US efforts to stifle China’s chip industry are thought to be part of a wider plan to hinder Beijing’s preparations for war.
Signs of the burgeoning conflict between the US and China can be spotted in many different places, from balloons in the sky to videos on TikTok. But nowhere is it more apparent than on the microscopic wafers of silicon, otherwise known as semiconductors.
Semiconductors, or microchips, are tiny pieces of technology that power everything from microwaves to military weapons. The industry is worth more than $580bn (£466bn), but even that figure belies their importance to the global economy. Their existence powers several trillion dollars’ worth of goods and processes; without them the global economy would shudder to a halt.
It’s therefore a source of concern to many that over 90% of the world’s semiconductors are made in the place many US officials think could be the site of the next global conflict: Taiwan.
If China were to annex Taiwan – which US officials believe could be attempted in the next decade – it, like the rest of the world, would find its supply of semiconductors massively disrupted.
Beijing wants to boost its advanced semiconductor capacity so as to be more economically resilient in the event of an invasion, but also as a means of developing its military to be prepared for such a conflict. The US, however, is using the tools of international trade to undermine these efforts.
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