Who is winning the US-China chip war?
The battle for global supremacy between the United States and China comes down to one sector: Semiconductor chips. That contest is "entering a new phase," Bloomberg said, as the American government pumps $100 billion into subsidies for tech firms and China builds dozens of new facilities to strengthen its own supply chain. China is the "largest global supplier" of older "legacy chips," but the Biden administration is aiming to use its investment to help control nearly 30% of the overall chip market by 2032.
China isn't standing pat. Beijing has authorized its own "massive barrage" in the so-called "chip war," Forbes said. It created a new fund, valued at $47.5 billion, to help make China "self-sufficient in producing and advancing semiconductor technology" and even to "assume a dominant role" that will allow it to sideline Taiwan — a chip-manufacturing powerhouse that also sits at the center of U.S.-China tensions. The stakes are high. Maneuvers in the chip war "will reverberate in every high-tech boardroom and war room worldwide."
What did the commentators say?
Right now the electronics industry depends on a "fragile semiconductor supply chain" that stretches from Europe to Asia, said The Economist. "The chip war threatens to bludgeon it." A world "divided into two semiconductor blocks" in the United States and China would try to replicate and replace the current "cat's cradle of relationships" that makes possible our current tech-driven lives. That won't be easy. And it's frustrating to tech executives around the world. "Many in the industry understand America's desire to thwart China," but they're not so sure the aim is noble: It looks to them more like America is acting on a "selfish desire to preserve its economic dominance."
Chinese leader Xi Jinping "needs the smallest and fastest chips to fulfill his dream of transforming China into a technology powerhouse," Michael Schuman said at The Atlantic. Despite its lead in legacy chips, the country needs America and its allies to share technology to make progress in more advanced semiconductor manufacturing. That "tells us a lot about the true balance of power between the U.S. and China," Schuman said. His verdict: "China is losing the chip war."
What next?
"Now comes the hard part" for U.S. manufacturers, said The Wall Street Journal. Money from the government is giving the sector a "big boost" and putting the American chip industry "back on a more stable path." But there are limits to what can be accomplished — other countries in Europe and Asia are also increasing their investment, "underscoring how the global race to produce more of the most advanced semiconductors is expanding and accelerating."
That race has produced a worldwide total of $1.2 trillion in commitments to semiconductor manufacturing outside of China, said Quartz. If all that manufacturing doesn't take place in the United States, one expert said, there will still be benefits. "The more capacity we build outside of China, and frankly, outside of Taiwan, the better off we'll be in reducing China's ability to threaten us and reduce our dependence on China."
