The fact that semiconductor chips are what can be considered as the “new oil” of the 21st century is evident when we look at the strategic value of oil in the 19th and 20th centuries and how it affected the global balance of power. The concept of ”new oil” refers to the fact that energy resources have been replaced by digital infrastructure and high-tech products as a determinant of economic growth, military capacity, and technological dominance today. As a matter of fact, just as energy resources shaped industrial revolutions, war strategies and economic development in the past, chip technology creates a similar geopolitical sphere of influence today.
Therefore, semiconductor chips, which are one of the decisive elements of technological superiority in the global power struggle, are now at the center not only of industrial and technology policies, but also of international security. In this context, the geopolitics of the 21st century is being reshaped by a new paradigm that revolves around semiconductor chips processed at the atomic level, data flows, and the dominance of artificial intelligence. On the other hand, the chip market will reach 1-1.5 trillion dollars by 2030[i] given the expected enormous growth, mastering this technology has become the key not only to economic, but also military and political superiority.
Therefore, chips, as the “sine qua non” of the modern world, are not only the heart of consumer electronics, but also the basis of national security, modern defense systems (UAVs / UCAVs, guided missiles) and autonomous technologies of the future. All these show that access to chip technology and its control have moved to the center of international competition, making semiconductors the “new oil” of the Decadence.
In this context, Taiwan Semiconductor Manufacturing Company (TSMC), has become one of the most strategic actors of the modern world economy. TSMC is the world leader in the production of semiconductor chips, which are used in almost all modern technological systems, from smartphones and household electronic devices to fighter jets and spacecraft. The company accounts for about 60% of global semiconductor production and 92% of advanced chip production (5 nanometers and below)[ii] by itself. This turned TSMC not only into an industrial giant but also a geopolitical element affecting the international balance of power.
In the 21st century, semiconductor chips are considered the brains of the digital age and constitute the basic building block of global technological systems. About 98% of the electronic devices used today are dependent on these chips. Because many critical technological infrastructures, from smartphones to cars, from computers to defense systems, are based on these miniature circuits. Therefore, it is inevitable that without semiconductor chips, a large part of the modern digital world will become dysfunctional. Additionally, many areas, including data flow, energy management, production processes, and national security systems, reach an impasse. Therefore, any disruption that may occur in chip production has the potential to lead not only to economic losses, but also to serious threats to national security. Indeed, an interruption in chip supply could paralyze a wide range of production chains, from the automotive to the defense industry, and even health technologies.
At this point, Taiwan-based TSMC, which alone accounts for about 60% of global semiconductor production, plays a vital role in the fragile balance of the world economy. TSMC’s production capacity is central to the strategic interests of not only major technology companies but also states, making the company an indispensable actor in both the global economy and national defense policies.
However, a large part of the technological infrastructure that makes TSMC’s global leadership possible is based on a Dutch-based company called ASML. ASML is a technology company that produces the most advanced lithography machines in the world. Lithography, as one of the basic stages of semiconductor chip production, enables the processing of microscopic circuit patterns on silicon wafers. The company, which is also the only one to develop EUV (Extreme Ultraviolet) lithography machines, enables nanoscale circuit processing, the most critical stage of chip production. Because of this, large manufacturers such as TSMC, Samsung, and Intel can produce advanced 5-nanometer chips and below only through ASML’s EUV technology. However, ASML functions as a strategic actor that does not produce its own chips but supplies the machines it develops to these companies. In addition, it holds a 100% Sunday share in these machines, which positions it as strategically significant as TSMC.
In contrast, semiconductor manufacturing depends on an extremely complex and multi-layered international supply chain. For example, the laser technology used in ASML’s EUV machines is provided exclusively by the US-based Cymer, and the special optical glasses included in the machines are provided exclusively Jul by the German company Zeiss. This interdependence network clearly shows that semiconductor manufacturing is actually based on a multinational system of cooperation and interdependence. Therefore, no country or company in today’s world has a full-scale chip production chain by itself.
The historical foundations of this complex system date back to the 20th century. In 1958, Jack Kilby laid the foundation for modern electronic technology by developing the first microchip circuit, and won the Nobel Prize in Physics in 2000 for this invention. Then in 1959, Robert Noyce laid the foundations of today’s chip industry by developing a silicon-based and mass-production-suitable monolithic chip and made technological contributions to critical projects such as the Apollo program. In the 1960s, Gordon Moore predicted that the number of transistors in integrated circuits would double every two years, a prediction that has been published in the literature as Moore’s Law.
Today, Moore’s Law has limited validity for analog and multifunctional systems, as chips have become more complex and heterogeneous. Analog functions such as RF circuits, sensors, power management and photonic circuits play a critical role in “More Than Moore” chips integrated into CMOS technology.[iii] This situation also brings various technical difficulties in terms of traditional design and production methods, among which heterogeneous integration, analog-digital decoupling, power distribution and management, complexity of production and testing processes, as well as material and thermal incompatibilities stand out.
The arrival of semiconductor technology in Taiwan began in the 1970s, driven by the Taiwanese government’s strategy to shift to advanced technology production. The key role in this process was played by Morris Chang, an engineer trained in the USA. While serving as head of the semiconductor division at Texas Instruments, Chang was invited to Taiwan by the Taiwanese government and founded TSMC. Chang’s biggest innovation is the development of a “fabless” model that provides manufacturing services to companies that design chips without a factory. Thus, companies that design chips but do not have a production facility (for example, Xilinx and Altera) were able to make TSMC produce,[iv] this model has become a global standard over time.
In contrast to these developments, the People’s Republic of China has not yet achieved a similar success. SMIC (Semiconductor Manufacturing International Corporation), the leading semiconductor manufacturer in China, has not yet reached 5 nm technology. The main reason for this is that in 2019, under pressure from the United States, the Netherlands imposed a ban on ASML from selling EUV machines to China.[v] This ban has ensured that China can only produce at the level of 7 nm. However, this situation has pushed China towards self-sufficiency in terms of technology. Shanghai-based company SMEE (Shanghai Micro Electronics Equipment) has succeeded in producing DUV (Deep Ultraviolet) machines at the 28 nm level and has raised its target to 7 nm.[vi] According to estimates, China will be able to reach a level to compete with TSMC between 2035-2040 Dec.
The nanometer size of semiconductors is of critical importance in terms of performance, energy efficiency and heating balance. Smaller geometries increase processing power by increasing transistor density, while also increasing energy consumption and heating problems. For example, while 3-5nm chips are preferred in smartphones, artificial intelligence systems, and high-performance servers, 7-10nm chips are used in graphics processors and game consoles, and 12-45nm chips are used in mid-range computers and home electronics. On the other hand, 65-130nm chips and above are widely used in the automotive and defense industries.
The reason “older” technologies are usually preferred in defense applications is that chips with small geometries generate high heat, which can lead to durability problems in long-term military operations.[vii] In addition, criteria such as reliability, longevity and durability to environmental conditions in defense systems require the use of mature and tested nodes instead of the most advanced technologies. For this reason, although the United States’ 3nm production capacity provides a significant advantage in high-tech consumer electronics, it does not automatically confer superiority over China in defense. Because durability and reliability are the priority criteria as well as performance in this field.
This struggle, which is called the “semiconductor war”, carries the potential for not only an economic competition, but also a geopolitical crisis. The United States is blocking China’s access to advanced chip technology and strategically supporting Taiwan in order to protect TSMC’s production capacity. In response, China is investing billions of dollars to develop its own chip technology and increasing its pressure on Taiwan in one possible scenario. According to many analysts, China’s realization that it will not be able to reach TSMC’s technological level in the long term may trigger a military move against Taiwan. After realizing this possibility, the USA has begun moving some of TSMC’s production facilities to Arizona. However, the Taiwanese government aims to ensure that the United States maintains its dependence on Taiwan in the long term by keeping the most advanced technologies (for example, 2nm and below production) in the country.
As a result, the semiconductor industry has become the nervous system of the global economy today. The competition between players such as TSMC, ASML, Samsung, Intel and SMIC is shaped not only by market shares but also by the geopolitical interests of states. For this reason, the ”chip war” has turned into a strategic struggle that will determine the future of the international system, rather than a trade competition in the classical sense. US restrictions on technology transfer, China’s self-sufficiency strategy, Europe’s position in the technology supply chain, and Taiwan’s strategic fragility will redefine the global balance of power in the coming years. Therefore, semiconductor technology is not only the focus of economic competition, but also the 21st century. it has become one of the main axes of the new geopolitical architecture of the century.
[i] Abay, Emre Gürkan, “Küresel çip sektöründeki büyümenin yapay zeka etkisiyle devam etmesi bekleniyor”, AA, https://www.aa.com.tr/tr/bilim-teknoloji/kuresel-cip-sektorundeki-buyumenin-yapay-zeka-etkisiyle-devam-etmesi-bekleniyor/3435594, (Access Date: 11.11.2025).
[ii] “TSMC ‘dünyanın en gelişmiş’ mikroçipini tanıttı”, CNBCE, https://www.cnbce.com/teknoloji/tsmc-dunyanin-en-gelismis-mikrocipini-tanitti-h11311, (Access Date: 11.11.2025).
[iii] “Yarı İletken Bileşen Teknolojileri”, Aselsan, https://www.aselsan.com/tr/blog/detay/436/yari-iletken-bilesen-teknolojileri, (Access Date: 11.11.2025).
[iv] “Neden Tüm Çipler Tayvan’dan Geliyor”, Eco Trends, https://ecotrends.blog/neden-tum-cipler-tayvan-dan-geliyor, (Access Date: 11.11.2025).
[v] “ABD’nin baskısına boyun eğen ASML, Çin’e çip makinesi ihracatını durdurdu”, Türkiye Gazetesi, https://www.turkiyegazetesi.com.tr/teknoloji/abdnin-baskisina-boyun-egen-asml-cine-cip-makinesi-ihracatini-1012531, (Access Date: 11.11.2025)
[vi] “Çin’in ilk 28 nm litografi aracı bu yıl bitmeden teslim edilecek”, Tech Inside, https://www.techinside.com/cinin-ilk-28-nm-litografi-araci-bu-yil-bitmeden-teslim-edilecek/, (Access Date: 11.11.2025).
[vii] Khan, Saif M,Peterson, Dahlia Mann, Alexander, “The Semiconductor Supply Chain: Assessing National Competitiveness”, CSET, https://cset.georgetown.edu/wp-content/uploads/The-Semiconductor-Supply-Chain-Issue-Brief-1.pdf?utm_source=chatgpt.com, (Access Date,10.11.2025).
