21 hours ago
- Business
- South China Morning Post
Washington has already lost dirty chip war but does not know it yet
The United States is fighting two chip wars against China. One involves playing dirty, which it has already lost, though it doesn't know it yet. The other, more legitimate, remains to be seen.
It depends on whether America can maintain its longstanding tech innovation and leadership. But with Donald Trump at the helm with his weird and often incomprehensible 'strategies' – from cuts and firings in government-funded basic research to direct interference in the tech sector – things don't look good.
The dirty chip war essentially tries to trip China over with export restrictions, bullying of allies from selling advanced tech, and sanctioning of Chinese tech firms, which often includes targeting their non-Chinese suppliers as well. It was started by Donald Trump 1.0, intensified under Joe Biden, but now somewhat moderated under Trump 2.0.
You can say China also has its own tit-for-tat dirty war, which involves smuggling and copying of export-restricted advanced chips and related tech such as automated software designs. But historically, rising tech superpowers, including Britain and the US, have always taken from others as a kind of state industrial policy. China's development is the rule, not the exception. Tech diffusion can be slowed but never stopped.
At the moment, there is something of a truce, though Washington clearly sees it as a continuation of the tech war by other means.
There seems to be a consensus within the Trump White House that putting the squeeze on China has actually made it move faster to refashion its entire chipmaking industry by creating an increasingly self-sufficient domestic sector with its own secure supply chains.
That's why Trump and Co have switched to a different track, by allowing Nvidia and AMD to sell to China respectively their lower-performance chips H20 and MI308 for artificial intelligence.
