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  • Ernie Diaz

When the Chips Are Down…

Experienced snackers know that a bag of chips is only 40% full. The rest is stale air. So why do western pundits fret about China’s supposed lead in chip sufficiency?


Surely it can’t be all the PR about grand government-backed initiatives for high-tech independence. Such proclamations and projections of great leaps forward are so much motivational talk, straight from the PRC playbook.


In reality, look no further than the collapse of Wuhan Hongxin Semiconductor Manufacturing. Over-leveraged, legally challenged, and beset with public-private paralysis, the company is rumored to be closing shop and transferring its critical gear to other plants, with not a chip made.


“The quest for chip capability is as urgent as ever,” says Jimmie Jeremejev, “especially cutting edge 7 nanometer chips. But Hongxin had to import Dutch machines to undertake the project.”


“Anyone phased by China’s nationalized approach to chip production is discounting the room for cooperation at the peril of lost opportunity,” comments Edward Lehman. “European players in the space, especially, have an open door to integrating horizontally with China’s chip effort, while the top-down issue works itself out.”

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