US Could Be Handing Key Chip Market to China, Warn Analysts

As the Trump administration attempts to choke off exports of strategically important computer chips to China, experts say the effort might well backfire, fueling innovation at Chinese firms that could help them seize the world semiconductor market.

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"What's actually happening is that the US government right now is handing China a big win as it tries to get their own chip business going," said Mr Jack Gold, principal analyst at J. Gold associates.

"Once they're competitive," he warned, "they'll start selling around the world, and people will buy their chips."

When that happens, he added, it will be difficult for US chipmakers to reclaim lost market share.

Silicon Valley semiconductor star Nvidia and its US rival Advanced Micro Devices (AMD) expect big financial hits from new US licensing requirements for semiconductors exported to China, they notified regulators last week.

Nvidia expects the new rules to cost it US$5.5 billion (S$7.2 billion), while AMD has forecast they could sap as much as US$800 million from the company's bottom line, according to filings with the US Securities and Exchange Commission.