US-China Decoupling Patterns in Supply Chains and Ecosystems for Semiconductors and AI technologies

The sharp confrontation between the US and China in high-tech industries continues. Securing and protecting the competitiveness of advanced technologies such as semiconductors and artificial intelligence (AI) are emerging as key issues in external economic security, and the US government continues to check technologies in China through various means. In addition, the US has recently strengthened direct technical sanctions on China, and these have taken the form of export controls and investment restrictions, and has sought to check China through technological cooperation with US allies, as well. These sanctions against China and tech alliances with allies are likely to lead to an anti-globalization “blocification” that severs and separates high-tech supply chains, technologies, market ecosystems, and standards into two separate, opposed camps. Korea, which is highly dependent on the external economy in the high-tech sector, needs to be able to respond to a situation in which supply chains, technologies, standards, markets, and ecosystems of the US and China reside in separate blocs for a considerable period of time to come. This study analyzes the emerging supply chain blocs of both the US and China, in terms of technologies and ecosystems, focusing on the semiconductor and AI. It identifies the implications for industry carried by the analysis, and describes prospects for future developments.