The potential harm American companies could face due to the intensifying conflict between the U.S. and China in the tech industry.

Semiconductors are present on the inside of smartphones, cars, toasters, and fighter jets, despite their outward differences.

Semiconductors are essential to the tech industry, according to Stacy Rasgon, senior semiconductor analyst at Bernstein Research.

The global semiconductor industry, worth $574 billion, is projected to surpass the trillion-dollar mark by the end of the decade. This industry has been embroiled in a trade conflict between the U.S. and China, two of the world's largest economies.

The U.S., which has the largest share in the global semiconductor market, recently imposed strict regulations on the sale of advanced chips and equipment to China, in an effort to limit Beijing's access to critical technologies. The Biden administration claims that the export controls are aimed at preventing the use of American-made chips in China's military. However, China has accused the U.S. of abusing export restrictions to hinder its technological progress.

Gina Raimondo, the U.S. Secretary of Commerce, stated in an interview with CNBC on Oct. 30, 2023, that the country cannot permit China to acquire our most advanced semiconductor chips for use in their military. This, she emphasized, is the point of no return.

The semiconductor industry has become the focal point of a technological struggle between the U.S. and China, and companies in the middle of it may face significant consequences.

The Semiconductor Industry Association reported that global semiconductor sales reached $574 billion in 2022.