China spends more on importing computer chips – $260 billion1 in 2017 – than it does importing oil. President Biden’s recent bans on the export of American-made chips to China as well as a ban on companies throughout the world using American technology to export to China intends to make it even more expensive and continue Chinese dependence for this crucial bit of technology gear.
Keep in mind that microchips are used in every conceivable product. Ovens, microwave ovens, refrigerators, cars, radios, speakers, doorbells, and thermostats, not even to mention our smartphones, iPads, laptops, and more. Since much of these are assembled in China, the availability of chips is crucial to the Chinese economy. A typical base model car has 1,400 chips. High-end models over 3,000. So chips are verywhere.
Taiwan produces more than 50% of the chips in the world with a near hammerlock on the latest most powerful models.
This leads to an immediate motivation for China to take over Taiwan. You don’t have to look to old history and culture for an explanation of China’s continuing rumbling toward Taiwan.
