The semiconductor industry has been a renewed topic of political debate for over three years. Due to recent US sanctions on the most advanced semiconductors, the industry has quickly become another flashpoint in the competition between the US and China to dominate the 21st century’s strategic technologies. In this Strategic Update, Dr Jonathan Liebenau explains the development of the semiconductor industry in the context of China’s rise to become an increasingly capable technology power. China’s sustained efforts in industrial policy to cultivate a domestic innovation system coincided with Western firms’ offshoring strategies since the 1990s, transforming China into a large producer and consumer of semiconductors. While Taiwan and the West retained cutting edge chip design capabilities, Chinese firms such as Huawei and Hikvision have become competitive providers of mobile phones, surveillance equipment and related infrastructure services. Despite Washington and its partners’ conviction to constrain in China’s technological prowess, industrial policy initiatives such as the CHIPS Act will face an uphill battle when it comes to bringing manufacturing capacity back to Western economies. In this context, the UK must combine short term incentives with a longer-term strategic vision to remain competitive in one of the 21st century’s key strategic arenas.
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China’s Semiconductors
About the author
Jonathan Liebenau is Reader in Technology Management at the London School of Economics and member of the ÐÓ°ÉÂÛ̳ IDEAS China Foresight Forum. He conducts research on the digital economy, technology policy, innovation management and related topics, most recently on Chinese high technology companies including studies of firms such as Xiaomi, Huawei, Lenovo, Alibaba and others such as semiconductor manufacturers and infrastructure builders. He has produced studies for the World Bank, the OECD, the UK and other national governments as well as leading technology firms such as Microsoft, Dell, Google, and Telefonica.