Chip Wars Part Two: The US Strikes First
This is bigger than you know
First let’s start with a startling fact: China spends more importing semiconductors than it does buying oil. According to Laura He of CNN Business, that adds up to $444 billion or 16% of China’s total imports. These are astonishing numbers and there are massive implications we can draw from this.
The US is the undisputed leader in chip design, advanced manufacturing, and intellectual property worldwide. We are the OPEC of semiconductors and those semiconductors are more critical to growth than oil. No modern technology, including AI, space, military equipment, vehicles, you name it, can run without them.
As of October 7, 2022, the Biden administration has levied severe restrictions on both the export of chips and their manufacturing equipment, and the ability of US citizens to work for firms in China that make them. Those citizens will now have to choose between their jobs and keeping their US citizenship.
This may be a bloodless war but it is war nevertheless. China is ruled by a dictator, Xi Jinping, with lifetime power, who wants his country to be entirely self-sufficient and able to cut itself off from the world. But no modern economy can survive without this technology.
