This podcast discusses the importance of semiconductor chips, comparing the chip-building capabilities of the United States and China. It explores the impact of the Biden administration's restrictions on China, the decline of the US market share in the semiconductor industry, and the relationship between China and the US in terms of innovation and chip manufacturing. The global semiconductor supply market share, value chain, and regional dominance are also explored.
Shortage of semiconductor chips is causing major disruptions in the automotive industry, resulting in longer lead times and reduced production of cars.
China's efforts to become a leader in the semiconductor chip market are hindered by its inability to produce advanced chips, leading to a decline in its influence in the global market.
Deep dives
The Impact of Semiconductor Chip Shortage on Automotive Industry
Due to a shortage of semiconductor chips, car manufacturers have had to increase their lead time from 3 to 4 months to 10 to 12 months. As a result, 20 million cars are expected to be taken off the conveyor belt between 2021 and 2023. The shortage has also affected the production timeline of chips, with the manufacturing process taking between 10 to 20 weeks. This shortage is not just a minor issue; it has become a major challenge in the automotive industry.
China's Dominance in Semiconductor Chip Market
China has been making significant efforts to become a leader in the semiconductor chip market. However, while China is amongst the top producers of chips, it still lacks the capability to produce the most advanced chips. The country mainly focuses on producing easy chips and lacks expertise in manufacturing the more complex ones. In terms of sales, China accounts for only 7% of the global semiconductor market.
The Global Shift in Semiconductor Chip Trade
The global semiconductor chip trade has witnessed a significant shift, with many countries pulling back their investments from China. The United States, Taiwan, South Korea, and Japan have become major sellers and buyers of semiconductor chips, while China's influence in the market has declined. This shift has resulted in China facing difficulties in accessing semiconductors and has disrupted supply chains, leading to increased semiconductor prices.
Patrick Bet-David explains the importance of semiconductor chips and how the United States and China compare in their chip-building capabilities. PBD also discusses how the Biden administration's new restrictions on China are making it difficult to build their own semiconductor chips.
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Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal Bestseller Your Next Five Moves
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