When the chips are down…
The Chinese government has just told the country’s biggest carmakers, such as BYD, Geely and SAIC to source their chips from local manufacturers, rather than relying on foreign-made chips, in order to reduce dependence on increasingly constrained foreign technology and create demand for a market it is pumping huge amounts of money into.
China’s dilemma is that while its technology, particularly in the case of EVs, increasingly dominates a growing number of markets thanks to strong domestic demand and very low costs, many of its products still depend primarily on US technology.
The differences between the two countries are increasingly evident: while growing demand for EVs in China is putting traditional carmakers out of business and turning their factories into zombies which now send their products to Russia to offset their losses, in the United States the EV market is around 10% of the total and growing slowly, which speaks volumes about consumer awareness there, as well revealing how uncompetitive most of its manufacturers are, with the obvious exception of Tesla.
An EV is a computer on wheels, to the point that traditional consumer electronics manufacturers such as Xiaomi are now making cars. Obviously, this means that the components of an automobile increasingly resemble those used in consumer electronics products, and that the decision as to…
