In the midst of escalating global tech tensions, the semiconductor industry has emerged as a critical battleground in the U.S.-China rivalry. The U.S. has restricted China’s access to advanced semiconductor technologies for security reasons, prompting China to increase state support for its own semiconductor sector. This shift is not only about survival under sanctions but also about achieving technological autonomy, as the U.S. currently dominates the semiconductor industry.
To counter U.S. restrictions and protect its leadership, China has ramped up government subsidies for its semiconductor companies by 35%, totaling approximately $3 billion. This investment aims to reduce reliance on foreign technology and foster domestic innovation, with companies like Huawei and SMIC benefitting from enhanced production capabilities.
China’s Semiconductor Ambitions
China aims to achieve self-sufficiency in semiconductors by 2025 as part of its “Made in China 2025” strategy, despite challenges in developing advanced manufacturing technologies. This competition not only impacts the global market but also triggers Western responses like potential subsidies and export controls.
In essence, the U.S.-China tech conflict in the semiconductor sector is reshaping global technological and economic landscapes, highlighting the broader geopolitical and technological hurdles both nations face.
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