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Paper short abstract

There is a burgeoning literature on the "chip war" between the US versus China, yet we lack adequate tools to measure who is winning and why. Many who analyze national development employ national accounts, yet we argue this is anachronistic in globalization, and offer an alternative framework.

Paper long abstract

Both China and the United States agree that semiconductors are a foundational technology of the twenty-first century underpinning many others, thereby crucial for national development and power. Since 2014 China has spent over $150 billion in industrial policy to catch-up with the world’s leaders in semiconductors. Since 2018 the United States has been implementing policies to try to prevent this catch-up, from blacklists of Chinese firms to export controls on entire modules of the global value chain, from 2022 committing $280 billion in the CHIPS and Science Act to semi-nationalizing key firms such as Intel and MP Materials. The United States has been able to weaponize not only technologies owned by transnational corporations (TNCs) domiciled in the United States but also TNCs from Japan, the Netherlands, South Korea, and Taiwan. We still lack an adequate explanation for how the US state can weaponize both US and non-US TNCs, as well as tools to measure who is winning and why in this chip war. We offer the concept of “national corporate power” and an original method to measure this in the age of global value chains (GVCs). We show that despite China producing more chips than Europe and the United States combined, US dominance remains staggering, including in China, because of its control over GVCs, which the US state can weaponize. This has resulted in a more than half-decade tech blockade on China, which has profound implications for the Global South’s capacity to technologically upgrade in this new age of techno-nationalism.