The next frontier in the tech battle between the US and China




The technological arms race between the United States and China has cut across everything from smartphones and cellular equipment to social media and artificial intelligence. But a new battleground is emerging that goes a layer deeper: to the components that power our smartphones, computers, automobiles and home appliances.To get more china tech news, you can visit shine news official website.

President Joe Biden on Tuesday signed new legislation aimed at boosting the US semiconductor industry, in an attempt to address a long-running computer chip shortage and reduce reliance on other countries, such as China, for manufacturing. Dubbed the CHIPS and Science Act, it provides incentives for domestic semiconductor manufacturing as well as research and development, including more than $50 billion in funding and additional investment in the National Science Foundation, the Department of Commerce and the National Institute of Standards and Technology.

China has long been a dominant force in tech manufacturing, with companies such as Apple (AAPL), Google (GOOG) and Microsoft (MSFT) relying significantly on the country to make their devices and the parts that comprise them. China has also rapidly gained ground in the semiconductor market, ranking first globally in assembly, packaging and testing and fourth — ahead of the United States — in wafer fabrication, according to a recent analysis by the Center for Strategic and International Studies.

China’s increased focus on its domestic manufacturing is likely a function of US restrictions on some of its biggest semiconductor companies. China’s semiconductor sales grew more than 30% in 2020 to reach nearly $40 billion, according to figures from the Semiconductor Industry Association (SIA), a trade group whose members include IBM (IBM), Intel (INTC), AMD (AMD), Qualcomm (QCOM) and Nvidia (NVDA).

But the Covid-19 pandemic caused a global shortfall in chip supply, with matters made worse this year by China’s stringent lockdowns, which stalled factories and hurt supply chains. Multiple regions are now rethinking their approach to the industry in order to become more self-sufficient and reduce exposure to Chinese manufacturing.
US Treasury Secretary Janet Yellen has repeatedly touted the importance of “friend-shoring,” or moving supply chains through US allies such as South Korea and Japan to further insulate the tech industry from China. European legislators, meanwhile, have proposed investments worth tens of billions of dollars over the coming years to boost the continent’s semiconductor industry.

China, for its part, continues to try to grow its semiconductor industry as part of a five-year plan announced last year.

“There’s growing global recognition that these are the technologies that will determine who ‘wins’ in the future global economy,” Kenton Thibaut, Resident China Fellow at the Atlantic Council’s Digital Forensic Research Lab in Washington DC, told CNN Business. However, she added, being completely self sufficient in chipmaking is easier said than done because of the layers of technology and specialized expertise involved. “It’s not really possible to gain a top spot in the semiconductor supply chain as a whole.Complicating matters further is Taiwan, the self-governed island off China’s coast that has become a diplomatic and military flashpoint between Washington and Beijing. Tensions around Taiwan, which China’s Communist Party views as its own territory despite never having controlled the island, have escalated rapidly after US Speaker of the House Nancy Pelosi’s visit there last week.

Taiwan is critical to the global semiconductor industry, with several of the world’s top manufacturers headquartered there, including Apple suppliers Foxconn and Pegatron. The biggest of those chipmakers, Taiwan Semiconductor Manufacturing Company or TSMC, accounts for an estimated 90% of the world’s super-advanced computer chips.

“Nobody can control TSMC by force,” the company’s chairman, Mark Liu, said in a recent interview with CNN. “If you take a military force or invasion, you will render TSMC factory non-operable, because this is such a sophisticated manufacturing facility [that] it depends on the real-time connection with the outside world — with Europe, with Japan, with the US.”