A Case Study Of The Impact Of The Sino-US Trade War On GigaDevice,A Listed Company In The Semiconductor Industry

On March 23,2018,the US President Trump stated according to the "301 Investigation" that he would impose an additional 25% tariff on related Chinese products,which kicked off the Sino-US trade war.On the surface,the "301 Investigation" is aimed at the current situation of the Sino-US trade deficit,but actually aims to curb the rise of China's advanced manufacturing industry.The US tariff policy and technological blockade against China have hindered the development of "Made in China 2025" to a certain extent.This article analyzes the impact of the Sino-US trade war on Zhaoyi's innovation,and provides a reference for other high-tech companies in my country to deal with the US technology jam.This paper selects Giga Device,a leading company in memory chip design in my country,as a case,and uses literature research,event research,comparative analysis,financial analysis and case analysis to analyze the impact of the Sino-US trade war on Chinese semiconductor companies.This article first sorts out the theories and related literature on trade friction,economic policy uncertainty and corporate innovation,and secondly describes the background of the case,involving the history of the Sino-US trade war,the process of domestic semiconductor substitution in my country,and Giga Device.Basic information and other background information are introduced,and then case analysis is carried out,including analysis of the impact of the Sino-US trade war on Giga Device based on industry comparison and the Perspective of Corporate Finance on the Changes of Corporate Operating Performance,as well as the research and development investment and innovation of Giga Device before and after the trade war.Key content such as comparative analysis.The thesis draws the following main conclusions: First,in the face of the impact of the Sino-US trade war on the semiconductor industry,stock market expectations have undergone a relatively drastic adjustment in the short to medium term.Using the event research method,it is found that in the [-10,20] event window interval,the semiconductor industry overall obtains a significantly positive abnormal return.In the [-10,60] event window interval,the overall semiconductor industry abnormal return drops to around 0.However,In a longer time window of [-10,90],a significantly positive abnormal return was again obtained.These empirical results reflect that the market has experienced optimistic-pessimistic-optimistic adjustments towards domestic substitution,negative impacts,and government support policies,and finally increased rational expectations for the country to introduce more supportive policies and enterprises to increase R&D investment,and market sentiment tends to be optimistic;Second,Giga Device's operating performance after the trade war has significantly improved compared to before,reflecting that leading semiconductor companies have significantly benefited from the acceleration of domestic substitution.In 2019,when the trade war became more and more intense,the company's operating income and net profit showed substantial growth compared with 2017 and 2018,and most of the financial indicators that reflect profitability and solvency,such as current ratio,have also shown significant improvement;Third,Giga Device has responded to the impact of the trade war by increasing R&D investment,and its innovation capabilities have been significantly improved.Compared with 2017 and 2018,The company's research and development expenses increased significantly in 2019,Invest a lot of money to develop more advanced flash memory chips,and obtained more innovative output such as patents,which will help to further accelerate the domestic substitution.Take steps to consolidate the leading position in the industry.This article enriches the literature related to the trade war through case analysis,verifies the theory that high-tech companies respond to economic policy uncertainty by increasing R&D investment,provides evidence for my country's semiconductor industry to accelerate the process of domestic substitution,and provides investors with regard to the industry The investment strategy provides a certain reference,and the overall has a certain academic value and policy value.