America depends on semiconductors manufactured in Taiwan and South Korea. But most of these factories are uncomfortably close to either China or North Korea
Save time by listening to our audio articles as you multitaska telecoms giant, invented the transistor, a switch that controls electric current and is a building block of modern electronics. Within a decade researchers were placing several transistors on a slab of silicon to make an “integrated circuit”, or chip. A thriving industry grew up around California, outsourcing low-value tasks, such as assembly, to Asia where labour was cheaper.
As the market grew, so did interest from America’s rivals. First, the Soviet Union tried and failed to replicate Silicon Valley. Later, Japanese firms such as Toshiba and Fujitsu managed to take a share of some chip markets. But the strategic danger comes from China, which today spends more on importing chips than it does on oil. Xi Jinping, the president, has ordered China’s tech titans to reduce its dependence on foreign chips; state funds dole out tens of billions a year to that end.
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