September 16, 2020

WELL, GOOD: America Is Going to Decapitate Huawei.

This being the New York Times, naturally it’s a bad thing:

Access to chips is crucial to any tech company — and Huawei has admitted it is already running out. Without chips, “What products can we still make?,” a Huawei employee has asked. The answer: not much. Fearing further pressure from the United States and seeing little hope for the future, some of Huawei’s top employees have already left the company. Huawei insists that it will soldier on. But it is hard to see how the company’s main products — like 5G equipment, network gear, smartphones and cloud computing services — will survive without access to chips.

China’s leading chip manufacturer, SMIC, is scrambling to build chips as small as 40 nanometers — billionths of a meter — without American technology. This might sound small, but today’s cutting edge is five nanometers. Even if China’s race to “de-Americanize” production at 40 nanometers succeeds, it will have built a chip as cutting edge as a flip phone.

Much as Beijing would like to, hardly any industry analysts expect China to wean itself off American tech soon. There’s just no way to create an entire industry from scratch, especially one that requires producing at the scale of nanometers. Beijing has no choice but to buy an estimated $300 billion worth of chips from abroad this year, more than it spends on any other product.

Huawei’s digital decapitation is a shocking display of American power. At the whim of the American president, any other Chinese tech company could suffer such a fate. Imagine if a foreign power could do the same to Google or Amazon.

Well, they can’t — and Trump aims to keep it that way.

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