October 4, 2023No Comments

The tension between China and the US also has an impact on the technological world

Author: Francesco Cirillo - U.S. Team

Washington and Beijing have planned strategies to increase semiconductor production with the advent of Artificial Intelligence. For this reason, Washington is somewhat concerned about China's chip production capabilities; the concern increased after the unveiling of the new Mate 60 Pro smartphone by Huawei. The chip component of this product is unique: in fact, semiconductor companies in Beijing and the People's Republic produce them entirely. US analysts think this demonstrates Beijing's technological capabilities and China's ability to become independent in technology production.


It is crucial for many companies, particularly Nvidia, to maintain a steady relationship with the People's Republic; this is a different view for the US government. To slow the growth of the industry, especially the development of the artificial intelligence field, the White House, Congress, and the defence and intelligence apparatuses should implement a containment strategy in the supply chain of the semiconductor industry. The New York Times states that China has used artificial intelligence tools, in particular, to pursue disinformation actions. This, according to Microsoft researchers, indicates that Beijing is eager to use generative AI to produce images and disseminate them online to apply disinformation actions.


For Beijing, one of the ways China could obtain the resources to compete with the US in that area is through the technology race. In a recent report translated by the CSIS (Political Bureau of the Central Committee of the CCP, 2023), At the Seventh Collective Study Session of the CCP Central Committee Politburo, Xi Jinping Emphasized Comprehensively Strengthening Military Governance and Using High-Standard Governance to Promote High- Quality Military Development [习近平在中共中央政治局第七次集 体学习时强调 全面加强军事治理 以高水平治理推动我军高质量发展]. Interpretation: China (originally published 2023), a working group of the Political Bureau of the Central Committee of the Communist Party of China, outlines guidelines for the integration of HiTech tools into the Chinese armed forces.

Source: https://www.pexels.com/it-it/foto/luce-blu-e-rossa-dal-computer-1933900/


Beijing recently announced the launch of a new approximately USD 40 billion investment fund intending to support the industrial growth of technology companies. The contention between the People's Republic of China and the US has also affected the artificial intelligence sector. The US is trying to impose restrictions on US companies operating and selling technology products to Chinese companies to hinder China's access to the industrial chain.


The Semiconductor Industry Association has stated that China will purchase chips and semiconductors worth around $180 billion in 2022 and only a few companies, including Intel, Nvidia and Qualcomm, have a significant relationship with Beijing. These companies are the only ones authorised by the US authorities to sell chips for Huawei's smartphones. In an economic and technological competition that Washington hopes will limit China's growth and development in the HiTech sector, further trade conflicts could also hurt US companies themselves.

September 28, 2023No Comments

Taiwan: What’s Next?

For our first Webinar of the 2023/24 season, we had the pleasure of hosting a great team of experts on Taiwanese affairs: Dr. Dafydd Fell, a distinguished Professor at SOAS University and the Director of the SOAS Centre of Taiwan Studies, and our very own ITSS researchers Sandra Watson Parcels and Ho Ting Hung (Bosco).

Our guests navigated the complexities of Cross-Strait relations, the upcoming Taiwanese elections, and the future of the semiconductor industry.

December 26, 2022No Comments

The Microchip War

Author: Francesco Cirillo.

The geostrategic rivalry between China and the US is affecting the semiconductor and integrated circuit industry.

In recent months, Washington has implemented a clear strategy to contain Chinese geo-economic expansionism, to prevent Beijing from gaining access to semiconductor manufacturing technologies. The technology war between Washington and Beijing has now reached the WTO. A few days ago, Beijing filed a request with the World Trade Organisation, asking it to analyse the restrictive policies imposed by the United States on the export of hi-tech products. This has not stopped companies operating in the sector from moving to protect themselves. First of all, Amazon started to design a new microchip aimed at PCs, with the aim of integrating semiconductor production in-house. In this technology war, other companies are also moving. Nvidia and TSMC have started to design new products for the industry.

Nvidia, as reported by Reuters, has presented a project for a new advanced microchip (called A800), capable of overcoming security controls concerning restrictive rules on the export of high technology to the People's Republic of China. The strategy pursued by TSMC is different. The Taiwanese company, after opening a production plant in the United States, is planning to design new advanced chips to meet Apple's needs. But the companies' business strategies have to cope with the technology war between China and the US. The Biden administration, following in the footsteps of Donald J. Trump's administration, has implemented tools to contain China's geo-economic expansion and prevent it from gaining access to advanced technologies in semiconductor manufacturing. In this scenario, Beijing has started to move. According to the Reuters agency, Beijing has decided to inject some 143 billion dollars into the industrial sector to support its companies. According to rumours, the five-year plan should cover the entire production chain process (from design to production). 

Image Source: pixabay.com

For the Chinese government, this economic aid package is part of its strategy to decouple its economic sector from that of the US, reducing its dependence on Washington in technology sectors. While China is one of the largest exporters of rare earths, it has a strong dependence on the US for hi-tech products, which are essential for its military modernisation project. In this context, Beijing aims to break free from its technological dependence on the US within the next three years, with the target of meeting 70% of its domestic needs.

However, this status in the semiconductor industry would risk putting it under great pressure as many companies, anticipating commercial retaliation from the US, might self-impose to stop doing business with China or cut off contact with Chinese companies. Beijing meanwhile has started its plans to support its companies and help them in the China-US competition. Despite the dialogues and communication channels between Beijing and Washington, the two superpowers maintain a certain distance and mutual distrust between them. The Semiconductor War of this millennium has entered its most delicate phase.