China's fab capacity concentrates on Huawei, analyst sees DeepSeek consolidating compute
teortaxesTex · x · 2026-11-07
teortaxesTex argues a power-law effect applies to Chinese semiconductors too: most fab capacity goes to Huawei and two smaller players. Provincial protectionism has stranded compute in poorly-run datacenters, but he expects consolidation.
His earlier thesis: DeepSeek — with healthy financials, guaranteed compute sufficiency, strong publishing and culture — will brain-drain lesser labs and outcompete them for marginal compute, reaching Liang Wenfeng's "two big, two small" equilibrium.
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