The Technological Cold War: Will the US and China’s Race for Semiconductor Dominance Redefine International Relations?
By Abdulla Alhemeiri
In an era when global supremacy is measured not in brute force but in bytes and nanometers, a new Cold War is unfolding, one where trade, technology, and sanctions serve as the formidable ammunition. At the center of this conflict is the semiconductor, a small but powerful electronic tool that is essential to modern advancement. The current rivalry for technological market dominance features China against the United States, along with its allies.
The year 2022 marked a pivotal chapter in the ongoing techno-political struggle, with many restrictions imposed by the United States against China. The United States recognizes the strategic significance of semiconductor chips in almost every electronic item, from everyday household devices such as microwaves and refrigerators to advanced military equipment such as SPY-6 and fighter jets. Thus, the United States decided to launch a series of sanctions aimed at slowing China’s growing semiconductor industry and limiting its capacities.
This was not only a tactical play, but also a declaration of American intention to maintain technological supremacy. The United States started blacklisting Chinese tech firms like Huawei and ZTE, and made its allies Taiwan, South Korea, Japan, and the Netherlands impose restrictions on advanced chips and machinery exports to China. These actions reflect the American intention to contain China’s technological growth amid understanding that a nation’s power is directly linked to its capabilities in semiconductor manufacturing and production. China, aggravated by these actions, has accused the United States of trying to stagnate its technological and economic progress. And in a tit-for-tat reaction, Beijing banned Iphone devices in certain government-backed agencies and companies wiping out $200 billion dollars from Apple’s market value. Additionally, Beijing restricted the exports of gallium and germanium, two essential parts of semiconductors, mainly affecting the European Union and the United States.
The global supply chains are seriously affected by the ongoing rivalry in the semiconductor industry. Semiconductors are essential to many sectors including transportation, healthcare, and consumer electronics. With the US and China being major chips producers and developers, their techno-political tensions threaten the market stability of these global supply chains. Companies and consumers are increasingly feeling the impacts, facing higher costs and delays in production schedules.
As this battle over semiconductors continues, it highlights a more worrying trend. The United States actions reveal a deep fear over China’s potential use of semiconductor technology in the military and espionage. This fear is starting to break down the connected world we live in, leading to the sounds of a Cold War that is reaching all parts of the globe. The impact of this divide is even felt here in the Middle East.
Countries like the United Arab Emirates and Saudi Arabia, with optimistic vision to lead in artificial intelligence, found themselves caught in the middle of this global tug-of-war. UAE’s leading AI company, G42, has been accused by the American intelligence of channeling advanced US technology and citizens data to China, raising concerns about national security. Simultaneously, the CIA director has been regularly meeting with the Emirati counterpart fearing G42’s collaborations with Chinese companies. The United States wants to make its message clear for the United Arab Emirates: to either align with China or the United States.
Meanwhile, Saudi Arabia’s Aramco venture capital fund was forced by the Biden administration to sell its shares of an American AI chips startup backed by Sam Altman, CEO of OpenAI. This move indicates a sign of growing mistrust towards Saudi connection with China, and its involvement in the US technology sector. Furthermore, the United States government halted sales of advanced Nvidia semiconductor chips to the UAE and Saudi due to AI technological connection with China. These excessive concerns and restrictions by the United States highlights a larger trend: Artificial Intelligence technology is polarizing the world.
The American approach further raises a key question: by trying to hold back a country’s technological progress out of fear, aren’t we holding back the progression of all humanity? The pursuit of technological leadership should be a collective effort to solve global challenges, not a competition that creates division and slows down progress. As China slowly moves closer to filling its gap with the United States in its semiconductor industry, it’s becoming clear that these sanctions might be more of a minor obstacle than a major barrier. So, we must consider: what is the ultimate goal of the restrictions in the semiconductor race? Would it be just for China to retaliate with similar measures in the future? History shows that such back-and-forth tactics rarely produce winners, rather only deepening divisions and increasing hostility.
In this new Cold War, it’s important to recognize that the international community’s choices will not only shape the future of technology, but also the future of the world. Will we let the constructed fear and distrust misguide us, or will we find a way to turn feud into cooperation for the advancement of all humanity? Sadly, the current trend suggests US restrictions will continue to provoke China, and China will counter these measures, leading to an endless crippling economic cycle. Nevertheless, let us have a glimmer of optimism. Just like the Cold War between the US and the USSR experienced a period of Détente leading to diplomatic negotiation, we should believe that verbal communications between the US and China will be sought, and tensions will be reduced.
