Semiconductor or chip diplomacy refers to the strategic use of semiconductor technology, production, and supply chains as a tool for diplomacy, geopolitical influence, and international relations. Chips are an essential processing part of any digital device. They are the ‘brain’ of mobile phones, computers, e-vehicles, and many other devices we are surrounded with. Semiconductors, essential components of modern electronic devices, have become a critical focus for countries worldwide due to their significant impact on economies, national security, and technological advancements.
Over the last few years, chips have gained geopolitical and diplomatic relevance. As a result, countries with substantial semiconductor manufacturing capabilities, like the USA, China, Taiwan, and South Korea, have gained significant leverage in international diplomacy. The possession of technology for producing advanced chips can be easily turned into a military and economic power.
The USA, which wants to maintain its technological advantages over China, is the main user of chip diplomacy. In addition to internal export control and sanctions actions, the USA initiated a diplomatic campaign toward allies to reduce the flow of advanced chip technology to China. Thus, for example, the Netherlands restricted the export of critical technology for printing chips. Taiwan and South Korea, among others, stopped exporting advanced microprocessors to China. China reacted by, for example, initiating action against the company Micron.
Chip (semiconductor) diplomacy may involve:
Investments and partnerships: Countries may invest in or form partnerships with semiconductor manufacturers or suppliers to ensure a stable supply of these critical components.
Trade agreements and policies: Governments may use trade agreements, export controls, or other policy measures to influence the semiconductor market and secure technological access.
Technological cooperation: Nations may engage in joint R&D and standardisation efforts to advance semiconductor technology and maintain a competitive edge in the global market.
Geopolitical influence: Countries with solid semiconductor industries can use their technological capabilities to influence other nations by offering incentives or applying pressure through access to semiconductor supplies.