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Trade and technology

China’s microchip ambitions: Semiconductors advance the next phase of techno-nationalism

Published 22 June 2021

China may still look beyond its borders to supply its enormous thirst for semiconductors. But the manufacturing giant is racing to catch up to US tech firepower. The third installment of the Hinrich Foundation series on the global microchip industry, this paper tracks China’s efforts to champion home-grown semiconductor manufacturers, including through trillion-dollar digital infrastructure plans.

Comprising the ‘brains’ for everything, from AI to machine learning and the internet of things (IoT), semiconductors represent the world’s most essential and coveted technology. China’s tensions with the US and its allies is accelerating strategic decoupling, reshoring, and ringfencing throughout the critical technology landscape.

This study is Part 3 of a Hinrich Foundation series, authored by Research Fellow Alex Capri, that began with the comprehensive primer Semiconductors at the heart of a US-China tech-war in January 2020. This paper will focus on the actions China has taken to catch up to US tech firepower. As with Part 1 and Part 2, this report also revisits the concept of ‘techno-nationalism’ – the neo-mercantilist mindset that links a nation-state’s technology prowess with its national security, economic prosperity, and socio-political stability.

The four themes of previous reports – strategic decoupling, tech alliances, innovation mercantilism, and the In-China-For-China strategy question – are also visited in this report. Export controls and restricted entity lists continue to be weaponized in semiconductor supply chains. Tech alliances continue to affect reshoring and diversification of global value chains.

Download this third instalment to learn what lies ahead for Chinese chipmakers, leading Taiwanese firm TSMC, and the electric vehicle sector that is driving demand for microchips.

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Alex Capri

Alex Capri is a Research Fellow at the Hinrich Foundation with over 20 years of experience in value chains, logistics and global trade management, both as an academic and a professional consultant.

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