The Silicon Sword Hanging Over China’s Head

Abstract

The Biden administration's escalating restrictions on China's semiconductor industry signal a shift in the U.S.-China technological competition. These measures, including sanctions, export controls, and supply chain containment, aim to deny China access to advanced semiconductor technology and expertise. This turn towards weaponizing semiconductor dominance indicates national security now drives the contest beyond purely economic interests. The U.S. has moved from a defensive posture of containing China's rise to an offensive posture of imposing steep costs by cutting off its access to cutting-edge technology. Stackelberg game theory models demonstrate how the U.S. leverages its current advantages in semiconductors to force difficult tradeoffs on China. This stranglehold aims to hobble China's technological ambitions and preserve U.S. semiconductor leadership.