[Traum]

Originally Posted by mikemhg

I see where your going with your thoughts here, I still believe China's decline in the 5g space was more a product of their own actions in regards to intellectual properties, and that of other Western democracies deciding to note continue with their infrastructure via Chinese companies. I feel that Trump has little to do with that, in the same way that I believe he had little to do with any upswings within the economy his first year or so in office.

Mike,

As a general comment, I'd say that intertional diplomacy involving China is very much like a jungle fight between animals. China is a big and intimidating animal, so a lot of smaller countries would be afraid to engage China in any sort of combative situation on their own even if they severely dislike China. But if there is an alpha animal known as the US starting the fight first, the rest of the smaller animals would not hesitate to jump in to take a bite or two off China. And this is what happened with Huawei and the Huawei ban.

In May 2019, Trump signed an executive order that effectively bans Huawei from doing business with any organization that operates in the US on the grounds of national security. Prior to this, much of Europe and Canada was planning to hire Huawei as a major provider to their 5G infrastructure. But with US leading the charge, persistent persuasion and pressure from Trump and Pompeo have gradually turned that around. UK, for example, formally announced in July 2020 that Huawei 5G equipment must be removed from UK by 2027. Similarly, France announced a de factor ban on Huawei at a similar date. IMO, Pompeo deserves a lot of credit in this because he was the runner and traveler flying all around the world to do the persuasion legwork.

The ban also means that Huawei loses access to US-made components as well as those containing US technologies. The 2nd item here is really the killer because gob piles of stuff contact "US technologies". Everything from Google is US technology, so no Android OS (although the open source portion is still available, and Huawei brands that as their own "Harmony OS"), no Google services and features, and no Google Play Store. Various semiconductor chips that are used in the phones contain US technologies, so Huawei can't get its hands on SoC. (There is an *asterisk here, but you will see that a little later.)

Here is a good summary of the Huawei ban:

https://www.androidauthority.com/hua...id-ban-988382/

Can you provide me any data in terms of the recent Trump policies and the adverse the measurable effect they've had to the manufacturing and tech sector in China (semiconductor tech, etc.).

Unfortunately, coming up with measurable data that can show the adverse effect from the bans is difficult in a number of ways. First of all, although the initial executive order was signed in May 2019, extensions to the ban has occurred 3 times until April 2020 to allow more time for American businesses to make alternative arrangements. The extensions mean that throughout this period, Huawei was able to continue with its business in pretty much the same way as before.

Additionally, the extensions allowed Huawei to stockpile lots of critical components prior to the full ban. Because of these offset measures, Huawei's financials didn't really take any major hits in 2020. In fact, I seem to recall that one of the quarterly reports saw higher revenues than before.

But what happens going forward is interesting because the ban means Huawei's smart phone business has reach the end of the line.

Huawei has also had to sell its Honor subdivision to minimize the impact on the core company's survival.

* * *

On the semiconductor front, Semiconductor Manufacturing International Corporation (SMIC) is China's top chipmaker. According to SMIC itself, they are capable of mass producing chips using the 28nm and 14nm process. Their latest achievements even allow for the manufacturing of chips that uses what can be considered as a pseudo 7nm process. (For what it is worth, Intel has been having major issues to reliably produce 7nm chips. Taiwan Semiconductor Manufacturing Company (TSMC), the undisputed leader in semiconductor manufacturing, currently mass produce with a 5nm process, and is close to having 3nm capabilities.) Unfortunately, SMIC is also listed in the US ban.

But don't be mistaken into thinking that China has the capability and capacity to produces its own advanced semiconductor products -- it can't. SMIC is already China's top chip maker, but a closer look at its revenue split will tell you that the capability isn't actually there. According to Tom's Hardware article here:

https://www.tomshardware.com/news/ch...tion-uncertain

mature technologies (40/45 nm and thicker) accounted for 90.9% of its wafer revenue in Q2 2020. Meanwhile, 28 nm and 14 nm accounted for only 9.1% of the company’s wafer revenue in the second quarter with the former being considering more popular than the latter.

Effectively, the revenue breakdown reveals that up to Q2 2020, SMIC's most advanced semiconductor manufacturing process (at 14nm) only accounts for a miniscule amount of SMIC's total business. If SMIC was capable of consistently having good yield numbers with its 14nm process, they would have focused their business on that since typically, the more technologically advanced products are supposed to carry a higher return.

With no means to purchase semiconductor products from foreign countries, and no means to produce them on its own, the semiconductor ban means China has no means (haha) to obtain recent-ish semiconductor technology, so the implications are far-reaching.

I'm not arguing with you, I just want to see the data here, as I truly believe you're giving Trump more credit than he deserves in terms of these policies and their efficacy.

Details of the various bans are of course not something that Trump would be able to come up with himself -- he would be relying on any number of his subject area experts to help him with a draft that causes maximum damage. But the decision to take up this direction is almost certainly Trump's, and for that, I think he has to be given the credit for it.