The US and China are competing in many fields. From military to economy to technology, the clash is strong. This clash is more visible in the field of semiconductors.
Recently the stakes in the semiconductor battle have reached new heights. This month, Taiwan Semiconductor Manufacturing Company declared that they would increase their capital expenditure.
Similarly, Samsung Electronics had signalled a heavy increase in semiconductor spending. In the US, Intel announced that it would invest $20bn in building two chip factories in Ohio.
But the companies are not the only players. There are strategically-minded governments to assert their technological superiority.
In this highly technology-driven world, semiconductors are the pillar. It is used in a variety of items, from smartphones to medical devices to F-35 fighter jets. Because of this, there is a clash over the semiconductor supremacy between the nations.
Nowhere is it more visible than in the geopolitical struggle between the US and China. The US is doing everything it can to stop China from achieving technological hegemony and slowing its growth.
The battle to rule the semiconductor business is transforming into the modern-day industrial equivalent of the 19th-century Great Game, where Britain and Russia clashed over Central Asia.
Both clashes are focused on securing resources and supply chains and at the same time pinning down allies and depriving rivals of strategic assets.
This time there is a focus on boosting intellectual capital, strengthening industrial capacity and pioneering the latest technology.
This week, Gina Raimondo, the US commerce secretary, urged Congress to pass the Chips Act. This would unlock $52bn in subsidies to domestic chip manufacturing.
Meanwhile, Ursula von der Leyen, the president of the EU, is also pushing similar legislation to double their semiconductors production to 20% of the global total by the end of the decade.
Across the channel, the British government is also thinking about the sale of the chip designer Arm Holdings to the US giant Nvidia on national security grounds.
On the other side of the field is China, which in 2020 spend more money on importing semiconductors than they spent on oil imports. They are squeezed hard by the US constraints on exporting advanced chips to China.
That has made China declare a “whole-of-society” priority to achieve technological self-sufficiency. Lavish funds have made China the biggest buyer of semiconductor manufacturing equipment.
The Chinese experts say that, they will make semiconductors important by realigning their commercial interests with national security imperatives.
It’s a confidence built on the vast domestic market, US-trained technologists and a flood of funding, and the government’s shift from consumer internet to strategic technologies.
But increasing regulations and technological lack to create more advanced chips is a backlash for China.
But China will overcome it by deploying existing technologies effectively. With the US and China closing in, the winner will be decided by basic state capacity and technological capability.
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