Introduction

Semiconductors have become foundational to both economic competitiveness and military power, driving advances in artificial intelligence, digital infrastructure, and high-performance computing (Triolo, 2023). As the societal and economic impact of semiconductors grows, so does their global geopolitical significance. For dominant world powers, such as the US and China, establishing control over the global supply chain and production of semiconductors is now a top priority. Recent dynamics in US – China relations suggest there has been an important shift from complementarity to rivalry, largely amplifying the growing value of semiconductors (Medeiros & Trebat, 2024). 

Since 2024 however, this competition has entered an even more complex phase. US export controls and alliance-based strategies have for long restricted China’s access to advanced semiconductors, yet recent evidence suggests that these methods have been only partially successful, as China has demonstrated growing technological adaptation. Chinese firms have shown surprising progress in chip design efficiency, AI model optimisation, and mature-node manufacturing, ultimately exposing a critical reality: technological containment does not fully impede capability accumulation (Shrivastava & Jasj, 2025; Lee, 2025). At the same time, the Trump administration has favoured a more transactional and assertive approach to economic security, relying heavily on tariff leverage and selective export enforcement (Kozlowskyj, 2026). These developments suggest that the semiconductor competition is becoming part of a broader struggle over compute efficiency, innovation ecosystems, and most importantly technological/digital sovereignty (Omorogieva, 2026). 

The US retains substantial and undeniable structural leverage within global semiconductor value chains. However, China’s adaptive innovation, along with the evolving dynamics of US policy instruments raise questions regarding the long-term durability for the US structural advantage. Semiconductor competition increasingly reflects a dynamic interaction between innovation and resilience, chokepoint, control, and alliance management challenges.  

This leads us to our main question: how does the U.S. leverage semiconductor value chains to counter China's technological ambitions?

Structural Leverage and Chokepoint Power in Semiconductor Value Chains

The US’s dominance in the global semiconductor value chain is well established and supported by multilateral and unilateral alliance/partnership frameworks. Its control over critical elements of the supply chain, such as intellectual property, manufacturing equipment, and tools for electronic design automation, has allowed it to extend its legal jurisdiction far beyond its borders (Malkin & He, 2024). Large tech firms such as TSMC or Samsung are heavily dependent on the US for chip-making tools and equipment, which in turn the US leverages to enforce its strict export restrictions to China (Kawakami, 2022). Key regional allies are thus strongly incentivised to align with the US’s broader geopolitical goals, and perhaps the thought of China growing in assertiveness alone worries them from a security standpoint. Through strict restrictions enforced by its regional partners-allies, the US uses its centrality in the supply chain to limit China’s technological autonomy by ensuring its continued reliance on foreign technology. This strategy adopted by the US maintains it in a position of technological hegemony, keeping its direct rival at a distance. However, scholars have rightfully highlighted these dynamics as possibly conducive to a stronger Chinese self-reliance for advanced chip making, which would potentially backfire on US policies in the long-term (Triolo, 2023).

Exports controls and restrictions play a fundamental role in the US’s strategy to curtail China’s technological aspirations. The Foreign Direct Product Rule (FDPR) policy shows how American export restrictions have heavily slowed Huawei’s plans down (Triolo, 2023). Chinese big tech capabilities have been disrupted by these policies, forcing tech giants to scale back their development ambitions.

These controls take both unilateral and multilateral forms. Multilateral export control schemes have made it even more difficult for China to access the necessary equipment to produce high performance microchips, as the important players in the global high-tech economy have sided with the US and its policies (Park, 2023). This includes primarily countries like Japan, Taiwan, South Korea, or even the Netherlands (Rasiah & Wong, 2021). For example, Japan’s collaboration with the US in limiting sales of extreme ultraviolet (EUV) lithography machines to Chinese big tech firms such as SMIC has hindered China’s ability to manufacture advanced chips (Triolo, 2023). These multilateral frameworks, though successful in coordinating efforts to maintain a technological edge, have raised questions on the domestic pressures that US allies could face to oppose the continued alignment with the US’s broader geopolitical agenda.

Alliance Coordination, Industrial Partnerships, and Managed Interdependence

US partnerships with countries like Japan, Taiwan, and South Korea are thus cardinal in controlling semiconductor supply chains. The collaboration and close alignment between the US and Taiwan in this sector is foundational for the emergence of TSMC as the most important microchip factory of the world. Similarly, close collaboration in the technology sector between the US and South Korea paved the way for the establishment of another central industrial hub. This can be exemplified by semiconductor capacity building investments like the 17$ billion Texas Samsung facility, or SK Hynix’s – another massive South Korean semiconductor company – broader commitments to technological development through big investments (Yeo, 2023).

Japan’s techno-nationalism has also so far aligned with US goals and broader strategies. Its collaboration with other key players such as TSMC in Taiwan, for example through the inception of fabrication activities in the Kumamoto Prefecture, ties into both countries’ ambitions to diversify the supply chains and to counter China (Park, 2023). Through partnership frameworks such as the ‘Chip 4 alliance’, the strategic importance of this collaboration seems well established to reinforce supply chain security and diversification. Once again, though very effective in keeping China at distance at first glance, the increasing interconnectedness of supply chains also potentially poses significant challenges to the US, including possible vulnerabilities in its own manufacturing capacity highlighted by its strong reliance on allied nations (Triolo, 2023).

China’s Adaptive Innovation and the Limits of Technological Containment

More recent evidence reinforces claims that export controls might in fact be ultimately unsuccessful in restricting innovation. Chinese firms have redirected investments towards domestic capabilities to reduce their dependence on cutting-edge fabrication nodes (Cai & Xie, 2026). At the same time, recent developments in Chinese AI model efficiency suggest that algorithmic innovation can partially compensate for restricted access to advanced computing hardware, thus exposing limitations of hardware-centric containment strategies (Lee, 2025). China’s ability to adapt and react to the US’s semiconductor strategy has come as a product of state-backed research mobilisation, ecosystem coordination, and innovation resilience (Arenal et al, 2025).

Policy Volatility and the Trump Administration’s Strategic Reorientation

The evolving policy approach of the Trump administration further complicates the sustainability of multilateral export controls coordination. While the objective of restricting China’s access to advanced semiconductor technologies remains consistent with previous administrations, recent policy signals show a shift towards more unilateral and transactional instruments of economic statecraft. These include renewed tariff-leverage, selective export licensing flexibility, and stronger pressure on allied firms to prioritize US production commitments (Kozlowskyj, 2025; Balbontin & Castro, 2025). While these measures might give the impression of short-term enhancement of bargaining power, in the long-term they risk generating alliance uncertainty and commercial frictions, thereby undermining the cooperative foundations of the US’s historical semiconductor supply chain leverage.

Conclusion

The US continues to exercise important leverage over semiconductor value chains to counter China’s ability to access the means to fulfil its technological ambitions. It relies heavily and capitalizes upon its dominant position in critical technologies such as electronic design automation tools, advanced manufacturing equipment, and alliance-based industrial coordination (Malkin & He, 2024; Kawakami, 2022). Through export controls, and more specifically the FDPR, and coordinated restrictions with key techno-allies, Washington has for years sought to constrain China’s access to advanced semiconductor capabilities and slowed the progress of major tech firms such as SMIC or Huawei (Triolo, 2023). In the short/medium term, this approach has reinforced US chokepoint control and demonstrated some degree of effectiveness of semiconductor supply chain leveraging as a tool of economic statecraft. 

What the US’s policy approach has perhaps failed to fully understand and operationalize is that supply chain dominance alone may not guarantee long-term technological primacy. China’s displayed growth in domestic innovation, AI model efficiency, and ecosystem coordination suggests that the US’s technological containments have generated adaptive responses rather than permanent and all-encompassing constraints. Equally critical to underline is the US’s dependence on continued alliance cohesion for the sustainability of its structural leverage. In this respect, the increasingly transactional and assertive approach promoted by the Trump administration exposes uncertainties concerning alliance management and industrial cooperation. 

Great power semiconductor competition reflects a struggle over fabrication capacity, revealing critical areas of competition such as compute efficiency, innovation ecosystems, and most importantly technological sovereignty. 

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