Online via Zoom
Recent scholarship on weaponized interdependence (Farrell and Newman 2019) teaches us to look for chokepoints everywhere, particularly in the semiconductor industry. Yet most chokepoints are never used. Samsung Electronics and SK Hynix together supply roughly 70% of the world's DRAM memory chips, and they produce a large share of that output inside China. By the logic of the weaponization literature, this concentration should have made the two firms prime targets or instruments of economic coercion. Neither happened. During the 2016–17 THAAD dispute, Beijing punished Korean retail and entertainment firms but left the two chipmakers alone. Seoul never tried to use memory supply as a counter-lever. As US–China rivalry intensified, both firms have expanded their Chinese operations rather than retreating.
We explain these two puzzles by shifting attention from governments to the multinational firms positioned at key chokepoints. We argue that immobile, capital-intensive fabs create a mutual hostage relationship. The host state cannot strike without disrupting its own supply of an input it cannot yet produce. The home state and its firms cannot withdraw without handing capacity and market share to competitors. This restraint is conditional. It erodes as the host's domestic substitutes mature, a "decay clock" that sets the scope of our argument. Drawing on an original longitudinal dataset of foreign semiconductor investment in China and firm-level subsidiary divestment data, we show Beijing consistently spared the Korean duopoly while coercing firms it could replace like Micron. The findings suggest that whether interdependence is weaponized depends less on where chokepoints lie than on whether the actors able to use them can absorb the cost of doing so.
This program is part of China Center's "Considering China Webinar Series", exploring important topics related to China's many facets with the local community.
About the Speaker
Jiakun Jack Zhang is an Associate Professor of Political Science and Associate Director of the Center for East Asian Studies at the University of Kansas(KU), where he is also the Founder and Director of the KU Trade War Lab (TWL). He is a Council on Foreign Relations Term Member, a Public Intellectuals Program Fellow with the National Committee on U.S.-China Relations (NCUSCR), and was a Wilson China Fellow at the Wilson Center’s Kissinger Institute. As an international political economy scholar, his research focuses on international trade, political violence, foreign policy analysis, Chinese foreign policy, and U.S.-China strategic and economic competition.
Zhang’s academic research explores the political economy of trade and conflict in East Asia, evaluating how multinational firms, interest groups, and supply chains adapt to tariff disputes and economic coercion. His research has been published in journals such as International Relations of the Asia-Pacific, Journal of Political Science Education, and Business and Politics, as well as edited volumes on international trade strategy. His policy commentary and insights are regularly featured across major international news platforms, including The Wall Street Journal, The Washington Post, Foreign Policy, South China Morning Post, and NPR.