I am surprised to see SMIC and Hua Hong's shares decline. One would think semiconductors fabbed by these companies would be used almost exclusively for the Chinese market. In theory, tariffs/sanctions should have no impact on their business.
this post was submitted on 11 May 2025
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The problem isn't SMIC's products. It's who they sell to and the prospect of THEIR products getting impacted by tariffs. These are meat-and-potatoes components with low margins, not just the high-end processors.
If Walmart and Target stop ordering Elmo dancing dolls, singing greeting cards, and consumer blood pressure monitors, SMIC business could eventually take a hit.
June is also when most Chinese manufacturers start gearing up for mass-producing products for next Christmas. These things don't turn on a dime.
Are the microcontrollers used in the Elmo dolls; I think that's the key question.
Better question: are they used for products intended for the US market?