Technology Hardware/Semiconductors:

China Presents Risks and Opportunities

August 20, 2021

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Key Takeaways

  • China’s 14th Five-Year Plan is a major issue for policymakers as the region looks for greater self-sufficiency from U.S. chipmakers and while its growing role in the electronics supply chain increases risk.

  • Contrary to other companies, AAPL will be a beneficiary amid increased political turmoil as it takes share at the high end of the China smartphone market.

  • Chip equipment makers will see heightened demand in China and new investments in Western markets, driven by greater aid from governments.

  • Traditional hardware companies are at risk to see retaliation from China, while leading edge chipmakers will largely be immune.

  • Chipmakers may once again shy away from large deals as China looks to use chipmaking as a tool against the U.S.

  • We view AAPL and INTC along with chip equipment providers as the biggest winners amid the current China/U.S. landscape. Memory companies and traditional hardware companies (HPQ/DELL) could be among the most at risk.


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