The semiconductor industry is the battleground of a global technology war between the United States and China. From 2020 to 2030, both countries have aggressively pursued dominance in chip production, but with vastly different strategies and challenges. The numbers tell a compelling story of control, competition, and the future of technology.
1. In 2020, the U.S. accounted for 47% of the global semiconductor market share
The U.S. has long been a leader in the semiconductor industry, with nearly half of the global market share in 2020.
This dominance came from a strong foundation of innovation, a network of leading companies like Intel, NVIDIA, Qualcomm, and an ecosystem that fostered cutting-edge research and development.
However, while U.S. companies led in design and intellectual property, actual manufacturing was increasingly outsourced to Taiwan and South Korea. This over-reliance on foreign fabs, especially Taiwan’s TSMC, became a growing concern for national security.
For businesses, this means opportunities in semiconductor-related industries such as AI, cloud computing, and 5G. Investors should monitor how U.S. companies adapt to geopolitical tensions and supply chain disruptions.
Companies reliant on U.S. chip suppliers should also have backup sourcing strategies as the competition with China escalates.
2. China’s semiconductor self-sufficiency rate was only 16% in 2020
China’s lack of self-sufficiency in semiconductor manufacturing meant it depended heavily on imports, particularly from the U.S., Taiwan, and South Korea. Despite ambitious government-led plans to boost domestic chip production, China still struggled with cutting-edge processes.
For businesses, this statistic highlights an opportunity: the Chinese government offers huge incentives to companies that help close this gap. Startups and established players in chip design, semiconductor equipment, and materials can benefit from China’s push toward self-sufficiency.
Investors should keep an eye on China’s domestic players like SMIC, Yangtze Memory Technologies (YMTC), and Hua Hong Semiconductor, as they may experience rapid growth with state backing. However, risks remain due to U.S. sanctions limiting access to key manufacturing technologies.
3. The U.S. semiconductor industry had a 56% share in global fabless semiconductor companies in 2020
Fabless companies design semiconductors but do not manufacture them. The U.S. dominates this sector, with giants like NVIDIA, AMD, and Qualcomm leading innovation. These firms rely on foundries like TSMC and Samsung to manufacture their chips.
However, relying on foreign foundries presents risks. Taiwan, where TSMC is based, faces growing geopolitical tensions with China, making supply chain disruptions a real concern.
Companies dependent on these fabless firms must prepare for potential shifts in production capacity and pricing. Those in sectors like AI, IoT, and automotive technology should diversify suppliers or invest in alternative semiconductor technologies, such as RISC-V architectures, to mitigate risks.
4. China imported $350 billion worth of semiconductors in 2020, more than oil imports
This statistic highlights the sheer dependence China had on foreign chip suppliers. Semiconductors were China’s most significant import, surpassing even crude oil. Given how essential chips are for everything from smartphones to military applications, this reliance created a major vulnerability.
In response, China has aggressively invested in domestic chip production through its “Made in China 2025” strategy. This push creates opportunities for foreign firms willing to collaborate within Chinese restrictions, but also risks as China seeks to replace foreign suppliers.
Tech companies that sell to China should be aware of increasing restrictions and potential export bans. Diversifying customer bases and understanding local regulations will be crucial for long-term stability.
5. Taiwan’s TSMC produced 92% of the world’s most advanced (5nm and below) chips in 2021
TSMC’s near-monopoly on leading-edge chip production is one of the most critical aspects of the semiconductor war. The company manufactures for Apple, NVIDIA, AMD, and many others, making it the most important foundry in the world.
For businesses, this dominance means supply chain vulnerabilities. Any disruption in Taiwan, whether from natural disasters or geopolitical tensions, could have a massive impact on global chip supplies.
Companies should evaluate alternative suppliers and consider how geopolitical risks could impact their production timelines.
6. The U.S. CHIPS Act, passed in 2022, allocated $52 billion in subsidies for domestic semiconductor production
The CHIPS Act represents a significant shift in U.S. semiconductor policy, aiming to reduce dependence on foreign chipmakers. With billions allocated for domestic chip manufacturing and research, this move signals long-term growth opportunities for American semiconductor firms.
Businesses should take advantage of available grants and incentives. Companies involved in semiconductor design, fabrication, and supply chain logistics can benefit from government-backed initiatives.
Investors should monitor firms receiving funding, as they are likely to be critical players in reshaping the industry.
7. China’s “Made in China 2025” plan aimed to achieve 70% domestic chip production by 2025
China’s ambitious goal to produce 70% of its semiconductors domestically by 2025 is one of the key drivers of the chip war. While progress has been slower than expected due to U.S. sanctions and technological limitations, China continues to invest billions in its semiconductor sector.
Businesses with interests in China must prepare for a more self-reliant semiconductor supply chain. Foreign firms looking to operate in China may face tougher regulations as China tries to reduce its dependence on U.S. technologies.
8. In 2021, the U.S. controlled 85% of global electronic design automation (EDA) tools
EDA tools are essential for designing semiconductors, and the U.S. holds a near-monopoly on them through companies like Synopsys, Cadence, and Mentor Graphics. Without access to these tools, China struggles to advance its chip design capabilities.
Tech firms should recognize the power that EDA firms hold over the semiconductor supply chain. Investors should also watch how China responds—whether through domestic alternatives or potential acquisitions.
9. China’s SMIC achieved 7nm chip production by mid-2022 despite U.S. sanctions
Despite restrictions on accessing cutting-edge semiconductor technology, China’s leading chipmaker, Semiconductor Manufacturing International Corporation (SMIC), successfully produced 7nm chips by mid-2022.
This was a significant achievement, given that the company was operating without access to extreme ultraviolet (EUV) lithography machines, which are essential for producing the most advanced chips.
SMIC reportedly used deep ultraviolet (DUV) lithography with multiple patterning techniques to work around these limitations. However, this approach is less efficient, more costly, and has lower yields compared to TSMC and Samsung’s 7nm processes.
For businesses and investors, this development signals that China is closing the technological gap, albeit at a slower pace. Companies reliant on proprietary U.S. technology should monitor how China’s domestic semiconductor industry evolves, as it may reduce China’s dependence on foreign chipmakers over time.
Investors looking at the semiconductor market should weigh the risks and opportunities of SMIC’s progress amid continued U.S. trade restrictions.
10. The U.S. export controls in 2022 restricted NVIDIA and AMD from selling high-end AI chips to China
In an effort to curb China’s advancements in artificial intelligence and supercomputing, the U.S. government imposed export restrictions in 2022 that prevented companies like NVIDIA and AMD from selling their most powerful AI-focused chips to China.
This directly affected China’s AI development capabilities, including sectors such as military applications, autonomous driving, and deep learning research.
For businesses, this means that Chinese companies may accelerate their efforts to develop domestic alternatives to NVIDIA and AMD products. U.S. firms must also consider the financial impact of losing the Chinese market for high-end chips.
Companies relying on AI-driven technologies should watch for shifts in China’s AI landscape. Some Chinese firms may pivot to alternative architectures, such as Huawei’s Ascend series, or explore open-source chip designs to reduce dependency on U.S. technology.
11. China’s semiconductor manufacturing capacity accounted for 15% of the global total in 2022
By 2022, China controlled around 15% of the world’s semiconductor production capacity. While this share was growing, China still lagged behind major players like Taiwan, South Korea, and the U.S. in terms of advanced chip production.
For businesses involved in the semiconductor supply chain, this figure highlights both risks and opportunities.
While China is building more fabs, it still lacks the most advanced production technologies, meaning companies with expertise in semiconductor manufacturing, materials, and equipment can find opportunities to enter the Chinese market.
However, U.S. companies should be aware of regulatory risks when dealing with Chinese semiconductor firms. Increased scrutiny and tighter restrictions may impact future collaborations or sales agreements.
12. ASML, a Dutch company, has a 100% monopoly on EUV lithography machines, essential for advanced chip production
ASML, a Dutch semiconductor equipment manufacturer, is the only company in the world that produces extreme ultraviolet (EUV) lithography machines, which are necessary for manufacturing the most advanced semiconductor chips (5nm and below).
The U.S. has pressured ASML to stop selling these machines to China, effectively blocking China from advancing beyond a certain technological threshold.
Businesses in the semiconductor industry must understand the significance of ASML’s monopoly. Without access to EUV machines, China will struggle to compete with TSMC, Samsung, and Intel at the cutting edge of semiconductor technology.
For companies relying on advanced chips, the restricted availability of EUV technology means that high-performance computing, AI, and mobile devices will remain largely dependent on non-Chinese suppliers for the foreseeable future.
Investors should also track ASML’s market movements, as its dominance in this space makes it a crucial player in global semiconductor supply chains.
13. The U.S. accounted for approximately 50% of global semiconductor design revenues in 2022
U.S. firms like Qualcomm, Broadcom, NVIDIA, and AMD collectively generated half of the world’s semiconductor design revenues in 2022. This dominance was due to strong intellectual property (IP) portfolios, cutting-edge research, and leadership in AI, 5G, and computing architectures.
Businesses working with semiconductor-based technologies should recognize that U.S. companies remain the primary source of innovation in chip design. However, geopolitical tensions could lead to shifts in supplier relationships, as China seeks to develop alternatives.
Investors should consider the long-term implications of U.S. leadership in semiconductor design. While companies like TSMC and Samsung manufacture the chips, U.S. firms remain at the forefront of creating new architectures and defining the future of computing.
14. China invested $150 billion in semiconductor development between 2015 and 2025
To reduce its dependence on foreign technology, China allocated a massive $150 billion to semiconductor research and production. This investment covers everything from chip design to fabrication, packaging, and AI-driven semiconductor applications.
Companies interested in the Chinese semiconductor market should explore potential partnerships and government incentives. However, businesses must also be mindful of U.S. trade restrictions, which may limit the ability to collaborate with certain Chinese firms.
For investors, China’s continued spending on semiconductor development signals long-term growth opportunities. Watching where these investments go—whether in materials, equipment, or chip manufacturing—can help predict the next big trends in the industry.
15. The semiconductor shortage in 2021-2022 led to a 30% increase in chip prices
The global semiconductor shortage in 2021-2022 affected nearly every industry, from consumer electronics to automotive manufacturing. Supply chain disruptions, increased demand, and limited production capacity resulted in a 30% rise in chip prices.
For businesses, this highlighted the need for diversified supply chains and long-term supplier relationships. Companies should consider sourcing semiconductors from multiple vendors to mitigate risks associated with geopolitical tensions and production constraints.
Investors looking at the semiconductor sector should be aware that supply-demand imbalances can drive significant price fluctuations. Companies that successfully navigate supply chain challenges will have a competitive advantage over those that rely on a single source of supply.
16. By 2023, TSMC planned to invest $40 billion in its Arizona fab, the largest foreign direct investment in U.S. semiconductor history
TSMC’s decision to invest $40 billion in a chip manufacturing facility in Arizona is a major shift in the global semiconductor landscape. This investment aims to reduce dependence on Asia for advanced chip production while strengthening U.S. semiconductor capabilities.
Businesses that rely on advanced chip manufacturing should monitor TSMC’s progress in Arizona. While the plant will improve supply chain resilience for U.S. companies, it will take time before it reaches full production capacity.
Investors should also watch how TSMC’s move affects global semiconductor trade. If more fabs relocate to the U.S., it could reduce China’s influence in chip manufacturing and shift investment priorities worldwide.
17. China’s YMTC was placed on the U.S. Entity List in 2022, restricting its access to U.S. chip technology
In 2022, the U.S. government placed Yangtze Memory Technologies Co. (YMTC), China’s top NAND flash memory producer, on its Entity List. This move effectively cut off the company’s access to U.S. semiconductor technology, including key materials, equipment, and intellectual property.
For businesses, this restriction meant a significant shakeup in the memory chip market. Companies that relied on YMTC’s low-cost NAND flash products were forced to look for alternative suppliers, primarily from South Korea and the U.S.
Investors and businesses should consider the long-term implications. The restriction has slowed China’s ability to become self-sufficient in memory chips, giving Western and South Korean firms a competitive advantage.
Companies that rely on NAND flash technology for storage devices should be prepared for potential price volatility and supply chain adjustments as China tries to find alternative solutions.
18. Intel announced a $20 billion investment in new fabs in Ohio in 2022
Intel’s $20 billion investment in new semiconductor fabrication plants in Ohio represents a major push to regain manufacturing leadership. These fabs are part of Intel’s strategy to build domestic capacity and reduce reliance on Asian foundries.
For businesses, this expansion means a more resilient U.S. semiconductor supply chain in the coming years. However, these facilities won’t be operational until the late 2020s, meaning short-term supply chain challenges remain.
Investors should monitor Intel’s progress, as its ability to scale domestic production will impact both U.S. chip manufacturing and global semiconductor competition. Companies looking for long-term partnerships in semiconductor supply chains should consider how Intel’s expansion could shift industry dynamics.
19. The U.S. controlled 38% of global semiconductor capital equipment production in 2021
The U.S. is a leader in manufacturing semiconductor capital equipment—machines used in chip fabrication. Companies like Applied Materials, Lam Research, and KLA play a crucial role in supplying the world’s leading chipmakers with essential tools.
For businesses involved in semiconductor manufacturing, access to these machines is critical. Companies dependent on U.S. equipment should stay updated on export regulations, as geopolitical tensions may impact supply chains.
Investors should note that semiconductor equipment manufacturers are in a strong position for growth, as demand for advanced chips continues to rise. However, restrictions on selling to China could impact revenue streams in the long term.
20. By 2025, China aims to produce 28nm chips at scale without reliance on U.S. technology
China’s semiconductor strategy includes producing mature-node chips (such as 28nm) at scale without relying on U.S. technology. While 28nm chips are not the most advanced, they are widely used in industries like automotive, consumer electronics, and industrial applications.
For businesses, this shift means that China may soon have a competitive edge in producing low-cost, widely used semiconductors. Companies reliant on China for electronic components should monitor how domestic production affects pricing and availability.
Investors should consider how China’s progress in 28nm production may impact global semiconductor supply chains. If successful, China could reduce its reliance on foreign suppliers for a significant portion of its semiconductor needs.
21. In 2022, China’s semiconductor imports dropped by 15% due to sanctions
U.S. sanctions and export restrictions led to a 15% decline in China’s semiconductor imports in 2022. This drop signaled that China was making efforts to reduce reliance on foreign chipmakers by boosting domestic production.
For businesses, this decline means that supply chain relationships with China are shifting. Companies that previously exported semiconductors to China may see reduced demand, while Chinese firms investing in domestic chipmaking could create new market opportunities.
Investors should be aware of how ongoing trade tensions impact semiconductor demand and pricing. A reduced reliance on imports could strengthen China’s internal semiconductor industry while challenging global players who previously dominated the Chinese market.
22. By 2024, the U.S. aims to increase domestic semiconductor manufacturing share from 12% to 20%
As part of its broader strategy to reclaim semiconductor leadership, the U.S. aims to increase domestic chip production from 12% in 2022 to 20% by 2024. This goal is driven by government subsidies, private sector investments, and strategic partnerships.
For businesses, this means a shift toward reshoring chip production. Companies that rely on imported semiconductors should consider long-term supply chain adjustments and explore opportunities to partner with U.S. chipmakers.
Investors should track progress in U.S. semiconductor manufacturing, as increased production capacity could lead to a more stable supply chain and reduced dependence on foreign fabs.
The success of this initiative will depend on how quickly new fabs can become operational and whether they can compete with Asian counterparts.
23. South Korea’s Samsung pledged $230 billion over 20 years to build new fabs, competing with U.S. and China
Samsung, one of the world’s largest semiconductor manufacturers, announced a $230 billion investment to build new fabs over two decades. This move positions South Korea as a major competitor in the semiconductor war, alongside the U.S. and China.
For businesses, Samsung’s investment means greater supply chain diversity and increased competition in semiconductor manufacturing. Companies looking for alternative chip suppliers may benefit from Samsung’s expanded capacity.
Investors should consider Samsung’s long-term commitment to semiconductor production. With a massive investment spanning multiple decades, Samsung is likely to remain a dominant player, influencing global chip pricing and supply dynamics.
24. The U.S. banned Huawei from acquiring advanced chips in 2019, severely impacting its smartphone business
The U.S. ban on Huawei acquiring advanced chips forced the company to pivot away from high-end smartphones. Without access to leading-edge processors, Huawei lost significant market share in global smartphone sales.
For businesses, this ban underscores the risks of relying on foreign semiconductor suppliers. Companies that depend on a single source for critical technology must develop contingency plans to ensure continuity in the face of geopolitical restrictions.
Investors should track how Huawei adapts to these restrictions. The company has shifted toward developing its own chip solutions, but its ability to compete with Western and South Korean firms remains uncertain.
25. In 2021, China’s largest chipmaker, SMIC, had 5% of the global foundry market share
Despite being China’s largest foundry, SMIC accounted for only 5% of the global foundry market in 2021. This small share highlights the dominance of TSMC and Samsung, which control the majority of advanced chip manufacturing.
For businesses, this means that while SMIC is growing, it remains far behind its competitors. Companies looking for foundry partnerships must weigh the trade-offs between working with SMIC and more established players like TSMC.
Investors should consider how SMIC’s market position evolves. While U.S. restrictions have slowed its growth, China’s continued investment in semiconductor manufacturing could lead to an expansion of its market share in the future.
26. The U.S. restricts over 600 Chinese entities from acquiring semiconductor-related technologies
As part of its broader strategy to limit China’s access to advanced semiconductor technology, the U.S. has placed restrictions on over 600 Chinese entities. These restrictions prevent Chinese companies from acquiring key technologies from U.S. firms, further slowing China’s progress in advanced chip production.
For businesses, these restrictions create supply chain risks and opportunities. Companies selling semiconductor-related technologies should be aware of legal restrictions when dealing with Chinese entities.
Investors should monitor how China responds to these restrictions. If China develops alternative technologies or sources from non-U.S. suppliers, it could shift global semiconductor trade patterns.
27. In 2023, Japan and the Netherlands joined U.S. sanctions, limiting China’s access to advanced lithography tools
In a major development, Japan and the Netherlands joined the U.S. in restricting China’s access to semiconductor lithography equipment in 2023.
This decision directly impacted China’s ability to manufacture advanced chips, as companies like ASML (Netherlands) and Nikon (Japan) are key suppliers of photolithography machines.
For businesses, this means that China will face continued delays in reaching the most advanced semiconductor nodes.
Companies that rely on cutting-edge chips should be aware that China’s supply chain will likely remain limited for the foreseeable future, making U.S., Taiwanese, and South Korean suppliers even more critical.
Investors should recognize that semiconductor equipment manufacturers in the U.S., Japan, and the Netherlands will remain dominant in the industry.
However, China is expected to increase funding for domestic alternatives, which may create new opportunities for startups and emerging players in semiconductor equipment.
28. The U.S. controls 60% of the global semiconductor intellectual property (IP) market
The U.S. maintains a dominant position in semiconductor intellectual property (IP), controlling approximately 60% of the global market. This includes critical chip architectures, design tools, and patents that form the backbone of modern semiconductors.
For businesses, this means that even if China increases its domestic manufacturing, it still faces challenges in designing competitive chips without relying on U.S.-owned IP. Companies should monitor potential legal battles, licensing agreements, and patent disputes as China pushes for self-sufficiency.
Investors should recognize that U.S. semiconductor IP firms, such as Arm (before its acquisition by SoftBank and later IPO), Synopsys, and Cadence, will continue to play an essential role in global chip development.
Long-term investments in these companies may remain stable as demand for semiconductor design expertise grows.
29. China’s NAND flash memory market share (via YMTC) dropped from 6% to 3% in 2023 due to U.S. restrictions
After being placed on the U.S. Entity List, Chinese memory chipmaker YMTC saw its global NAND flash memory market share drop from 6% to 3% in 2023.
This decline was largely due to the inability to access advanced semiconductor manufacturing tools and a loss of international customers wary of U.S. sanctions.
For businesses, this means that memory chip supply chains will continue to be dominated by South Korean (Samsung, SK Hynix) and U.S. (Micron) companies. Companies relying on NAND flash memory should reassess their suppliers to avoid potential geopolitical disruptions.
Investors should note that while China is aggressively funding domestic memory production, it faces an uphill battle against established players. Companies in the NAND flash industry, particularly those outside of China, may continue to hold a competitive advantage for the foreseeable future.
30. By 2030, the global semiconductor industry is projected to be worth $1 trillion, with fierce competition between the U.S. and China
By the end of the decade, the global semiconductor industry is expected to surpass $1 trillion in value.
This growth will be driven by increasing demand for AI chips, 5G technology, autonomous vehicles, and the Internet of Things (IoT). However, the battle between the U.S. and China will shape how this industry evolves.
For businesses, this means that securing long-term semiconductor supply chains will be critical. Companies in every sector—from consumer electronics to cloud computing—must prepare for continued volatility in chip availability, pricing, and innovation.
Investors should consider how regional policies, government subsidies, and supply chain realignments will impact the semiconductor market. The U.S., China, South Korea, and the EU will continue investing heavily in chip manufacturing, making it one of the most competitive industries in the coming decade.
Those who strategically position themselves in the right semiconductor segments—whether in design, manufacturing, or equipment—will benefit from this trillion-dollar industry’s expansion.
wrapping it up
The semiconductor war between the U.S. and China is more than just a competition over microchips—it is a fight for technological and economic dominance that will define the global power balance for decades.
Both nations are pouring billions of dollars into semiconductor research, manufacturing, and strategic alliances, ensuring that this battle will continue to shape industries far beyond just computing.
