Trade War Has Damaged U.S. Chip Industry in Ways a Deal May Never Fix
Not all the news is dire. Many American chip makers are experiencing strong sales to customers other than Huawei. Over time, they also expect to pick up more sales from Huawei’s rivals as those companies increase market share. And some analysts predict a new trade pact with Beijing in coming months.
“I really think it’s an 85 percent probability,” said Pierre Ferragu, an analyst with New Street Research.
Nor do all semiconductor veterans see lasting harm from the China sanctions. T. J. Rodgers, who led Cypress Semiconductor for 34 years before leaving the company in 2016, said the impact would be temporary and was a reasonable price to pay if China could be compelled to trade more fairly.
“I don’t think it’s a big deal,” Mr. Rodgers said. “There is always somebody to whine.”
Mr. Lidow built Efficient Power, starting in 2007, around the idea of making chips with gallium nitride, a semiconductor widely used in LED lights, on silicon wafers to handle jobs like converting voltage in automotive radar, wireless battery charging and infotainment systems. The company, which uses factories in Taiwan, originally projected it would get 70 percent to 80 percent of its revenue from China, he said.
Mr. Lidow said it still might reach that goal eventually, but he expects revenue from China to decline about 20 percent this year because of the trade tensions.
One major sign of trouble, he said, is that some customers in China have backed away from plans to ask Efficient Power to customize its chips to meet their specifications. They are still buying some standard products, he said, but have decided to avoid technical relationships that would cause a longer-term dependence on his company.
Customers in China believed “up to now that the U.S. democratic process was a force that couldn’t be compromised by an individual,” Mr. Lidow said. But not now, he said.
“You can never regain that confidence,” he added.