U.S.-China Tech Rivalry: The Geopolitics of Semiconductors

demands of the US and China while trying to hold onto its edge in advanced technology.

South Korea is in a similar position. Companies like Samsung and SK Hynix dominate parts of the industry. Yet, the country is trying to balance its dependence on Chinese raw materials and its strategic partnerships with the US. The government has been investing in R&D and diversifying its supply chains to eliminate the risks associated with the ongoing rivalry. Japan, a significant supplier of semiconductor materials and equipment, has also taken steps to build up its domestic capacity. Closer cooperation with the US and other allies has become part of its strategy to cut reliance on China and strengthen its role in the broader technology market.

Major tech firms like Intel and NVIDIA face revenue risks from declining access to Chinese markets. NVIDIA, for example, has cautioned that the export restrictions could wipe out billions in revenue. Apple, too, is feeling pressure and has started looking at other production bases, like India and Vietnam, to cut back on its reliance on China.

While the US and China compete for technological supremacy, India is leveraging this rivalry to accelerate its semiconductor ambitions. Though it may not yet compete with powerhouses like Taiwan or China for the most advanced chip production, India is working towards positioning itself as a critical and trusted third hub in semiconductor supply chains. The ‘Make in India’ initiative of 2014 laid the foundations for increased electronics manufacturing, including semiconductors. This paved the way for the Production-Linked Scheme (PLI) for semiconductor manufacturing, which was launched in December 2021 with a total outlay of Rs 76,000 crore. This scheme aims to boost domestic manufacturing and attract investments in the semiconductor value chain.[26]

With government-backed initiatives like the Semicon India Program and the India Semiconductor Mission (ISM), the country is rapidly building capacity and fostering a strong domestic ecosystem. As part of the ISM, in May 2025, India approved its sixth semiconductor manufacturing facility, a joint venture between HCL and Foxconn.[27] The US Department of State is working with ISM to explore and expand opportunities in the semiconductor ecosystem.  The International Technology Security and Innovation (ITSI) Fund, created by the CHIPS Act, supports this partnership. The US$ 500 million program aims to strengthen defense innovation and increase operational coordination, technology sharing and industrial cooperation between the two nations.[28]