The geoeconomics of global semiconductor value chains: extraterritoriality and the US-China technology rivalry

Abstract

This paper conducts a study into the exercise and development of US structural power in the global semiconductor industry and offers a geoeconomics explanation for US dominance in the sector. It emphasizes the role of legal jurisdiction and spatial dimensions of technological development in perpetuating US structural power in global semiconductor value chains. The goal of this paper is to apply the concept of extraterritoriality to the study of structural power; how it is acquired, and how it is used. It explains why we should consider extraterritoriality as a feature of US structural power in International Political Economy (IPE) and suggests three features to help illuminate the concept: Power in global value chains, legal-jurisdictional power, and alliance-based power. The paper first explains how the US acquired the policy tools and leading market position for projecting extraterritorial power in the semiconductor industry during the late twentieth century, how it then utilized its structural privileges to target Chinese technology firms, and finally, the current and potential constraints on its deployment based on the reactions of Chinese and US transnational corporate actors.