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Non-Tech : Kirk's Market Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Augustus Gloop who wrote (21563)	11/28/2024 9:54:13 AM
From: Kirk ©	1 Recommendation Recommended By Return to Sender Read Replies (1) \| Respond to of 26439

Clearly the restrictions, sanctions and tariffs are hurting China. Funding cuts, layoffs, and reorganization common in China's competitive chip industry Jay Liu, Taipei; Jessie Shen, DIGITIMES Asia Thursday 28 November 2024 In 2024, major Chinese semiconductor businesses continue to announce closures or severe layoffs, according to industry sources. Xiangdixian Computing Technology, commonly referred to as China's Nvidia, has opted to cease operations. Huaxia Smartchip, an intellectual property firm, declared bankruptcy in early 2024, while Smarter Microelectronics, a key communications chip producer, reportedly will cut its R&D personnel by 40%. Sources said that Chinese chipmakers face unique district operating constraints, regardless of whether they focus on advanced or established products. This process of bankruptcy, dissolution, and reorganization can be viewed positively as resource consolidation, allowing human and technical assets to operate more efficiently. Nonetheless, while the reshuffling continues, only a small handful of semiconductor companies can truly differentiate themselves in this competitive environment. Growing instability in Chinese IC design firms Sources in Taiwan's industry supply chain were recently questioned about the current status of Chinese IC design customers. Most stated that their clients' situations are becoming more uncertain, particularly those who specialize in advanced process products. This customer segment was highly engaged one or two years ago, and the developed technology appears impressive; however, only a few products have been mass-produced. They were either placed on the export control list by the US Department of Commerce during the trial period or were unable to provide comprehensive services. The lack of progress in business development has resulted in technology with no market outlet. According to the sources, the number of customers submitting products for trial production is gradually decreasing, and they will eventually learn that these clients have ceased operations and terminated their business relationships. The ongoing pressure from the US technology conflict is a major factor exacerbating competition among Chinese firms. Companies that produce advanced process products, particularly in AI or high-speed computing, are added to the export control list in a sequential order. Once on the list, regardless of the company's current prominence or claims of continued diligence, it is effectively eliminated from the competition. Concerning mature process products, there were initial concerns that a significant volume of Chinese products would be disseminated indiscriminately worldwide. Under pressure from the US, American terminal application manufacturers officially requested the discontinuation of Chinese chip use. Moreover, numerous other brands have targeted the US market and developed their own products. Regulatory limitations have substantially curtailed the international export of Chinese chips, constraining competition in a restricted market. Many in Taiwan's IC design industry bluntly stated that a large number of their Chinese counterparts have gone bankrupt in recent years, with many of them being companies founded solely to receive subsidies. It is undeniable that China's official subsidies for IC design have been substantially diminished, impacting certain companies that aspire to operate and develop but have not yet achieved profitability. Technological breakthroughs halted Should these businesses cease operations, it is plausible that resource-rich manufacturers would seek to acquire them or take over the teams and personnel displaced by their dissolution. However, this did not transpire within the prevailing economic climate, which is marked by uncertainty, according to the sources. Relevant industry players have also observed that since the dissolution of Oppo's chipmaking arm Zeku, most manufacturers that have made technological breakthroughs but went bankrupt have no way of passing on their technical capabilities and achievements. Technology accumulation has become extremely difficult in China, and this quandary may pose a long-term challenge for the Chinese chip industry.