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Between Sanctions and Subsidies: Geoeconomic Lessons from the Semiconductor Ecosystem

Journal of Geoeconomics Cover

Abstract

Semiconductors have become the quintessential strategic industry of the twenty-first century, sitting at the crossroads of economic competitiveness and national security. In recent years, major powers have deployed a mix of coercive and supportive measures that are transforming the sector’s geography. On one side, export controls and investment screening seek to deny adversaries access to critical technologies; on the other, industrial policies aim to secure supplies and sustain technological leadership. This paper maps these concurrent policies across leading economies and interprets them through a geoeconomic lens – as instruments designed to shift the global distribution of capabilities. By linking denial and inducement strategies within a unified analytical framework, it highlights how the semiconductor race exemplifies the broader tension between economic interdependence and national security in the global order.

Keywords

Semiconductors, export controls, investment screening, industrial policy, economic statecraft, supply-chain security, geoeconomics

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Author Biography

Michele Savini Zangrandi

Michele Savini Zangrandi is an economist in the Emerging Markets and World Trade Division of the International Relations and Economics Directorate of the Bank of Italy (Banca d'Italia).

Lilia Patrignani

Lilia Patrignani is an economist at the Bank of Italy (Banca d'Italia).

Alessandro Schiavone

Alessandro Schiavone is an economist at the Bank of Italy (Banca d'Italia).


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