“Chip War” remains an important domain US-China competition. This clearly applies during the Biden administration, with semiconductor investment becoming the focus of the marquee law. And the emphasis on semiconductors and their competition with China remains under the Trump administration. The field is front and center Ministry of CommerceThe newly announced US investment accelerator.
Still, despite this consistent prioritization, Washington risks going the wrong way in the chip war. Framing of Washington's semiconductor competition misunderstands China's positioning. In particular, the United States risks neglecting the upstream foundation on which all integrated circuits are being built, and neglecting China's growing stranglehold against that foundation.
Billy Bean said Auckland athletics “we couldn't do the same thing the Yankees do,” and he was hoping to win. China has taken that advice to heart.
Beijing's industrial, science and technology policies prioritize the semiconductor sector. Beijing also operates this prioritization according to a practiced and well-documented playbook. Beijing supports the state company investment Direct funding for grants, research and development, leveraging international relationships Get it Foreign technology and human capital. This playbook already allows China to catch up with international leaders Mature node It's not a high-tech semiconductor value chain, but still an important area Packaging and testing Integrated circuit products.
But while the playbook may be well documented, its specific priorities, and the threat they pose to the US is not.
First, the US continues to effectively blind the non-trivial, asymmetric semiconductor subsectors that Beijing is doubling to dominate next-generation capabilities. Wide band gap semiconductor and Photonics.
Second, China prioritizes developing control over semiconductor materials and other upstream elements of the value chain, and is now vertically integrated on the foundations it controls. Together, these campaigns create asymmetric strategies that grab the gap between US policy and capabilities.
The default US approach to high-tech competition begins with a crown gem at the forefront of research and development, focusing on (for example, the “nanometer” size of chip function and transistor density becomes increasingly smaller). However, such an approach is similar to assuming that batting averages are the only important indicator for building a baseball roster. And even after Billy Bean's “moneyball” revolution and the emergence of alternative asymmetric logic, he refuses to be upset from that assumption. On the base.
In contrast, Beijing has taken a “money ball” approach to the chip war.
Bean expected to win, saying that Auckland's track and field “we couldn't do the same thing the Yankees do.” China has taken that advice to heart. China's semiconductor policy prioritizes segments such as broad bandgap semiconductors and metrics such as market share and vertical integration. And now Beijing is hoping to win.
For example, considering strategic values and corresponding resources, China is dedicated to wide bandgaps or third generation semiconductors (e.g. Silicon Carbidegallium nitride, and Indium lining). These semiconductors are fed to emergency downstream applications, such as new energy vehicles, communications and data centers needed to power artificial intelligence applications. And Beijing recognizes that the field is relatively vulnerable. That its international competitors do not prioritize semiconductors with broad bandgap in any formidable way. Here is the area to pass.
And in this sector, more generally, China is positioned to overtake through vertical integration that begins upstream of the value chain. China is the main global source gallium It is necessary for gallium nitrification third generation semiconductors. This upstream advantage gives the cost and process benefits of China's downstream champions as well as the advantages of developing and expanding third-generation semiconductor manufacturing.
For example, Telecom giant Huawei has investment Through the corporate venture arm at Silicon Carbide epitaxial wafer company Tianyu Semiconductors. Vertical integration, such as Huawei, also promotes the leverage that China enjoys more than foreign companies and countries. December 2024.
The new fault lines Beijing is creating in the semiconductor war are now clear. US trade representatives have recently been held Public Comments Hearings as part of a section 301 investigation into Chinese conduct, policies and practices targeting superiority in the semiconductor industry.
Participants at the hearing included industry leaders who felt they were bringing the unfair competitive pressures of China's industrial policy closer. Others warned that Beijing was allowing it to conquer the solar power department a decade ago, as it uses the same approach in semiconductors. These testimonies emphasized that USTR's full power and advancement of the authorities is the first step needed to reset competitive dynamics and give us a level playing field against China's non-market playbook.
However, government defense could be “too little, too late” as China is already heading towards a full sector advantage. The US should also place it before the curve. The US must begin investing in not only technical glamour and glamorous, but also in the semiconductor sector, which is important to the market. And the US should also start using its market and narrative strengths Shaping Semiconductor fields, types, and applications are important in a way that coincides with US strengths tomorrow.
This does not mean imitating China. Rather, it means that it is intentional about the strengths that the United States is cultivating and protecting. And that means working to shape the game of tomorrow, now.
Editor's Note: This article was originally published by RealClearDefense and is now available via RealClearWire.
