President Donald Trump has ordered an investigation into the national security risks posed by the import of semiconductors, the equipment used to build them, and the products that use them.
A key goal of the probe is to assess the potential for building a domestic semiconductor manufacturing capability to meet U.S. demand for advanced computer chips.
While the United States produces roughly 12 percent of the world’s chips, it relies heavily on imports from Taiwan and South Korea for advanced chips used to create artificial intelligence and other advanced technologies that require immense processing power.
The investigation will also inform the administration how best to curb exports of American-designed chips to communist China, whose market share of semiconductor manufacturing and related products is rapidly rising.
Semiconductors are the foundation of virtually all modern electronic devices, from pickup trucks to cell phones, refrigerators, and hypersonic missiles.
They are crucial for building electronic components because of their unique ability to conduct electricity under certain conditions while not conducting electricity under other conditions, providing the foundation for generating binary code.
The processing power of advanced chips also has immense implications for research that could have national security implications, including crunching and extrapolating data to develop new medicines or weapons.
There is, therefore, a real strategic advantage for those nations that can lead the world in semiconductor design and manufacturing.
U.S. leaders are worried that giving China access to top-tier semiconductors could boost the communist country’s global power because advanced chips used in AI can also be used for other military applications, including autonomous weapons, cyberwarfare systems, and surveillance infrastructure.
Trump’s new investigation into the semiconductor supply chain could yield further restrictions on international access to semiconductors, even as his administration has expressed a desire to replace Biden-era restrictions with new, streamlined rules for chips.
The Chinese Communist Party (CCP) is pouring billions of dollars into its semiconductor ecosystem, aiming to rapidly build out advanced facilities to create modern chips domestically and eliminate its need for U.S.-designed chips.
The regime has launched the China Integrated Circuit Industry Investment Fund to boost local chip design and manufacturing. First spun up in 2014, the fund underwent a phase shift in 2024 and is now investing tens of billions of dollars in China’s burgeoning AI chip industry.
Chinese companies are also developing novel workarounds to sidestep the relatively limited access they now have to the most advanced chips. Many are developing AI models that work on massive numbers of lower-end chips by making their models smaller, faster, and less dependent on super-high-end hardware.
A key example of this is DeepSeek, a Chinese AI company that released its own ChatGPT competitor, which was built in part by linking as many as 30,000 lower-tier chips to mimic the processing power of more advanced systems that were restricted from export.
Whether the United States can hold back Chinese development of advanced semiconductors for much longer is an open question, as is China’s ability to quickly seize a greater share of the international semiconductor market.
—Andrew Thornebrooke
BOOKMARKS
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—Stacy Robinson
