The so-called "chip war," a long-running technological confrontation between the US and China, continues. In late May 2023, Beijing cracked down on US-based tech firm Micron and banned its products in the country, depriving the company of the critical Chinese market. China imposed sanctions against Micron, stating that it poses a threat to the security of the country. The US authorities responded with similar restrictions, although they were the first to initiate sanctions against China. Notably, the Chinese authorities banned Micron, which received 25% of its revenues in China, against the background of the severe restrictions imposed by Washington on microchip production. August 2022 was the chip war’s starting point when US President Joe Biden signed a law aimed at reinforcing the country's leadership in all advanced technologies from AI to quantum computing. The document was called the CHIPS and Science Act. The US lawmakers said that the act was designed to confront China and that its norms would limit cooperation with that country. In 2022, China significantly increased its semiconductor manufacturing. Back in 2021, it managed to increase production by 33%. Last summer, Chinese IT companies developed rapidly despite the US restrictions. Currently, China is not very self-sufficient in producing chips. At the same time, the technological gap between China and its competitors is widening. However, the Chinese government is actively supporting the industry. It has poured billions of dollars into the IT sector and plans to increase the manufacture of tech products. According to analysts, US sanctions have pushed China to expand production. The severe global shortage of microchips boosted the Chinese technology sector. As a result of the narrow microchip supply, a number of industries, particularly the automotive one, had to halt production. Against this backdrop, Chinese companies benefited considerably. According to Graham Ellison, a former Pentagon adviser, and Eric Schmidt, the former head of Google, if Beijing gains a sustainable advantage throughout the semiconductor supply chain, it would give it a sharp boost in fundamental technology. In that case, China may overtake the US.
