USA vs China, The invisible war.

Photo courtesy: Sydney Morning Herald

The USA and China are fighting a war. It's not a war that you can really see and it's not a traditional battlefield war with soldiers, at least not yet. This is a war that's being fought in government offices and company boardrooms. It's a war that's being fought with rules and regulations and it's meant to stop rivals from getting their hands on the most important technology in the world, microchips. You might hear them called semiconductors, microchips, or integrated circuits. These are all the same thing, microchips, tiny pieces of metal that are magic and that run our world. This is a big thing that's happening in geopolitics right now. It's going to be the center of global attention for years to come. To be clear, though, we must first understand what a microchip is and its background.

Microchip size compared to a human finger

Our life depends on chips, whether we know it or not. Everything has silicon in it, anything that has any technological smartness to it is a product of silicon. A computer has a tiny silicon chip called a microchip. It has electronic circuits that let it store a lot of information or carry out logical and mathematical processes. A microchip is a brain for things with technology smarts, to put it simply. Microchips are found in everything, including phones, computers, refrigerators, televisions, and missiles. As I already stated, small metal pieces power our entire planet.

America was going to experience great luck. In the 1950s, computers were just starting to take off. But they looked like in the image below.

It was clunky and ineffective. It was not yet exceptional. The plan was to clean up all of these messes. At that time, a new technology known as "Transistors" had emerged. It was similar to a highly accurate, dependable on-and-off switch that enables incredibly exact control of electrical pulses. Nonetheless, transistors first had this appearance.

So the idea was to make it small and start carving these little on-and-off switches onto a material called silicon. It's like a superabundant metal-like material inside of Earth's crust, but it's actually a horrible conductor of electricity. If you mix silicon with other elements of semiconductors of electricity, exactly what they needed to precisely control the flow of electricity very accurately, no more clunky long wires. Let's just carve our little transistor switches onto this silicon chip, a single circuit, that way we can fit a lot more into one place, all close together, so that's what Jack Kilby did in 1959. And then the world changed forever.

The USA vs China

 

The United States and China are engaged in a furious arms race to control the microprocessor market. Microchips are necessary for many daily tasks, from managing our health information to controlling appliances in our houses, making this rivalry significant. The global economy is intently monitoring what is happening in the microchip war.

In terms of market share, the United States has historically dominated the microchip sector. Microchip design and manufacturing have long been dominated by American firms like Intel, Qualcomm, and AMD. But, China has become a significant rival in recent years. Chinese firms like Huawei, SMIC, and Tsinghua Unigroup have been significantly investing in microprocessor technology and have made substantial progress in catching up with their international competitors.

The Rise of China

China's government's strong efforts to assist the sector have contributed to the country's growth in the microchip industry. China started the Made in China 2025 project in 2015 with the goal of an increasing domestic manufacturer intending to increase as microchips. Also, the Chinese government has offered large subsidies and additional inducements for Chinese businesses to make investments in the sector.

Due to its efforts, China now supplies more than half of the world's demand for microchips. Nonetheless, despite its development, China continues to lag behind the United States in terms of cutting-edge technology and design. As a result of their reliance on American technology, Chinese businesses are exposed to export restrictions imposed by the United States.

The American Response

Particularly given the current trade conflict between the USA and China, the United States has grown increasingly concerned about China's expanding power in the semiconductor sector. To stop the transfer of some technologies, the Trump administration put export restrictions on them, including microchips. These rules have been maintained by the Biden administration, which also put further export restrictions on SMIC, the biggest chipmaker in China, in 2021. The microchip battle may have huge repercussions. China may eventually surpass the United States and take over as the main player in the market if it keeps growing in this sector. With China potentially leveraging its dominance to influence the development of new technologies and gain a geopolitical advantage over other nations, this might have significant repercussions for the world economy.

Conclusion

The United States and China's battle over microchips is an example of the intensifying rivalry between the two nations in the technology industry. China has quickly caught up to the United States even though the United States still does though cause of its aggressive policies and investments. This tournament has important potential ramifications, therefore everyone in the world will be eagerly following its progress. Both nations will continue the toothache microprocessor industry as it develops, and the competition between them will only get more intense.