Semiconductors are among the most intricate tools that human beings have ever invented. They are also among the most expensive to make.
The latest chips — the sort that power supercomputers and high-end smartphones — are densely packed with transistors so small they’re measured in nanometers. Perhaps the only things more ingenious than the chips themselves are the machines that are used to build them. These devices are capable of working on almost unimaginably tiny scales, a fraction of the size of most viruses. Some of the chip-building machines take years to build and cost hundreds of millions of dollars each; Dutch company ASML, which makes the world’s only lithography machines capable of inscribing designs for the fastest chips, has produced just 140 such devices over the past decade.
Which brings us to another amazing detail about microchips: They are a triumph not just of technology but also of global trade and cooperation. In the recently published “Chip War: The Fight for the World’s Most Critical Technology,” Chris Miller, a history professor at Tufts University, describes the geographic sprawl of the semiconductor supply chain:
“A typical chip might be designed with blueprints from the Japanese-owned, U.K.-based company called Arm, by a team of engineers in California and Israel, using design software from the United States. When a design is complete, it’s sent to a facility in Taiwan, which buys ultrapure silicon wafers and specialized gases from Japan. The design is carved into silicon using some of the world’s most precise machinery, which can etch, deposit and measure layers of materials a few atoms thick. These tools are produced primarily by five companies, one Dutch, one Japanese and three Californian, without which advanced chips are basically impossible to make. Then the chip is packaged and tested, often in Southeast Asia, before being sent to China for assembly into a phone or computer.”
That’s why I have been so impressed with the aggressive and creative way the Biden administration has gone about curtailing China’s alarming, decades long effort to build a domestic semiconductor industry that’s independent from the rest of the world. This month, the Commerce Department announced a set of restrictions that prevent China from getting much of what it needs to establish a commanding position in the chip business. The government said the rules were meant to block “sensitive technologies with military applications” from being acquired by China’s military and security services. With few exceptions, the sanctions prohibit China from buying the best American chips and the machines to build them, and even from hiring Americans to work on them. Analysts I spoke to said the rules will devastate China’s domestic chip industry, potentially setting it back decades.
The rules “are an absolute historical landmark,” said Gregory Allen, a fellow at the Center for Strategic and International Studies and a former director of AI strategy at the Department of Defense. In a recent report, Allen writes that Biden’s restrictions “begin a new U.S. policy of actively strangling large segments of the Chinese technology industry — strangling with an intent to kill.” Considering the ways China might use the advanced chips — including in expanding its dystopian, AI-powered surveillance and repression regime — the strangulation is justified.
Semiconductors are one of the few sectors for which China still depends on the rest of the world; the country spends more money importing microchips each year than it does oil. The Chinese government has invested billions of dollars to “indigenize” the industry, but its progress has been slow. And in some of the most advanced areas of the business, Chinese semiconductor manufacturers lag far behind their international competitors.
How can China respond? One way is by evading the rules. The country has long been masterful at getting around sanctions, and microchips are small and potentially easy to smuggle.
Allen also warned that we don’t know how grave a provocation China might consider these rules. He pointed out that in the run-up to the attack on Pearl Harbor, it was America’s refusal to sell oil to Imperial Japan that led the latter to conclude that it was “functionally at war” with the United States. The semiconductor rules are narrower than our oil restrictions on Japan were. “But will China see it that way?” Allen asked. “I kind of doubt it.”
On the other hand, what choice does the United States have?
“These technologies are going to be the foundation of economic strength over the next decades, and there are significant concerns about what the world would look like if China gained the upper hand,” said Martijn Rasser, a senior fellow at the Center for a New American Security. “It wouldn’t be a world that I would want to live in, and I don’t think most Americans or most of our friends and allies would want to live in it either.”
Farhad Manjoo is a New York Times columnist.
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