Impact of shifting US policy on global chip technology market

The recent introduction of new rules by the United States to limit shipments of chips and chip technology to Chinese manufacturers has sent shockwaves through the global chip market. In an exclusive interview with CNBC Africa's Julius Bizimungu, Paul Becker, CEO of International Economics Consulting, shed light on the far-reaching implications of these restrictions. The Biden administration's move restricts manufacturers of advanced computing chips from supplying Chinese producers, affecting not just the chips themselves, but also other technology products reaching China. The broader ban on international restrictions prohibits companies worldwide from selling chips for artificial intelligence or supercomputing in China made with US technology. This move has global repercussions, disrupting supply chains and causing ripple effects across industries. Electronics, particularly smartphones, laptops, and automotive sectors, heavily reliant on chips, are expected to face supply shortages and price hikes. The restrictions may also impact the plans of original equipment manufacturers (OEMs) who were considering shifting to in-house chip production for self-reliance. However, achieving complete self-sufficiency by 2025 as projected by some analysts seems challenging due to the complexity of semiconductor production and global supply chain dynamics. The escalating demand for chips driven by emerging technologies like cloud computing and machine learning is expected to persist, exacerbating the shortage issue. The US's aim to control the chip market through initiatives like the US Chips and Science Act, which allocated $52 billion for the industry, could lead to a consolidation of chip production within the US. This consolidation may have geopolitical ramifications, especially in regions like Africa, which heavily depend on electronics imports from China. As the US tightens its grip on chip production, other countries like Taiwan and Europe may emerge as key players in the global chip market. However, the tensions between China and Taiwan over access to US technology could further complicate supply chain dynamics and disrupt global trade relationships. In conclusion, the US's stringent restrictions on chip technology are reshaping the global market dynamics, creating challenges and opportunities for key players in the semiconductor industry.