‘A Work of War’: Inside America’s Silicon Blockade Against China

By squeezing the industry’s natural choke points, the Biden administration aims to block China from the future of chip technology. And the implications will go far beyond the intrusion of China’s military advance, threatening the country’s economic growth and scientific leadership as well. “We’ve said there are key technical areas where China shouldn’t get ahead,” says Emily Kilcress, a senior fellow at the Center for a New American Security and former US trade official. “These are the areas that will boost economic growth and development in the future.” Today, scientific progress is often made by running simulations and analyzing huge amounts of data, rather than through trial and error experiments. Simulations are used to discover new life-saving drugs, model the future of climate change and explore the collision behavior of galaxies – as well as the physics of hypersonic rockets and nuclear explosions.

“The person with the best supercomputer can do the best science,” Jack Dongara, founding director of the Laboratory for Innovative Computing at the University of Tennessee, told me. Dongarra runs a program called top 500, which presents a biannual ranking of the fastest supercomputers in the world. As of June, China claimed 134 sites, compared to 150 for the United States. But the picture is patchy: Around 2020, applications from China fell in a way that suggested Dongara wanted to avoid attracting unwanted attention. Rumors of new supercomputers are leaking out in scientific papers and research announcements, leaving observers to guess the true state of the competition — and the scale of China’s supposed lead. “It’s amazing because in 2001 China didn’t have computers on the list,” Dongara says. “They’ve grown so big now that they dominate her.”

However, there is a crucial weakness under China’s strength: all the chips that support the country’s most advanced projects and institutions are closely tied to American technology. “The entire industry can only function with American input,” says Miller. “In every near state-of-the-art facility, there are American tools, American design software and American intellectual property throughout the process.” Despite decades of efforts by the Chinese government, spending tens of billions of dollars on “homegrown innovation,” the problem remains acute. In 2020, China’s domestic chip producers provided only 15.9 percent of the country’s total demand. In April, China spent more money on semiconductor imports than it did on oil.

America totally caught up It seized control of the global semiconductor market in 2019, when the Trump administration added Huawei, a major Chinese telecom maker, to its entity list. Although the listing was a ostensible punishment for a criminal breach — Huawei was caught selling sanctionable items to Iran — the strategic benefits became immediately apparent. Without access to semiconductors, software and other essential supplies in the United States, Huawei, the world’s largest maker of telecoms equipment, has been left struggling to survive. “The Huawei sanctions pulled back the curtain immediately,” says Matt Sheehan, a fellow at the Carnegie Endowment for International Peace who studies China’s tech ecosystem. “Chinese tech giants are working on chips that are made in America or contain deep American components.”

The Export Control Act has long been seen as a dusty and murky backwater, far removed from the actual exercise of American power. But after Huawei, the United States discovered that its priority in the semiconductor supply chain was a rich source of untapped leverage. Three companies, all located in the United States, dominate the market for chip design software, which is used to arrange the billions of transistors to fit on a new chip. The market for advanced chip makers is similarly concentrated, with few companies able to claim effective monopolies on core machinery or processes – and nearly all of these companies are American or rely on American components. At every step, the supply chain passes through the United States, US allies, or Taiwan, all operating in a US-dominated ecosystem. “We found it,” Sheehan says. “We started using these weapons before we really knew it how to be used “.