7nm, the new apple of discord
Despite the U.S. government's best efforts and sanctions, China seems to have secured access to cutting-edge microchip technology. Launched in August, Huawei's Mate 60 Pro uses Chinese microchips with 7nm engraving, way below what their technology is supposed to be able to achieve (finer engraving means denser and more powerful microchips).
This resonated as a small bomb in informed communities as a geopolitical win for China, signaling that if this technology is already available for consumer products, their defense might even be ahead (think satellites, guided missiles, drones, etc). While the Dutch ASML was supposed to hold a global monopoly on such technologies, China is introducing a new game-changing parameter in the global tech playfield.
It might not be a primary concern in your day-to-day work within an innovation department, but the ongoing Cold War tensions between the two countries have far-reaching consequences. The main one is that the Chinese market's disconnect from the global consumer economy is now 100% engaged.
Whether you're into consumer or B2B technology, this giant market's window of opportunity is closing down. If by 2025, you're still relying on your sales in the country as the most significant contributor to your EBIDTA, you might not be toasted yet, but you'll be in proper danger.
Philippe MEDA
Can I have a "I told you so" moment?
Also, don't feel safe if your business doesn't rely on technology. The recent Huawei success with their new smartphone is at the expense of the iPhone. With or without 7nm microchip technology, it says loud and clear that the Chinese consumer is favoring more and more Chinese companies over foreign ones, however iconic your product might be.
Locally, Huawei is the new Apple, BYD the new Tesla, and you should start asking who's the new Dyson, Nike, or Louis Vuitton.
Philippe MEDA
The early (loud) signals were already there more than a year ago for non-tech markets!
The world has changed.
Adapt.
To be clear, I don't think non-Chinese companies should flee this market, even if controlled disengagement is necessary. But it's a critical time to rethink your positioning, roadmap, and how to reinvent a new value proposition for this market that doesn't rely on Western brand culture and past legitimacy.
Innovation is changing the market.
When the market changes by itself so drastically, the only real opportunity is trying to leapfrog above and beyond.
