Speaker 1: Well, shares of semiconductor companies foul, with the industry selling
Speaker 1: off globally. This is after fresh US curbs on China's
Speaker 1: access to American technology, joining US now to discuss religion.
Speaker 1: Who Bloomberg's Intelligence senior technology analysts. So we've got tighter
Speaker 1: restrictions now on the export of some chips which are
Speaker 1: used for artificial intelligence and super computing. So what are
Speaker 1: the details of these new measures from the US and
Speaker 1: what do they aim to do? Sure, so, thanks for
Speaker 1: for having me on. So so the couple of things
Speaker 1: right there. There was a ban on the shipment of
Speaker 1: AI chips and high performance computing ship and we're talking
Speaker 1: about the ultra high end chips that uh that are
Speaker 1: supplied by Video, A m D and and Intel. Um
Speaker 1: they will uh their US is trying to block the
Speaker 1: sale of those And we kind of got hint of
Speaker 1: that about about a month ago when in Video and
Speaker 1: A m D both provided a k warnings about that.
Speaker 1: And we don't see a big impact on sales yet,
Speaker 1: but it's yet to be seen how the US will
Speaker 1: implement that. The second big thing that I think investors
Speaker 1: need to be concerned about is more along the lines
Speaker 1: of not being able to sell equipment to manufacture high
Speaker 1: end chips to to Chinese entities. And that's UM more
Speaker 1: along the lines of trying to slow down the development
Speaker 1: of these chips UH domestically in China. UM again, UH
Speaker 1: you know there there was a soft barring of this
Speaker 1: equipment sold uh to China. As it is there. There
Speaker 1: isn't any sail to that right now. But this somewhat
Speaker 1: lays the groundwork of officially not selling that equipment to
Speaker 1: to the Chinese. We can get into the risk of retaliation. Certainly,
Speaker 1: that was something that Bernstein pointed out today with the
Speaker 1: move on the part of the Biden ad ministration to
Speaker 1: prevent China from getting kind of this cutting edge technology.
Speaker 1: But are any of these chips manufactured in Taiwan? Well,
Speaker 1: if we think about from from the smaller geometries tens
Speaker 1: and smaller, about eighty of those chips are are made
Speaker 1: in Taiwan, right and uh as we get even to
Speaker 1: the advanced cutting edge technologies, UM, Taiwan holds that now
Speaker 1: the Chips Act that the US past UM just recently, UH,
Speaker 1: that that's supposed to diversify the supply. So the US
Speaker 1: lessons dependency of Taiwan. But even even that isn't going
Speaker 1: to make a great impact, at least in their term.
Speaker 1: There's some geopolitical implications here that we need to be
Speaker 1: cognizant of as well, in terms of China want to
Speaker 1: reunify with Taiwan. Um and and you know, I I
Speaker 1: I think um one of these uh, some of the
Speaker 1: measures of the U S implement that is trying to
Speaker 1: uh try to halt any type of Chinese China Taiwanese reunification.
Speaker 1: And now keep in mind, I think it is a
Speaker 1: big risk if there is a reunification, because I don't
Speaker 1: think that's Taiwanes want to be reunified. And and uh
Speaker 1: if if there is a halt in a chip production,
Speaker 1: um uh, it hurts everybody also, including the Chinese. So
Speaker 1: I think it's more of a turn than anything else. Yeah,
Speaker 1: and God forbid, we're dealing with a situation where there
Speaker 1: is an invasion on the part of the mainland forces
Speaker 1: on Taiwan. We were talking yesterday about a report that
Speaker 1: the Biden administration has a contingency planning for a potential
Speaker 1: assault that would include evacuating some of the highly skilled
Speaker 1: chip engineers from from Taiwan. But when you look at
Speaker 1: companies that manufacture the technology G that is used in
Speaker 1: in manufacturing these computer chips. I'm thinking of advanced micro
Speaker 1: devices just one name. How is a decision like this
Speaker 1: going to impact those companies? Well, advanced micro devices relies
Speaker 1: on t SMC to manufacturers chips for them. Uh So
Speaker 1: if anything, if if t SMC comes down, it will
Speaker 1: be a crippling effect to the chip industry in its entirety. Now,
Speaker 1: if we're talking about companies who supply the equipment to
Speaker 1: manufacture the chips itself, someone like an s mL or
Speaker 1: or someone like an SML um uh you know, then
Speaker 1: we are going to see some negative impact um for
Speaker 1: for those companies as well because of the man will
Speaker 1: potentially dry up if there is a China Taiwanese invasion.
Speaker 1: So let's talk about the potential impact on Chinese manufacturers
Speaker 1: that require these chips. So what are the implications for
Speaker 1: them and what's the likelihood of retain revalviation from China? Sure? So,
Speaker 1: so from from the negative impact is that some of
Speaker 1: the advanced chip manufacturing it will be slowed. We know
Speaker 1: that the Semi Charastry Manufacturing Corps NICK has been trying
Speaker 1: to attain some of that equipment for quite some time now,
Speaker 1: and they've been advancing to sixteen nanometer technologies and then
Speaker 1: now they can't manufacture these chips. Similar for the domestic
Speaker 1: Chinese domestic memory manufacturing as well. UH, they've been trying
Speaker 1: to grow their China manufacturing, but with some of these
Speaker 1: restrictures in place the memory market, the memory development will
Speaker 1: also slow as well. Now now, Paul, in terms of retaliation, UM,
Speaker 1: I know that the US has been really really focused
Speaker 1: on the advanced ship making UM capabilities. The issue is
Speaker 1: is that a couple of things China manufactures about the
Speaker 1: electron on good globally. We have a report out there
Speaker 1: that we think they could potentially diversify away from China
Speaker 1: to about the only reliant. But now if the Chinese
Speaker 1: wants that can actually shut down the manufacturing UH domestically
Speaker 1: to supply whether it's your iPhone or your PC. UM,
Speaker 1: think about this. A hundred percent of the made in
Speaker 1: China and a hundred percent of pecs made in China.
Speaker 1: That's amazing down Yeah, well, Juno, thank you so much
Speaker 1: for being with us. See he is a Bloomberg Technology
Speaker 1: senior tech analysts joining us here on daybreak. Asia