Chip design involves a lot of upfront investment cost that's recuperated by selling at volume. If the US allowed Huawei to make its own chips, Huawei's chips ea

Chip design involves a lot of upfront investment cost that's recuperated by selling at volume. If the US allowed Huawei to make its own chips, Huawei's chips eat into the global sales volume, profits, and future R&D funds of Qualcomm. If the US simply banned Huawei from buying Qualcomm chips, Qualcomm still takes a hit on its sales volume and profitability and nothing has changed on the US side of the books. But if the US bars Huawei from getting its chips manufactured and gives it no choice but to buy from Qualcomm, Qualcomm's sales volumes stay elevated and it is able to recoup its R&D investments. Ultimately, a big part of the US/China tech war is due to the structure of high tech R&D, which is to sink a massive amount of capital at the beginning in hopes of getting a global monopoly and being able to sell to everyone in the world to recoup that initial cost. While China was a consumer and assembler of US technology, the US could rest easy knowing that it had a captive global market for high tech products to fuel its future R&D costs and stay ahead. But when China starts developing and selling alternatives, there's not enough buyers and sales volume to support both Chinese and US cutting edge tech companies, and some of them will go under in the decades following. We saw this happen with Taiwan's TSMC becoming the only real vendor of the latest semiconductor process nodes after decades of US fabs falling out of the race. But Taiwan is under US military influence, China isn't. Ultimately, this is about keeping China on a leash as a consumer instead of a producer of technology as much as possible because there isn't enough customers and capital in the world for two high-tech R&D superpowers to siphon at the same time.