Current Accounts: The Hinrich Foundation Trade Podcast
The semiconductor trade wars
Published 14 November 2023
In this special edition of Current Accounts, the Hinrich Foundation’s podcast on global trade, guest host Nii Akrofi Smart-Abbey from the US Association of Foreign Press Correspondents talks to Robb Gordon of Intel, along with Rob York and Akhil Ramesh of Pacific Forum, on de-risking in global semiconductor supply chains.
Tune in to the special episode hosted by the Association of Foreign Press Correspondents in the United States here:
The semiconductor is at the forefront of the convergence of global trade and geopolitics.
McKinsey projects the industry will reach a trillion dollars by 2030, up from US$574 billion last year according to the Semiconductor Industry Association.
The industry, however, is increasingly at the mercy of the most intense geopolitical contest in the world today. Makers of the world’s most advanced chips are based in a handful of countries, though they depend on tens of thousands of components and hundreds of suppliers across the planet. Much of the brain trust for the tech design of advanced chips is American while much of the market demand for chips as components to assemble final products lies in China. The two superpowers are locked in a battle for global domination on nearly every level, including in the semiconductor space.
Can US allies in the handful of key chokepoints in the chip supply chain, including Taiwan and the Netherlands, be counted on to keep foregoing trade with China in service of US objectives? And is the industry built for the kind of self-sufficiency that both the US and China appear to want for themselves?
US chip giant Intel Corp.’s Senior Policy Director and Managing Legal Counsel Robb Gordon joins us for a podcast with our partners at the think tank Pacific Forum, moderated by the Association of Foreign Press Correspondents-USA. Pacific Forum authored a series of papers for the Hinrich Foundation on the American friend-shoring policy, including a paper on de-risking semiconductor supply chains.
Here is an excerpt from their conversation:
Nii Akrofi Smart-Abbey:
I wonder if this description of blow hot, blow cold with the [US] control measures worries US manufacturers or US players in the semiconductor industry.
What I will say is that we have to be cognizant of what the government, not just our government here in the US, but the other governments around the world are doing as far as restrictions, which could make it more difficult for Western companies to do business in China. It’s no secret many companies have a large footprint in China, not just a manufacturing footprint, but also a consumer footprint. A significant amount of revenue from many companies comes from China and a lot of that revenue then comes back to the United States or to the home country, the host, the country of origin for the company in terms of capex spending, in terms of R&D. So there is definitely some benefit derived from those profits that are made overseas. So that’s something that we have to balance. We’re continually making sure that we’re compliant and that we are within the guidelines of all of them, whether they’re guardrails or the export controls that are put in place by the US government. So it is something we deal with and work with all the time.
Tune into the Hinrich Foundation’s podcast series for insights on international trade.
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