The geopolitical irony that we are experiencing in the chip war has an unexpected beneficiary: Russia

The technological and trade war between the United States and China continues to open new fronts of debate. The last one, derived from the singular Nexperia situationis beginning to point to a future in which European decoupling from the Chinese chip industry may end up having an effect that is especially disturbing.

Or dad, or mom. The strategic semiconductor sector has become the absolute focus of this trade war, and here Europe has traditionally been a security ally of Washington, but at the same time a key economic partner of Beijing. The problem is that the old continent has been forced to choose sides. US pressure for technological “decoupling”, coupled with concerns about national security, has forced the European Union to harden its stance towards Chinese investments and companies.

Risk for Europe. This European effort to decouple its chip industry from China, far from shielding the continent’s security, could end up being counterproductive and self-destructive. With this decision, Europe would be assuming enormous economic and supply chain costs to align with Washington, putting at risk the future of its own industries, such as automotive or electronics, which are highly dependent on the Chinese market and production.

The Nexperia case. The recent epicenter of this conflict is the aforementioned Nexperia case. In late September, the Dutch government invoked an old national security law to take effective control of Nexperia, a Dutch automotive chip company. That company is actually owned by the Chinese firm Wingtech, and the intervention marked a dangerous turning point, transforming China’s acquisition of technology from an economic issue to one of geopolitical security.

Beijing’s revenge. The Chinese government did not sit idly by. The Chinese Ministry of Commerce banned the export of certain finished Nexperia components from China to Europe. Those reprisals They stopped the delivery of key partsthreatening to provoke a new chip crisis in Europe, and especially affecting to automakers in Germany and other countries that depend on that supply.

Russia rubs its hands. If China’s chip industry is forced to operate under strict separation from European markets (decoupling), and Europe ceases to be a viable destination or supplier, China could find it easier to supply those chips to Russia, which desperately needs them for its weapons programs, especially in the wake of severe Western sanctions.

Strategic irony. The situation is paradoxical. European “security” actions aimed at containing Chinese influence may end up resulting in a transfer of technological supply capacity to Russia. Thus they would inadvertently strengthen the war machine of what is Europe’s most immediate adversary in the Ukrainian conflict.

History repeats itself. In reality, the curious thing is that it is suspected that all these events are part of a historical pattern. Europe is dragged into a conflict by the US (first Iraq, then Afghanistan, now this decoupling) only for Washington to withdraw or change focus later, leaving Europe alone to bear the impact of broken supply chains. It does not appear that there was much strategic thinking on the part of the EU and the Netherlands when making that controversial decision with Nexperia.

USA also wins. This dynamic seems to further strengthen the leading role of Washington, which if it pushes Europe towards decoupling, not only restricts a rival (China) but also causes European countries to massively increase their defense spending. An expense that would obviously fall on the US military industry.

a crossroads. Europe faces a colossal strategic problem. Its security depends on the US, its economy is closely linked to China, and at the same time it seeks its own autonomy. Restrictions on semiconductors put Europe at risk of sacrificing its own long-term economic prosperity in favor of a strategy that could be abandoned by its main ally.

Long term consequences. If this trend that began with the Nexperia case is consolidated, European value chains dependent on Asia will be destroyed, in addition to an increase in inflation due to the cost of decoupling and a possible strengthening of relations between China and Russia. What is happening with Nexperia is no longer just a corporate dispute, but the symbol of an EU that is being governed without a clear vision of its own long-term interests.

Image | Nexperia | Kremlin

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