Semiconductors, the cornerstone of modern technology and a significant industry globally, have become the subject of a heated struggle between China and the United States. This conflict is not about market share or tariffs, but about security, as the two nations compete to secure their position as the leading producer of advanced microchips.
The story of the semiconductor industry’s transformation and the resulting global power struggle begins in the 1950s with the invention of the first semiconductor chip. Chris Miller, author of Chip War, explains how the US government played a crucial role in the development of the semiconductor industry, which started as a means to ensure access to the most advanced chips for its guidance computer systems in NASA’s spacecraft and missile system.
In the late 1960s, chip companies realized they could make a lot more money by designing chips for civilian products like corporate computers, which led to the outsourcing of manufacturing and assembly to countries with cheaper labor, including Japan, Taiwan, South Korea, and Hong Kong. These countries were US allies, and the US government encouraged them to deepen their ties while also banning them from sharing technology with the Soviet Union and China.
Rise of Asian Semiconductor Powerhouses: Toshiba, Samsung and TSMC
However, by the 1970s and 1980s, Toshiba in Japan and Samsung in South Korea started designing and manufacturing chips that rivaled the Americans’, while Taiwanese company TSMC became an expert in chip manufacturing in the 1990s. This marked the beginning of a shift in power as these countries began investing in their own chip companies and eventually became leading players in the semiconductor industry.
Today, China is the world’s largest market for semiconductors and is investing heavily in the development of its semiconductor industry, with the goal of becoming self-sufficient and reducing its dependence on foreign technology. This effort has been met with resistance from the US, which is increasingly concerned about the security implications of China’s rise as a semiconductor power.
The ASML Case: A Battle of Interests Between China and the US in the Semiconductor Industry
The case of Zongchang Yu, a former engineer at ASML, the world’s only company capable of making the most advanced semiconductor chips, highlights the extent of the struggle between China and the US. Yu left ASML to start two new companies, one in the US and one in China, and was later accused by US and ASML lawyers of recruiting other ASML engineers to his US company and bringing with him stolen information about ASML’s machine, backed by the Chinese government.
In conclusion, the global struggle for semiconductor supremacy is a multifaceted and complex issue, driven by national security concerns, geopolitical tensions, and technological advancements. The US and China’s ongoing rivalry highlights the significance of semiconductors as a key determinant of nations’ power on the world stage and the importance of maintaining technological superiority in this field.