The “war of the chips” is growing more and more, it is not at the moment and apparently a risk factor for the global economy, but it could become one because this clash is led by the two great economic powers of the times current.
Recently, semiconductor makers in South Korea expressed their concern, saying that the conflict between the United States and China on multiple technological fronts is an “all-out war” with extraordinarily intense virulence in the arena of the chip industry, They pointed out that the consequences can be of great proportions.
What is the chip war?
It is a relatively recent phenomenon that, in addition to involving the two great powers of our times, includes effects on the technological, financial, and logistics markets and many more.
In fact, the global economy could be at risk.
The United States and China have been engaged for months in a global fight for dominance in the semiconductor industry.
Both nations recognize the importance of semiconductor chips in innovation and national security, are also investing to increase their domestic production, and prioritize their business strategies in favor of their local industries, including the military.
As we know, chips are essential for technological innovation and national securityas they power military communications and missile guidance systems.
Also, these chips, microchips, semiconductors, and so on, are the small electronic components of popular digital devices like smartphones, computers, cars, and airplanes, to name a few.
Chips are therefore essential in modern life and its manufacturers have become more than strategic companiesincluding national security.
These companies are of predominantly Asian origin, China and South Korea are the main manufacturing countries (considering Taiwan as part of China), along with the United States, the undisputed Western leader.
Although the United States and China have long been competitors in the semiconductor industry, tensions between the two nations have escalated in recent years.
The two countries seek to reduce their mutual dependence and establish themselves as the dominant player in the industry, thus the “chip war” is born.
But the actions of aggression escalate more and more.
United States in campaign
Recently, it became known that The US Department of Commerce is considering banning the sale of chips to Chinaas early as early July, according to The Wall Street Journal.
Specifically, the Commerce Department wants to deprive its rival of semiconductors for artificial intelligence (AI), according to the source.
The measures against China are not recent. In October it was decided that domestic firms wishing to export to China would need to obtain authorization.
In this way, the administration prohibited shipments of the most avant-garde chips, but allowed several models to be marketed, without requiring a permit.
However, the latest approach is to extend that restriction to more processors, especially those intended to train AI models.
Nvidia and AMD are two of the leading US manufacturers of chips for training AI models.. About 22% of Nvidia’s revenue comes from China, according to its latest quarterly results.
In this way, the new measure will not only affect Beijing, but the business of both sides.
But the effects will go further, hundreds or thousands of suppliers around the “sharks”, the logistics markets, the financial markets, the consumer markets of course, a global impact if this “chip war” intensifies as the indications they point it out.
China reacts
The US government is doing everything it can to prevent the machines that go into making cutting-edge integrated circuits from falling into the hands of China.
For this reason, the pressure is intense on the Japanese companies Tokyo Electron, Nikon and Canon, as well as some South Korean, German and American companies, also involved in this conflict.
But experts know that the more pressure is brought to bear on China, the more likely it will double down on developing its own lithography machines, essential for chipmaking.
It is no secret to anyone that China is boosting its semiconductor industryalthough it still has to overcome very important technical challenges to fully emancipate itself from foreign powers.
While that is happening, the “chip war” is heating up and the global economy is in the middle.
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