Japan, South Korea, Singapore, Australia, the UK and Israel have committed to the US-proposed Pax Silica strategic initiative “to build a secure, prosperous, and innovation-driven silicon supply chain – from critical minerals and energy inputs to advanced manufacturing, semiconductors, AI infrastructure and logistics.”
The Netherlands and United Arab Emirates (UAE) participated in the Pax Silica Summit held in Washington, DC, on December 12, but did not sign the Pax Silica Declaration. Taiwan was invited as a special guest. Canada and the EU were reported to have participated in related discussions on supply chain issues. India was notably excluded.
Pax Silica formalizes the semiconductor and AI alliance that the US has been building under the Trump 1, Biden and Trump 2 administrations. As the first line of defense in the world’s new geostrategic contest as seen from Washington, DC, it also defines the practical limits of the self-sufficiency the initiative hopes to achieve.
“Pax Silica is the Department of State’s flagship effort on AI and supply chain security, advancing new economic security consensus among allies and trusted partners,” it says on the department’s official website.
According to Under Secretary for Economic Affairs Jacob Helberg: “If the 20th century ran on oil and steel, the 21st century runs on compute and the minerals that feed it. This historic declaration hails a new economic security consensus ensuring aligned partners build the AI ecosystem of tomorrow.”
The Pax Silica Fact Sheet states that: “Pax Silica aims to reduce coercive dependencies, protect the materials and capabilities foundational to artificial intelligence, and ensure aligned nations can develop and deploy transformative technologies at scale.”
It also says: “Pax Silica is a positive-sum partnership. It is not about isolating others – but about coordinating with partners who want to remain competitive and prosperous.” But while the Pax Silica Declaration does not mention China specifically by name, it is clearly aimed at it.
“We understand the importance of addressing non-market practices that undermine innovation and fair competition. We believe that coordination is essential to protect private investment from the market distortions of overcapacity and unfair dumping practices, and to preserve a level playing field for innovation and growth. We understand the importance of cooperation on the enforcement of our respective policies to protect sensitive technologies and critical infrastructure from undue access, influence, or control,” the declaration says.
Under Secretary Helberg was explicit in comments reported by Politico:
“It’s an industrial policy for an economic security coalition and it’s a game changer because there is no grouping today where we can get together to talk about the AI economy and how we compete with China in AI. By aligning our economic security approaches, we can start to have cohesion to basically block China’s Belt and Road Initiative – which is really designed to magnify its export-led model – by denying China the ability to buy ports, major highways, transportation and logistics corridors.”
“This grouping of countries will be to the AI age what the G7 was to the industrial age. It commits us to a process by which we’re going to cooperate on aligning our export controls, screening of foreign investments, addressing anti-dumping but with a very proactive agenda on securing choke points in the global supply chain system.”
According to the Fact Sheet, the initiative responds to “Growing demand from partners to deepen economic and technology cooperation with the United States.” In fact, it is an attempt to codify the US demand that its partners not do the same with China.
Referencing the Pax Romana and Pax Americana, it declares that “Pax Silica is a new kind of international grouping and partnership – one that aims to unite the countries that host the world’s most advanced technology companies to unleash the economic potential of the new AI age.”
Pax Silica has nothing new to say about the Taiwan issue and makes no concrete proposals regarding supplies of rare earth elements, but it does have something to offer partner countries made uneasy by US protectionism. As stated in the Declaration:
“We believe that true economic security requires reducing excessive dependencies and forging new connections with reliable partners and suppliers committed to fair market practices. At the same time, we will endeavor to provide access to trusted partners to the full stack of technological advancements that are shaping the AI economy.”
For Japan and South Korea, which supply essential parts of that full stack, signing up for Pax Silica is both a way to keep the Trump administration happy and a green light for their own national semiconductor projects.
On the same day that the Pax Silica Summit was held in Washington, DC, the Japanese press reported that about 20 more companies are considering investments in Rapidus, the new logic foundry being built near Sapporo on the northern island of Hokkaido.
Rapidus is Japan’s attempt to catch up with TSMC, a state-of-the-art semiconductor contract manufacturing company aiming for mass production at the 2-nanometer node in 2027 and at 1.4-nm soon after that.
Established in 2022, it was originally backed by Sony, Toyota and its group semiconductor maker Denso, NAND flash memory maker Kioxia, national telecom carrier NTT, telecom equipment maker NEC, investment firm Softbank, Mitsubishi UFJ, Japan’s largest bank, and the Japanese government. Rapidus is working with IBM to commercialize IBM’s 2-nm process technology.
Details have since emerged showing 22 new investors in Rapidus, including Honda, Fujitsu, Canon, Fujifilm, Seiko Epson, Ushio, Kyocera, JX Advanced Metals, Dai Nippon Printing, Hokkaido Electric Power, Nippon Express, Nohmi Bosai (fire prevention), Argo Graphics (digital design & manufacturing process technology), Nagase Sangyo (specialty chemicals and functional materials), seven more commercial banks and the Development Bank of Japan. In addition, Organo is building and will own water purification facilities on site.
As can be seen by the long list of participants, Rapidus has become an extensive public-private national industrial project of the sort that the US might dream about but that only South Korea, Taiwan and China can match.
In South Korea, the government has announced an “AI Era Semiconductor Development Strategy” that includes plans to build 10 new semiconductor factories and to expand the nation’s fabless (design only, no factories) semiconductor sector tenfold.
This was made public by Minister of Trade, Industry and Resources Kim Jung-kwan at the “Artificial Intelligence (AI) Era K-Semiconductor Vision and Development Strategy Briefing” presided over by President Lee Jae Myung on December 10.
As reported by Business Korea, the strategy aims “to transcend the [South Korea’s] existing semiconductor industry structure centered on memory semiconductors and develop system semiconductors including fabless and foundry, while enhancing competitiveness in materials, components, and equipment to leap forward as the world’s second-largest semiconductor power.”
Pax Silica can be seen as an American strategy, but it also provides a platform for the industrial policies of Japan and South Korea, which have no interest in ceding technological leadership to China and every intention of taking maximum advantage of their partnership with the US.
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The Western demise is only its own doing. Pitting one against other won’t lead to global growth that would enable the world to prosper.
For the US, if they are not winning it means someone is cheating.
A US blackmail operation! “You have to choose, us or China, you can’t have both. If you try, we will punish you in a thousand ways.”