The trade war will not only confront two countries, but many companies in between. MIPS, SMIC, Huawei, Intel, TSMC, AMD, ARM, NVIDIA and a host of smaller names that work directly for them. Who will dominate the semiconductor sector in the Asian country? The answer to this question is key, as it will be China’s spearhead to face the threat of destruction from the US.
One must be very clear when talking about the confrontation that the two countries expect: they both need each other. The fight is for the domination and subjugation of the other, where the US continues to be the giant that tries to subdue the still “little one”. The problem is that the small one in 10 years has quadrupled its volume and if this continues, companies such as MIPS or SMIC could become the engines of the industry under the protection of the Chinese government.
TSMC vs Intel vs SMIC and MIPS vs ARM / NVIDIA
If you follow us daily you will know that NVIDIA has bought ARM for a very high value, that it is facing problems to close the absorption given the sizes of the companies and the number of governments, partners and associates that it must convince, and that if it is done it is a submission movement to China, where the main orders are for Huawei smartphones.
MIPS history is certainly somewhat controversial, but currently their IPs have been transferred to various affiliates following the acquisition of IMG by Canyon Bridge, so that the CFIUS (US Foreign Investment Commission) cannot intervene.
Thus China can bypass the American bans, while making direct competition to ARM with its RISC-V architecture. The war reaches such an extent that it is stipulated that the Chinese industry could access the MIPS IPs to develop a high-performance CPU with its technology as the main asset in the cores.
What does this mean? Well, it is a double play against the US, first it would veto the union of NVIDIA and ARM, it would counterattack with MIPS under RISC-V, it positions SMIC as a semiconductor factory worldwide with a large volume of business in chips of all kinds, encourages internal trade and could not be vetoed in the US.
The US seems to be firing cannon shots
The US coups have managed to partially slow down China’s economy, it is true, but in terms of semiconductors it is losing ground as it was seen only a few days ago. What does this situation mean then? Well, America is losing the battle in part, although it has an advantage, but it will end up not winning the war if it does not manage to get the majority of companies, suppliers and manufacturers out of China and especially Asia.
We cannot ignore that both TSMC and SMIC or Intel have among their ranks companies to which they supply components, such as Qualcomm, Broadcom or Texas Instruments , so the establishment of these, as well as their logistical supports are key to reducing times, something essential in today’s society.
The United States seems to be able to hit China, but it is not going to bring it down. The Asian giant is a monster that has grown, which is extremely competitive and, above all, is led by a government that remains in power, with all that that means. The question is not who will dominate the world of semiconductors, but whether it will be MIPS or SMIC, where in this case we will have to wait another 10 years to draw conclusions.
