3 ms·

will this slow down the US innovation rate?

adrian_b 3y ago
It will not slow innovation directly, but it may have indirect effects. There are companies which develop leading edge products that depend on lasers, LEDs or gallium nitride power transistors. If China really cuts the exports of gallium and germanium, then such companies might have to reduce the volume of their production and to raise prices, which would lead to lower sales. Lower sales would cause lower profits, so maybe less money will be spent on research. Gallium and germanium are widespread, but their extraction processes are extremely expensive. A shortage would rise their prices, which would stimulate the creation of new mines and refining plants. However, that would require a few years. China has just been hit by a new wave of US sanctions that will make difficult for them to continue the production of some semiconductor devices, but they should also be able to become self sufficient in a few years.
- imtringued 3y ago
  As far as we know these companies won't refuse to produce in China and hand over IP.
  - genmud 3y ago
    They will if the US threatens them with sanctions or requires export licenses and they see their value in the US market being greater than the CN market. ASML is a really good example.
  - DiogenesKynikos 3y ago
    That's not generally a requirement of operating in China. It's much more of a trope than actual reality. Many, many large foreign companies have operated in China for decades, without losing their IP.
kylehotchkiss 3y ago
I could see china restricting even more in the future which could cause some effects in chip prices which is when we’d start seeing price increases or availability issues. This Black Friday might be a good opportunity to upgrade any older tech around the house as the deals could be the best in a while/for a while with the drop off in shipping prices earlier this year and the financial issues some retailers have had. Who knows, next year we could see price bumps on a lot of tech because TSMC’s output has to reduce for whatever reason

It will not slow innovation directly, but it may have indirect effects. There are companies which develop leading edge products that depend on lasers, LEDs or gallium nitride power transistors. If China really cuts the exports of gallium and germanium, then such companies might have to reduce the volume of their production and to raise prices, which would lead to lower sales. Lower sales would cause lower profits, so maybe less money will be spent on research. Gallium and germanium are widespread, but their extraction processes are extremely expensive. A shortage would rise their prices, which would stimulate the creation of new mines and refining plants. However, that would require a few years. China has just been hit by a new wave of US sanctions that will make difficult for them to continue the production of some semiconductor devices, but they should also be able to become self sufficient in a few years.

imtringued 3y ago
As far as we know these companies won't refuse to produce in China and hand over IP.
- genmud 3y ago
  They will if the US threatens them with sanctions or requires export licenses and they see their value in the US market being greater than the CN market. ASML is a really good example.
- DiogenesKynikos 3y ago
  That's not generally a requirement of operating in China. It's much more of a trope than actual reality. Many, many large foreign companies have operated in China for decades, without losing their IP.

kylehotchkiss 3y ago

I could see china restricting even more in the future which could cause some effects in chip prices which is when we’d start seeing price increases or availability issues. This Black Friday might be a good opportunity to upgrade any older tech around the house as the deals could be the best in a while/for a while with the drop off in shipping prices earlier this year and the financial issues some retailers have had. Who knows, next year we could see price bumps on a lot of tech because TSMC’s output has to reduce for whatever reason