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The chip industry is globally integrated, with the United States still being the dominant controller worldwide.

Updated: Jun 5

The chip industry has long been a model of global operation.

The entire industry chain covers multiple stages, including design, manufacturing, packaging and testing, and the involved materials and equipment.


These stages are distributed worldwide, and no single country or region can complete all the steps of the industry chain independently, including the United States, Japan, South Korea, and China.


From design to the final product, chip production involves extensive collaboration.

Typically, chips are designed in the United States, use materials from Japan, are manufactured in Taiwan, then packaged and tested in Taiwan or mainland China, and finally sent to mainland China to be assembled into various electronic products, which are then exported to the global market.


Although the chip industry chain appears globally integrated, it is actually controlled by an invisible hand, which is the United States.

In this industry chain, the most critical technologies such as EDA (Electronic Design Automation), IP (Intellectual Property), and semiconductor equipment are almost entirely monopolized by the United States.


Lithography machines are primarily produced by ASML in the Netherlands, and semiconductor materials mainly come from Japan.


The Netherlands and Japan are allies of the United States in international politics and economics.

Therefore, even though the chip industry chain appears globalized, it is firmly controlled by the United States.


The United States can decide the direction of this industry chain at any time, and any country or company that dares to challenge its authority risks being cut off from supplies.

For example, the United States can stop supplying lithography machines, semiconductor equipment, and materials, making it impossible for competitors to continue producing chips.


In this context, if the United States can maintain its dominance in the chip industry, it will naturally allow this globalized model to continue developing.


Because, in this process, the United States can reap the most benefits, while other countries only get a portion of the profits to keep the entire industry chain running.


However, in recent years, mainland China has rapidly developed its own strength by leveraging the globalized model of the chip industry.


Purchasing lithography machines from ASML in the Netherlands, advanced manufacturing equipment from the United States, semiconductor materials from Japan, and utilizing EDA and IP technologies from the United States, China's chip industry has risen quickly.

From the perspective of the United States, this development model uses the U.S.-led global industry chain to grow itself.


Moreover, China is the world's largest chip market, consuming one-third of the world's chips and importing two-thirds of the world's chips.


The Chinese market has become one of the largest sources of revenue for American chip companies.


If China achieves chip self-sufficiency, it would be a massive blow to the United States, causing significant economic losses and seriously threatening U.S. political interests.


Therefore, the United States is clearly unwilling to see China achieve chip self-sufficiency through the globalized industry chain.


Thus, the United States has begun to take action, trying to cut off the global supply chain, preventing China from relying on this chain to develop its chip industry.

The U.S. has implemented a series of restrictions, prohibiting the export of critical technologies and equipment to China, attempting to curb the development of China's chip industry.


In this situation, China can only achieve chip self-sufficiency by establishing its own chip industry ecosystem.


From raw materials, design, wafer manufacturing to foundry and packaging and testing, all stages need to rely on its own industry chain.


This is a complex and lengthy process that cannot be achieved overnight, but it is a path China must take.


China has already made solid strides on this path. The government and enterprises are increasing investment, promoting independent innovation in the chip industry.


Chinese companies have started to develop their own EDA software, design and manufacture their own chips, and vigorously promote the localization of semiconductor equipment and materials.


At the same time, China is actively cultivating local semiconductor talent and strengthening cooperation and exchanges with international peers to accelerate technological progress.

Despite facing numerous challenges, China has shown immense potential and resilience in the development of its chip industry.


Through independent innovation and global cooperation, China's chip industry is gradually narrowing the gap with international leading levels.


China's goal is not only to achieve chip self-sufficiency but also to become an important part of the global chip industry in the future, contributing to global technological innovation.


In summary, the globalized nature of the chip industry determines that no country can operate completely independently, but within the U.S.-led global industry chain, China is finding its breakthrough by pursuing independent innovation and global cooperation, gradually achieving self-sufficiency and sustainable development in the chip industry.


In the future, China's role in the chip industry will undoubtedly become increasingly important, contributing more to global technological advancement.

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