The Chip War: How Silicon Became the Currency of Power

Fundacja Dobre Państwo • January 2, 2026 • 🇵🇱 Polski

Introduction

Technological superiority is not achieved with a single "best chip," but rather through a stable chain connecting design, production, and service. The economics of decision-making also becomes crucial: technology that shortens the time to make a decision is cheaper across the entire operation. From this perspective, a chip embargo is not an "on/off" switch for progress, but rather a valve on the learning pipeline. It slows innovation by cutting off access to key machinery and software. This article explains how silicon has become the currency of power, analyzing the technology, geopolitics, and economics of this revolution.

CPU, GPU, NPU, FPGA: Strategic Applications

Modern systems rely on specialized chips. The CPU is a general-purpose orchestrator. The GPU, originally designed for graphics, excels at massive parallel processing, which is crucial for AI. The NPU is an accelerator tailored for neural networks, and the FPGA is programmable hardware "clay," valued in space for its ability to be updated after mission launch. Historical programs like Apollo, Minuteman, and Tomahawk shaped the connection between chips and military power, demanding quality, mass production, and miniaturization essential for precision weaponry.

CoWoS and HBM: Keys to Computational Power

The modern "combat power" of GPUs no longer depends solely on advanced lithography. Key factors have become bandwidth to HBM (High Bandwidth Memory) and the availability of advanced packaging, such as CoWoS (Chip-on-Wafer-on-Substrate). These technologies eliminate data access bottlenecks, which is critical for reconnaissance systems and artificial intelligence. Access to CoWoS production capacity has become so vital that designers reserve it months in advance, and control over these technologies serves as a tool for geopolitical pressure.

Geopolitics of Chips: USA, China, Europe, Taiwan

The global chip war features a clear distribution of power. The USA controls key design software (EDA) and architectures, allowing it to enforce sanctions globally. China responds with a "long march" strategy toward self-sufficiency, investing in domestic companies like SMIC and the open RISC-V architecture. Europe boasts monopolists in equipment (ASML) but lacks foundries. Meanwhile, Taiwan, with its dominant TSMC, acts as a "silicon shield" and the most volatile flashpoint on the map. A potential blockade of the island would cut off the world from the lion's share of new computational power.

Conclusion

The evolution of chips represents a transition from craftsmanship to automated precision, where reliability is paramount. In space, rad-hard chips reign supreme, while in the military, the "zero trust" doctrine aims to protect against hardware backdoors. The economics have shifted from price per transistor to "joules per decision," and the industry's paradox is that while transistors are virtually free, the factories to produce them cost billions. During the Cold War, the reliability of a missile was at stake. Today, it's the certainty that no digital spy is hidden within the silicon, and access to computational power defines the global hierarchy of forces.

Summary

This article examines the global competition for semiconductor technology, which has become a key currency of power in geopolitics, defense, and economics. It presents principles for assessing technological power, such as the functional chain rule, emphasizing the importance of each stage—from design (EDA) to packaging (HBM, CoWoS) and testing. It discusses the practical applications of key chip technologies (CPUs, GPUs, AI accelerators, rad-hard chips) in military, space, and civilian contexts. The article also explores the geopolitical aspects of supply chain control and the impact of technology embargoes and sanctions on state development, illustrating these mechanisms with examples from Huawei, SMIC, and Russia. Understanding these mechanisms is crucial for assessing the strategic position of states in the digital age.

Frequently Asked Questions

What is the "chip war" and why has silicon become the currency of power?

The "Chip Wars" are a global competition for dominance in semiconductor technologies. Silicon has become the currency of power, as control over its production and design determines the military, economic, and technological strength of nations.

What are the key elements of technological advantage in the context of chips?

Technological advantage relies on the "functional chain," which encompasses design (EDA, IP), manufacturing (lithography), packaging (HBM, CoWoS), testing, and service. Stability and competence at each link are crucial.

How do technological embargoes affect the development of countries?

Embargoes don't completely halt progress, but they act as a "valve on the learning pipeline," slowing the accumulation of process experience. They can restrict access to machines, software, or services, fundamentally altering a country's standing in the technology race.

What are the main types of processors and their applications in military and space contexts?

The main types are CPU (universal conductor), GPU (for parallel processing, crucial for intelligence), NPU (AI accelerator for tensors), and FPGA (programmable 'clay' for connectivity and prototyping, resistant to harsh environments). Each one plays a specific role.

Why are technologies like HBM and CoWoS so important today?

HBM (High Bandwidth Memory) and CoWoS (Chip-on-Wafer-on-Substrate) are crucial because they shift the performance bottleneck from lithography itself to memory bandwidth and advanced packaging. Without them, even the most advanced logic circuits cannot achieve their full performance.

What is the significance of the RISC-V architecture in the geopolitical context?

RISC-V is an open processor architecture that removes political licensing fees, offering an alternative to x86 and Arm. This is a strategic move for restricted countries, allowing them to build independent ecosystems and maintain software compatibility.