An ongoing trade war starting in 2018 when the Trump administration imposed tariffs on China. During the Biden administration, restrictions were placed on certain NVIDIA chips going to the country. During the second Trump administration, more restrictions for state-of-the-art chips as well as chip-making equipment going to China were enacted.
The Result
The consequence of American restrictions caused China to develop its own versions of AI chips and manufacturing techniques. In addition, Apple's investment in China, beginning a year after the iPhone's introduction in 2007, helped the country gain enormous expertise in electronics assembly (see
Apple in China).
As of 2026, China leads the world in total chip volume. It also leads in manufacturing the previous generation of chip technology, but the country is catching up quickly. China's goal is to have a replacement by 2030 for ASML's lithography system, which is the most advanced chip-making equipment (see
ASML). Taiwan (TSMC) and South Korea (Samsung, SK Hynix) still make the most advanced chips for AI.
Where Is American Chip Manufacturing?
In Arizona and Oregon, Intel makes state-of-the-art processors but not AI chips. NVIDIA and AMD design GPUs, which are made in Taiwan. In New York State, GlobalFoundries makes older and specialized chips. TSMC in Arizona is making state-of-the-art chips but sends wafers back to Taiwan for packaging (see
TSMC 3DFabric). TSMC's plans for Arizona are two packaging plants, an R&D center and six fabs for making wafers (see
chip capital of America).