It is no secret that China is investing heavily to build a homegrown semiconductor supply chain. Pouring billions of dollars into research and development (R&D) over the last few decades, the East Asian nation wants its homegrown technology giants to have computer chip manufacturing on par with that of Western nations and their allies. As a part of the simmering trade war, the United States has tried to slow down this progress by restricting computer chip exports to the nation.
Today it looks like China has inched forward in this technological tug-of-war despite these restrictions. Smartphone maker Huawei just released a new smartphone with a 7-nanometer computer chip made by Chinese chipmaker SMIC, with many other phone components coming from local suppliers instead of Western allies.
Shares of Western semiconductor companies have fallen in recent trading days on this news, with Taiwan Semiconductor Manufacturing (NYSE: TSM) stock off 16% from recent highs. Investors are likely worried that Chinese manufacturers are going to steal customers from them. But are these concerns warranted? Let’s investigate.
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