In Semiconductors, China Is In Commodity Hell (Part 4)
The idea that there is – or will be, any time soon – a serious Chinese threat to American technological leadership in semiconductors is an illusion.
Why then is there so much alarmism on this subject?
A lot of it is due to the fact that so many analyses don’t use the right framework to understand competitive positioning.
Processors
In the most advanced processor categories – high-end CPUs (general purpose processors), GPUs (graphic processing units), and FPGA’s (field programmable gate arrays) – t
he U.S. share is nearly 100%.
China has less than a 1% share in these high-value product segments.
But for China, it’s really even worse. It is not just the small size of China’s market share. The
quality of China’s share is also low. In the
CPU product segment –
- “Chinese CPUs have few civilian customers, reflecting their lack of competitiveness on the open market. China’s large businesses depend on imports for 95 percent of the CPUs they consume. The country remains especially weak on CPUs with the x86 architecture.”
And in the
GPU segment – seen as especially important for emerging artificial intelligence and machine learning technologies – the picture is bleak
- “The United States monopolizes the design market for GPUs. Two U.S. firms, Nvidia and AMD, dominate the market. Intel is also developing a discrete GPU. China’s only significant GPU firm is Jingjia Micro, selling largely to military customers. However, its sales totaled only $36 million in 2019, and its GPUs are produced at the substandard 28 nm node.”