Chips have become one
of the most valuable and strategic commodities. At the same time, the chip
industry and its global supply chains are increasingly subject to trade and
technology wars, sanctions, export controls and investment restrictions amid
growing geo-economic tensions. These unilateral measures and conflicts can lead
to friendly fire, i.e., the extraterritorial sanctioning of companies from
third, often like-minded, countries. In other words, given the complexity of
supply chains and interdependencies, many countries and their companies,
potentially partners and allies, could be caught in the middle of a conflict.
Such situations can lead to supply chain disruptions and, even worse, to
reduced trust, even among allies. The effectiveness of joint sanctions or restrictions
and the avoidance of supply chain disruptions for key technologies therefore
depend on the cooperation of likeminded countries, which should intensify their
cooperation and consider a permanent platform for it based on a sector-specific
minilateral agreement for the semiconductor industry that should include common
rules, including standard setting, as well as tools for monitoring, information
sharing and supply chain resilience planning, ultimately leading to a sectoral
mini-regime. The agreement should also provide a platform for dialogue and
cooperation on export controls and subsidies for the semiconductor industry. As
such, it has the potential to become an effective driver of regulation and
policy coordination and a step against the gradual fragmentation of the
industry.