Navigating the silicon divide: East Asian industrial responses to the US–China semiconductor rivalry

Yongshin Kim

Chapter 14 in A Modern Guide to Industrial Economics, 2026, pp 258-275 from Edward Elgar Publishing

Abstract: The US–China chip war introduces a new dynamic not only for bilateral coordination but also for East Asian semiconductor powerhouses, which possess substantial semiconductor production capabilities. East Asia, comprising Japan, South Korea, and Taiwan, dominates global semiconductor production, controlling most of the wafer fabrication capacity and 100% of the advanced 7- and 5-nanometer node production. This chapter compares how and why these East Asian economies have developed distinct industrial policies to navigate the evolving landscape of global semiconductor production shaped by the US–China chip conflict. This study offers two contributions. First, it assesses whether these so-called developmental states react uniformly to external shocks despite being commonly categorized under the same model. Second, it advances theoretical debates on how states define strategic orientations amid semiconductor supply chain restructuring. The chapter argues that their responses are path-dependent, reflecting each country's unique state–business coordination and specialized position within the global value chain.

Keywords: Chip war; Developmental state; State-business coordination; Industrial position; Semiconductor (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035365609
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