China and the United States have had quite a contentious relationship over the past decades regarding various economic and geopolitical matters. However, those tiny chips inside electronic devices have now become the point of contention between two world superpowers.
As the 47th president of the United States, Donald Trump, is preparing to enter the White House, China is also preparing for a new round of sanctions and restrictions on its semiconductor industry. Trump already announced his plans to impose a 60 percent tax on imported goods from China. Additionally, Trump might also bolster restrictions on exporting chips and GPUs to China.
In light of this, China has started stockpiling US-made chips to minimize the impact of potential restrictions. According to a new report by the South China Morning Post, China imported over $1.11 billion of integrated circuits from the US in October, which shows a 60 percent increase compared to the same period last year.
Moreover, the customs data shows China has imported $9.61 billion of microchips from the US in the first 10 months of the year, a 42.5 percent surge compared to 2023. China"s monthly purchases of chips from the US have consistently surpassed $1 billion since June. The country is particularly interested in purchasing CPU-based processors, controllers, and chips for storage and signal amplification.
Trump has already shown that his promises to put China in hot water aren"t just a hoopla. During his first term as POTUS, Trump designated TikTok as a threat to the US national security and ignited a trade war with China.
Additionally, imposing export restrictions on China is not an agenda just for the Republicans, as we"ve seen the Biden administration banning Nvidia from sending AI chips and GPUs to China.
The roots of these conflicts all go back to China"s appetite for conquering Taiwan, the world"s biggest and best chip producer. A Chinese conquest of Taiwan and its access to advanced chip manufacturing technologies could be a national security disaster for the United States.