The global chip market originally had its own operating rules, because of the dynamic changes in supply and demand, the chip situation will fluctuate periodically. Generally speaking, a cycle will include five stages: recovery, boom, slowdown, recession, and trough.
However, things have been a little different in recent years, with the chip situation suddenly shifting from a global shortage to a surplus. Judging from the first quarter of this year, TSMC has taken the lead in achieving a recovery, but the United States has opened a "Pandora's box", and the nightmare may come.
More than half a century after the rise of semiconductors, the global chip market has experienced many ups and downs, creating many chip giants and making many chip companies disappear into the dust. Despite external policy interference, the overall operation has been relatively stable.
For example, the Wassenaar Agreement, which was signed collectively by developed countries in the West, is used to restrict exports related to advanced technology.
However, in recent years, the situation has become different, and the United States has begun to directly interfere in the semiconductor industry, on the one hand, imposing restrictions on us and hindering the development of our chips. On the other hand, the chip bill was introduced to take out huge subsidies to enhance the strength of the local area.
Because semiconductors originated in the United States, the United States has a great advantage in semiconductors, and many chip giants such as Intel, Nvidia, and Qualcomm have emerged, and they can easily make huge profits in the world with advanced chip technology.
Especially in our mainland market, it is even more profitable. Therefore, when we began to develop chips, especially the emergence of Huawei's Kirin chip, it once affected Qualcomm's domestic share, so the United States was not happy.
The U.S. side does not want to see the rise of our chips, and not only restricts the export of high-end chips, but also restricts cutting-edge semiconductor manufacturing equipment.
However, the chip restrictions implemented by the United States, although they have been increasing layer by layer, not only did not block the development of our chip industry, but instead prompted us to strengthen our decision to make independent breakthroughs, and our mainland quickly set off a chip construction boom.
The state has introduced various preferential policies, large funds have provided financial support, domestic wafer factories have accelerated their expansion, and chip production capacity has increased rapidly. SMIC alone has invested 170 billion yuan to build four wafer fabs in Beijing, Shenzhen, Shanghai and Tianjin.
As a result, our chip imports have declined rapidly, from $415.6 billion in 2022 to $349.5 billion in 2023.
In just one year, we have lost $66.1 billion in chips. So, whose loss is it? According to statistics, American companies basically account for about half of the global chip exports, so half of the $66.1 billion loss is American companies.
This is certainly what the United States does not want to see, although it restricts the development of our advanced chips, but the mature process capacity is exploding.
As a result, while implementing chip restrictions, the United States also passed the chip bill and provided $52.7 billion in subsidies, of which $39 billion was directly used to subsidize the chip manufacturing industry, with the aim of rapidly increasing local chip manufacturing capacity.
The purpose of the United States is to take the advanced process technology into its own hands, so through the usual routine of "carrot + stick", it has allowed wafer giants such as TSMC and Samsung to build factories in the United States, and has also attracted many chip companies to the United States.
Today, Intel, TSMC, Samsung, Micron and other giants have received chip subsidies from the United States, they are already giants in the chip industry, coupled with a large number of subsidies provided by the United States, they naturally actively promote the expansion of the United States wafer factory.
After the United States implemented chip subsidies, Europe, Japan, South Korea also took action, and even India subsidized them.
Because of the chip restrictions and chip subsidies in the United States, all parties have realized the increasing importance of chips, and no one wants chips to be overly dependent on the outside. Besides, whoever masters high-end chips will have the ability to develop high-tech.
As a result, driven by the United States, the world began to engage in a chip subsidy race, and the media reported that the United States and Europe alone amounted to $81 billion.
However, the chip "subsidy frenzy" may bring uncontrollable consequences, because the purpose of the subsidy is to rapidly increase chip production capacity, and the result may bring the risk of "serious overcapacity", which will be a "nightmare" for wafer giants.
You must know that the chip situation has been declining in the past two years, and the chip inventory has been overstocked, and it has only begun to recover after adjustment.
And this risk is not a big problem for us, after all, the market in our mainland is large enough, and the internal circulation can also deal with it, while the life of other wafer giants is not easy, coupled with the chip restrictions of the United States, I am afraid that the chip will be smashed.
In this regard, some foreign media directly commented that the United States has opened a "Pandora's box", and the wafer market has been completely troubled!