US–China Chip War: The Nexus Of High Tech And Geopolitics

Less than a week ago, on August 16, US tech giant Intel
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canceled a $5.4 billion acquisition deal with Israel-based Tower Semiconductor after failing to reach a required agreement with Chinese regulators. China is one of Intel’s most significant markets. The latest salvo in a months-long series of hostilities, this cancellation marks a continuation of China’s unrelenting tactics in its chip war with the US and its allies. On July 3, Beijing declared a license requirement for exporters of gallium and germanium—rare-earth metals used in the manufacture of semiconductor technologies, including computer chips, spy satellites, and artificial intelligence. The rare-earths mandate fired back at the Biden administration’s mounting restrictions on microchip exports to China.

The chip war largely stems from the US’ concerns regarding China’s use of semiconductor technology in its military. In 2022, President Xi Jinping introduced his vision for the establishment of a “world-class” Chinese military. According to the 2022 China Military Power Report, Beijing aims to develop advanced dual-use technologies that could potentially surpass Washington’s. While the full extent of China’s military capacity is still unclear, its technological prowess positions it as a force to be reckoned with—TOP500, a ranking of the world’s 500 most powerful supercomputers, notes that while the US ranks number one with 150 supercomputers, China closely trails behind with 134.