Manufacturing Weapons of the New Cold War

Components of a conflict

Now, all five of the biggest chipmakers—including one Taiwanese and two South Korean firms—have agreed to build plants in the United States. The government is providing substantial financial incentives to build in the U.S., as part of Washington’s developing view of semiconductors as a vital strategic asset. In this industry, the country wants to stay as far ahead of China as possible.

In October 2022, the U.S. made its first major move to slow Beijing’s progress: It banned exports to China of the most advanced chips, as well as the tools to design and produce them. Since then, Washington has focused on building a domestic chip industry, as the vast majority of semiconductors have long been manufactured on Taiwan—an island that’s been a locus of U.S.-China tensions for decades.

Meanwhile, China has responded to the chip ban by boosting its own chip production. Last year, Huawei, the leading Chinese semiconductor firm, unveiled a sophisticated chip in a new smartphone. Now, it’s promising to introduce a chip to rival the world’s best.

So where does this struggle over semiconductor chips stand?

Chris Miller is an assistant professor of international history at Tufts University’s Fletcher School of Law and Diplomacy, and the author of Chip War: The Fight for the World’s Most Critical Technology. Miller says the financial incentives are working. But foreign firms aren’t just taking the bait; they’re also beginning to see the United States as their main future market. With AI investment in the U.S. booming, more and more of their business is with U.S. customers. They’re watching their Chinese markets shrink, too, as Beijing supports domestic firms and encourages them to move away from non-Chinese suppliers. Thanks to the export ban, Miller says, the world of semiconductor chips appears to be dividing into two spheres—a Western and a Chinese—and for now, the U.S. and its allies are pulling ahead …

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• “All the big South Korean companies have realized that even though they want to keep doing business in China where they can, it just isn’t a growth market anymore. Chinese markets are often shrinking now, on account of China’s industrial policy favoring domestic firms. So the South Korean business community—the chip industry, specifically, as well as more broadly—has made a deliberate choice to bet more heavily on the U.S. market, because they’re still welcome there. They have capabilities that are welcome. It’s the opposite in China.”
• “Nvidia has a special category of chips they can sell to China; they’ve deliberately downgraded them to meet the U.S. rules—and China’s buying a ton of these chips right now. If smuggling were solving all of China’s problems, China wouldn’t be spending all this money to import such volumes of Nvidia’s downgraded chips legally.”
• “Chinese AI firms have been trying to rebrand themselves as Singaporean or even American. They’re trying to reduce the number of Chinese investors they have and to sell their products only outside China. That speaks to how the Chinese tech sector looks less attractive as a place to invest—time or money.”

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Russia’s global battle vs. democratic revolution

As Anatol Lieven noted in 2022, three months after Russia invaded Ukraine, Putin believed that the Russian and Ukrainian peoples were bound together historically in a common, great civilization. The Ukrainian state may not have wanted to see their country under Russian rule; but the Ukrainian state, in Putin’s view, was after all run by a fascist clique that had little to do with everyday Ukrainians. So why wouldn’t everyday Ukrainians greet the Russian army with flowers?

Samuel Ramani’s new book, Putin’s War on Ukraine: Russia’s Campaign for Global Counter-Revolution, takes a complementary view: Putin’s fundamental motivation, Ramani says, was to counter the “color revolutions” in neighboring countries. If Putin could extend Russian hegemony over Ukraine, he could not only reverse its “Euromaidan” uprising of 2014 but ultimately undo its “Orange Revolution” of 2004, Georgia’s “Rose Revolution” of 2003, and the entire pattern of nationalist-democratic revolutions in the region.

Putin’s counter-revolutionary stance is popular in Russia, Ramani says, because it has “historical legitimacy”—a broad resonance with Russians’s common sense of their country’s historical identity.

In the nineteenth century, Tsar Alexander I earned the moniker “Policeman of Europe” for combating revolutionary forces and mores. In the twentieth, the Soviet Union—far from exporting revolution—was a force of reaction through the Warsaw Pact: The Soviets crushed popular uprisings in East Germany in 1953, Hungary in 1956, and Czechoslovakia in 1968. That counter-revolutionary tradition survived the fall of the U.S.S.R., too: During the constitutional crisis of 1993, Russia’s acting prime minister, Yegor Gaidar, warned that ongoing unrest in the streets would turn Russia into a “huge concentration camp.”

Of course, the counter-revolutionary tradition would be nothing without another of Russia’s traditions: the revolutionary tradition. That may be less visible in Russia at the moment, but Putin evidently doesn’t like seeing it among his neighbors.

—Gustav Jönsson

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