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

style=”line-height: 20.8px;”>Unlike the US and China, which are heavily focused on achieving technological self-sufficiency at the most advanced process nodes, India is prioritizing the development of fabrication capabilities in the 28–90 nanometer range, targeting sectors such as automotive, telecom, and industrial automation, where global demand remains high.[29] Additionally, India is investing in research on next-generation technologies like 2D materials, aiming to position itself at the forefront of future semiconductor innovation.

For example, US chipmakers such as Micron Technology have begun shifting part of their production to India after Beijing used economic pressure to retaliate against American firms. Alongside scaling up its research and development work in the country, Micron is investing US$ 2.75 billion in its first central backend semiconductor facility in India. The new Assembly, Testing, Marking and Packaging (ATMP) plant is being built in Sanand, Gujarat. Tata Electronics is setting up a semiconductor fabrication unit in the Dholera Special Investment Region, with an estimated cost of Rs 91,000 crore.

Union Minister Ashwini Vaishnaw recently announced India’s first indigenous semiconductor chip, which is expected to launch this year.[30] This marks an essential step in reducing dependence on imports and strengthening India’s position in the global semiconductor industry. By leveraging the global supply chain shift and strategic alliances with global players, India is not only mitigating the risks posed by US–China tensions but also emerging as a viable third hub in the international semiconductor market to be a leader in manufacturing and innovation.

Conclusion
The growing rivalry between the US and China over semiconductors has become one of the sharpest points of tension in their relationship. The effects have extended far beyond the US and China. Supply chains have been chaotic, and numerous states are rethinking their approach. The balancing act has been delicate for smaller powers—maintaining ties with the US and China while safeguarding their technological futures. The US–China semiconductor war is more than just an industry-specific conflict. It is a proxy for broader geopolitical competition, with long-term consequences for power distribution, stability in international supply chains, and the future of economic interdependence.

[1] Manish Shakdwipee and Wei Xu, “China’s Role in Supply-Chain Strategies”, MSCI, 8 January 2024.

[2] Matt Sheehan, “Biden’s Unprecedented Semiconductor Bet”, Carnegie Endowment for International Peace, 27 October 2022.

[3] John Neuffer, “Our 2017 Policy Plan to Spur U.S. Semiconductor Industry Growth and Innovation”, Semiconductor