15 July 2026

Chips, Code, and Control: Rewriting the Economics of Old Tech Wars

Institute for Security and Development Policy | Abhivardhan and Jagannath Panda

The United States–China technology rivalry is fragmenting into two distinct geopolitical domains, separating physical semiconductor manufacturing from highly networked artificial intelligence ecosystems. While Washington and Beijing weaponize critical hardware chokepoints like lithography and electronic design automation tools, the global software landscape remains highly collaborative through open-source models and cross-border talent mobility.

This divergence stems from the structural difference between capital-intensive hardware fabrication and decentralized, cloud-based software development. Consequently, algorithmic ecosystems are proving far more resilient to traditional export controls and strategic denial than physical silicon supply chains. This shift allows middle powers like India, Japan, South Korea, and Singapore to bypass binary superpower alignment. By leveraging diversified hardware partnerships and sovereign data governance frameworks, these nations are actively carving out new pathways to technological sovereignty in a multipolar digital order. Ultimately, this evolving landscape is creating a new hierarchy of power shaped not only by fabrication capacity, but also by influence over code, standards, and platform dependency.

Comment
New Delhi must exploit the growing separation between hardware supply chains and software ecosystems. India possesses a massive pool of software talent and data resources. This domestic strength allows the nation to build independent artificial intelligence frameworks. Strategic partnerships with Japan and South Korea will secure the necessary hardware inputs.

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