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$39 billion couldn't fix everything
Choosing dependencies to attack
The office discussed whether to make a real run at ASML, the Dutch maker of EUV machines. It decided it was comfortable with production in an allied country like the Netherlands and focused its capital on other dependencies.
Fixing the most acute
The same logic applies to dependencies on China. If there are five or 10 major industrial dependencies, fixing all of them is not required to shift the strategic dynamic. The most acute dependencies can return substantial strategic value when they are addressed, even if other dependencies remain.
Scale and allies
Behind this sits a view of scale. China's manufacturing is a total powerhouse, and a strategy that focuses only on what gets built in the United States will have a very hard time competing. A strategy that works in concert with allies and partners puts the country in a very strong position.
How did ASML become the only EUV supplier?
EUV research began in the 1990s, and it took more than two decades to reach commercial production. The work needed partners across several countries and huge sums of money. In 2012, Intel, TSMC, and Samsung agreed to invest in ASML to fund the effort. Rivals such as Nikon and Canon dropped out of EUV development.
Why does allied production count as safer?
Allies share security commitments and treaties, which lowers the risk of a supplier being used as leverage. The Netherlands is also a member of the European Union and sells to the same set of chipmakers as other allied countries. It joined NATO in 1949 as a founding member.
How big is China's manufacturing sector?
United Nations figures put China's share of global manufacturing value added at roughly 30 percent in 2022, the largest of any country. That is more than the United States, Japan, and Germany combined. Factories there are supplied by dense local networks of component makers and logistics firms. The United States held a share of about 16 percent.
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