CHINA is a big and fast-growing consumer of computer chips, used in an array of products that include smartphones, personal computers, communications equipment and server systems.

Chinese customers accounted for about 34 percent of global chip sales in 2018, which totaled $468.8  billion, according to the Semiconductor Association.

CHINA'S importance to American chip makers is managed by the fact that many chips are sent to China to be assembled to make gadgets for customers elsewhere, such as iPhones that the Taiwan based Foxconn makes for Apple in China.

Roughly 60 percent of semiconductors sold are connected to the Chinese-based supply chain, the consulting firm KPMG said.

Chip makers hope the latest barbs between China and the United States are mainly aimed at gaining leverage in trade talks, not permanent changes in how the countries will have to do business.

''Each volley in the US-China trade dispute causes semiconductor companies to wince and financial markets to wobble, while pushing us further from a deal that would benefit both economies, the two largest in the world,'' John Neuffer, the Semiconductor Industry Association's president and chief  executive  said recently after news of China's ''unreliable entities list.''

''We urge both sides to avoid further escalations, get back to the negotiating table and reach a high-standard, enforceable and sustainable agreement,'' Mr. Neuffer said.

Apple's exposure in China is broad. The company assembles most of its products there, and the and the region of greater China, is its No.3 market, after the United States and Europe.

In its latest quarter, Apple earned $10.2 billion in China, Taiwan and Hong Kong, or about 18 percent of its total revenue.

Apple did not respond to requests for comments.

The iPhone makers dependence on China was vividly demonstrated late last year when Chinese consumers began balking at buying the latest model of the smartphone.

Total revenue for the region that includes China dropped 25 percent in the fourth-quarter to $13.2 billion.

One of Apple's responses was to cut the price of its cheapest phone in China. The situation seems to have stabilized. Other tech behemoths have found little traction in China.

''Silicon Valley braces against retaliation''.

The honor and serving of the latest operational research on Trade Tariffs and Intellectual Property Rights, continues. The World Students Society thanks authors David Streitfeld and Don Clark.


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