It's the old, old 'Manager's Dilemma': Do we 'buy-built' or do we 'roll our own'?

The Chinese were very happy to 'buy-built' from the US. It was win-win. The US semi manufacturers had a very large market to sell to, and the Chinese saved money on the huge costs of setting up their own semiconductor industry.

So now the Chinese have been forced to 'roll their own'. That will take a little time and money, for sure. But ... the US manufacturers have lost the biggest market in the world and will very likely go under, especially when their previous client undercuts them using their newly-built fabs and takes over the markets the US manufacturers used to sell to as well.

You know the US textiles, paper products, home appliance, earth-moving, etc, etc, industries that have disappeared? The US semiconductor industry is going to go the same way.

I’m assuming that sanctions like these are intended to bite over the long term. The real test for China (and U.S. foreign policy) will be in 30 or 40 years - are they competitive with Western technology in 2065? Or will they stay stuck in the late-2010’s?

I’m sure that the State Department will be referencing their old Soviet playbook carefully, hoping to see the same result play out again.