the Congo minerals necessary for making mobile phones can only be imported through Chinese processing. Trump believed he could use tariffs to blackmail the whole world. But it is China that has the upper hand."

Original: www.toutiao.com/article/1846575417840714/

Statement: This article represents the views of the author."