Huawei obsession will cause serious damage to US semiconductor industry: expert
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He said one consequence would be slower global sales and the US chip industry's gradual loss of dominance. He cited a Boston Consulting Group study as claiming a full decoupling with China would reduce the sector’s revenue by 37% and lower its global market share to 30%; by contrast, China’s market share would rise from 3% to 31%.
Added Kennedy: "And a weakened US chip industry cannot but hurt the rest of the country’s related sectors, including flagship companies and smaller suppliers as well as their employees. One might think that the US industry could prosper even more if it on-shored all of its manufacturing and locked Chinese competitors such as Huawei out of the West.
"But one industry insider told me the frank truth: 'The idea that we can decouple from China and our industry will still be successful is not tethered to reality'.”
Kennedy said it was possible to justify a smaller and less dominant US chip industry if crippling Huawei and the decoupling of the technology industry were both needed to protect the national security of the United States. But, he said, it would end up having a diametrically opposite effect.
"Most importantly, the United States’ military preparedness would suffer," Kennedy claimed. "Over the last few decades, federal funding has stagnated, but US industry has filled the gap and then some.
"Total semiconductor R&D by private firms in 2019 was almost US$40 billion, or nearly 20% of total sales. A less profitable US chip industry means fewer funds available for R&D, and less R&D translates into less progress in accelerating computing power and developing new applications, including for the US military and intelligence community.
"Conversely, as China fills some of the gaps created by the withdrawal of US firms from their industry, Beijing will have more resources available for their own civil- military fusion program."
So looks like for EUV China will have to do extra work.
