Now it’s official: our own semiconductor industry is in a “death spiral“ after Chinese export bans

Analyses by the New York Fed and the Center for Strategic and International Studies confirm that US semiconductor companies are losing tens of billions of dollars per year in sales. In an 18-month period immediately following strict sanctions against US chip exports to China, US companies lost an average of $770 million in market capitalization, with $130 billion in lost market cap industry wide. In company-specific examples, Micron has lost half of its revenues as a result of China export restrictions. In 2024 alone, Qualcomm will forego $10 billion in lost sales of 7-nanometer chips which are now manufactured by SMIC, a Chinese semiconductor firm. The United States now faces strong challenges from companies in allied countries, who are resisting calls to further decouple from China’s semiconductor market, the world’s largest. Resources and links: Federal Reserve Bank of New York, Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls Collateral Damage: The Domestic Impact of U.S. Semiconductor Export Controls Commerce Department Implements New Export Controls on Advanced Computing and Semiconductor Manufacturing Items to the People’s Republic of China (PRC) The Anatomy of Export Controls Reuters, China sets up third fund with $47.5 bln to boost semiconductor sector Former ASML CEO says US-China trade war is on “basis of ideology” US calls for Netherlands, Germany, South Korea, Japan to tighten chip curbs on China, drawing resistance from allies Bloomberg, US Seeks Allies’ Help in Curbing China’s AI Chip Progress Closing scene, Xinjiang Province