Since the pandemic disrupted supply chains around the globe, there’s been a persistent shortage of semiconductor chips, leading to the cancellations of more than three million vehicles from automakers’ production schedules. There are a few signs of improvement in places like Taiwan, where foundries are transitioning back to producing semiconductors compatible with automobiles rather than consumer electronics. According to J.P. Morgan Research, “More chips will become available in the second half of 2022” and “the shortage is nearing the end.”

Now President Biden is limiting China’s access to semiconductor technology from the U.S. and other countries. But as Straight Arrow News contributor Peter Zeihan explains, our fears that China dominates the entire semiconductor industry is misguided.

Excerpted from Peter’s Oct. 12 “Zeihan on Geopolitics” newsletter:

The Biden administration has announced further limits on Chinese firms’ ability to access foreign (read: U.S. dominated) semiconductor technology. Many of my followers ask why I don’t consider China a more capable potential threat to the global order than I do; the ability for Beijing to be cut off from global technology with what amounts to the stroke of a pen is one of them.

China remains utterly dependent on foreign countries for innovation and tech discovery, research, investment into its higher level manufacturing. It’s not just that the most advanced chips powering everything from your smartphone to the cloud and advanced computing are designed in the West (and primarily the U.S.) – key production components and technologies, such as advanced lasers, are often siloed within one or two companies in the U.S., the Netherlands/EU, or Japan and South Korea. While China might produce the lion’s share of low-end chips, they are hardly at the forefront of anything.