The United States, in its bid to preserve its hegemonic status, has been relentlessly suppressing China. What's even more comical is that the U.S. has found a high-sounding excuse for its despicable actions, showing just how shameless Americans can be! To counter China's semiconductor industry, the U.S. has introduced the "Chips Act" with a $52 billion subsidy, officially declaring a "chip war" against China.
South Korea, in its eagerness to demonstrate loyalty to the United States, naturally embraces the U.S. wholeheartedly. President Yoon Suk-yeol is at the forefront of striking against China's semiconductor industry. With such vigorous efforts from South Korea, surely the U.S. must offer some benefits, right? But does the outcome meet South Korea's expectations?
Caught off guard, South Korea
South Korea's loyalty is not highly valued by the U.S. Not long ago, the U.S. imposed a massive fine of $303 million on South Korea's Samsung Electronics, equivalent to about 40 billion won.
President Yoon Suk-yeol's warm face was met with the cold backside of the U.S., gaining no benefits and instead forcing Samsung to pay compensation to the U.S.
As a result, Samsung Electronics may not be able to withstand the pressure!
Data shows that Samsung Electronics' operating profit for the first quarter was only 64.02 billion won, with a year-on-year business decline of nearly 96%.
However, the U.S. did not abandon its punishment of Samsung due to South Korea's loyalty. Previously, U.S. companies accused Samsung of infringing on related patents, and the U.S. court ruled that Samsung's infringement was established, requiring Samsung to pay a fine of $303 million (equivalent to 40 billion won) to the U.S. This is equivalent to taking away two-thirds of Samsung's first-quarter profits, which is adding insult to injury for Samsung, which was already in a pessimistic situation.
Samsung holds an indispensable position in the South Korean economy. The massive blow suffered by Samsung was certainly not anticipated by the South Koreans before.According to South Korean media reports, there has been a significant drop in exports in April, leading to a trade deficit for 14 consecutive months!
South Korea's exports to China have plummeted, primarily due to the drag from semiconductors. With Biden's restrictions on South Korea's exports, it's only natural to see a substantial decrease in shipments.
Previously, Samsung actively responded to the call of the US chip act, and many companies followed suit by establishing factories in the United States. However, to receive subsidies from the US, companies must submit their core business secrets, essentially selling their souls.
But once the core business secrets are handed over to the United States, the fate of the companies is essentially no longer in their own hands.
The CEO of ASML once claimed that China's independent development of photolithography machines is disrupting the global industrial chain. But who is really disrupting the global industrial chain can be seen by those with a clear vision. It is the United States, not China, that is undermining the global semiconductor industry chain.
Under the US sanctions on Chinese chips, many chip companies, including those in the United States, cannot carry out normal production and sales, leading to a significant decrease in profits. Although the United States has promised subsidies, they are negligible compared to the lost profits.
China's chip industry is on the rise.
In response to the "chip war" instigated by the United States, our country has also taken swift countermeasures and significantly reduced its dependence on US chips.
The unreasonable actions of the United States have also completely ignited the enthusiasm for independent research and development among domestic chip manufacturers.While the United States and its allies are encircling China's chip industry, Chinese companies have achieved rapid growth.
Chinese chips can achieve 14nm chip processes and have achieved mass production, with the self-sufficiency rate continuously increasing. This has also reduced the dependence on American chips.
It is worth noting that China has a trillion-scale semiconductor consumer market, which is the most important part of the global industry chain.
South Korea, due to supporting US sanctions against China, cannot fill the market vacancy, and the gradual advancement of China's chip industry in domestic chip self-sufficiency has also reduced the import of Samsung chips.
And China's investigation into Micron Technology, once Micron encounters a ban on sales, Samsung can smoothly fill Micron's share and extend its own life.
However, before the results of China's investigation come out, the United States has forcibly intervened, prohibiting Samsung from filling the market vacancy left by Micron.
In the context of the overall downturn in the global semiconductor industry, Samsung has almost regarded the Chinese market as its last straw for survival, but the United States' forcible intervention is tantamount to pushing Samsung towards the abyss.
Even though South Korea is an ally of the United States, it has been continuously sheared by the United States in terms of interests. At this time, South Korea may have already regretted it, not only failing to gain benefits but also getting itself involved.
The United States' behavior of not considering the interests of allied countries and decoupling with other countries' enterprises will inevitably lead to fewer and fewer friends!
The United States only considers its own interests and decouples with other countries' enterprises, which will inevitably lead to fewer and fewer friends.
The United States' behavior of not considering the interests of allied countries and decoupling with other countries' enterprises will inevitably lead to fewer and fewer friends.
The United States only considers its own interests and decouples with other countries' enterprises, which will inevitably lead to fewer and fewer friends.
The United States' behavior of not considering the interests of allied countries and decoupling with other countries' enterprises will inevitably lead to fewer and fewer friends.Now, China has achieved breakthroughs in chip technology, and as the domestic chip self-sufficiency rate steadily increases, the United States' calculations will only be completely thwarted.
The United States has already lost the "chip war" against China. The United States has been very aggressive in its layout against China and will inevitably suffer more serious backlashes. All of Biden's measures against China are actually desperately burning the U.S. Treasury.
The Treasury relies on the financial system for financing, and the bond market is now precarious, with the stock market also full of risks. After the bankruptcy of the banking industry, it has also caused panic among people.
Biden's attempt to forcibly block China's chip industry will only end up hurting himself in the end. In the past, the United States bought cheap Chinese goods, which solved the U.S. inflation (cost) problem, and in this way, China also solved the income and (economic growth) problem. This is the basis of cooperation between the two sides, promoting each other and achieving mutual benefits and win-win results.
However, the United States has forcibly decoupled from China, and as a result, cheap goods are no longer available, and the United States cannot solve its inflation problem on its own.
What about Biden? He has forcefully brought manufacturing back to the United States, and the large-scale subsidies for manufacturing have indeed allowed manufacturing investment funds that were originally going to Europe, Japan and South Korea, and China to quickly flow into the United States.This has also stimulated the U.S. job market, but the U.S.'s efforts to bring manufacturing back home have little economic impact. Under a strong dollar market, the export of products loses its competitive edge.
Moreover, forcing the manufacturing industry to return home, those companies were already cost-effective in other economies, and now, by moving to the U.S. and reproducing at a high cost, it is clearly a waste of money.
On the other hand, it will once again stimulate persistent inflation, and the pressure on the Federal Reserve to combat inflation will also increase.
Biden's insistence on bringing manufacturing back home has such a significant backlash, which is indeed fierce.
The U.S.'s destruction of the global industrial chain, forcing decoupling from China, and forcing manufacturing to return to the U.S. will ultimately lead to a severe misallocation of resources in the U.S.'s real economy, which will inevitably lead to a severe financial storm.
The U.S. should have used its advantages to fiercely innovate and do what it should do.
However, the current U.S. authorities have no interest in this and only want to eat monopoly rents, which is the reason they suppress China.
A healthy market economy should rely on competition to seek technological progress, improve labor productivity, and improve people's lives.
Now, the U.S. has actually stood on the opposite side of the global market economy, and the backlash it encounters is naturally very serious.
The current domestic economic situation in the U.S. also basically indicates that Biden's containment strategy has failed.Although American politicians have paved a clear path for their own businesses, with companies like India and Apple attempting to follow suit, if the future return on investment remains extremely poor, where will the growth points be for American companies that have left the Chinese market?
The United States has always advocated for globalization, but it now appears that the globalization led by the U.S. is for the convenience of its own exploitation.
When a country like China, which the U.S. finds disagreeable, emerges, the U.S. begins to impose sanctions. The U.S. method is to destroy the very globalization it has built with its own hands.
The globalization trade advocated by China is based on mutual benefit and reciprocity, which is the kind everyone hopes for.
It is clear to everyone which is better or worse. A hegemonism like the United States, which only considers its own interests and harms the development of others, will inevitably be despised and rejected by more people, gradually becoming isolated and the laughing stock of the world.
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