Swasti Rao
The outgoing Joe Biden administration has been unusually active in recent weeks, making significant decisions with long-term implications. These include lifting certain restrictions on Ukraine and imposing stricter trade measures on China. The structural effects of these moves will become evident in 2025 and beyond. As recently as early December, the administration delivered its third major blow to China’s semiconductor industry. This effort seeks to curtail China’s ability to access and produce advanced chips that could support artificial intelligence for military purposes or pose risks to the United States’ national security.
For India, these developments are not merely a geopolitical spectacle but hold direct strategic relevance. Beyond observing this unfolding competition, New Delhi has an opportunity to assess its role in helping the US build resilience in semiconductor production and supply chains amid the intensifying “chip war.”
A global tug-of-war
The US has maintained dominance in the semiconductor industry since Silicon Valley pioneered the technology. Over time, however, East Asian nations such as Taiwan and Japan emerged as key manufacturing hubs, incentivised by government subsidies. As Chris Miller highlights in his book Chip Wars: The Fight for the World’s Most Critical Technology, this evolution allowed the US to establish critical business and strategic alliances in a region vulnerable to Russian influence during the Cold War. In the current Cold War-style rivalry between the US and China, these alliances remain crucial in countering Beijing’s ambitions for a unipolar Asia.
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