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