The battle for dominance in the semiconductor industry is driving the global economy.


For more than a century, the scramble for oil has fueled wars, forged unusual alliances and disrupted diplomatic ranks.


But now, the world's two largest economies are looking for another valuable resource: the semiconductors and chips that power our daily lives.


Electronic chips are at the heart of a fierce battle between the United States and China.


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These tiny silicon chips are at the heart of a $500 billion industry that is expected to double by 2030. Chip-making companies and national networks that control supply chains are key to becoming an unprecedented superpower.


China needs the technology to make chips, and much of that technology comes from the United States, so Washington is taking it away from Beijing.


Chris Miller, author of "Slide Wars" and an assistant professor at Tufts University, said the two countries in the Asia-Pacific region are clearly engaged in an arms race, but he added that there is more to the race. There are: "Both. It's happening all over the world. Traditional patterns, domains, like the number of ships or missiles, but increasingly it depends on the quality of artificial intelligence (AI) algorithms that can be used in military machines.


For now, the US is winning, but its ongoing war with China is changing the global economy.


chip maker


Semiconductor manufacturing is complex, specialized and fully integrated. iPhone chips are made in the United States, manufactured in Taiwan, Japan or South Korea and then assembled in China. Future of India, more investment in this sector can play a big role


Semiconductors were invented in America, but over time East Asia emerged as a manufacturing hub, thanks in large part to government incentives including subsidies.


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This allowed Washington to establish trade relations and strategic alliances in regions that were under Russian influence during the Cold War. This alliance is now equally effective in countering Beijing's growing influence in the Asia-Pacific region.


The competition is to build the best and most efficient chip at scale, and to be as small as possible. The challenge is the number of transistors, which are tiny electronic switches that turn electricity on or off, so can you fit them into the smallest part of a silicon chip?


"This is what the semiconductor industry calls Moore's Law, that the density of transistors will double over time, and it's a very difficult goal to achieve," said Jiu Wang, a partner at Bain & Company in Silicon Valley. .


"It's made our phones faster, our digital photo archives bigger, our smart home devices smarter over time, and our social media content richer," he added.


Washington wants to push China away from chip-making technology.


Getting to that point isn't easy, even for major chipmakers. By mid-2022, Samsung will be the first company to begin mass-producing three-nanometer chips. Later that year, Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest chip maker and a major supplier to Apple, followed suit.


How small is this piece? Smaller than a strand of hair, 50 to 100,000 nanometers.


These small chips are more powerful, which means they can be used in more expensive devices such as supercomputers, artificial intelligence and the Internet of Things.


There is also a lucrative market for "low-end" chips that power everyday items in our lives like microwaves, washing machines and refrigerators. However, this requirement is likely to disappear in the future.