ASSESSMENTS

As the U.S.-China Tech War Rages on, the Electronics Industry Braces for Impact

Mar 29, 2019 | 09:00 GMT

A Samsung silicon wafer is displayed on March 23, 2011, in San Jose, California.

The semiconductor industry is entering a period of increased specialization as new technologies, such as artificial intelligence, require more tailored computer chips.

(JUSTIN SULLIVAN/Getty Images)

Highlights

  • Chip manufacturers are finding that keeping up with Moore’s law by increasing the density of transistors to boost computing power is no longer worth the multibillion-dollar investment.
  • The semiconductor industry is also entering a period of increased specialization as new technologies, such as artificial intelligence, require more tailored computer chips.
  • Meanwhile, China's desire to increase its own chip manufacturing and design capabilities has led the United States to consider export controls and other constraints, which pose the most immediate threat to U.S. tech companies.
  • However, the semiconductor industry has become deeply globalized over the past 30 years, and untangling that interconnected web risks slowing innovation and technological advancement in the long term.

Semiconductor manufacturers create the computer chips that power today's growing multitude of electronic devices -- from coffee makers to self-driving cars, and everything in between. The industry, therefore, plays a crucial and increasingly embedded role in the global economy. But today, manufacturers are facing the highest levels of geopolitical risk and competition they have seen in decades, as they grapple with a seismic shift away from Moore's law and toward more specialized chips. Meanwhile, the ongoing trade war between the United States and China -- the two most important markets for electronics -- is threatening to fragment the entire industry and globalized tech sector it operates within....

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