In the last two decades, semiconductors have grown from basic components to what now people calling the "new oil" of the 21st-century global economy. These have become the essential and crucial for all digital infrastructure including artificial intelligence, supercomputing, 5G network implementations, advanced military capabilities, and consumer electronics. This significant dependence on semi conduct has turned the semiconductor supply chain from from a showcase of global efficiency into a serious vulnerability and a key battleground in the rivalry among major powers.
The present article posits that the US-China semiconductor race is not merely an economic disagreement, but a quintessential case of structural realism. The two great powers are caught in a cycle of competition, driven by the anarchic structure of the international system, which causes them to prioritize national security and relative gains in a zero-sum competition for technological preeminence/supremacy. The United States, as the incumbent hegemon, seeks to maintain some technological and military edge over China, which it does by denying China access to critical technologies. China, as the rising challenger, perceives this technological dependence as an existential vulnerability and has embarked on a classic "self-help" strategy to achieve self-sufficiency and, in the future, to counter the power of the US-led order.
This article explores the Chip War through the lens of realism, highlighting how the pursuit of relative gains, fear of dependence, and balancing of power play crucial roles in shaping the strategies of both the US and China.
UNDERSTANDING THE STRATEGIC IMPORTANCE OF SEMICONDUCTORS
Semiconductors a essential for modern economies, advanced technologies and military power are now one of the preeminent arenas in which the US–China competition is unfolding. Their complicated supply chains contains chokepoints controlled by a small number of states, providing significant geopolitical leverage. Realist theory would argue that semiconductors are the 21st century's strategic resource, and that dependence on foreign suppliers presents security threats, thereby leaning states to pursue relative benefits through technological self-sufficiency. China relies heavily on imported chips, and is therefore investing heavily into domestic capacities, but it is also meeting US exit restrictions with additional sanctions on Chinese firms and lumbering to augment its own manufacturing base. These are distinct features of a 'realist' struggle for control, security and technological superiority.
1. Theoretical Framework: Key Principles of Realism
In order to examine the Chip War from a realist lens, we must begin by examining the core assumptions that realism makes about how the world operates. Realism is perhaps the most staunchly conservative school of thought when it comes to international relations theories; an international system is defined as anarchic—not devoid of order, but lacking a central, global authority that can impose rules, or guarantee protection. In an anarchic international system, states must help themselves to survive, and the greatest concern of states is security. The United States and China exist in this self-help system, and both nations consider dominance in semiconductor technology not simply an economic priority, but an essential component to national survival, and long-term strategic security. Chips drive artificial intelligence, advanced weaponry, and communications capabilities; thus whichever nation is behind in semiconductor technology will be behind in power.
There is a theoretical tension within realism broadly regarding whether states seek to only gain enough power to feel secure (defensive realism) or are always looking to gain as much power as they can (offensive realism). These two conceptualizations help to explain the behavior of the US and China. The US, as the current global leader in semiconductor technology, exhibits defensive realist logic in its behavior - it is attempting to maintain the current order and to prevent China from supplanting it. In contrast, China exhibits a behavior indicative of an offensive realist actor. China is attempting to reduce its reliance on foreign technology due to its status as a rising power. As a result of its rising power, it is trying to increase capabilities and is moving closer to establishing regional hegemony. From China's perspective, being cut off from semiconductor chokepoints controlled by the US and Japan is essential to achieving autonomous action and developing strategic influence.
Realism also stresses relative gains, both of which are particularly pertinent when thinking about technology and geoeconomics: For instance, in the Chip War, the United States is actually happy to incur economic costs—including the restriction of economically advantageous semiconductor sales to China, so that China cannot close the technological power gap even though cooperation would lead to both economies being wealthier. In other words, while the outcome would benefit both economies, the United States sees China's relative economic growth, in this case, faster than the relative growth of the United States, as strategic loss. Therefore, the semiconductor race is not a technological race, but the very notion of realism, emphasizing the preeminence of power, security, and longer-term strategic advantage over short-term economic gain.
A REALIST ANALYSIS OF THE US-CHINA SEMICONDUCTOR RIVALRY
A realist analysis shows that the US–China semiconductor rivalry is not a random economic dispute but a calculated struggle shaped by structural pressures in the international system. Both states behave in ways that reflect the logic of survival, power maximization, and fear of relative decline. In viewing the Chip War through this lens, the conflict is a reasonable consequence of two great powers competing within an anarchic global order in which military advantage is determined by preeminence in technology control. Every significant action—export controls, industrial policy measures, ally building and investments – fall squarely into human realism’s avoided but crucial claim: to ensure stability states must secure stability through a monopoly of power.
From this viewpoint, the American approach fits the classic definition of a hegemon attempting to protect or maintain its technological and military advantage. The export restrictions imposed in October 2022 were particularly surprising because they went beyond the traditional approach to trade policy and explicitly restricted the most advanced inputs that China would need to develop the most advanced chips. This legislation cut China off from access to AI processors, chip-making equipment, and specialized software. Although it restricts profits and trade for American chip companies in the long term, the policy under defensive realism makes sense and reasonable; the United States government is willing to accept economic pain in the short term in return for limiting China's long-term gains that may threaten the dominance of the United States. Policymakers in the US government recognized the implications of modifying China's access to advanced chips; they believed it would expedite Chinese modernization in military capabilities and surveillance, thus resulting in a threat to US security. Shielding China from technology to develop advanced chips is a reasonable positioning under defensive realism to constrain technology transfer to China and (hopefully) preserve the global hierarchy of power.
China's response corresponds closely with realist expectations as well. China has long recognized that reliance on American, Japanese, and Dutch semiconductor technology is a potentially devastating and dangerous vulnerability, a concern reinforced through the enactment of broad US export controls. In response, China has further solidified its commitment to independence by investing heavily in domestic chip firms like SMIC and YMTC, and through plans and policies like "Made in China 2025". This is all classic self-help behavior; China wants to ensure that it can never be crippled by a foreign power denying access to a critical technology. From an offensive realist perspective, China is acting as a rising power seeking more authority and eventually dominance, and it appreciates that it can never become a regional hegemon while its chip supply chain is controlled by its primary strategic adversary. The competition has evolved into a fully realized security dilemma in a technological sense. What the United States sees as a defensive measure to stop China from having technology that can be used for military purposes, China sees as an offensive measure intended to contain its rise. The movement toward chip self-sufficiency is interpreted in the US as an aggressive move to undermine US global dominance, while it is simply designed in China as a defensive way to protect its economic and security interests. This ongoing distrust reinforces escalation on both sides. Every action taken to strengthen one's own security is perceived to be a threat to the other, leading to additional actions designed to augment those fears. Consequently, the semiconductor industry has become the most prominent contemporary site for the security dilemma, with both states essentially in a state of action and reaction.
Alliance politics further bolster the realist nature of the conflict. The semiconductor supply chain is distributed among a number of US allies, who control the key chokepoints of this supply chain: Taiwan (chip fabrication), the Netherlands (EUV lithography), and Japan (equipment and materials). The US has used its security partnerships to persuade these allies to restrict exports to China, despite these allies’ economic self-interest in selling to China. Here we see a quintessential realist insight; unwilling alliances are practicalities of power, rather than enduring moral commitments. As the hegemon, the US is uniquely able to pressure smaller states into compliance with the hegemon’s strategic goals. Their compliance, underpinned by dependence on US military support, illustrates how the asymmetry of power affords a dominance state the ability to coordinate collective action to isolate a rival power that is rising.
CONCLUSION
In conclusion, looking at the US–China semiconductor conflict only through economics or liberal ideas of cooperation doesnot explain what is happening on the ground. Liberal theory assumes that trade, interdependence, and shared institutions lead to peace. But if that were true, the United States would never willingly chosen to cut ties from a major trading partner. At this stage in the competition, these moves only make sense when we understand that both countries see semiconductors as crucial to their national security, military strength, and long-term survival.
Looking at it from a realist angle really makes the picture clear. The chip war is a power struggle between a dominant state and a rising challenger. The US is acting like a defensive hegemon trying to protect its lead, even at economic cost. China, on the other hand is stepping up and behaving like a rising power determined to fix what it views as a dangerous dependence on foreign technology. This changes has created a full security dilemma wheere each step taken by one side to feel safer is seen as a threat by the other which leading to more tension escalation. The semiconductor race is therefore not a temporary dispute but a structural competition or structural rivalry that is likely to deepen. Policymakers must understand that this is not a conflict solved through trade agreements; it is a long-term contest over who will shape the technological future of the 21st century.
REFERENCES
- Dhanak, Kabir. “U.S.–China Trade War: Analysis of the Semiconductor Industry.” IOSR Journal of Business and Management, vol. 26, no. 10, Ser. 6, Oct. 2024, pp. 48–59. IOSR Journals, https://www.iosrjournals.org/iosr-jbm/papers/Vol26-issue10/Ser-6/G2610064859.pdf
- Meketa Investment Group. US-China Chip Wars Set to Expand in 2025. Jan. 2025, meketa.com/wp-content/uploads/2025/01/MEKETA_US-China-Chip-Wars.pdf.
- Maksakova, Anastasia. Semiconductors Are a New Weapon of Geopolitics: The U.S.–China Rivalry, AI, and the Future of Global Security. 2025, Central European University, MA thesis. CEU eTD Collection, https://www.etd.ceu.edu/2025/maksakova_anastasia.pdf
- Tavares, N. The U.S.-China Chip War: Using International Relations. Honors Research Project in Politics, Law, and Society, Bryant University, 10 Dec. 2024. Bryant Digital Repository, digitalcommons.bryant.edu/cgi/viewcontent.cgi?article=1005&context=honors_politicslawsociety.
- Gera, Anmol, Mallika Dutt, and Dr. Pritam Banerjee. The AI Chip War: A Battle for Technological Supremacy. Policy Brief No. 11, June 2025, Centre for WTO Studies, IIFT. WTO Centre CRIT, wtocentre.iift.ac.in/PolicyBrief/CWS-CRIT-AI%20Semiconductor_Policy_Brief_No-11.pdf.
