The Cold Tech War and the Semiconductor Industry: What Next?

B. Valle

Summary Bullets:

• Geopolitical dynamics are having a growing impact on the semiconductor market

• The EU and the US have passed legislation to improve their competitive position vis-à-vis Asian countries

The pandemic and its aftermath, and more recently the war in Ukraine, has created a world of rising inflation and supply-chain imbalances that is profoundly disrupting the semiconductor industry, giving way to worldwide shortages of chips and advanced microprocessors. The trend towards economic nationalism that predated the pandemic has also contributed to the increasingly geopolitical slant affecting the competitive dynamics in this technology market segment. Moreover, the application of artificial intelligence (AI) and machine learning (ML) has become a fundamental driver of the semiconductor industry, and China is fast becoming a leading power in AI applications. New US restrictions on the sale of AI chips to China demonstrate the strategic importance of AI for national economies to reach their digitization potential.

Continue reading “The Cold Tech War and the Semiconductor Industry: What Next?”