Cables From The Diplomatic Frontlines - Importance of strategic & rhetorical framing in Washington's new strategy: an overwhelming technological blockade of China.

Technological blockade of China requires a solid diplomatic and rhetorical framing.

• The CHIPS Act produces early results.

• “Today is another win for America, and another massive new investment in America spurred by my economic plan” said President Biden when commenting on Micron’s decision to invest $20 bln this decade, and up to $100 bln over the next 20 years in chips manufacturing in upstate New York.

• And credit where it is due - he is right about that.

• In fact, here is what the CEO of Micron had to say about his decision-making process: “there is no doubt that without the CHIPS Act, we would not be here today”.

• The investment incentives within the CHIPS act continue to deliver major wins.

• Micron’s investment decision follow those of Wolfspeed ($5 bln on a new chipmaking facility in North Carolina), and Intel (new $20 billion facility in Ohio) announced in recent months.

• All of these wins were then followed by IBM’s announcement (mere two days after Micron) to invest $20bln into domestic semiconductor manufacturing and advanced tech development (focusing on AI and Quantum computing) in Hudson Valley, New York.

• But the new era of great power competition and sprint for dominance in semiconductors is no longer limited to positive incentives to boost domestic capacity.

• The US is no longer interested in only boosting its own capacity - there is now a corresponding goal to pull China back and put it into semiconductor chains.