Recruiter’s View

Pay attention to this Mile Marker:  On October 7, the Biden administration killed the Chinese semiconductor industry. 

On OCT 07, The  U.S. Department of Commerce restricted China’s ability to “both purchase and manufacture high-end chips…”

The not-so-subtle security attacks from the CCP have been a problem for years.  

The U.S. Department of Commerce took direct action, restricting American technology AND talent.  U.S. nationals were forced to choose between their jobs and their citizenship.  (Reports suggest that hundreds of Chinese-Americans resigned immediately.) 

And, just for added emphasis, the new regulations were issued five days before the Chinese Communist Party opened this year’s congress.  

Definitely an in-your-face message. 

Impact

The chip sector has been weak all year. 
Chip shortages directly affected auto production.
Predictably, the recent ban dragged stock prices lower for most chip makers. 

China’s economy was already in trouble.  With this new ban, Hong Kong’s Hang Seng Index has been cut in half, since FEB, 2021. 

Implication 

This is going to spread.
More U.S.-China splits are likely.
Some will be brutal. 

There will be spill-over.
Elon Musk, for example, can’t be thrilled about the prospects for his new Tesla plant in China. 

In fact, all international investment in China is seriously at risk.
The CCP could well seize anything it wants, whenever it wants. 

And, alarmingly, Taiwan Semiconductor Manufacturing (TSM) — the largest semiconductor company in the world — is based in, um, Taiwan.  

Is China really going to let that stand? 

Recruiter’s View 

Anyone relying on improved chip availability may be disappointed. 

Any U.S. citizen looking for work in the semiconductor industry may be pleasantly surprised. 

And anyone planning a trip to Taiwan may want to reconsider. 

-TD