Chips Investigation is going to hurt the US far more than it will China

BrianTycangco鄭彥渊
12-19

This is going to hurt the US far more than it will China.

The US has very little capacity to produce legacy chips at a realistic price. It is a mass-market product that is quickly being dominated by China, which supplies the global electronics industry. The US can't undo this without causing a great deal of harm to itself and its consumers.

Nobody in their right mind will invest tens of billions in legacy chip manufacturing in new locations that don't have the same supply chain ecosystem that China offers - including an endless amount of downstream manufacturers.

China accounts for 1/3rd of global electronics manufacturing, much of which ends up on store shelves at $Wal-Mart(WMT)$ $Target(TGT)$ $Costco(COST)$. It results in enormous cost-advantages for electronics manufacturers who can source most inputs locally. Do American consumers really want to pay 50% to 100% more for a flat-screen TV, wireless routers, or air purifiers?

ImageImage

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment