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1. Which companies are ahead in frontier innovation on critical technologies? Comparing China, the European Union and the United States

Author:
Alicia Garcia-Herrero, Michal Krystyanczuk, and Robin Schindowski
Publication Date:
05-2025
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Competition in critical technologies is attracting increasing attention not only because of the foundational nature of these technologies for other types of innovation, but also because of their role in the United States national security strategy. In this paper, we look into which entities in China, the European Union and the US innovate at the technology frontier in the three most important critical technologies – artificial intelligence, quantum computing and semiconductors – based on identification of the most radical novel patents in these technologies and their subsectors. Working with these pathbreaking patents, we look into the origin of the companies that file the largest numbers of them. US innovators dominate the innovation frontier for quantum computing and, to a lesser extent, AI, with Chinese innovators doing better in semiconductors. European innovators lag in all, but perform relatively better in quantum computing, in which they rank similarly to Chinese innovators. Furthermore, the innovation ecosystem is quite different across geographies. In the US, tech companies top the rankings of critical novelties and are highly concentrated: as many as three companies are in the top rankings of all of the three critical technologies. Frontier innovators in the field in which the EU competes most equally – quantum – are mostly research centres and not companies. China lies somewhat in between in all three domains.
Topic:
Science and Technology, European Union, Innovation, Artificial Intelligence, Semiconductors, and Quantum Computing
Political Geography:
China, Europe, Asia, and United States of America

2. Transatlantic Cooperation on Semiconductors: A US Perspective

Author:
Julia Tréhu
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Semiconductors are essential for the global economy, but recent supply chain disruptions and geopolitical tensions have highlighted new risks, leading to new policy approaches. US semiconductor strategy centres around three objectives. First, the funding provided through the CHIPS and Science Act is part of a larger push to strengthen domestic industry and manufacturing. Second, the US seeks to deny strategic adversaries of key technology through export controls. And third, it aims to secure the supply chains for critical technologies. The European and American semiconductor sectors are already tightly intertwined, and further coordination has occurred through forums like the Trade and Technology Council. But challenges remain, including the risk of a subsidy race. Further transatlantic cooperation on key aspects of these new industrial policies can ensure the realisation of shared objectives for a more resilient semiconductor sector.
Topic:
Science and Technology, Economic Policy, Transatlantic Relations, Industry, and Semiconductors
Political Geography:
North America and United States of America

3. South Korea: Caught in the Crosshairs of U.S.−China Competition Over Semiconductors

Author:
Paul Triolo
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
This paper explores how countries with advanced semiconductor industries are caught in the middle of the growing U.S.-China competition in technology that is focused on advanced computing. Among them, South Korea and its national champions, Samsung and SK Hynix, have arguably incurred some of the most significant pressure. This paper explores how those firms have billions of dollars of sunk investment in China-based facilities producing cutting-edge memory, and the future of these facilities remains in doubt after a series of U.S. export control measures unleashed by the U.S. Commerce Department starting in October 2022. South Korean companies are also players in other parts of the global semiconductor supply chain, including semiconductor manufacturing tools, and China remains an important market for both components and electronic devices. This paper argues that each country caught between the United States and China in technology competition faces difficult trade-offs in determining how best to support its leading companies while navigating changing and often what is viewed as arbitrary decisions coming from Washington that have already significantly disrupted global supply chains. Finally, at the same time as U.S. export controls are having a major impact on the ability of South Korean companies to retain business operations and market access in China, major front-end manufacturers, particularly Samsung, are also looking to expand their operations in the United States and benefit from U.S. CHIPS Act funding. This paper argues that all of the above dynamics put South Korea in one of the more complex positions as the industry faces continued restructuring, buffeted by both export controls and industrial policies.
Topic:
Supply Chains, Economic Security, Semiconductors, and Economic Competition
Political Geography:
China, Asia, South Korea, and United States of America

4. Time to Rethink Export Controls for Strengthened US-EU Cooperation and Global Trade Rules

Author:
Matthias Bauer and Dyuti Pandya
Publication Date:
04-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The escalation of broad export controls by the US, under the guise of national security and the aim to curb technological transfers to potential adversaries,[1] marks a new epoch of bureaucratic oversight. The US push for broad export controls also underscores a critical juncture in US-EU relations and global trade rules. Broad export restrictions not only challenge the very foundation of free trade but also contribute to the erosion of Western technology leadership.[2] Unilateral export controls may start strong but eventually lose effectiveness and become counterproductive,[3] pushing non-US companies, particularly in the semiconductor sector, to find alternatives to US components.
Topic:
International Cooperation, European Union, Regulation, Exports, Trade, and Semiconductors
Political Geography:
Europe and United States of America

5. Action from Semiconductor Companies is Long Overdue

Author:
David Albright and Spencer Faragasso
Publication Date:
09-2024
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
The United States and its allies have struggled to stop the supply of controlled microelectronics to Russia, which then uses them in a variety of drones, missiles, and other weapon systems in its brutal war against Ukraine. While the United States and its allies can do more, it is time to turn far greater attention to the Western companies making these goods and demand far more from them. A recent companion study of trade data charting exports from China to Russia in a twenty-month period up to the end of 2023, conducted by one of us, showed that exports of the most critical microelectronics, electronic integrated circuits, amounted to $1.5 billion, steadily increasing throughout 2023, despite Western restrictions and pressure on China, which remains uncooperative, even hostile. 1 Electronic integrated circuits take on special significance, because Russia cannot make them, and there are limited manufacturers in the world, almost all in the United States and Europe. In a four-tier U.S. priority listing of banned electronic and other components and the means to make them, Tier 1 is exclusively composed of electronic integrated circuits. Aided importantly by China, Russia is countering the sanctions imposed by the United States and its allies. Without more countermeasures and enforcement, it would be unsurprising to find Russia continuing to acquire large quantities of restricted Western microelectronics needed for its war production.
Topic:
Sanctions, Weapons, Trade, Semiconductors, and Russia-Ukraine War
Political Geography:
Russia, Ukraine, and United States of America

6. Investigating the Effect of the U.S. Semiconductor Export Controls on China

Author:
Hyok Jung Kim, Jonghyuk Oh, and Hyuk Hu Kwon
Publication Date:
09-2024
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
his report examines the significant impact of U.S. semiconductor export controls imposed under the Biden administration in October 2022. These controls, which target a broad range of semiconductor manufacturing facilities and AI chips, are part of a strategy aimed at curbing China’s advancement in critical technologies. A notable 32.5% decline in China’s imports of semiconductor manufacturing equipment has been observed, particularly in regions with advanced production capabilities and foreign company operations, such as those involving Samsung Electronics and SK hynix. While Korea experienced substantial drops in exports to China, the Netherlands saw an increase, reflecting its dominance in specific technologies like lithography. The AI chip sector has also been affected, with China turning to downgraded chips due to restricted access to high-performance models from companies like Nvidia. South Korea must adapt by strengthening its upstream semiconductor industry, considering reshoring production, and collaborating with international partners to mitigate risks. As U.S. export controls continue to evolve, the global semiconductor industry may face increased fragmentation, making strategic responses from affected nations essential to maintain competitiveness. Additionally, ongoing monitoring and adaptation to the dynamic regulatory environment shaped by these export controls are crucial.
Topic:
Economics, Science and Technology, Exports, Artificial Intelligence, Imports, and Semiconductors
Political Geography:
China, Asia, North America, and United States of America

7. Export Controls Game: Rethinking Global Integration

Author:
Sangjun Yea
Publication Date:
07-2024
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The article discusses how geopolitical interests are influencing trade policies and global supply chains, leading to a reevaluation of international relationships. The U.S. and China are specifically highlighted, with the U.S. implementing export controls on semiconductors to prevent China's military advancement, while China responds with its own export restrictions on essential raw materials. Using a game-theoretic model, the study illustrates how countries use export control measures to balance security interests and economic benefits, ultimately impacting the global semiconductor supply chain and production decisions of multinational corporations.
Topic:
Exports, Trade Policy, Economic Integration, Supply Chains, and Semiconductors
Political Geography:
China, Asia, North America, and United States of America

8. Cooperation on Semiconductor Supply Chains and Technology

Author:
Soyoung Kwon
Publication Date:
12-2024
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The security alliance between the United States and South Korea, once focused primarily on military defense, is evolving to include economic security and technological cooperation. The evolving partnership between the two countries, particularly in the areas of semiconductor supply chains and advanced technologies, features the deepening and broadening of the alliance in the form of a Global Comprehensive Strategic Alliance. This change is driven by intensifying competition between the United States and China, which has led to the securitization of key technologies like semiconductors. This paper examines the opportunities and challenges in deepening and broadening US-South Korea cooperation on semiconductor supply chains. While such developments support the shared objectives of advancing technological innovation, bolstering supply chain resilience, and addressing potential threats from China, challenges remain in diverging threat perceptions and concerns about collective deterrence. The study concludes that aligning strategic objectives in economic security and technological cooperation is essential to ensure the sustainability of the alliance and its ability to navigate the complex global techno-geopolitical landscape.
Topic:
Defense Policy, Science and Technology, Supply Chains, and Semiconductors
Political Geography:
Asia, South Korea, North America, and United States of America

9. Building a Coalition - the U.S. Faces Down Competition with China in the Chip Sector

Author:
Damian Wnukowski
Publication Date:
04-2023
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs
Abstract:
In recent months, the U.S. has intensified its international efforts to limit China’s ability to produce the most advanced chips. The result includes the introduction by Japan and the Netherlands of restrictions on the export of modern machines for chip production. In response, China is trying to attract foreign investment and develop its own potential in this sector. The U.S. actions may significantly slow the pace of China’s technological development and economic growth and limit its potential to further strengthen its military capabilities. This may make it difficult for China to support Russia with dual-use products and render possible offensive actions against Taiwan harder.
Topic:
Economy, Production, Semiconductors, and Competition
Political Geography:
China, Asia, North America, and United States of America

10. South Korea and IPEF: Rationale, Objectives and the Implications for Partners and Neighbors

Author:
Jaewoo Choo
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
Institut français des relations internationales (IFRI)
Abstract:
As a key manufacturer of high-end technology components critical to the sustainability of the Fourth Industrial Revolution, South Korea is essential in any effort to rebuild a resilient global supply chain but also to the promotion of a clean economy. South Korea can thus contribute to two of the pillars of IPEF (Indo-Pacific Economic Framework), specially to pillars II and III (supply-chain resilience and a clean economy). However, as the US executive and legislative branches intensify their hawkish approaches to China, they have not given much consideration to the possible damage they will inflict on the strategic interests of some of their allies. In particular, they have not fully considered Korean factors when legislating on bills such as the Inflation Reduction Act (IRA). This paper argues that allies such as South Korea and France must make the White House and US legislature aware of the external consequences of their decisions and behavior, and that they must cooperate within the confines of US-led strategic initiatives.
Topic:
Science and Technology, Economy, Supply Chains, and Semiconductors
Political Geography:
China, Asia, South Korea, and United States of America