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5 Chip Stocks At Risk In Expanding Trade War

Xelor

Xelor

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It is easier to induce national governments to discriminate against foreign producers than to defend the interests of domestic consumers.
-- George W. Stocking​


Major U.S.-based semiconductor companies such as Intel, Qualcomm and Texas Instruments are highly reliant on global supply chains in which China is a major player. Chips designed in the U.S. but manufactured in China, as well as chips made in the U.S. but sent to China for final testing and assembly, will be hit by a 25% tariff that the Trump administration has announced on semiconductor imports from China, per the Journal. Scheduled to take effect on July 6, this will be a tariff on U.S. chipmakers' own goods, the Semiconductor Industry Association argues.

By raising their costs, this will reduce the competitiveness of U.S.-based semiconductor firms. Meanwhile, China now has added impetus for spurring the growth of its own semiconductor industry into a major competitor to U.S. firms in design as well as fabrication. This, in turn, would diminish the future market potential for U.S.-based chipmakers in China, and eventually elsewhere in the world.

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All those Trumpkins who've been keen to have Trump levy tariffs had better earn decent salaries....Though weren't Trumpkins also the ones expecting Trump to create jobs for them? If these tariffs create new jobs, they had better pay well. Have you looked at the price of in-America-made products and compared them with comparable in-China/Mexico-made ones?

People say they wouldn't mind paying a little bit more for "Made in America." The thing is that the "more" that they'll have to pay isn't "a little bit."

Who's "Made in America" going to most adversely affect? People who are most price sensitive.
 
the first semiconductor fabrication facility I worked at was in May, 1989; Hitachi Semiconductor US, in Irving, Texas.
At that time the Hitachi fab was a brand new, $250 million facility that was yet to produce 'full process' wafers.
A comparable facility would now cost a minimum $2 billion to construct & to equip.
An ex Intel manager, Jim Hartman, was the Hitachi fab manager & Jim was the man that hired me; thanks Jim.
At the time the Japanese were still the big dogs on the block producing DRAM & SRAM chips.
The Irving facility was in place to reduce tariffs on Japanese made chips, because the chips were produced in the US.
I went on to work at several Dallas, Tx. area fabs; Texas Instruments, Honeywell, and Dallas Semiconductor which I was working with the Yield Enhancement Group for four years.

Here we are 29 years later and the industry has seen major production shift from Japan, to South Korea, and then to China.
Certain countries have & do produce more/less certain types of circuits but even this has changed to some degree over time.
At one time Cypress Semiconductor CEO Rogers stated he would NEVER have a production facility outside of the US. Well, as we all know that didn't last long.
Cost of production is the overriding factor for CEOs when it comes to manufacturing most any product, no matter what the product being produced is.

Trump may be a 'business man' but Trump is in over his head as POTUS, and Trump will surly 'screw the pooch' with his attempts to do whatever the Hell he is up to. I'm not at all confident that even Trump himself even knows what the Hell he is up to.

The semi companies mentioned above will most likely weather the storms put in place by Trump's errant ways, as these companies have endured for decades; all be it at the cost of employees, and of course, share holders.
This will happen again; employees & share holders will no doubt lose big time with Trump's whiny baby agenda.

Make America Great Again ....................... haha ..........
 
As foreign Nations realize that many sanctions imposed by the USA are about the same as tariffs and target specific markets. Energy markets in particular but not the only markets. The Petrodallar is a market control mechanism. The Big Money Central Banks are all USDollar oriented. I have stated repeatedly on this board that the USA 's Full Spectrum Dominance also includes Economic Dominance. That dominance is beginning to crumble and the sanctions and tariffs and trade wars may be the final nail in the coffin. As the China Daily recently wrote "the wise man build bridges, and the fool builds walls." An old Chinese quote from a book of wisdom. I hope I'm wrong.
/
 
Paul Krugman wrote a long piece last weekend that outlines the disruption that will occur if Trump doesn't backoff on his trade war.

Thinking About a Trade War (Very Wonkish)

SNIPPETS:

There are, I think, three main questions:

1. How high might tariffs go?

2. How much would this reduce world trade?

3. How costly would the trade war be?

...
there’s a pretty good case that an all-out trade war could mean tariffs in the 30-60 percent range; that this would lead to a very large reduction in trade, maybe 70 percent; but that the overall cost to the world economy would be smaller than I think many people imagine, maybe a 2-3% reduction in world GDP.

This last calculation, however, doesn’t take account of the disruptive effects of deglobalization: some people would actually gain, but a lot of people, very much including large groups and many communities in the U.S., would take big hits, especially in the short-to-medium run.
...
Still, there are several fairly recent efforts: Ossa finds that a trade war would, under his favored assumptions, lead to tariffs of nearly 60 percent, while Nicita et al, using slightly different assumptions, estimate a rise in tariffs of 32 percentage points from current levels.
...
[How much will trade will decline?]My back of the envelope calculations suggest that we might be looking at around a 70 percent fall in trade for a wide range of cases. I’d be happy to be corrected by trade modelers if that’s wrong.
How big are the costs?

...To do this right, we should use one of those computable general equilibrium models I mentioned above. These suggest substantial but not huge losses – 2 or 3 percent of GDP. What I’d like to do is offer a bit of intuition about why those losses aren’t bigger, then explain why a trade war would nonetheless be highly disruptive.
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While PK considers a 2-3% loss in GDP "not huge" that's a lot, IMHO.
 
MTAtech said:
Paul Krugman wrote a long piece last weekend that outlines the disruption that will occur if Trump doesn't backoff on his trade war.

While PK considers a 2-3% loss in GDP "not huge" that's a lot, IMHO.
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One question for ya. Has Krugman, EVER been right? Sure he has but I've never seen a guy keep his job, less perhaps sports analysts, for as long as he has when he's been wrong waaayyy more than he is right. LOL


Tim-
 
Xelor said:
It is easier to induce national governments to discriminate against foreign producers than to defend the interests of domestic consumers.
-- George W. Stocking​




All those Trumpkins who've been keen to have Trump levy tariffs had better earn decent salaries....Though weren't Trumpkins also the ones expecting Trump to create jobs for them? If these tariffs create new jobs, they had better pay well. Have you looked at the price of in-America-made products and compared them with comparable in-China/Mexico-made ones?

People say they wouldn't mind paying a little bit more for "Made in America." The thing is that the "more" that they'll have to pay isn't "a little bit."

Who's "Made in America" going to most adversely affect? People who are most price sensitive.
Click to expand...

If I was China I’d just keep scaring people in the hope democrats get back in and it goes back to normal and destroys the USA as a major economic power where they set the prices of our exports for us.
 
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chuckiechan said:
If I was China I’d just keep scaring people in the hope democrats get back in and it goes back to normal and destroys the USA as a major economic power where they set the prices of our exports for us.
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I am confident China is glad you are not China.
 
MTAtech said:
I won't hold my breathe waiting for you to backup your assertion that PK's been wrong "waaayyy more than he is right."
The Economic Argument Is Over — Paul Krugman Has Won
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From 2013, nice! Well, a whole lot has gone on since then, and despite the claim made by the author, the argument was never settled, not even close, and it's arguable that in 2013 we were STILL in the slowest recovery in American history! Krugman was wrong, then, and he's wrong now. Unlimited check book spending during recessions does not help in the long run, it hurts, and ONLY a fool and his dog believes otherwise. The debt is still growing and some argue has already reached the point of no return where in some foreseeable future the entire world economy will collapse under the weight of the debt, and either war or a collective solution will reconcile the future for all the Earth's inhabitants. Meaning, the world will eventually absolve itself and reset the economy starting at near zero for everyone. Those in debt below the threshold will have all debt waived and those above it, like progressive taxation, will have a portion of their debt waived as to maintain the integrity of world banking, and monetary health. The world will adopt a single currency and the days of currency manipulation will be gone. Free trade will truly be free. Massive spending by main street's of the world and private citizens will make the reset seem like only a small stain on the worlds history book. Citizens, armed with money and zero debt will save the world economies, and credit will be once again something used only in emergencies, not like it is today. Saving money will be popular once again!

Of course everyone has to go along with it, or it's war, and that might very well be the course, but make no mistake, the world economy is a ticking time bomb!


Tim-
 
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