Why China is losing the microchip war

The global semiconductor industry has transformed into a primary battlefield for geopolitical supremacy between the United States and China. Originally developed for U.S. military guidance systems, microchips evolved through Moore’s Law into an exponential driver of computing power, leading American firms to outsource manufacturing to Asian allies like Taiwan and South Korea. While China initially dominated low-end assembly, its recent aggressive pursuit of self-sufficiency through state subsidies and alleged intellectual property theft—exemplified by the case of former ASML engineer Zongcheng Yu—triggered a severe U.S. backlash. Chris Miller, author of *Chip War*, observes that the U.S. has shifted to a zero-sum strategy, utilizing export controls to exploit "choke points" in design software and lithography equipment. This escalating "chip war" forces critical players like Taiwan’s TSMC, which produces 92% of advanced chips, to choose sides, effectively weaponizing the global supply chain and heightening tensions over Taiwan’s sovereignty.