President of major producers in The chip supply chain believes that companies will stop using chips in the near future. China Thanks to the U.S. new regulations, manufacturers can now manufacture their product

“The business model of producing in China and exporting abroad is no longer viable,” Hideo Tanimoto is president KyoceraHe told them the Financial Times, He said that it was still possible to manufacture for China’s domestic market, but he did not rule out the possibility. He also pointed out the worsening relationship between Washington, Beijing. “Obviously with all that’s happening between the U.S. and China, it’s difficult to export from China to some regions.”

Japan-based residents are facing problems due to newly-passed regulations KyoceraIt holds 70% of the market for ceramic parts in These are the chips-making tools. U.S. Controls, Tanimoto claims. in part, for the company’s decision to slash its forecasted full-year operating profit by 31%. 

In October 2008, the Biden administration implemented strict export control measures China, limiting the sale of advanced chips and chipmaking equipment to the country’s chip industry.

Earlier this year, Japan and the Netherlands—whose companies manufacture the equipment needed for the most advanced chips—are also moving to bar exports This technology can be used to help Chinese businesses. 

Tanimoto pointed out that Financial Times Japanese businesses are being “asked not to ship their non-cutting-edge tools,” It is clear that geopolitical conflict can also affect technology of lower quality. 

According to the company’s recent earnings reports, a decline was also attributed. in Demand for smartphones, and inflation to lower income. Kyocera reported $846 Million in Operational profit in The most recent quarter saw a decrease of 3.9% over the previous year.

Many companies are looking to move manufacturing overseas. China, in part to diversify their supply chains after Beijing’s COVID-zero policies disrupted manufacturing. Tanimoto noted that prices are increasing as well. Financial Times Chinese workers have seen an increase in their wages. Recent expansions in production by Foxconn and Apple of consumer electronics have been made possible by Foxconn and Apple. in Both India and Vietnam

Trade between countries is possible despite all the rhetoric about decoupling China And the U.S. hit a record high in In 2022 the U.S. will import $536.8 million worth of Chinese goods.

The controls China

Biden’s new chip controls are dragging down China’s semiconductor industry. Yangtze Memory Technologies Corp (YMTC), China’s largest manufacturer of memory chips, has cut its orders for some chipmaking equipment by up to 70%, according to the South China Morning Post

Semiconductor Manufacturing International Corporation China’s largest chip foundry, admitted earlier this month It is likely that the opening of one its new factories will be delayed than expected. It cited difficulty in getting high-tech equipment. 

Both SMIC and YMTC are on the U.S.’s Entity List. U.S. companies can’t sell certain advanced technologies to companies on the list without a license from the U.S. government.

Beijing is yet to take retaliatory steps against the U.S. considering Advanced technologies that are used to make advanced solar wafers can be subject to export restrictions. China Produces 97% of the components. 

Chinese officials have been increasing their funding for high-tech technologies instead, and Guangzhou was the first to do so on Monday announcing A new fund of $29 billion for investments in Semiconductors, renewable energy, and other high-tech sectors. 

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