Pillola estratta del Disruptive Talks S01E03. Ascolta l'episodio in Audio Podcast.
[This focus is intended to be complementary to the discussion we had with Giacomo Ciarlini, Head of Content & Education for DataPizza, su questa pagina o nel episodio S01E03 del podcast]

The semiconductor industry has become one of the main battlegrounds in the geopolitical and economic competition between the world's superpowers in recent years. At stake is not just control of a market worth more than $500 billion, but technological leadership in key sectors such as artificial intelligence, 5G, quantum computers and many others.

In an increasingly digital world, the ability to design and produce the most advanced chips is fundamental to the national security, economic development and scientific progress of every country. This is why the United States, China and Europe are investing massively in this sector with plans worth tens of billions of dollars.

The balance of power in the semiconductor industry is now being challenged by the rise of China and American countermeasures. Washington fears that Beijing will erode US technological leadership and limits the export of advanced technologies. A new technological cold war is underway.

Today we will analyze the origins and dynamics of this battle for control of chips, examining the key players, the strategic moves and the impact this competition will have on innovation and the geopolitical future.

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What are semiconductors and why are they so important

Semiconductors, commonly called chips or microchips, are the electronic components that form the basis of most modern technological devices. They are made of semiconductor materials such as silicon, germanium, gallium arsenide and contain miniaturized integrated circuits that process and process data and signals.

They are found everywhere: smartphones, computers, household appliances, cars, industrial and military systems. They are essential for the digital economy and enable key technologies such as artificial intelligence, 5G, internet of things.

Their strategic importance derives from several factors:

  • They are indispensable for almost all modern hi-tech products.
  • Their production requires very high skills and investments in R&D.
  • Their offer is rigid, it takes years to open new factories.
  • They enable innovations in key sectors such as AI, cloud computing, robotics.

For all these reasons, control of the production of the most advanced semiconductors has become a battleground between superpowers such as the USA and China.

A competition between superpowers

The battle for control of the production of the most advanced chips has become a battleground between superpowers such as the USA and China. A real technological trade war is underway, with mutual limitations on exports and billions of investments on both sides to gain leadership in this strategic sector.

The goal is to secure dominance in the production capacity of cutting-edge semiconductors, essential components for a multitude of military and civilian technologies. What is at stake is global technological hegemony in the coming decades.

Let's see a timeline of the main moves in this high-tech trade war:

  • December 2020: The US blacklists SMIC and other Chinese companies, effectively banning the export of advanced chip technologies to them.
  • February 2021: President Biden extends Trump's executive order banning American investments in Chinese military-related companies.
  • April 2021: The US introduces new controls to limit the export of semiconductor software and technologies to certain Chinese companies and entities.
  • October 2021: Washington imposes further restrictions on the export of chip manufacturing machinery and equipment to Chinese giants such as SMIC.
  • June 2022: China responds by adopting a law that threatens to limit exports to the US of rare earths, essential materials for producing advanced chips.
  • October 2022: The United States enacts broad technology export controls to limit Chinese access to the most advanced chips.
  • November 2022: Washington pressures allies such as Japan and the Netherlands to impose similar restrictions on machinery exports to China.
  • January 2023: The Netherlands confirms the introduction of strict controls on the export of chipmaking machinery to China.

The actors on the field

The global semiconductor industry involves several key players, each with a specific role within the complex manufacturing supply chain. Let's analyze the main players in this battle for technological leadership.

Taiwan is the beating heart of global chip manufacturing, home to the Taiwan Semiconductor Manufacturing Company (TSMC), the undisputed leader in contract manufacturing of cutting-edge semiconductors. TSMC holds over 50% of semiconductor foundry market share and is a key supplier to tech giants such as Apple, Nvidia, Qualcomm and AMD. The United States fears that a possible Chinese invasion of Taiwan could disrupt global chip supplies, given TSMC's manufacturing dominance on the island.

The United States dominate in the design and marketing of advanced chips, with industry leaders such as Intel, Nvidia, Qualcomm, AMD and Micron Technology. However, their domestic production capacity is limited. For this reason, the USA has imposed restrictions on the export of advanced technologies to China, to maintain its competitive advantage, and is investing billions of dollars to revive domestic semiconductor production.

The Japan excels in the production of advanced chemical materials such as polysilicon needed to make the most innovative chips. Furthermore, together with the USA and the Netherlands, it dominates the semiconductor design software market, with leading companies such as Synopsys, Cadence and Mentor Graphics.

THE Netherlands they host ASML, the only company in the world capable of producing the complex EUV lithography machinery, essential for creating the most advanced chips. The Netherlands has also imposed restrictions on the export of these machines to China, under pressure from the United States.

There South Korea, with giants such as Samsung and SK Hynix, is another large semiconductor manufacturer, specializing in DRAM and NAND Flash memories. Samsung is the world's largest memory manufacturer and holds over 70% of the DRAM chip market.

There China it is heavily dependent on imports of chips produced in Taiwan, South Korea and Japan. It is investing heavily with state subsidies to develop a domestic semiconductor industry and reduce foreign dependence, but has yet to close a significant technology gap with industry leaders.

The impact on artificial intelligence

More advanced chips, such as those produced with 5nm technology and below, are indispensable for training advanced artificial intelligence systems, running quantum computer algorithms, and increasing blockchain security through greater computing power for mining.

The shortage of these latest generation chips is holding back the development of AI, which requires enormous computing power to train increasingly complex models on large amounts of data. The United States limits exports of advanced chips to China in an attempt to contain its technological rise in AI, while China is investing heavily to develop a domestic advanced semiconductor industry and reduce its dependence on foreign suppliers.

The European Union also aims to strengthen its technological and production sovereignty in the chip sector through the Chip Act, which will mobilize over 43 billion euros in public and private investments. The objective is to support research, strengthen production capacity and attract investments to compete with the USA and Asia.

In conclusion, the geopolitical battle for control of the production of the most advanced chips risks fragmenting the global market and slowing down technological innovation. The balance of power in this strategic sector will be decisive for the future not only of artificial intelligence, but also of other cutting-edge technologies such as quantum computers and blockchain.

Does the topic interest you? I recommend you listen to our discussion with Giacomo Cialdini, Head of Content & Education for DataPizza, who explored the topic in depth.


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