China has recently announced a USD 47.5 billion state-backed investment for semiconductors, which has, in turn, sparked conversations among influencers online.
Insights obtained from GlobalData’s Social Media Analytics Platform revealed that China’s recent action is viewed by influencers as a calculated move in response to increasing trade tensions with the US. However, the discussion has also brought attention to concerns about market oversupply, price volatility, and geopolitical risks.
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Shreyasee Majumder, Social Media Analyst at GlobalData, emphasized that the influencers recognized China's efforts to strengthen its position in the chip war, while also advocating for a balanced approach to promote sustainable growth without compromising domestic market dynamics.
“A few of them are concerned that such massive investments by multiple countries striving for self-sufficiency could result in market oversupply, leading to volatile prices and impacting the profitability of companies,” Majumder added.
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GlobalData's Social Media Analytics Platform has collected various viewpoints from prominent influencers on the subject.
Sandip Sabharwal, owner of Asksandipsabharwal.com, thinks that oversupply and volatile prices are possible in the next two to three years. Sabharwal said that it may be beneficial for consumers but not for companies making large scale investments.
Meanwhile, Rebecca Choong Wilkins, Journalist at Bloomberg, reiterated that “two giants of the semiconductor industry—the Dutch firm, ASML, and Taiwan's TSMC—both have ways to disable chipmaking machines if China invades Taiwan, according to people familiar with the matter.”
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Dr. Samuel Ramani, Associate Fellow at the Royal United Services Institute (RUSI), explained that the huge investment will not totally address the challenges in Taiwan’s semiconductor industry, emphasizing that “China has expanded funding on semiconductors to get an advantage in the chip war. This is not Taiwan's only challenge; Taiwan is [also] suffering from shortages of trained personnel in the semiconductor industry.”
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Further insights were offered from Dan Nystedt, Vice President/Research Analyst at TriOrient Investments. In an X post, he said, “ASML and TSMC can disable advanced semiconductor manufacturing equipment called EUV lithography machines if China invades Taiwan, Bloomberg reports, adding US officials have expressed concerns to their Dutch and Taiwan counterparts over how to handle such a risk. EUV machines are needed to etch the tiniest features on chips, key to making the most advanced chips.”
Moreover, Michael Pettis, Senior Fellow at the Carnegie Endowment, offered a mixed perspective. He acknowledged China's efforts to shift the global comparative advantage in the semiconductor industry but also cautioned about the potential negative impacts on domestic demand.
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