Introduction: From Silicon Wafers to Strategic Weapons
Chips, tiny devices made from sand, have become the core battlefield of national competition in the 21st century. When Trump defined semiconductors as “national security assets” in 2017, few anticipated that eight years later, this game would evolve from a nanotechnology race into a global confrontation over rare earths and chips.
This article will comprehensively present the key events, data turning points, and strategic evolutions of the chip war from 2017 to 2025, revealing how technological hegemony and resource countermeasures reshape the global power landscape.
Chapter One: The Iron Curtain of Chips — Trump’s Chip Iron Curtain
December 12, 2017, Oval Office, White House, USA. Trump signed the National Emergency Act, defining semiconductors for the first time as “core national security assets” and secretly instructed the Department of Commerce to establish a “Chip Security Review Committee.” At this time, the Chinese semiconductor market accounted for 40% of the global market, while US companies derived 38% of their profits from China (according to the 2017 report by the Semiconductor Industry Association of America). The bill mandated a mandatory review of “foreign transactions that may threaten US technological superiority,” directly targeting Chinese acquisition cases, such as the rejected acquisition of Aixtron by the Fujian Grand Chip Investment Fund.
May 16, 2019, the US Department of Commerce added Huawei and its 68 affiliates to the Entity List on the grounds of “threatening national security,” cutting off their access to Google’s Android system and Qualcomm chips. The export ban on ASML’s EUV lithography machines from the Netherlands took effect simultaneously, and the production lines of Tokyo Electron’s wafer equipment were frozen. The New York Times commented, “This is the first time the US has viewed the chip supply chain of a commercial giant as a geopolitical weapon; chips have become the cornerstone of the digital world.” Huawei’s founder, Ren Zhengfei, urgently convened a meeting at the Shenzhen headquarters to launch the “backup plan,” and the HiSilicon chips were quickly put into production.
March 17, 2020, the Trump administration pushed the EU to pass the Critical Raw Materials Act, listing rare earths and high-purity silicon materials as strategic resources. During the European Parliament vote, German MP Hermann Schaeuble warned, “We are using China’s rare earths to manufacture our chips while allowing the US to cut off supplies.” This act directly led to a 15% reduction in China’s rare earth export quotas, causing tremors in the global chip material supply chain.
The Trump administration’s “small courtyard with high walls” strategy marked the full outbreak of the chip war. Through legal tools, technological blockades, and ally mobilization, the US defined chips as the core battlefield of geopolitics. This chapter reveals how technological hegemony escalated from commercial competition to national security games, also foreshadowing the fracture and reconstruction of the global supply chain.
Chapter Two: Breaking the Cocoon — The Bloody Dawn of Chinese Chips
December 18, 2020, during the lockdown in Wuhan, the engineering team of SMIC continuously debugged processes in a cleanroom for 72 hours, ultimately achieving mass production of 14-nanometer chips. The Kirin 9000 chip released by Huawei HiSilicon in October 2020 became a swan song, but the Ascend AI chip quietly lit up in the Guizhou Gui’an data center, achieving computing power equivalent to 75% of NVIDIA’s V100. He Jianming recorded in his documentary literature “My Heart Soars” that Huahong completed the transformation of its 28-nanometer chip production line during this period, codenamed “Project 520,” with employees working overtime increasing by 200% year-on-year.
July 15, 2021, Yangtze Memory Technologies announced the mass production of 64-layer 3D NAND flash memory, breaking Samsung’s monopoly. However, the US, Japan, and the Netherlands reached an agreement at the end of 2021 to restrict the export of EUV lithography machines to China. The Financial Times commented, “China is using a ‘national system’ to counter the US’s technological barriers, but the cutoff of EUV lithography machines remains a fatal blow.” In the same year, the novel “Returning Heart” was published, showcasing the path of cooperation between Chinese entrepreneur Lin Daojian and Taiwanese technical expert Lin Tonggen against the backdrop of cross-strait chip collaboration, echoing the theme of “the same source of chip soul.”
The Dilemma of Russia:
February 24, 2022, after the outbreak of the Russia-Ukraine conflict, the Russian military’s communication system frequently collapsed due to a lack of civilian chips. Moscow urgently turned to China to procure MediaTek MT6761 chips, but in March 2022, the US added major Russian chip design companies to the Entity List. The Russian Academy of Sciences’ Electronic Research Institute was forced to restart silicon-based processes from the 1990s, leading to a 30% increase in the failure rate of military drones.
April 1, 2023, China and Russia signed the Joint Semiconductor R&D Agreement, jointly building the Harbin-St. Petersburg chip corridor, with plans to establish a 28-nanometer production line by 2027. However, Russia’s 90-nanometer process yield rate was only 20%, far below the international standard of 90%.
- [Chapter Summary]
China was forced to accelerate its chip self-research under blockade, gradually building a technological moat from foundry to design, from civilian to military applications. Russia’s dilemma highlights the vulnerability of latecomer countries under technological blockade, while Sino-Russian cooperation becomes an attempt to counter the Western camp. This chapter showcases how crises spur the awakening of technological independence and exposes the fatal weaknesses of the global industrial chain.
Chapter Three: Biden’s Noose and China’s Counterattack
August 9, 2022, Biden signed the CHIPS and Science Act in the White House Rose Garden, allocating $52 billion to subsidize domestic chip manufacturing while prohibiting subsidized companies from expanding production lines below 28 nanometers in China. The act requires subsidized companies to disclose core technology details and restricts cooperation with Chinese companies. TSMC founder Morris Chang publicly opposed, stating, “Globalization is dead; the chip war will cost every country.”
October 7, 2022, the US Department of Commerce issued the third round of regulations, adding Northern Huachuang, Tsinghua Unigroup, and 31 other Chinese tech companies to the Entity List, with a high-bandwidth memory chip export ban covering nodes below 14 nanometers. The Economist commented, “The Biden administration’s sanction logic is ‘suffocating competition,’ but the backlash from the Chinese market has already been felt.” In the first quarter of 2023, Intel’s Chengdu wafer factory saw orders plummet by 60%, forcing a 30% layoff; NVIDIA’s H100 inventory piled up, resulting in a $55 billion market value evaporation.
China’s Countermeasures:
August 1, 2024, China’s Ministry of Industry and Information Technology announced export controls on gallium and germanium, causing global semiconductor-grade gallium prices to soar by 300%. European Commission President Ursula von der Leyen urgently visited China, requesting the easing of restrictions, but China insisted on the “principle of countermeasures and reciprocity.”
October 2024, Beijing launched a “mismanagement” investigation into the Dutch Nexperia factory, forcing the European automotive industry to wait six months for IGBT chips at a high price of 3,000 yuan each. Germany’s Der Spiegel stated, “China has choked Europe’s throat with rare earths.”
- The Biden administration’s sanctions pushed the chip war to a new climax, but China gradually turned the passive situation around through rare earth resources, market backlash, and precise countermeasures. This chapter reveals the game logic of “technological bullying” and “resource countermeasures” — when the West attempts to define the strong through rules, China rewrites the scale of power with scarcity.
Chapter Four: Breaking the Deadlock with Rare Earths — The “Battle of Shangganling” in the Chip War
October 9, 2025, China’s Ministry of Commerce issued six announcements, implementing precise controls on rare earths and related technologies. The new regulations require that rare earth materials needed for high-end chips below 14 nanometers and storage chips above 256 layers be included in a case-by-case approval list; exports of rare earth items containing more than 0.1% “Chinese components” must obtain permission from China; and rare earth production technology exports require licenses.
The Dilemma and Response of the US:
Exposed Military Vulnerability: 87% of the supply chain for 153 types of main battle equipment of the US military relies on Chinese rare earth processing. The F-35 fighter jet requires 417 kilograms of rare earth materials, 70% of which are neodymium-iron-boron magnets; 98% of the 830 pounds of rare earth materials required for each F-35 is dependent on Chinese supply.
Market Panic: After the announcement of China’s control order, US rare earth concept stocks plummeted, with MP Materials’ stock price dropping more than 10% in a single day, resulting in a net loss of over $65 million for the year. Ford’s factory halted production due to a shortage of neodymium-iron-boron magnets, and the F-35 production line faced suspension.
Strategic Contradictions: Trump first issued a “20-day ultimatum,” threatening to impose a 100% tariff on China, but hours later reversed his statement, saying “the meeting between the US and Chinese heads of state has not been canceled,” exposing strategic anxiety.
- China’s Technological Advantages:
Refining Monopoly: China controls 92.3% of global rare earth refining capacity, with impurity rates below 0.001%, and the processing cost per ton is 30%-40% lower than that of the US. Patent Barriers: 75% of global rare earth processing patents are held by China, and US companies must pay $23,000 in patent fees for every ton of magnets produced. Full Industry Chain Advantage: From mining, smelting, separation to deep processing and waste recycling, the full industry chain layout forms an integrated process of “rare earth electrolysis – powder metallurgy,” enhancing the magnetic energy product to 55 MGOe.
- The breaking of the deadlock with rare earths marks a new stage in the chip war. China, through resource advantages and technological monopolies, shifted the focus of the game from “technological stranglehold” to “resource countermeasures,” breaking the myth of the US’s one-way blockade. This “Battle of Shangganling” centered around rare earths demonstrates the decisive significance of industrial chain dominance.
Chapter Five: The Turning Point of 2025 — Temporary Agreements and Strategic Stalemate
June 26-27, 2025, both China and the US confirmed through official channels that they had signed a trade memorandum of understanding, with the core content being a temporary arrangement of “rare earths for technology.” According to the agreement, China will restore rare earth exports to the US (valid for six months, limited to civilian fields), while the US will ease export restrictions in areas such as chip design software and aircraft engines.
Agreement Details and Execution Mechanism:
China Delivers First: The agreement adopts a “China delivers first, the US eases restrictions later” mechanism. China approves the issuance of rare earth licenses to US companies but sets dual restrictions: valid for only six months and limited to civilian fields, excluding military needs.
US Concessions: The restrictions lifted by the US mainly target the export controls implemented in April 2025, including ethane, chip design software, and aircraft engine parts.
Execution Supervision: China’s new export licensing regulations require filling in end-user information to prevent re-export. The US Export Administration Regulations require congressional authorization for technology unblocking to China, raising concerns among lawmakers.
Reactions and Geopolitical Impact: EU’s Urgent Response: The EU ambassador to China urgently met with the Chinese foreign minister, requesting a solution to the shortage of rare earth magnets. Japanese Ministry of Economy, Trade and Industry officials hurriedly studied countermeasures, and Indian trade representatives actively called Beijing to seek dialogue. Corporate Adaptation: NVIDIA launched a “China-specific version” GPU; American chip equipment giants like Applied Materials and Lam Research secretly adjusted technical parameters to maintain their business in China. Accelerated Technological Breakthroughs: Northern Huachuang’s 14-nanometer thin-film deposition equipment has been mass-produced at SMIC; Huada Jiutian’s analog circuit design tools and Guangzhou Gexun Electronics’ 3-nanometer modeling systems have begun to replace Western products.
- The temporary agreement in mid-2025 marks the entry of both parties into a strategic stalemate phase. The US made limited concessions under short-term supply pressure but did not abandon its core technology blockade strategy. China, on the other hand, used the strategic application of rare earth resources to buy time for technological breakthroughs. This dynamic of “needing each other” yet “guarding against each other” defines the new normal of major power technological relations.
Chapter Six: Global Industrial Chain Restructuring and Future Projections
New Trends in Technological Competition:
In the Chip Field: China has improved the performance of 14-nanometer chips to nearly 7-nanometer levels through Chiplet heterogeneous integration technology. Huawei’s Ascend 910B cluster computing power reaches 320 TOPS, threatening the US military’s “Joint All-Domain Command System.”
Quantum Computing: China’s “Nine Chapters No. 4” quantum computer can crack RSA-4096 encryption in 3 minutes, bringing the US military’s nuclear password system to the brink of failure. The Beidou-3 satellite carries a quantum key distribution system, enhancing communication anti-jamming capabilities in the Taiwan Strait region by 400%.
New Material Breakthroughs: Chinese scientists announced the mass production of nickel oxide superconducting materials, which, if applied to magnetic levitation bearings, could reduce rare earth usage by 60%.
- Global Industrial Chain Restructuring:
The US’s “Decoupling from China” Failure: The US demanded TSMC replicate its 3-nanometer production line in Arizona, but the yield was only 58%, and 80% of the equipment relied on Chinese supply. Japan’s Mitsubishi Chemical transferred 28-nanometer etching machine technology to China in exchange for rare earth import quotas. China’s “Precise Control” Offensive: Implementing “blockchain traceability” for military-grade rare earths, while civilian-grade rare earths are exported through “international capacity cooperation.” In 2025, Chinese-funded cobalt mines in the Democratic Republic of the Congo accounted for 60% of global production. Emerging Forces Choosing Sides: The world may split into “rare earth-quantum” camps (led by China and Russia) and “chip-energy” camps (the US-Japan-Europe alliance), with third-world countries forced to take sides.
- Future Predictions:
Short-term (2026-2027): China and the US will continue to “strangle each other’s chips and limit each other’s rare earths,” with the US rallying Australia and Canada to form a “Rare Earth G7,” but finding that while they have the mines, the factories are still in China. Mid-term (2028-2030): China’s chip self-sufficiency rate will exceed 70%, with domestic equipment completely replacing imports. The US will need ten years to rebuild rare earth processing lines, while US military stockpiles can only last for three months. Long-term (after 2030): The world will eventually return to the negotiating table, as no matter how stylish the “strangling each other” posture is, it cannot stop the diminishing air supply. The rules will be restructured into a new paradigm of “resources for technology.”
- The chip war is profoundly restructuring the global industrial chain. Technological hegemony and resource hegemony mutually constrain each other, forming a new strategic balance. The future competition will no longer simply depend on the level of technology or the amount of resources, but on the ability to control the entire industrial chain ecosystem.
The Final Chapter: The Spiral of Games and the Uncertain Endgame
The Game Situation After October 2025:
As the crane at Lianyungang Port lifts rare earth containers onto ships bound for Los Angeles, and chip companies in San Jose, California, receive notifications from the US Department of Commerce about the partial lifting of export restrictions, the surface thaw conceals the undercurrents.Deep-seated cognitive fractures still exist: the US side tends to view China’s rare earth controls as “retaliation against the US,” while the Chinese side counters that this is “a universal policy based on national security.” This fundamental distrust makes any agreement frail.
Decisive Factors:
Speed of Technological Breakthroughs: China’s domestic chip equipment market share rose from 16% in 2023 to 28% in 2025. The US will need ten years to rebuild rare earth processing capacity.
Reality of Military Dependence: 78% of the US military’s rare earth supply chain is entirely dependent on China. If China cuts off supplies, US stockpiles are only enough to fight “half a Gulf War.”
Resilience of Global Industrial Chains: Globalization is like marriage; you can argue, but if you really separate, you find that the pillows, blankets, and electric blankets are all bought by the other party.
- The endgame of the chip war is far from certain; it is a process of spiral ascent. When Trump’s tariff threats encounter the rigid constraints of rare earth controls, and the inventory anxieties of US companies collide with China’s technological barriers, the initiative has quietly shifted in the micro world. There are no true winners in this game, only survivors who adapt to the new rules in continuous evolution.
The real insight is that technological self-reliance is like losing weight; shouting slogans for three days results in three years of fat loss; chips and rare earths are both “calories” that must be gnawed at bit by bit. When China tells the world with six announcements that “rare earths are not rare, but the rules are strict,” the chip war has evolved from a simple technological competition to an ecological contest of the entire industrial chain.
The outstanding performance of the J-10CE in the India-Pakistan air battle on May 7, 2025, was not only a tactical victory but also a concentrated reflection of the Chinese Air Force’s system combat capabilities. This practical verification demonstrated the maturity of China’s military technology, especially in beyond-visual-range strikes and data link coordination capabilities, marking that the Chinese Air Force has the strength to compete with the top Western air forces. This asymmetric advantage has made the US realize that using traditional hot war means to contain China will incur unbearable costs, forcing it to shift the main battlefield of the game to the economic and technological fields. The essence of the chip and rare earth war is the struggle for dominance over the global industrial chain. The US attempts to stifle China’s high-tech industry through chip bans but underestimates China’s countermeasure capabilities and technological breakthrough speed. China, on the other hand, demonstrates the synergistic effect of resource strategy and market laws through precise countermeasures like rare earth controls. Although the temporary agreement of 2025 is a compromise, it reveals the limitations of the US strategy: it cannot sever the ties between China and the global industrial chain, nor can it stop China’s pace of technological independence. The strategic thinking of “grasping both hands and being tough with both hands” is particularly crucial in this context. On one hand, military modernization must continue to strengthen system combat capabilities, transforming technological advantages into strategic deterrence; on the other hand, technological independence must break through the “choke points” and promote the formation of a “countermeasure-innovation” dual cycle in key areas such as chips and rare earths. Historical experience shows that the key to victory in major power games lies not in temporary compromises but in who can continuously consolidate the three-dimensional advantages of “technology + resources + rules.” As General Secretary Xi Jinping pointed out: “The cooperation between China and the US benefits both, while conflict harms both. Both sides should respect each other, treat each other equally, and manage differences constructively.” The endgame of this game is not about zero-sum victory or defeat, but about whether a new paradigm of balanced coexistence can be constructed. China’s goal is not to replace anyone but to promote the world towards a future of multipolar co-governance through strength and wisdom.
Appendix: Timeline of Major Events in Global Chips and Rare Earths (2017-2025)
Chip Technology Breakthroughs and Sanction Events
| Year | Country/Region | Event Type | Date | Details | Impact and Consequences |
|---|---|---|---|---|---|
| 2017 | USA | Policy Legislation | December 12 | Trump signed the National Emergency Act, listing semiconductors as national security assets | Beginning of the chip war, initiating technology blockade against China |
| 2019 | USA | Technology Sanctions | May 16 | Huawei was added to the Entity List, cutting off access to Android system and Qualcomm chips | China launched the “Chip Fire Plan,” accelerating self-research |
| 2020 | China | Technology Breakthrough | December 18 | SMIC achieved mass production of 14-nanometer process | Milestone in China’s chip self-research, breaking through US blockade |
| 2021 | USA/Japan/Netherlands | Technology Blockade | December | Tripartite agreement to restrict EUV lithography machine exports to China | Yangtze Memory Technologies’ R&D hindered, global chip supply chain tightened |
| 2022 | USA | Policy Legislation | August 9 | Biden signed the CHIPS and Science Act, subsidizing domestic chip manufacturing | Strengthening restrictions on China, promoting manufacturing return |
| 2023 | China | Technology Breakthrough | All year | SMIC’s N+1 process matured, Yangtze Memory Technologies’ 232-layer NAND flash mass production | China gradually becomes self-sufficient in mature process fields |
| 2024 | China | Countermeasures | August 1 | Export controls on gallium and germanium implemented | Global semiconductor-grade gallium prices soared by 300% |
| 2025 | China | Technology Breakthrough | June | Huawei’s Ascend 910B cluster computing power reached 320 TOPS | Threatening the US military’s “Joint All-Domain Command System” |
| 2025 | China/USA | Temporary Agreement | June 26-27 | Signed the “rare earths for technology” memorandum | Temporarily alleviating supply chain tensions |
Key Events in the Rare Earth Game
| Year | Country/Region | Event Type | Date | Details | Impact and Consequences |
|---|---|---|---|---|---|
| 2017 | Global | Resource Landscape | All year | China’s rare earth reserves accounted for 37% of the global total, with heavy rare earths accounting for 80% | Laid the foundation for the rare earth game |
| 2020 | China | Resource Management | March 17 | Promoted the EU to pass the Critical Raw Materials Act | China’s rare earth export quotas reduced by 15% |
| 2024 | China | Policy Legislation | October | Implementation of the Rare Earth Management Regulations | Constructing a full industrial chain regulatory system |
| 2025 | China | Precise Control | October 9 | Ministry of Commerce issued six rare earth control announcements | Targeting rare earth materials needed for chips below 14 nanometers |
| 2025 | USA | Response to Crisis | October 10 | US military urgently procured 3,000 tons of rare earth permanent magnets to replenish reserves | Exposed supply chain breakage risks |
| 2025 | Global | Market Volatility | October | Rare earth concept stocks plummeted, with MP Materials’ stock price dropping 18% in a single day | Wall Street panicked over rare earth dependence |
| 2025 | USA | Military Impact | October | F-35 fighter jets faced production suspension due to rare earth shortages | Each F-35 requires 417 kilograms of rare earth materials |
Comparative Data on Technological Breakthroughs and Industries
| Field | Technical Indicators | China’s Level (2025) | US/International Level (2025) | Gap Analysis |
|---|---|---|---|---|
| Chip Manufacturing | Advanced Process | 14nm mass production, N+1 process close to 7nm | 3nm mass production, 2nm in R&D | 1-2 generation gap, but Chiplet technology narrows the gap |
| Chip Design | AI Computing Power Chips | Ascend 910B reaches 320 TOPS | NVIDIA H100 reaches 400 TOPS | Performance is close, but ecological gap is significant |
| Rare Earth Refining | Purity Process | Impurity rate below 0.001% | Purity only 99.5% | China has an absolute advantage, controlling 92.3% of global refining capacity |
| Rare Earth Magnets | Magnetic Energy Product | 55 MGOe | 42 MGOe | China leads, with significant patent barriers |
| Quantum Computing | Computing Power Breakthrough | 3 minutes to crack RSA-4096 | Traditional supercomputers need thousands of years | China achieves “dimensionality reduction strike” |
| Equipment Self-Sufficiency Rate | Domestic Rate | 28% (2025) | Insufficient domestic capacity | China’s growth rate is rapid, increasing by 6 percentage points per year |
Military Supply Chain Dependency Data Table
| US Equipment Model | Rare Earth Dependency | Chinese Chip/Material Usage | Potential Risks |
|---|---|---|---|
| F-35 Fighter Jet | 78% of the rare earth supply chain relies on China | Each requires 417 kilograms of rare earth materials, 70% of which are neodymium-iron-boron magnets | Supply cut leads to production suspension, affecting US military readiness |
| Virginia-class Submarine | Highly dependent | Each consumes 4 tons of rare earth materials | Sound-absorbing tiles and missile guidance systems are constrained |
| Berkley-class Destroyer | Highly dependent | Key systems use Chinese chips | Risk of being paralyzed remotely during wartime |
| Ford-class Aircraft Carrier | Severely dependent | Identified 6,500 Chinese chips, over 70,000 tons of steel from China | Symbolizes the highest combat power of the US military facing supply chain risks |
| Tomahawk Missile | Directly affected | Rare earth controls lead to a 40% decrease in production capacity | Precision guidance systems rely on rare earth materials |
(This article is based on real events and authoritative reports, with data sourced from government announcements, industry reports, and media commentary, striving to objectively present the panorama of the chip war.)