China's Semiconductor Strategy and its Implications for Responding to the U.S.-China Technology Conflict

Semiconductors are at the heart of the U.S.-China technology hegemony competition under the administration of U.S. president Joe Biden. Conflicts between the U.S. and China over the semiconductor supply chain are intensifying as Biden signed an executive order on February 24, 2021, ordering the government to investigate the supply chains for semiconductors, batteries, rare earths, and biopharmaceuticals. The U.S. enacted the Export Control Reform Act (ECRA) and the Foreign Investment Risk Review Modernization Act (FIRRMA) as parts of a larger omnibus bill, the National Defense Authority Act (NDAA) of 2018, and has been working to keep China’s semiconductor technology innovation in check through restrictions on Chinese firms such as Huawei and SMIC export controls. In addition, the Biden government’s review of the semiconductor supply chain is currently being led by the The Department’s Bureau of Industry and Security (BIS) of the U.S. Department of Commerce, and the U.S. is expected to focus its efforts on building a hightech and supply chain alliance in the future. China’s semiconductor industry faced a major ordeal as the Trump and Biden administrations imposed sanction after sanction. In what form will China’s technological independence strategy proceed? How should Korea respond to the U.S.-China semiconductor competition? With this question in mind, this study aims to examine the U.S. semiconductor supply chain reorganization strategy and China’s response strategy corresponding thereto. In addition, it determines an appropriate response strategy for Korea by anticipating the form the competition between the U.S. and China may take, how semiconductor supply chains may reorganize, and by exploring the possibility of China’s technological independence in the future.