https://orcid.org/0000-0002-1943-8251
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Abstract
This paper conducts a study into the exercise and development of US structural power in the global semiconductor industry and offers a geoeconomics explanation for US dominance in the sector. It emphasizes the role of legal jurisdiction and spatial dimensions of technological development in perpetuating US structural power in global semiconductor value chains. The goal of this paper is to apply the concept of extraterritoriality to the study of structural power; how it is acquired, and how it is used. It explains why we should consider extraterritoriality as a feature of US structural power in International Political Economy (IPE) and suggests three features to help illuminate the concept: Power in global value chains, legal-jurisdictional power, and alliance-based power. The paper first explains how the US acquired the policy tools and leading market position for projecting extraterritorial power in the semiconductor industry during the late twentieth century, how it then utilized its structural privileges to target Chinese technology firms, and finally, the current and potential constraints on its deployment based on the reactions of Chinese and US transnational corporate actors.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 Referring to the market dominance of Microsoft (Windows) and Intel in the personal computing market in 1990s.
2 SMIC was able to mass-produce 110-nanometer chips in 2004, whereas TSMC was able to mass-produce 90-nanometer chips. There was formerly only a one-year technological difference between the two (Dickie, Citation2004).
3 TSMC later also scored a victory against SMIC in both jurisdictions.
4 This gap was exacerbated by management problems and international competition, as explored in detail in Li (2022).
5 Not all trade secrets are registered, and quantification of trade secrets remains a black box.
6 At the time of writing, RISC-V chip architectures are largely used for sensors and mobile devices, not desktop PCs, where Intel and AMD are dominant.
7 One industry report estimates Chinese membership to comprise over 70 percent of the consortium (see Sharwood, Citation2021).
8 Database available at pedata.cn Data for 2022 only covers the first two quarters of the year.
9 VC investors ‘exit,’ or realize the return on their investment, through various channels like IPOs, M&A, and selling their acquired position in a company to another VC. In the semiconductor industry, along with other industries where US export controls and Chinese government priorities meet, namely biotechnology and artificial intelligence, private as well as public financing has been increasing, particularly since 2018 (Locket & Cheng, Citation2022).
10 See, for example, Lin, Citation2017; Colonnelli et al., Citation2022.
11 This problem affects the US and Europe as well (interviews 1C and 9C; Liu, Citation2022; SIA, Citation2020).
12 Some interviewees noted that China’s education system, R&D ecosystem, as well as its corporate culture has not yet matured to supply the labor force needed to compete with IC design firms in the US (Interviews 5A, 7A, 8A, 9A).
13 The paper was selected by the IEDM as one of the top three papers on memory technology at the annual electrical engineering conference. See Duan et al. (Citation2021).
Additional information
Notes on contributors
Anton Malkin
Anton Malkin is an Assistant Professor in the department of Global Studies at the Chinese University of Hong Kong, Shenzhen. His research centers on the intersection of finance and technology in the global political economy, with a focus on China’s role in this context.
Tian He
Tian He is an Assistant Professor in the Department of International Studies at Xi’an Jiaotong-Liverpool University. His research focuses on East Asian political economy, US-China relations, and comparative and international politics of the Asia-Pacific region.