TECH WARSemiconductor War: Assessing the Strategies and Impact of US Led Technology Decoupling
The United States and its allies have taken significant policy measures including sweeping export control regulations to make it hard for China to obtain advanced chips and chip making equipment. China though continues to be an important player in the globalized supply chain. China is directing its efforts towards manufacturing cutting-edge processors as also attempting to become competitive in legacy chip manufacturing. India is also seeking to build a vibrant semiconductor and display design and innovation ecosystem.
On 16 September 2022, US National Security Advisor Jake Sullivan announced a change in the US policy of being “only a couple of generations ahead” of China in key technologies to maintaining “as large of a lead as possible”.1 The Biden administration has identified three families of technologies which will be of particular importance over the coming decade and one of them is computing-related technologies, including microelectronics, quantum information systems and artificial intelligence.2 Preserving the lead and denying the same to the competitors in these arenas are being advanced by the administration as a “national security” issue. The US has also secured the commitment of its allies and partners to choke China’s semiconductor industry and “reduce collective reliance on Asia” of EU–US alignment on rare earths. The US efforts to limit the advancements around the world in this field of science and technology is poised to define the geopolitical landscape of the 21st century.
This Brief will examine the strategic motivation behind the US attempts to decouple from China in the field of advanced chip manufacturing and key challenges faced by the US and its allies in these efforts. The Brief will thereafter highlight opportunities and challenges decoupling of China presents for India for its semiconductor ambitions.
Technology Race Between U.S. and China
In the history of warfare, the human ability to innovate and employ latest technology have been decisive factors in winning wars. For over a decade now, both the US and China have been racing to develop Artificial Intelligence (AI) and other emerging technologies to gain a competitive edge which will assist to secure even greater power, wealth, status and influence.
In April 2017, the US initiated Project Maven to accelerate AI capabilities that will enable it to digitally identify and track targets using surveillance assets, which will assist in furthering combat efficiency by employing data technology. Maven is one of hundreds of AI initiatives being pursued by the Pentagon. The then-Deputy Defense Secretary Bob Work established the Algorithmic Warfare Cross-Functional Team, which is overseen by the Defense Undersecretary for Intelligence (known as the USDI), under Project Maven.3 Advanced AI chips are central to this effort.
