Analyst: It is difficult to find alternatives to the standardization and process system capabilities of China's manufacturing industry

Dec 01,2022

Jonathan Goldberg, founder of D2D Advisory, an analysis agency, said recently that although the pipeline is long and difficult, American companies now seem inevitably to reduce or completely eliminate their dependence on China.

Goldberg believes that the chip products actually digested in China account for 10% - 15% of the global demand. With the process of domestic substitution, no matter what American companies do in China, the share of the latter will decline. On the supply side, American manufacturers have certain dependence on China in the sealing and testing process. But in general, other countries have enough capacity to make up for most of the vacancies. Goldberg believes that American companies will have many choices.

Goldberg pointed out that the most difficult thing to find alternatives is the ability of the standardization and process system of China's manufacturing industry. He also revealed that Apple plans to completely transfer most of its product production to regions outside the Chinese Mainland in the next seven years, which is also quite long for Apple, which may be the world's best company in electronic product supply chain management, especially for others.

Goldberg also said that the unilateralism of the United States is hard to be recognized by its allies at present. The "sudden attack" of the new BIS October rules was criticized by many impacted allies.

Goldberg suggested that the United States should use more leverage to leverage its allies, such as imposing sanctions on Chinese panel manufacturers. Such sanctions have nothing to do with the interests of the United States, but they can please East Asian allies. In addition, sanctions on Chinese car chips can slow down the development of Chinese car manufacturers and will be welcomed by Germany.