Supply Chain Resilience in an Era of Long-Term, Peacetime Competition: The Semiconductor Case and a New Framework for Supply Chain Assessment

Abstract

The U.S. defense acquisition system is positioning for strategic competition with China. That effort must be informed by and responsive to the nuances of China’s global supply chain positioning—a competitive dynamic unique relative to past eras of great power competition. Updating for this reality demands a thorough understanding of how Beijing leverages its military–civil fusion (MCF) strategy to weaponize its manufacturing prowess, relative industrial self-reliance, and the asymmetric supply chain dependencies that result. The immediate security risks of Beijing’s approach—and the challenge it poses to the U.S. ability credibly to compete—have been evident since China cut off rare earths exports to Japan in the midst of a territorial dispute in 2010. Yet U.S. acquisition processes have not updated. The Pentagon, military services, and defense acquisition program officials must rethink frameworks for assessing supply chain integrities, the risks that dependencies all along acquisition program value chains can create, and responsive acquisition processes. Until it does so, the U.S. approach to defense acquisition will feed into Beijing’s continued, subversive global positioning.