The Biden administration is strategically targeting key areas of technological advancement in the chip industry to impede China’s progress. This approach goes beyond hindering military advancements, as it also poses a threat to China’s economic growth and scientific leadership. Emily Kilcrease, a former U.S. trade official and senior fellow at the Center for a New American Security, explains that the areas being restricted are precisely the ones that will drive future economic development.
Today, scientific breakthroughs are often achieved through simulations and data analysis rather than traditional trial-and-error experiments. Simulations play a vital role in various fields, such as discovering life-saving drugs, modeling climate change, studying colliding galaxies, and understanding the physics behind hypersonic missiles and nuclear explosions.
Jack Dongarra, the founding director of the Innovative Computing Laboratory at the University of Tennessee, emphasizes the importance of supercomputers in advancing scientific research. According to the biannual TOP500 ranking, China currently holds 134 positions compared to the U.S.’s 150. However, Dongarra notes that China’s recent decrease in submissions suggests a desire to avoid drawing attention. The true extent of China’s lead in supercomputing remains uncertain, as rumors circulate through scientific papers and research announcements.
Despite China’s strength in supercomputing, it is heavily reliant on U.S. technology for advanced projects and institutions. A significant vulnerability lies in the fact that most of the chips powering China’s advancements are tied to U.S. technology. Even with extensive efforts and investment in indigenous innovation, China’s domestic chip producers only met 15.9 percent of the country’s demand in 2020. Additionally, China spends more on importing semiconductors than it does on oil.
In 2019, the U.S. recognized its power over the global semiconductor market when it added Huawei, a major Chinese telecommunications manufacturer, to its entity list. This move, ostensibly due to a criminal violation, exposed the strategic advantage of controlling the semiconductor supply chain. As the largest telecommunications equipment producer globally, Huawei was severely affected by the ban on U.S. semiconductors and other essential supplies. This incident highlighted how Chinese tech giants rely on American-made chips or components.
Export-control laws, previously viewed as irrelevant, gained significance after the Huawei ban. The U.S. realized its dominance in the chip-design software market, which is crucial for arranging billions of transistors on a chip. Similarly, a few companies possess effective monopolies over advanced chip-manufacturing tools, and the majority of these companies have American ties. The entire supply chain is intertwined with the U.S., its treaty allies, and Taiwan, forming a U.S.-dominated ecosystem. This newfound leverage was utilized without fully understanding its potential impact.
Overall, the Biden administration’s focus on restricting China’s progress in chip technology carries significant consequences for China’s economic growth, scientific advancements, and military capabilities. By targeting key areas of innovation and leveraging its control over the semiconductor supply chain, the U.S. aims to curtail China’s dominance in the industry.
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