America’s No. 1 long-term challenge is China and right now we continue to supply the People’s Liberation Army (PLA) with semiconductors, many of them quite advanced, as this article explains. The Biden Administration is trying to impose limits on those sales for reasons of national security. But three largest U.S. chipmakers–Invidia, Intel and Qualcomm–have launched a lobbying campaign to sharply limit or even gut the administration’s intentions. Chips designed by Qualcomm and manufactured by Taiwan Semiconductor Manufacturing Corp. (TSMC) have been identified as being in the PLA’s possession.
This is a classic standoff between a government quite rightly concerned about China’s increasing assertiveness in the world and inside the United States and a private sector that is wedded to the philosophy of “globalization.” As Michael McLaughlin and I write in Battlefield Cyber: How China and Russia Are Undermining Our Democracy and National Security, entire generations of American CEOs have not believed they bear any responsibility for America’s national security. Their only job is to make money. The three companies sell about $50 billion worth of chips to China a year.
The companies may have some good points on how fast their sales can be restricted and on the impact that cutting back on those sales might have on spurring China into creating its own advanced semiconductor industry, which it hasn’t been able to do. But the administration is entirely correct in seeking to limit the sophistication of American chips and American-designed chips being sold to China and in seeking to rebuild manufacturing capacity in the United States. This is clearly a sensible national security goal.
If U.S. companies and the U.S. government cannot agree on a strategy, we have little chance of stopping China’s race for AI and quantum computing and its continued penetration of the world’s IT systems. If the semiconductor companies continue to resist and undermine U.S. national security goals, I think a president of the United States has no choice but to invoke national security and force the companies to cooperate. That would be wildly unpopular in Silicon Valley and the companies’ share prices would suffer (erasing some of the wealth of their shareholders), but that might have to be the price that must be paid if the United States is to resist China’s obvious goal of undermining America and dominating the world.
