China's chip war strategy needs multinational allies

For China to prevail in the semiconductor competition, it needs to implement a multinational approach, capitalizing on its stronghold in legacy integrated circuits for consumer electronics and the automotive industry. Although the US excels in cutting-edge AI chips, China is positioning itself as a significant contender in the mass market for legacy chips. The CPU market, historically ruled by Intel and AMD, is becoming increasingly competitive as Chinese companies narrow the gap, paving the way for potential self-sufficiency. In contrast, memory chips have been dominated by East Asia, with Samsung and SK Hynix holding two-thirds of the global DRAM market, while Japanese companies play a vital upstream role. America's key advantage lies in its influence over allied critical technologies, beyond just GPU leadership. As AI transitions from training to practical applications, CPUs will regain significance in the next five years, marking this as a crucial battleground.