CIAO DATE: 06/05

China, Semiconductors, and Security

Abstract

China's rise is topic number two these days, in both international relations and foreign policy circles. Many predict it will soon be number one, and that it will remain so for a long time. This paper focuses on one aspect of that topic, the establishment and expansion of the industry currently viewed by China's leaders as a key strategic priority: the industry that makes semiconductors, the microchips at the core of computers, electronics, telecommunications, weapons systems, and much more.1 More specifically, it concentrates on the present and likely future expansion of the basefor applied research in this sector. The building of such a base is a crucial step in the value-added innovation-production chain. In its absence, only low level assembly operations are possible; in its presence, high-level innovation and the kinds of basic research required for future system-transforming, system-leading breakthroughs may begin to develop.

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