Oxford Debate: 'China Simply Cannot Reach Semiconductor Supremacy by 2030'
Motion: China Will Win The Race For Supremacy in Semiconductor Production by 2030
ZURICH, SEPTEMBER 20, 2022 – Semiconductor chips are built into satellites, cars, computers, smartphones and basically every other electronical device – they own our lives. Their production is highly complex and only a couple of firms can produce the most advanced chips – on which the success of every larger tech company depends.
Currently, the biggest player in the semiconductor industry by far is Taiwan Semiconductor Manufacturing Company (TSMC). More than 90% of the most advanced chips are supplied from Taiwan, making semiconductors not only an economical, but also a geopolitical issue.
Both the U.S. and China are trying to catch up in the race for control over the semiconductor supply chain. The Chinese government aims to expand domestic production of semiconductors to meet 80% of domestic demand by 2030.
In this Oxford Debate, Sophie-Charlotte Fischer, Jimmy Goodrich, Jan-Peter Kleinhans, and John Lee debated whether Beijing will succeed in that goal.
Disclaimer: Positions presented in the debates do not necessarily represent the speakers’ views.
China will win the race for supremacy in semiconductor production by 2030.
The Key Arguments:
- Supremacy doesn’t mean having technical and market leadership in every domain of the semiconductor industry, argued John Lee. It means having a dominant market position in the industry as a whole. China has been working on this for some time. It benefits from existing strengths, having the largest and most developed market for multiple end users of semiconductors, integration with fast-growing markets in the developing world, and strong support from senior political leadership. The increasing export controls imposed by the U.S. will only encourage the Chinese semiconductor industry to work seriously on domestic capability and capacity.
- Even though China is likely to have the highest semiconductor manufacturing capacity by 2030, this does not at all mean the country will have global supremacy in the sector, countered Jan-Peter Kleinhans. You can’t claim supremacy if your cutting-edge AI chip relies on chemicals from Japan, production equipment from the Netherlands, and design software from the U.S. China would need to establish Chinese alternatives for each component in the transnational value-chain of semiconductor manufacturing. Each alternative would have to compete against the international cutting edge. As it doesn’t have a viable competitor established today, it simply cannot reach supremacy in only eight years.
- It’s impossible to define what supremacy in the tech industries means eight years from now, based on what we see today, said Sophie-Charlotte Fischer. China is well-positioned to surprise us, as it has attracted the highest levels of foreign direct investment related to semiconductors and, according to some assessments, even led the U.S. in new semiconductor patents. The government now has prioritized development of the third generation of semiconductors, and there’s been remarkable progress. We also see how reluctant U.S. allies like South Korea are in supporting restrictions on exporting to China, which, after all, will only grow as a marketplace for semiconductors.
- China will still face major hurdles by 2030 that will impact its ability to produce leading-edge nodes, according to Jimmy Goodrich. While the country’s design capabilities are advancing, its domestic software ecosystem and advanced manufacturing capabilities are lacking. Technological complexity, knowhow in the workforce, and export controls will all have significant impact and will only increase as tensions between China and the U.S. escalate. Scientists are working very hard on developing sub-7 nanometer semiconductors, mostly outside of China. It’s very hard to start from scratch, as China would have to. The country will be increasingly relevant, but its semiconductor industry will continue to depend on a foreign supply chain. No country can dominate the entire ecosystem, and that will still be the case in 2030.
Arguing in favor of the motion:
Sophie-Charlotte Fischer is a senior researcher at the Center for Security Studies (CSS) at ETH Zurich. She is also a Research Affiliate with the Centre for the Governance of AI (GovAI) in Oxford. Sophie’s research focuses on the geopolitics and governance of emerging technologies. Research topics of interest include the U.S.-China competition in emerging technologies, the EU’s approach to geopolitics and technology, and the role of technology firms in international security. Sophie holds a doctorate in Political Science from ETH Zurich. In her thesis, she investigated how technology companies shape the strategies available to the American government to respond to China’s technological rise.
John Lee is director of the consultancy East West Futures. He is also a researcher at the Leiden Asia Center, a consultant for the International Institute for Strategic Studies and Co-lead on the EU China Semiconductor Observatory. John’s research focuses on China and digital technology, in particular China’s cyberspace governance regime, the semiconductor industry and future telecommunications networks. Previously he was a senior analyst at the Mercator Institute for China Studies and worked at the Australian Department of Foreign Affairs and Trade and Department of Defence. He tweets @J_B_C16.
Arguing against the motion:
Jimmy Goodrich is vice president for global policy at the Semiconductor Industry Association (SIA). In this role, Jimmy leads SIA’s global policy team and directs SIA’s international competitiveness, trade, export control, supply chain, global market research, and China policy agenda. Previously he was director of China policy at the Information Technology Industry Council (ITI) in Washington D.C. Before moving to Washington D.C. in 2012, Jimmy spent a total of seven years working in the tech sector in China, including for Cisco Systems, APCO Worldwide, and USITO.
Jan-Peter Kleinhans is head of Technology and Geopolitics at Stiftung Neue Verantwortung (SNV) – an independent, non-party, non-profit, tech-policy think tank in Berlin, Germany. His focus is on the analysis of semiconductors as a strategic asset, how resilient the global semiconductor value chain is to external shocks and how geopolitics effect this value chain. Jan-Peter testified at the US-China Economic and Security Review Commission and presented his work at the Dutch parliament, among others. Jan-Peter has been working at SNV since 2014 and was responsible for mobile network security (2018-2020), in particular 5G security and the issue of the trustworthiness of network equipment vendors. He presented his work on 5G security to the Foreign Affairs Committee of the German Bundestag, the NATO Parliamentary Assembly and the United Nations Institute for Disarmament Research, among others. Before that he worked on the topic area of IT security in the Internet of Things. He studied communication sciences in Uppsala, Sweden and business informatics in Darmstadt, Germany. Jan-Peter is Fellow of the Transatlantic Digital Debates 2016. (Photo: © Sebastian Heise)
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About Oxford Debates
The Oxford Debates at Asia Society Switzerland are a format to address ‘big’ questions that have no one answer or solution but are inviting many conflicting views. Four renowned experts in the field form teams of two, one team arguing for the motion, the other against it.
The Oxford-style format is broken down into four sections: opening remarks, rebuttals, a moderated question-and-answer session, and closing remarks. Before and after the debate the audience is polled whether they agree with the motion or not. The voting breakdown is not shared publicly until the end of the debate. The greater percentage change between the first and second votes determines the debate’s winning team.
Disclaimer: Positions presented in the debate do not necessarily represent the speakers’ views.