In mid-April, the impact of the U.S. authorities' tariff policy on China's electronics industry was finally revealed. The current situation of Shenzhen's Huaqiangbei market may be one of the epitomes of this storm. The following follows the comprehensive perspective of China Exportsemi to peel off the cocoon.
Ⅰ The current situation of Huaqiangbei market
According to a report by the Financial Associated Press on April 15, many stalls in the Huaqiangbei market have suspended the quotation of popular chips such as CPUs and graphics cards, and some stalls have even closed their doors. A stall owner said helplessly: "Now everyone is waiting and seeing, sealing the inventory, worried that the price will skyrocket and plummet." Behind this phenomenon is the market's anxiety about the future.
In addition, according to IT House, corresponding media reporters learned from a number of domestic chip manufacturers that customer inquiries have increased after the tariff change. IDM in the United States may be the most affected by the tariff war, and it is expected that the price of some chip channels such as storage and MCU will rise.
Figure: Huaqiangbei chip quotation stagnation, stall closure, dealer closure to deal with price shocks
Ⅱ Impact on U.S. chip companies
Zhang Junya, a senior analyst at the LeadLeo Research Institute, pointed out that the relevant tariff policies mainly impact IDM companies with wafer factories in the United States and IC design companies that rely on American wafer fab foundries, such as analog chip manufacturers Texas Instruments TI, Onsemi, and Analog Devices, logic chip manufacturers Intel, memory chip manufacturers Micron, and a few IC design manufacturers Qorvo. In the short term, it will lead to a suspension of orders and a backlog of inventories, and if it is not possible to circumvent tariffs by shifting capacity, it may be forced to increase prices. In the long run, it may force U.S. companies to move wafer capacity outside the U.S., but the cost of relocating production lines is extremely high.
According to a report by the Securities Times on April 15, the semiconductor products of IDM manufacturers such as Intel and Texas Instruments are likely to increase in price, but the magnitude depends on their cost absorption capacity and market competition pattern.
Ⅲ Impact on domestic chip companies
In stark contrast to the plight of American chip companies, domestic chip companies have ushered in new opportunities. According to the Financial Associated Press, a number of listed electronic components companies said that due to the relatively low proportion of the chip business in the United States, the actual impact of the tariff war will not be too great. An executive of a listed distribution company revealed, "When it comes to products of American origin, downstream customers have begun to communicate with us about the feasibility of (domestic) substitution."
From the perspective of subdivisions:
Analog chip field: According to the analysis of Huatai Securities, analog chips mostly use the IDM model, and half of the top ten analog chip companies are American companies. Texas Instruments and ADI account for more than 20% of their revenue from China, and if the tax is calculated according to the 125% tariff, the end customer cannot afford it, or the order is transferred or the price pressure is transmitted to Texas Instruments, which is expected to further accelerate the introduction of domestic analog companies, and the bidding pressure in the industry may be reduced. At present, the simulated localization rate is about 20% water level, and there is a large space for domestic substitution.
CPU field: With the price of U.S. products rising due to tariffs, domestic CPUs are expected to gradually expand their share in the domestic market. From the perspective of the domestic chip market pattern, Loongson, Huawei, Feiteng, Hygon, Zhaoxin, Sunway and other manufacturers are on the candidate list.
GPU and AI field: Domestic companies such as Biren Technology and Moore Threads have begun to launch products that benchmark against NVIDIA, but due to the domestic advanced process technology, there is still a certain gap with international leading products.
Ⅳ Impact on the global chip market
The U.S. tariff policy has changed the trade pattern of the global chip market and impacted the supply chain. Chips are the core components of the global electronics industry, and the instability of its market may affect the entire electronics industry chain and affect the development of many related industries, such as consumer electronics, communications, automobiles, etc. In addition, the tariff war may also lead to the reshaping of the competitive landscape of the global chip market, prompting countries to reevaluate and adjust their chip industry strategies.
Ⅴ Future Trends
The rise of domestic chips: This event will further stimulate China's independent research and development and innovation in the field of chips, the government and enterprises will continue to increase investment in the chip industry, and the technical level and market competitiveness of domestic chips are expected to continue to improve. In the future, the share of domestic chips in the low-end market will be further expanded, and gradually penetrate into the high-end market.
Restructuring of the global industrial chain: The restructuring of the global chip industry chain will be accelerated, and enterprises will pay more attention to the diversification and resilience of the supply chain. On the one hand, chip manufacturers may transfer some of their production capacity to other countries and regions to reduce their dependence on the United States; On the other hand, countries will also strengthen the construction of local chip industries and improve the self-sufficiency rate in the global chip market.
Trade negotiations and cooperation: Although the current tariff war has led to the instability of the chip market, in the long run, countries still need to resolve trade disputes through trade negotiations and cooperation and restore normal order in the global chip market. In future trade negotiations, the chip industry will become one of the important topics, and countries will negotiate on tariffs, market access, intellectual property protection and other issues to seek common development space.
To sum up, the U.S. tariffs have caused turmoil in the chip market in China Qiangbei, and domestic chip companies are facing new opportunities and challenges. In the future market competition, domestic chip companies need to seize the opportunity, accelerate technological innovation and industrial upgrading, improve product quality and performance, to meet market demand, but also actively respond to challenges, strengthen cooperation with international enterprises, and jointly promote the development of the global chip industry.
