Why China Could Invade Taiwan Soon

National Intertest ^ | 3/4/2021 | Gordon Chant

[AdmSmith]

To protect themselves against possible sanctions, Chinese companies have been building stockpiles to safeguard production lines. Chinese media has been calling it a “competition for inventory”, noting that some companies are buying chips at up to twenty times normal prices. Huawei, for instance, which has borne the brunt of sanctions, has stockpiled two years’ worth of crucial chips needed for its 5G base stations and cloud business. The rush to stockpile has spread worldwide, leaving suppliers struggling to keep up with demand. That, combined with the impact of the pandemic, has precipitated a global shortage of chips.
https://www.wired.co.uk/article/china-microchip-autonomy-huawei

The stockpiling is as well planned in case there is kinetic attacks on Taiwan.

[AdmSmith]

John Stokes has written (14 April) a must read about the consequences for the semiconductor industry in case there is a Chinese invasion.

https://doxa.substack.com/p/why-a-chinese-invasion-of-taiwan

spoiler: TSMC would not survive under Chinese control.

[AdmSmith]

This article from 2020 is related: https://warontherocks.com/2020/06/the-chip-wars-of-the-21st-century/

[AdmSmith]

Why the Chip Shortage Is So Hard to Overcome
Semiconductor producers are trying to increase output, but the small gains are unlikely to fix the shortfalls hampering production of everything from cars to home appliances to PCs

Fears of sanctions prompted tech companies in China to stockpile chips and prepare for the worst, Huawei Technologies Co. deputy chairman Eric Xu said last week. The Chinese company uses a range of chips in its telecommunication products and consumer gadgets, and aggressively stockpiled components to protect against U.S. export restrictions.

“Now [the Chinese companies] are stockpiling for one month, three months, or even six months, and they have disrupted the whole system,”

https://www.wsj.com/articles/why-the-chip-shortage-is-so-hard-to-overcome-11618844905?mod=djemalertNEWS

[AdmSmith]

Once a month, senior executives of Yangtze Memory Technologies Co. fly to Beijing for a flurry of meetings with China's top economic management bodies. They focus on the company's efforts to build some of the world's most advanced computer memory chips — and its progress on weaning itself off American technology.

So far, Yangtze Memory, also known as YMTC, has remained under the radar of the U.S. government. But the company is taking no chances. With the guidance of Beijing, it has launched a massive review of its supply chain in an effort to find local suppliers — or, at least, non-U.S. ones — to replace the current dependence on American technology.

The collective effort has occupied over 800 people, full time, and including staff from its multiple local suppliers, for two years. And they have not finished yet

.While the rest of the city endured a brutal quarantine, high-speed trains remained in service to ferry YMTC employees to its $24 billion 3D NAND flash memory plant that began producing chips in 2019.

While the threat of sanctions hangs over them, so too does the largesse of state aid — subsidies and investment from local governments and the private sector have amounted to at least $170 billion since 2014, according to the state-backed China Securities Journal. There are also guaranteed orders with other Chinese chipmakers and domestic tech giants like Xiaomi, Oppo, Vivo and Lenovo.
https://www.newsbattle.net/2021/05/05/us-china-tech-war-beijings-secret-chipmaking-champions/

Yangtze Memory Explained: China's Next Semiconductor Giant 10 min video by asianometry:
https://www.youtube.com/watch?v=sxqcaViwnvM

As the semiconductor industry is cyclical, will the Chinese try to kill its Western competitors with Chinese state subsidies at the next downturn.