ABSTRACT
This chapter contends that the US can reinforce the semiconductor supply chain and maintain its position as an innovation leader by cementing a semiconductor alliance with Indo-Pacific partners, specifically South Korea, Taiwan, and Japan. The chip supply chain's fragility and the industry's centrality to the global economy are stoking an intensifying competition that will have significant economic and security implications. To ensure the resilience of the chip supply chain and retain a technological advantage, the US should collaborate with its Indo-Pacific partners using a balanced approach that embraces selective restrictions, friendshoring, and growth-promoting strategies instead of decoupling, onshoring, and isolation. To brace against the instability of geopolitical risk and Chinese industrialist policies, the coalition should coordinate on frameworks for multilateral export controls, investment screening, subsidy transparency/ceilings, contingency planning, supplier diversification, and compensation mechanisms. To prevent the imperatives of national security from overshadowing the needs of innovation, the coalition should open up channels of communication with the private sector and collaborate multilaterally on: research, investments, and workforce training. A proactive, flexible, and values-based approach is needed to deter coercion, counteract market-distorting activities, and beat adversaries on the merits of the technology.
