The engines of global power have shifted. Where oil once defined the geopolitics of the 20th century, advanced compute and microelectronics now shape the balance of the 21st century. Every dimension of national strength, from military capability to artificial intelligence leadership and economic growth, depends on access to innovative chips. Semiconductors are no longer hidden in the background of consumer electronics, but they are at the center of global competition. As adversaries invest heavily in their own semiconductor industries, U.S. leadership is under pressure. Erik Hosler, a voice in the discussion on semiconductor scaling, highlights that leadership in computing is inseparable from leadership on the global stage. His perspective captures the essence of today’s challenge: computing power is now a measure of national power.
This reality is not abstract. Compute power determines who leads in AI, who secures next-generation defense systems, and who captures the lion’s share of global economic growth. The Special Competitive Studies Project (SCSP) frames advanced compute as the backbone of national resilience and international competitiveness. To understand why, it is necessary to look at the security, technological, and economic dimensions of microelectronics and why the U.S. must treat them as a strategic imperative rather than a background industry.
Compute as a National Security Asset
Defense systems increasingly rely on advanced microelectronics. From missile guidance to satellite networks, chips determine accuracy, speed, and reliability. The rise of electronic warfare and cyber defense has made compute capacity as critical to military strength as aircraft carriers or tanks.
Autonomous systems, such as drones, robotic vehicles, and surveillance platforms, depend on chips to process vast sensor inputs and make real-time decisions. Missile defense requires extraordinary computing capacity to track and intercept threats within seconds. Space systems, from satellites to exploration vehicles, depend on microelectronics hardened against radiation and designed for precision.
Artificial intelligence-driven defense platforms further raise the stakes. Algorithms that detect threats, analyze data, and support battlefield decisions rely on the availability of advanced chips. Without secure access to microelectronics, the U.S. risks falling behind in the technologies that define modern warfare.
AI and the Compute Race
Artificial intelligence is one of the defining technologies of this century, and it is inextricably tied to compute power. Training large-scale AI models can require millions of GPU hours, with costs running into tens of millions of dollars. Only nations and companies with access to the most advanced chips can compete at the frontier.
AI leadership is not just about research talent, but hardware. Models like GPT-class systems, weather simulations, and national security decision-making tools require compute resources beyond the reach of outdated architectures. Edge AI, deployed in vehicles, medical devices, and industrial systems, also requires powerful and efficient chips to operate effectively at scale.
Compute has become the critical bottleneck, shaping not only the size of models but the innovation they enable. Without leadership in semiconductors, AI leadership is unattainable. The U.S. cannot separate its AI ambitions from its semiconductor strategy.
Economic Competitiveness
Semiconductors are the general-purpose technology of the modern economy. These include power smartphones, automobiles, telecommunications, medical devices, and industrial automation. Advances in microelectronics drive productivity gains across nearly every sector.
Economists estimate that every dollar of semiconductor output supports several dollars of output in downstream industries. In the U.S., chips directly support hundreds of thousands of jobs and indirectly enable millions more. Losing competitiveness in this sector would reverberate across the economy.
Nations that control advanced chip production and design capture disproportionate shares of global growth. Taiwan’s role as a hub for advanced manufacturing has given it enormous strategic influence. For the U.S., maintaining leadership in this sector is inseparable from maintaining overall economic competitiveness and ensuring that jobs and intellectual property remain within trusted networks.
Supply Chain Fragility
The COVID-19 pandemic revealed the fragility of semiconductor supply chains. Shortages disrupted industries ranging from automotive to consumer electronics, costing billions and slowing growth. Geopolitical tensions, particularly around Taiwan, have added further uncertainty.
TSMC manufactures more than 90% of the world’s most advanced chips in Taiwan. Concentration at this scale creates unacceptable risk. A natural disaster or geopolitical crisis could paralyze global supply chains, undermining consumer industries and defense systems.
Relying on a small number of geographic hubs for advanced chip production is no longer sustainable. Reshoring production to the U.S., diversifying global supply chains, and collaborating with trusted allies are essential steps toward building resilience. Microelectronics must be treated not as commodities but as strategic assets whose availability determines national security.
Strategic Outlook
Ensuring leadership in advanced compute is about more than building fabs. It requires an ecosystem approach that includes design, manufacturing, packaging, and critical supporting equipment. Research pipelines, workforce development, and export control policies must also align to sustain leadership.
Erik Hosler explains, “The devices that we (as an industry) make, inspect, and measure, as well as the key supporting equipment and infrastructure, critically rely on the wavelength, power, brightness, etendue, bandwidth, and all-around capabilities of light sources.” His observation illustrates that semiconductor leadership is inseparable from leadership in the broader ecosystem of tools and technologies. Chips do not exist in isolation, but they depend on lithography systems, metrology tools, and materials science.
This interdependence means that leadership requires coordination across multiple sectors. The U.S. must invest not only in fabs but also in the full spectrum of supporting technologies. Coordination with allies will be equally vital, ensuring that investments are aligned and that trusted networks reduce duplication while amplifying resilience.
Compute as Strategy
The world’s balance of power now rests on advanced compute and microelectronics. These technologies determine who leads in AI, who secures military advantage, and who drives economic growth. Treating them as strategic imperatives rather than background industries is essential for U.S. leadership.
The lesson of history is clear: nations that control foundational technologies shape global outcomes. In the 20th century, it was oil and aerospace. In the 21st century, it is computing. The U.S. and its allies must act urgently to ensure that semiconductor leadership remains secure.
Compute are not just technology, but a strategy. By investing boldly, coordinating with allies, and securing supply chains, the U.S. can ensure that advanced compute remains the cornerstone of national strength and global leadership.
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