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The U.S.-China Conflict Over Chips Is About to Get Uglier

By Yahoo! Finance

October 26, 2020

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On a scorching hot day in late August, representatives of Taiwan's government and industry crowded into the clinical cool of a state-of-the-art semiconductor facility for a symbolic moment in the global tech conflict.

They were attending the opening ceremony for a training center built by Dutch company ASML Holding at a cost of about $16 million, small change for an industry used to spending $10 billion or more on a single advanced manufacturing plant.

The real value of the site in the southern city of Tainan is strategic: It's one of just two such facilities outside the Netherlands capable of training semiconductor engineers to fabricate cutting-edge chips on ASML machines. Fellow U.S. ally South Korea hosts the other — and Washington is working hard to ensure China never acquires the same technology.

As the U.S.-China confrontation takes root, the ability to craft chips for everything from artificial intelligence and data centers to autonomous cars and smartphones has become an issue of national security, injecting government into business decisions over where to manufacture chips and to whom to sell them. Those tensions could kick into overdrive as Communist Party leaders set a five-year plan that includes developing China's domestic technology industry, notably its chip capabilities.


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