Chip War: The Fight for the World's Most Critical Technology

by Chris Miller

The dollar values at stake in China’s vision of reworking semiconductor supply chains were staggering. China’s import of chips—$260 billion in 2017, the year of Xi’s Davos debut—was far larger than Saudi Arabia’s export of oil or Germany’s export of cars. China spends more money buying chips each year than the entire global trade in aircraft. No product is more central to international trade than semiconductors. It wasn’t only Silicon Valley’s profits that were at risk. If China’s drive for self-sufficiency in semiconductors succeeded, its neighbors, most of whom had export-dependent economies, would suffer even more. Integrated circuits made up 15 percent of South Korea’s exports in 2017; 17 percent of Singapore’s; 19 percent of Malaysia’s; 21 percent of the Philippines’; and 36 percent of Taiwan’s. Made in China 2025 called all this into question.