Why chips are the new oil — and where the analogy breaks
Everyone says semiconductors are the 21st century's oil. The truth is more interesting.
The comparison works on one level: like oil, chips are an input to everything, their supply is geographically concentrated, and governments treat them as strategic. Subsidies, export controls and alliance politics now follow fab geography the way they once followed oilfields.
But chips differ in the ways that matter. Oil is consumed; chips are capital goods that persist. Oil supply is limited by geology; chip supply is limited by knowledge — which can, with enough money and time, be built anywhere. And unlike oil, the chip supply chain is a loop: the machines that make chips themselves depend on chips.
The practical takeaway: watch capacity announcements and export rules the way commodity traders watch OPEC.
Why it matters
If chips are the strategic commodity of the century, their chokepoints are where the next crises will start.
What to watch next
Whether export controls expand to legacy-node chips, and how fast domestic capacity actually ramps.