I think that's actually the key reason. China accounted for 40% of chip sales from US companies. Cutting that off is absolutely catastrophic. Meanwhile, this also spurred China's domestic industry which is already dominating legacy chip sales globally, and will likely soon start competing in bleeding edge chips as well. So, not only have these companies lost their biggest market, but now they also have stiff competition. The whole chips sanctions scheme achieved the exact opposite of the intended effect.

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