"China’s rapid expansion in the traditional chip sector has been a 'game-changer' since the outbreak of the tech war. If this expansion trend continues, China will gain strategic autonomy" – He Pengyu
This piece corrects the 'Nanometer Myopia' that plagues Western analysis.
From ChinArb perspective, the historical parallel to Japan is the killer insight. Japan didn't start with Mainframes; they started with Calculators. They used high-volume, low-margin applications to build the Cash Flow Engine that eventually funded their dominance.
China is replicating this with EVs and IoT. By dominating the 70% of the market that is 'Legacy', they are creating a Self-Sustaining Ecosystem.
The danger for the US isn't that China copies Nvidia today (that's hard); it's that China makes Nvidia irrelevant for the vast majority of industrial applications by controlling the Base Layer of the global economy
Great analysis, thank you for the article and translation!
Thanks for the nice comment Mark.
This piece corrects the 'Nanometer Myopia' that plagues Western analysis.
From ChinArb perspective, the historical parallel to Japan is the killer insight. Japan didn't start with Mainframes; they started with Calculators. They used high-volume, low-margin applications to build the Cash Flow Engine that eventually funded their dominance.
China is replicating this with EVs and IoT. By dominating the 70% of the market that is 'Legacy', they are creating a Self-Sustaining Ecosystem.
The danger for the US isn't that China copies Nvidia today (that's hard); it's that China makes Nvidia irrelevant for the vast majority of industrial applications by controlling the Base Layer of the global economy