In a massive blow to the Chinese chip industry, the Netherlands and Japan have agreed to join the sanctions imposed by the Biden administration, effectively killing off the Chinese government’s efforts to manufacture the most advanced semiconductors. According to the South China Morning Post, China’s Foreign Ministry spokesman Mao Ning said the “U.S.-led export control pact threatens the stability of the global semiconductor supply chain.”

Straight Arrow News contributor Peter Zeihan explains the consequences of this latest development.

Excerpted from Peter’s Jan. 31 “Zeihan on Geopolitics” newsletter:

An American, a Dutch, and a Japanese guy all walk into a bar…sounds like the beginning of a bad joke, right? Unfortunately for the Chinese, their semiconductors are on the shit end of this joke.

As the Japanese and Dutch join the U.S. sanctions against Chinese semiconductors, we find ourselves at a precarious crossroads. The semiconductor industry has long been the personification of globalization, with dozens of products crossing countless borders and supply chains longer than the DMV line. But what happens now?

China’s demography is collapsing, and its semiconductor industry isn’t far behind. So someone else will have to step up and start producing these semiconductors; all eyes are on the U.S., the Netherlands, and Japan. Although, we may have to put up with middle-of-the-road semiconductors for a while.