🔬 The Semiconductor War
America's most critical technology vulnerabilitySemiconductors are the foundation of modern power. Every smartphone, AI system, fighter jet, and medical device depends on them. The country that controls chip production controls the 21st century economy — and the US has a serious problem.
The Competitive Landscape
The US Sanctions Strategy
The approach: Since 2019, Washington has progressively tightened export controls — first targeting Huawei, then expanding to block China's access to advanced AI chips, cutting-edge manufacturing equipment, and the tools to make sub-14nm chips. Japan and the Netherlands joined in 2023, creating a unified chokehold on equipment sales.
China's response: Beijing launched a $140B+ push for self-sufficiency and, in December 2024, banned exports of critical minerals (gallium, germanium, antimony) to the US — materials essential for chips, missiles, and night-vision systems. This is now a two-way economic war.
America's Single Point of Failure
🇹🇼 The Taiwan Chokepoint
Share of global <10nm chip production — chips powering AI, smartphones, military systems
America's Leverage: Equipment Control
⚙️ The Chokepoints the US Controls
| Company | Country | Equipment | China Status |
|---|---|---|---|
| ASML | 🇳🇱 Netherlands | EUV Lithography | Banned |
| Applied Materials | 🇺🇸 US | Deposition, Etch | Restricted |
| Lam Research | 🇺🇸 US | Etch Systems | Restricted |
| KLA | 🇺🇸 US | Inspection | Restricted |
| Tokyo Electron | 🇯🇵 Japan | Coaters, Etchers | Restricted |
| Nikon | 🇯🇵 Japan | DUV Lithography | Restricted |
The Spending Race
Is the US Strategy Working?
📊 China's Self-Sufficiency Progress
The Takeaway
🎯 Strategic Outlook
Taiwan is the biggest risk. A Chinese move on Taiwan wouldn't just be a geopolitical crisis — it would shut down the global semiconductor supply chain. The US has no short-term alternative to TSMC for cutting-edge chips.
The US is playing catch-up. America dominated chip manufacturing in the 1990s. It offshored production and now makes just 12% of global chips. The CHIPS Act is trying to reverse 30 years of decline in 5 years.
Export controls buy time, not victory. Sanctions are slowing China but also motivating a $140B+ push for self-sufficiency. The US needs to run faster, not just trip the competition.
This determines everything else. AI training, military systems, medical devices, vehicles — everything runs on chips. The leader in semiconductors has leverage over every other industry.