China and the United States are trying to take over Taiwan’s semiconductors. In the background a stylized electrical panel
Like China, the United States sees AI as the key to military and economic power in the 21st century.st century. Republicans and Democrats in Washington DC are concerned about the pace of China’s progress. In fact, the running joke on Capitol Hill is that the only thing they can agree on is the Chinese threat.
To this end, Congress recently passed the CHIPS Act and the Executive Branch has implemented trade controls to prohibit technologies it deems essential to China’s AI development. Even if this desire is rational, it is unlikely to work in the medium to long term, and it will only increase geopolitical tensions.
America’s technology strategy is based on seven realities that, even if true today, are unlikely to all be true tomorrow.
Semiconductors require one of the world’s most complex supply chains. Although the governments of these regions are now aligned with the United States, this is not always the case. Most of the key choke points are in regions that trade more with China than with the United States.
1. Europe’s central role in semiconductor trade
One of the major obstacles in China’s path to progress in semiconductors is access to advanced photolithography technology and testing equipment, particularly from ASML in the Netherlands. U.S. negotiations over trade controls with the Netherlands required intense pressure – pressure that may not be possible in the future. Actually, Dutch politicians are already questioning the deal.
As China’s economic ties with Europe, particularly with Germany, deepen. These expanded trade relations could potentially lead Europe to reevaluate its alignment with U.S. priorities. This could accelerate if U.S. European security commitments change, such as a reduced presence in Ukraine or a reduced role in NATO. desires that current presidential candidates have suggested.
Such developments could lead to a realignment of economic and security interests between Europe and the United States, with profound implications for technological containment of China.
2. Japan’s shifting alliances
Japan is the other key supplier of semiconductor production and testing equipment. Today, Japan’s strategic alignment with the United States is anchored in a deeply rooted security alliance. However, Japan becomes less and less dependent on the US Navy for its security.
If the United States limits its engagement with other security partners, Japan may well prioritize its economic interests over its security alliances. The United States is a significantly smaller trading partner than China, which already accounts for more than a quarter of Japan’s total trade. This ratio will likely become more pronounced over time.
Beyond these key choke points, there are a number of questionable assumptions that must remain true for the United States to maintain its technological dominance:
3. Taiwan at a crossroads
Taiwan’s semiconductor prowess is a pillar of the industry, but like Japan, it must perform a delicate strategic alignment dance to balance its largest trading partner, China, and the United States. United.
Xi ordered Chinese military to invade Taiwan by 2027. Today, the invasion of Taiwan and the subsequent destruction of its semiconductor facilities would be a disaster for all nations. As China moves closer to parity with the technologies the United States and its allies have denied it, the destruction of Taiwan could have a far greater impact on the United States and Europe than on itself.
4. A technological leap forward
The current technological superiority of American and Taiwanese semiconductor production, especially in the field of advanced chips, is an important factor in the global balance of power. However, the slowdown in the ability of advanced manufacturers to increase transistor density – the end of what is known as Moore’s Law – creates an opportunity for China to narrow the gap.
Although it is said that the West is more than a decade ahead, a few breakthroughs could change the dynamic. China continues to advance as an innovator, as evidenced by the 7 nanometer chip in Huawei’s new phone. This ability to bring products from the laboratory to the market could change the race for technological dominance.
5. Viability of next generation technology
Today, Samsung, Intel and TSMC are at the forefront of next-generation 3D semiconductor technologies, but Chinese competitors like SMIC are fast adopters.
These are the most complex devices ever built and there is no guarantee that non-Chinese companies will succeed in scaling up production. If increasing complexity and costs cause technological progress to slow, the jump might not be as vast for a government-funded player, giving Chinese companies a more achievable goal.
If the West maintains its lead in high-end chips, in many applications China will be able to make up its deficit by using a greater volume of less energy-efficient equipment.
6. Clean energy production
Generating a single image in Midjourney uses as much electricity as charging your smartphone. A typical ChatGPT session requires 16 oz. (500 ml) water to cool the servers.
By 2030, data centers, the lifelines of AI, should use at least as much electricity as the country of Argentinamaybe much more.
It will be difficult for America and its allies to power these data centers without support from China. China produces ¾ of the world’s solar cells and is the first to market 4th generation nuclear technology.
7. The resource equation
The United States relies heavily on Chinese companies for materials critical to semiconductor production, such as gallium and germanium. Decoupling resources is difficult. It will take over a decade if it is possible, according to Jensen Huang, founder of NVIDIA. This is a potential choke point for US semiconductor production and China has already started controlling exports of key materials.
The most obvious response from Western countries is to deny access to the advanced refinement capabilities on which the Chinese depend. As long as this remains a trade dispute, the United States and China may be able to continue their efforts, but at a slower pace. If tensions escalate, a broader withholding of strategic resources could be devastating for both countries.
It’s a mistake to poke the panda
Giant panda bear showing its teeth, eating bamboo
Given this level of uncertainty about the future, And Given the likelihood of near technological and economic parity, it seems unwise for the United States to seek conflict. The memories of the injured are long.
This kind of short-sighted nationalist agenda echoes the decisions that brought the United States into conflict with Japan and into World War II.
In the 1930s and 1940s, the United States engaged in a strategy of withholding resources from Japan in order to slow its expansion. Japan saw this as a strategic threat and responded by bombing Pearl Harbor. Just as Japan did, China will take whatever steps it deems necessary to prosper.
Unlike Japan in 1940, China’s challenge today is that its economy is overproductive. Japan is an island country, but China’s land and mineral resources are vast. In the event of escalation, its capabilities, resources and economy will continue to grow.
Treating China as a strategic threat, rather than a strategic counterpart, is a short-sighted approach to political governance. We share a small planet and limited resources. While the United States should assert its right. It makes no sense to limit strategic cooperation and increase rivalry. Our world depends on it.