Semiconductors, a strategic weapon in the economic war between the United States and China

Semiconductors, a strategic weapon in the economic war between the United States and China

Shares of semiconductor producers fell sharply in early October in Asian markets after Washington announced drastic restrictions on their chip exports to China. France 24 deciphers the strategic questions of this component, used by the United States as a weapon to curb Chinese influence.

The technological war between the United States and China has entered a new phase with the announcement on Friday, October 7, of drastic measures to limit exports of semiconductors to China. The US president, Joe Biden, intends to take advantage of the technological progress of the United States in this strategic sector to stop the hegemonic, economic and military advance of his main rival.

For his part, President Xi Jinping is trying to reduce dependence on China with the aim of becoming the world leader in the sector.

Essential to the operation of our everyday devices, as well as advanced technology in the field of weapons, these electronic chips have already been the subject of several disputes between Washington and Beijing.

Back in 2018, the Trump administration banned Chinese telecommunications company ZTE from purchasing American-designed semiconductors, bringing the company to the brink of bankruptcy before finally suspending the measure.

Since then, the Covid-19 crisis has been there, further revealing the strategic value of these chips, whose scarcity has triggered inflation and has had a lasting impact on the production of electronic products internationally.

To analyze in detail the geopolitical implications of this sector, France 24 spoke with Chris Miller, director of the Eurasia program at the US think tank Foreign Policy Research and author of the bestselling book “Chip War”.

Brussels will inject about 50,000 million euros in the semiconductor industry
Brussels will inject about 50,000 million euros in the semiconductor industry © DR

France 24: Can you explain What are semiconductor chips and how have they become so important to the global economy and everyday life?

Chris Miller: Semiconductors are tiny pieces of silicon on which billions of tiny circuits are etched. These circuits provide the computing power inside almost any device with a switch: smartphones, computers, data centers, cars, or even dishwashers. The average person interacts with dozens or even hundreds of semiconductors every day and seldom sees them.

This technology, invented in United States, has played a decisive role for the American military sector ?

America’s computing advantage was crucial during the Cold War. Since the early days of the missile race, the Pentagon has focused on applying computing power to defense systems. The first major application of the chips was in missile guidance systems, but today they are used in everything from communications to sensors to electronic warfare.

Just as anyone interacts with dozens of microchips every day, the military is critically dependent on the power and signal processing capabilities of microchips. Furthermore, as the military begins to experiment with more and more autonomous systems, its reliance on these chips is only increasing.

Do you think President Joe Biden’s decision to move more chip production to the US is a good strategy? ?

Today, 90% of the world’s most advanced processor chips are produced in Taiwan. The TSMC company is the number one manufacturer in the industry, thanks to its enormous size and extraordinary manufacturing precision. Its cutting-edge chips power everything from smartphones to PCs to data centers.

If this production were to cease due to a war with China, the cost to the world economy would be in the hundreds of billions of dollars. Given Beijing’s growing military power and Xi Jinping’s aggressive nationalism, this is a risk that has become too great for the global economy.

From this point of view, the effort to diversify areas of advanced chip manufacturing is fully justified. This explains why the United States, Japan and Europe are trying to strengthen their position in the semiconductor supply chain.

Europe is often considered to be behind in the high-tech field, but one Dutch company, ASML, has managed to carve out a place for itself in this market. What role does she play? ?

ASML produces essential machines for the manufacture of these latest generation chips. This company specializes in electronic lithography (circuit printing and reproduction technique) and has a 100% market share in the production of the most advanced machines in this field. It has honed these capabilities over the years and today is a key supplier to companies like Samsung, TSMC and Intel.

Do you think China has the means to matchr, or even surpass the United States in the field of semiconductors ?

For several years, Washington has been concerned about the national security implications of China catching up in the semiconductor sector, particularly in light of Xi Jinping’s “Made in China 2025” initiative, which is a top priority. maximum.

China has invested tens of billions of dollars in government chip development programs. These programs have made it possible to make substantial progress in certain areas, especially in design.

Overall, however, China lags far behind the capabilities of Taiwan, the United States, and South Korea, especially in manufacturing. In addition, all of China’s chip production now relies on machine tools imported from abroad, mainly from the United States, the Netherlands and Japan.

Article translated from the original, in English, by David Rich

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