US-China Trade War Chips make it tough for US to quit China
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New Delhi: US-China Tension has been going on for a long time between the two big powers of the world, America and China. But America is not able to leave China even if it wants to. American Finance Minister Janet Yellen is currently on a visit to China to normalize the relations between the two countries. Semiconductor companies have suffered the most due to the sour relations between the US and China. Both countries have imposed various restrictions on each other’s companies. American officials say that American products have been installed in China’s military and surveillance programs. Therefore, a strict ban has been imposed on sending chips and chipmaking equipment to China. America wants them to be made in the country itself. For this, strong incentives are also being given to the companies. But it is not easy for US companies to do so.
China is a big market for US chip companies. The reason for this is that a large number of such products are made there, in which semiconductor ie chip is widely used. These include smartphones, dishwashers, cars and computers. They are exported all over the world. China accounts for one-third of the total semiconductor sales in the world. But 60 to 70 percent of the revenue of some American companies comes from China only. Many companies are making chips in America but they are sent to China for assembling and testing. It will take many years to set up new factories for this in America. That is, the semiconductor industry is largely dependent on China.what is compulsion
China is a big market for US chip companies. The reason for this is that a large number of such products are made there, in which semiconductor ie chip is widely used. These include smartphones, dishwashers, cars and computers. They are exported all over the world. China accounts for one-third of the total semiconductor sales in the world. But 60 to 70 percent of the revenue of some American companies comes from China only. Many companies are making chips in America but they are sent to China for assembling and testing. It will take many years to set up new factories for this in America. That is, the semiconductor industry is largely dependent on China.
what is compulsion
In May, the Chinese government banned the US chipmaker company Micron Technologies. He said that the company failed in the cyber security review. The company says that about 12 percent of its revenue will end with this ban. In June, the company announced an increase in its investment in China. The company will build a chip packaging facility in Xi’an city with an investment of $600 million. This is proof that American companies cannot leave China even if they want to. Especially for the chip industry, maintaining relations with China is a compulsion. This is the reason why America is also pushing for normalization of relations with China.
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