October 11, 2023

China Goes on the Offensive in the Chip War

The Biden administration’s plan for the United States to control the future of computing was never going to be easy, but at least it was meant to be straightforward: a strategy of denying China access to a limited group of advanced semiconductors while upgrading chip capabilities at home. In August 2022, President Joe Biden signed the CHIPS and Science Act to boost U.S. manufacturing of advanced chips. Two months later, the White House introduced sweeping export controls designed to restrict China’s ability to buy or build the most sophisticated computer processors. Together, these moves aimed to position the United States favorably in a struggle over what is quickly becoming the world’s most consequential industry.

China’s expansion in semiconductor manufacturing is poised to hurt one other aspect of the American semiconductor ecosystem: chip design.

For years, semiconductors have been at the heart of the global economy, and nowhere more so than in China, where chip imports exceed oil imports. Microchips of varying complexity are ubiquitous in everyday devices, but the ultra-advanced chips targeted in Biden’s export controls are unique in their outsize impact. Crucial to expanding cutting-edge supercomputing and artificial intelligence, the chips in question would have played an indispensable role in building out China’s future AI ecosystem, bringing considerable benefits to China’s economy, weapons systems, and surveillance apparatus. By leveraging these chips’ highly concentrated manufacturing pipeline—disproportionately located in countries friendly to the United States—the Biden administration hoped to cut off China’s access to them altogether.

Read the full article from Foreign Affairs.

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