Sharper: Chips

The reliance on semiconductor chips, from accomplishing everyday tasks to fighting wars, has placed them at the center of geopolitical decisions by leaders around the world. Recent export controls by the U.S. Department of Commerce Bureau of Industry and Security was the latest move to limit Chinese production. CNAS experts are sharpening the conversation around control of the chips market, and how they influence foreign policy decisions. Continue reading this edition of Sharper to explore their analysis, commentary, and recommendations.

Features

Rewire: Semiconductors and U.S. Industrial Policy

The U.S. government has played a major role in the semiconductor industry since the invention of the first integrated circuit, via funding scientific research and via military procurement, which has driven the commercialization of new technology. However, though government—and specifically, the Defense Department—has had deep connections with the chip industry, it has played only a supportive role in building America’s semiconductor industry, with the key innovations and firms emerging from private-sector expertise. Chris Miller explores lessons the U.S. could learn as it considers industrial policy for the first time in decades.

A Conversation with Under Secretary of Commerce Alan F. Estevez

Earlier this month, the U.S. Department of Commerce Bureau of Industry and Security issued a rule that imposes significant new export controls designed to limit the development, purchase, production, and use of semiconductors, semiconductor manufacturing equipment, and supercomputers in China. To discuss the rationale behind and the scope, scale, and implementation of these new controls, CNAS hosted Alan F. Estevez, Under Secretary of Commerce for Industry and Security, for a moderated discussion and a question and answer session with Martijn Rasser, Senior Fellow and Director of the Technology and National Security program at CNAS.

When the Chips Are Down

Essential to the day-to-day functioning of modern society, semiconductors are increasingly at the center of a high-stakes competition between the United States and China. Taiwan—already a flashpoint in this competition—accounts for 92 percent of the world’s most advanced chip manufacturing capacity. Control over Taiwanese semiconductor facilities and human capital would give China roughly half of global chip fabrication capacity and almost all state-of-the-art manufacturing capacity. A virtual strategy game conducted by CNAS in conjunction with The Gaming Lab, and detailed in a report by Martijn Rasser, Becca Wasser, and Hannah Kelley, has produced critical insights into the nature of U.S.-China strategic competition and global competition for semiconductors.

Commentaries

Uniting the Techno-Democracies

"The United States’ technological advantage made its military more potent, its economy more prosperous, and its democracy, at least in theory, more vibrant," write Richard Fontaine and Jared Cohen in Foreign Affairs. "Since then, autocratic states have caught up. China is at the forefront, no longer a mere rising power in technology and now an American peer. In multiple areas—including facial and voice recognition, 5G technology, digital payments, quantum communications, and the commercial drone market—it has surpassed the United States. Leaders in Cuba, Iran, North Korea, Russia, Venezuela, and elsewhere are increasingly using technology for illiberal ends, following China’s example. And despite the United States’ remaining advantage in some technologies, such as artificial intelligence (AI) and semiconductor production, it has fallen behind China in formulating an overall strategy for their use."

Can Russia Rebuild Its Tech Sector with China's Help?

"The far-reaching export controls the United States and others imposed in response to Russia’s further invasion of Ukraine were meant to have long-term erosive effects, but their impact on Russia has already been tangible," argue Emily Kilcrease and Maria Shagina in War on the Rocks. "This is particularly true in the semiconductor sector. Moscow’s attempts to kick-start homegrown production of semiconductors and electronic components, which started in 2021, have unsurprisingly produced meager results, and the Western technology required to launch an indigenous chip sector is now further out of reach. China will thus play a crucial role in the future of Russia’s tech sector, but a complicated one. While China’s geopolitical sympathies lie with Russia, active support would likely run afoul of the allied export controls and put China’s own chip ambitions at risk."

The Mother of All ‘Zero-Days’—Immortal Flaws in Semiconductor Chips

"The CHIPS Act begins to solve the problems of geography and geometry," write Peter Levin and Michael D. Lumpkin in The Hill. "Unless and until we systematically address on-chip cybersecurity, as the NSA recently highlighted, we will build devices that are vulnerable by design, deploy them to the field, and be helpless if an adversary takes control. Chips are on the vanguard of our digital defenses. They need to be protected with thoughtful policy and common-sense requirements of how they are secured and what happens if they are breached."

In the News

Featuring commentary from Emily Kilcrease, Martijn Rasser, and Megan Lamberth.