SEMICONDUCTORS are among the most important resources that sustain the modern world. They are present in our computers, our phones, our cars and various electronic devices that were made for at least the last ten years.
So it’s no surprise that one of the main issues of America and China’s trade dispute involves the global semiconductor market, with some analysts framing the situation as a “Chip War.”
But I would argue that there is no war. What is actually happening is that the US and China are attempting to localize their respective semiconductor industries to make them independent of global disruption. Sure the US may put out sanctions, and the Chinese may steal foreign IP, and call that a war, but at the end of the day, what both are trying to do is closer to a divorce than a war.
Now, how successful both countries will be in the end is another matter. The US is paying a lot of money to bring back semiconductor manufacturing, with some plans to establish new facilities. The problem is that it will take a lot of time and money, and renovating an autarkic logistics semiconductor supply chain may not be as simple as it looks.
On the other hand, China has reported that its scientists have invented this or that ground breaking chip. However, its chip companies have yet to show any progress.
A good example is Tsinghua Unigroup, a large tech holding company that filed for bankruptcy in 2021. China has other companies, and there are some who say that China’s universities have unlocked the next revolutionary chips but it’s important to know the difference between reality and propaganda.
China has posted a lot of news about their breakthrough semiconductor research, but it will take time to bring those from research to the market.
In any case, regardless of how successful the US and the PRC are at creating their own internal industries, one thing is certain. Both are making sure that they won’t be interlinked./PN
