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0 pointsrefulgentis1mo ago0 comments

This comment makes several claims that don't survive scrutiny.

"Sanctions to eliminate the competition for Micron" — The October 2022 export controls and YMTC's Entity List designation were part of a sweeping national security policy targeting advanced compute capabilities, not a protectionist carve-out [1]. Multiple allied governments (UK, Australia, Japan, Netherlands) independently reached similar conclusions and imposed their own restrictions. If this was "for Micron," it backfired spectacularly: China retaliated by banning Micron from critical infrastructure projects in May 2023, costing Micron ~25% of its revenue [2].

"Huawei sanctions done to eliminate the competition of Qualcomm" — Huawei's CFO was indicted for bank fraud related to Iran sanctions violations [3]. The Five Eyes intelligence consensus on Huawei infrastructure risk predates the Trump administration by years (flagged since at least 2012) [4]. Reducing this to "helping Qualcomm" requires ignoring criminal indictments and an entire allied intelligence assessment.

"Chinese companies were ready to take a dominant position on the SSD market" — YMTC's global NAND share didn't reach ~10% until Q3 2025, three years after sanctions [5]. In 2022 they were a small player with single-digit share. Samsung alone held ~35% [6]. "Ready to take a dominant position" is not supported by any market data from that period.

"Even Apple had decided to use the Chinese SSDs" — Apple was in an exploratory testing phase and dropped YMTC in October 2022 before the Entity List designation in December, amid political scrutiny and its own risk assessment [7]. No Apple product ever shipped with YMTC memory. "Had decided" is doing a lot of heavy lifting here.

"This shamelessly huge increase in the price of memory" — This is the most egregious misattribution. The 2024+ memory price crisis is driven by: (1) Samsung/SK Hynix/Micron massively reallocating wafer capacity to HBM for AI accelerators, which requires far more wafer area per bit than conventional DRAM [8]; (2) deliberate production cuts in 2023 after the oversupply glut (Samsung posted its worst quarterly profit since 2009) [9]; (3) structural AI demand consuming enormous DRAM/NAND capacity [10]. Chinese memory companies at single-digit market share were nowhere near large enough to have prevented Samsung and SK Hynix from chasing the vastly more profitable HBM market. That's the price driver, not sanctions on YMTC.

The monocausal "US sanctions to protect Micron caused expensive memory" narrative requires overstating China's pre-sanctions market position, mischaracterizing Apple's exploratory talks as a commitment, ignoring the documented reasons for the sanctions, and attributing a price crisis driven by AI demand to restrictions on companies that held single-digit share.

[1] https://americanaffairsjournal.org/2024/11/the-evolution-of-...

[2] https://www.bbc.com/news/business-65667746

[3] https://www.justice.gov/opa/pr/chinese-telecommunications-co...

[4] https://www.cfr.org/backgrounder/chinas-huawei-threat-us-nat...

[5] https://biz.chosun.com/en/en-it/2026/01/30/5RWQ5BS2H5H4HAYM6...

[6] https://gizmodo.com/chip-china-semiconductor-1849354820

[7] https://www.pcmag.com/news/apple-decides-using-cheap-chinese...

[8] https://spectrum.ieee.org/dram-shortage

[9] https://techcrunch.com/2023/04/06/samsung-cuts-memory-chip-p...

[10] https://en.wikipedia.org/wiki/2024–present_global_memory_sup...

0 comments

adrian_b1mo ago

> Huawei's CFO was indicted for bank fraud related to Iran sanctions violations

This is the official US justification. This does not mean that is also true.

The Huawei sanctions happened immediately after Huawei had shown their next generation CPU for smartphones, which was better than the next generation CPU shown by Qualcomm, and also immediately after market surveys announced that Huawei will become in a few months the world leader in the smartphone market, in front of Samsung.

When something like the US sanctions happens, what matters is who is the beneficiary, not which is the official explanation. The beneficiaries have been mainly Qualcomm, Apple and Samsung. The US sanctions were exactly what they needed, the only thing that could stop their competition.

The accusation of dealing with Iran and the blackmailing of Huawei by arresting the daughter of the CEO in Canada, are probably based on true facts, but they have probably been known for many years and they have only been exposed at that time in order to legally justify the sanctions, but due to the timing and consequences of the sanctions it is completely implausible than the old deals with Iran were their real motivation. After all, USA has also made deals with Iran, when they had the interest to do this, and they have not sanctioned themselves in such a way that would affect world economy in unrelated markets. When USA forces citizens of other countries to lose money by buying more expensive smartphones, because there is lower competition, how exactly does this hurt Iran?

The sanctions against the makers of memory devices did not have any credible "national security" motivation, despite the official claims.

> "Ready to take a dominant position" is not supported by any market data

I am too lazy to search now for quotations, but some time before the announcement of the US sanctions there were published prognoses for the future market share of YTMC, which was projected to grow very fast, after they had announced a new generation of more dense SSDs, which they were willing to sell at lower prices, to get market share. The fact that Apple has stopped their plans to use YTMC as supplier, a short time before the announcement of the sanctions, does not prove anything, except that the Apple management was probably already aware of this outcome.

> "This shamelessly huge increase in the price of memory" — This is the most egregious misattribution.

I agree with what you said about the present causes of the memory price increases. However, that has nothing to do with what I have said, which did not contain any misattribution.

What I have said is that if an increased competition on the memory market would not have been prevented by the US government, today we would have had more vendors and more diverse vendors on this market. In such a market, a deal like that of Altman and the other deals for exclusive contracts with the memory vendors would have had a much less impact. So great price increases would not have happened, because the other vendors would have been eager to step in and increase their market share. The memory market would have been much more stable. Now, in markets with 2, 3 or at most 4 vendors that matter, just a few exclusive contracts are enough to destabilize the market.

refulgentisOP1mo ago

I appreciate the detailed response, but I think several of your arguments actually undermine your own case on closer inspection.

tl;dr: "Who benefits is what matters, not the official explanation" is how you prove anything you want. Boeing benefits when Airbus has problems, that doesn't mean Boeing sabotaged them. And even on its own terms: Qualcomm collected royalties from Huawei on every handset sold (per their 2018 licensing deal), so Qualcomm had direct financial incentive for Huawei to sell more phones, not fewer. The "cui bono" doesn't even bono the right cui.

On "cui bono" as proof of motive:

"When something like the US sanctions happens, what matters is who is the beneficiary, not which is the official explanation" is a general-purpose conspiracy epistemology that can prove anything. Boeing benefits when Airbus has production problems, that doesn't mean Boeing sabotaged Airbus. Cui bono is a reason to investigate, not a reason to conclude.

But even on your own terms, the timeline doesn't work. You say the Huawei sanctions happened "immediately after" Huawei showed their next-gen CPU. The Kirin 980 was announced at IFA in August 2018 [1]. The Entity List designation came in May 2019, nine months later [2]. In the semiconductor industry, nine months is not "immediately after." The Snapdragon 855, which benchmarked significantly faster than the Kirin 980 in CPU and GPU, shipped in December 2018 [3]. If Qualcomm needed government protection from an inferior chip that launched earlier, that's not a very compelling story about competitive threat.

You're right that Huawei was on track to overtake Samsung in smartphone shipments. They hit #2 globally in 2019 [4]. But Huawei's strength was in price-competitive handsets in emerging markets, not in chip design threatening Qualcomm's licensing business. Qualcomm's revenue model is based on patent licensing across the entire industry; Huawei's rise in handset volume actually increased Qualcomm's licensing revenue, since Huawei paid Qualcomm royalties on every handset sold (they signed a patent license agreement in 2018). Qualcomm had financial incentive for Huawei to sell more phones, not fewer.

On "they knew about Iran for years":

You concede the Iran dealings are "probably based on true facts" but argue the timing was convenient. The actual timeline: HSBC's internal probe of the Huawei-Iran transactions began in late 2016, the DOJ investigation built on HSBC's disclosures throughout 2017-2018, and the arrest warrant was issued in August 2018 [5][6]. Criminal investigations of this complexity involving international banking, foreign defendants, and extradition treaties routinely take years. The idea that prosecutors had a ready-made case sitting in a drawer and deployed it at an opportune moment isn't how federal criminal prosecution works. Grand jury proceedings, evidence gathering, and extradition requests have their own institutional momentum and timeline.

Also: "USA has also made deals with Iran and they have not sanctioned themselves" is a non-sequitur. The sanctions against Huawei aren't for "dealing with Iran" in the abstract, they're for bank fraud, i.e., lying to HSBC about the nature of transactions to evade sanctions that were in force at the time. The US government conducting foreign policy with Iran through official channels is categorically different from a private company deceiving banks to circumvent sanctions law.

On YMTC's projected dominance:

You say there were "published prognoses" for YMTC's rapid growth. I don't doubt that bullish analyst projections existed. But even the most optimistic 2022 forecasts projected YMTC reaching perhaps 8-10% of NAND by 2025 [7], which is roughly what actually happened despite the sanctions [8]. "Dominant position" means something like Samsung's 35%. Single-digit-to-low-double-digit share, even at aggressive prices, is "credible new entrant," not "dominant position."

On Apple: You say Apple dropping YMTC before the Entity List "doesn't prove anything, except that Apple management was probably already aware of this outcome." This is unfalsifiable. If Apple dropped them after sanctions: "they were forced to." If Apple dropped them before: "they had inside knowledge." What evidence would you accept that Apple made an independent commercial/reputational risk decision?

On memory prices:

I actually think you have the kernel of a legitimate argument here, and I should have engaged with it more carefully. You're right that the memory market is a tight oligopoly with a documented history of anticompetitive behavior: Samsung, SK Hynix, and Micron have literally pled guilty to DRAM price fixing, paying $731 million in criminal fines in the 2000s, and faced renewed price-fixing allegations in 2018 [9]. More vendors would structurally improve this market.

But the distance between "more vendors would be good for competition" and "US sanctions on YMTC caused the current price crisis" remains enormous. Even in your restated version, the counterfactual requires YMTC to have grown large enough by 2024-2025 to serve as a meaningful alternative when Samsung/SK Hynix pivoted to HBM. Given that YMTC actually did reach ~10-13% NAND share by late 2025 even under sanctions [8], and prices still spiked, the evidence suggests the HBM reallocation would have overwhelmed any competitive pressure from a mid-sized Chinese entrant. The structural problem is that three companies control >90% of DRAM, and YMTC doesn't make DRAM at all, they make NAND. CXMT's DRAM operation is far smaller and wasn't even targeted by the same sanctions.

The memory price crisis is real, the oligopoly is real, and more competition would help. But attributing the current crisis primarily to sanctions rather than to AI-driven demand reallocation and the inherent fragility of a 3-player oligopoly (which existed long before any Chinese entrant) conflates a contributing factor with the primary cause.

[1] https://www.gsmarena.com/huawei_announces_the_kirin_980-news...

[2] https://www.federalregister.gov/documents/2019/05/21/2019-10...

[3] https://www.tomsguide.com/us/snapdragon-855-benchmarks,news-...

[4] https://www.theverge.com/2020/1/30/21114885/huawei-overtakes...

[5] https://thefinanser.com/2021/06/usa-v-china-or-huawei-v-hsbc...

[6] https://www.cbc.ca/news/meng-wanzhou-huawei-kovrig-spavor-1....

[7] https://newsletter.semianalysis.com/p/2022-nand-process-tech...

[8] https://www.reddit.com/r/hardware/comments/1q3qln3/ymtc_rock...

[9] https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal

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