The next stage of the tech wars will play out in two major arenas. One is chipmaking, which creates the world’s information-processing infrastructure, including the one that trains and runs artificially intelligent software. Any degree of Chinese control over the production of chips is intolerable to America. The other is green technology, as its components may become the backbone of the entire global economy. For China the strength of its companies in this arena is not just a natural consequence of two decades of focused industrial policy, but a confirmation of its important role as a global leader. (View Highlight)
America is pushing chipmakers to expand cutting-edge production on its shores. On April 8th the government announced 6.4bn for South Korea’s Samsung to build fabs in Texas. The moves fall under its 369bn green-subsidy package passed in 2022. It supports domestic production of green gear through tax credits. Meanwhile, America maintains high tariffs on Chinese solar panels and EVs, of 14.25% and 25% respectively. (View Highlight)
Chinese chipmaking has not panned out so spectacularly, however, despite government subsidies of about $150bn over the past ten years. That is to some degree a measure of America’s success in blocking the flow of chipmaking technology into the country over the past two years. (View Highlight)
China installed more solar in 2023 than America has in total. In chips China has market power, but not technological dominance. With green tech it has both. (View Highlight)