The following technology market analysis is from Simon Bulleyment, IT Consultant and Director at Sibrossa.
Companies in the technology sector and others connected to it like the automotive industry could see a new wave of problems that would add to the struggles caused by the chip logistics delays. The increasing tensions between the US and China, both major players in the semiconductors field, could alter the way the sector operates.
In this regard, the US is working on limiting China’s access to top-notch chip technology in a bid to maintain an advantage. The US administration worries such advanced technology could be used to develop military uses at a time when China is engaging in aggressive diplomatic maneuvers in East Asia.
The geopolitical tensions in the region have been building up for years with China’s territorial claims irking its neighbors. But it has peaked lately around Taiwan and China’s claim on it.
Such a confrontation could hurt the performances of tech companies on both sides of the Pacific ocean. Whereas Chinese companies could see their economic activity curtailed and their prospect limited by US measures, American firms could suffer from the supply bottlenecks this might create.
As a result, companies that are heavily dependent on chips produced in China could see some production difficulties. This could be the case for some time as the industry is heavily concentrated in Asia.
At the same time, the US measures could incentivize new investments in semiconductors production capacity in other regions not subjected to these restrictions such as the US and Europe. This could change the current nature of the supply chain and how the sector operates in a significant manner.