Huawei future looks dark, China chip dream at risk|US weighs export control on China top chipmaker

Semiconductor Manufacturing International Corporation, or SMIC, is China's largest semiconductor manufacturer and the fifth largest in the world. China's State Council on August 4 announced its latest semiconductor policy, which includes a plan for China to reach 70 percent self-sufficiency in chips by 2025. This is part of China's latest drive to compete in the technology sector. But the plan has dealt a major blow when the Trump administration announced that they are considering blacklisting SMIC on September 5. Following the news, SMIC's Hong Kong share price plunged 22.9% on September 7, down 23.6% during the session.

Why does the US suddenly intend to take action against SMIC? The Wall Street Journal stated that a report by a U.S. defense contractor has alerted the U.S. government to the fact that SMIC is suspected of supporting the build-up of the Chinese Communist Party's military.

Huawei is SMIC's largest customer, with 18.7% of its revenue coming from Huawei.

China has long relied on imports for its chips. Market research firm IC Insights noted that China's semiconductor self-manufacturing rate was about 15.7% in 2019, up only slightly from 15.1% in 2014.

In August, Chinese Foreign Minister Wang Yi visited the Netherlands in anticipation of the release of the ASML EUV lithography system, but the request was not met. While Wang addressed the issue of lithography exports, the Dutch Prime Minister and Foreign Minister expressed concern over the "Hong Kong version of the National Security Law" and human rights issues in China, including religious freedom.

The Wall Street Journal reported that SMIC's customers are mainly Chinese enterprises, with nearly 60% of its $3.1 billion USD revenue in 2019 coming from Chinese companies. An industry professional's analysis pointed out that SMIC's ban is not just a problem for ZTE and Huawei, but will impact the chip manufacturing needs of other Chinese semiconductor companies, which could seriously result in the nationwide chip shortage.

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#China#SMIC#Huawei#TSMC#ZTE#ExportControl

[kamisuntori]

Karma .. payback for Nortel, a former Network Technology leader filed for bankruptcy in 2009.

[yorkhunt]

I think US is still happy to export chips to China -- Pringles and Lays!

[central]

SMIC is Huawei's last hope to fabricate chips/processors. SMIC is stuck at 15nm, can't fabricate even 7nm. Huawei's Kirin processor is 5nm.
These last shipments will last 6 months. It took Samsung 16 years from zygote 5nm to production. Samsung/TSMC will be rolling out 3nm in 2021.
SMIC/Huawei 15nm compared to Samsung/TSMC 3nm is completely laughable. Good luck with closing that gap.

[jimjohnson]

Great news guys! Keep up the great reporting!!! 🎉

[djoys]

Why trade with a thug and spend resources to Look for alternatives, it is safe and wise.

[peterw]

US chip makers work hand in hand with the US military. Why can't China do the same ?
The one thing that the US does export to China and they are going to cut it off. China will just ramp up then do it better.

[adamcooke]

I like this kind of video -- good analysis, informative and the production quality is beyond my expectation. Good, in one word!

[raybod]

Make the dollar more worthless by making the U.S. an unreliable trading partner. The U.S. needs to export high value products. China will only suffer temporarily until its engineers eventually create their own home grown technology. They don't need to steal anything. Once it's known something can be done, people (Chinese) will figure out how to do it.

[logicmdewet]

Hahaha.. you hired some Chinese children that doesn't know much to work in Canada. The diversity is so importent.. And the children knew more than you thought. They walked away and you still don't get it. Canadian thinking controled by their PM.

[mchrysogelos]

RESTRICT SMIC - otherwise you KNOW what they will do!!

[MiNi-nnsu]

Trump - Thug Life 😎

Xi - Panda Life 😂😂😂

[AlbertLloydy]

Great channel! I hope this reaches the regular Chinese people and someday they can be freed.

[srinivasangreddy]

America pls wake and push Indian country with Technology support and India will Live to America and world's expectations.
Bcz we Love peace for all Human race to Live happily in this world and Love their country.
Andhrapradesh is having 10 Lakhs of government Land to support any big company.

[ivan]

Every Chinese company deserves to be blacklisted. In fact, all of China should be blacklisted.

[dyu]

US's sanction of SMIC will only hasten China's acceleration of their semiconductor industry. Unfortunately US does not have a monopoly of the industry. There are other countries that will be eager to do business with China. Above all, there are more Chinese in this industry than others.

[waynemeaford]

As a former Nortel shareholder, poor old Nortel, I think Nortel should very proud of Huawei for what it has achieved that Nortel was not able to get done. Nortel was great; wanted Nortel to succeed but csco, lucent was too much for it.

[adamcooke]

But except SMIC, China has many other semiconductor companies can produce IC, and other companies can design IC. US and its allies should take that into consideration, if they would like to ban Huawei and ZTE

[bresoccercards]

Lol! Help protect countries that follow international rules? Said the American. You can't make this stuff up!

[steveolson]

are not all american tec companys connected to us military!

[kruelunusual]

It’s a trade war, it’s not like they haven’t known about these relationships for years!