The most important point, for me at least, from the work highlighted today published in the East Asian Economic Review (Dec. ’20) by Chad P. Brown of the Peterson Institute for International Economics and CEPR is how murky the global semiconductor industry is.
The main point of the article though is to show how little interest the U.S. semiconductor complex has today in the fight it finds itself in, unwittingly, with China.
This is in marked contrast to the 1980s when the same industry was leading the charge against what was believed to be an unfairly competing and predatory Japan [Sound familiar?]; and then, as now, U.S. players de facto control the industry.
In fact, the industry has been a U.S.-centric show all along as the table below extracted from the piece highlights.
The author describes how the industry has developed from the first U.S.-Japan tension and highlights how different today’s issues with China are. In large part because the world is a very different one from the 1980s.
What’s left unsaid, but clear, is the U.S. has become an unreliable partner and this will surely stimulate not only foes but friends alike to de-emphasize reliance.
The analyst concludes by wondering if the U.S., by holding this problematic metaphorical soap lightly, might have been better off than squeezing hard with the near-certainty that ultimately that’ll result in it popping from its grip?
The second and final point I took away is what a multi-dimensional problem this is and therefore anyone claiming clear or definitive insight, unless they’re prepared to load their work with a lot of caveats, is most likely a fraud or, at best, delusional. Whether they’re aware of this or not.
For some issues there are no tweet-able answers; this would be a good example.
You can access the full read via this link The Politicized Semiconductor.
Happy Sunday.