Joe Biden has made one thing clear in his first 100 days as president: he needs to ensure that the United States outperforms China on a variety of fronts, with technology at the forefront. His strategies maintain Trump’s tough stance on Chinese technology export restrictions, but they also have several new aspects, such as cooperation with allies in sensitive fields including semiconductors and an emphasis on strengthening domestic capabilities. According to Paul Triolo, head of Eurasia Group’s geo-technology activity, “the focus is on domestic creativity and forming technology partnerships to align confrontation against China in the software domain.”
Any Trump-era export restrictions on Chinese firms have been maintained by the Biden administration. Huawei, a telecommunications equipment manufacturer, and SMIC, China’s largest chipmaker, were included on Trump’s so-called “entity list,” which prevents American companies from selling technologies to companies on the list. The Trump administration imposed a regulation last year, that essentially cut Huawei off from vital semiconductor suppliers, hurting the company’s smartphone market. The US believes Huawei poses a national security threat, which Huawei has consistently refuted. Though Biden has maintained these laws, he has also announced initiatives to fuel American innovation.
“Early messaging about Biden’s strategy indicates that it couples defensive initiatives (e.g., sanctions on Chinese military companies) with more aggressive, or constructive ones — investments, for example, in alternatives to China,” aid Emily de La Bruyere, co-founder of consultancy Horizon Advisory. Biden calls for Congress to spend $180 billion in promoting the “US leadership in critical technology and upgrading America’s science infrastructure” in his American Jobs Plan. The bipartisan CHIPS Act also proposes investing $50 billion in production and science.
The Endless Frontier Act was reintroduced to the democratic platform earlier this month, by a bipartisan group of Democrats and Republicans. This bill recommends renaming the National Science Foundation (NSF) in the United States as the National Science and Technology Foundation (NSTF). This is a non-profit organisation run by the US government with the aim of promoting scientific study. Under the newly renamed NSTF, a technology directorate will be established with $100 billion over five years to “reinvigorate American leadership in the discovery and implementation of core innovations, that will shape global competitiveness.”
Artificial intelligence, semiconductors, electronics, materials sciences, and advanced communications technology, among other fields, will be funded by the directorate. The emphasis on domestic investment while retaining export restrictions is “primarily motivated by the perceived need to secure the US business technological leadership in key areas such as semiconductor manufacturing,” according to Triolo. But, he said, “raising new barriers around US technology and effectively weaponizing main supply chains as part of an attempt to curb China’s growth are (also) part of the Biden policy.”
Though, Biden’s announcements have been diverse, one subject has remained at the forefront of his administration’s thinking: semiconductors. Many of the systems we use depend on these components to function. Part of the reason for the focus is to resolve the global chip shortage, which has affected carmakers as well as other sectors. Biden believes that by doing so, he will be able to protect supply chains and ensuring that the United States’ semiconductor needs are fulfilled. The longer-term target, however, is to improve the United States’ ability to produce semiconductors, a segment of the supply chain that has shifted heavily to Asia, especially Taiwan and South Korea.
Biden signed an executive order in February that entails a risk assessment of the semiconductor supply chain. Intel revealed last month that it would invest $20 billion to develop two new chip factories, which are to serve as a foundry, as part of a larger effort to bring production back to the United States.
