HBM isn’t just a semiconductor product anymore. It has become a leverage point in great-power competition. As outlined in The AI Memory Chokepoint (https://businessengineer.ai/p/the-ai-memory-chokepoint), the memory layer is now the structural bottleneck for AI. Whoever controls HBM capacity exerts disproportionate influence over the speed of AI progress. Nations have understood this — and industrial policy is now being weaponized accordingly.
The global HBM landscape reflects two alliances with very different incentives:
The US-led semiconductor bloc, anchored in the CHIPS Act.
The Korea–Japan axis, which actually produces nearly all advanced memory.
China, meanwhile, is pouring capital into its own counter-strategy but is blocked by export controls at the most critical layers.
China: $140B+ in the Big Fund (largely restricted by controls)
THREE things matter here: who subsidizes, who is allowed to buy equipment, and who has production capacity. Only two countries actually manufacture HBM at scale: South Korea and, to a lesser extent, Japan (Micron Hiroshima). This mismatch — investment everywhere, production concentrated in one region — is the geopolitical tension at the center of the AI economy.
2. Industrial Policy Tools — How Nations Compete
Every government is now running the same playbook with slightly different emphasis.
Subsidies
Direct grants, tax credits, R&D funding, loan guarantees. The logic is simple: fabs don’t get built without public money.
Export Controls
The US has effectively cut China off from:
leading-edge GPUs
advanced HBM
cutting-edge lithography equipment (ASML EUV)
high-bandwidth packaging tools
Controls choke China exactly at the layer described in The AI Memory Chokepoint: memory bandwidth and advanced packaging.
Talent Policy
Visa programs, STEM incentives, anti-poaching rules. Semiconductors are skilled-labor-intensive; talent flight is national-security risk.
Supply Chain Strategy
Friend-shoring, stockpiling, diversification, onshoring. HBM’s fragility means countries now stock memory the way they stockpile oil reserves.
Alliances
Chip 4 (US-Japan-Korea-Taiwan), bilateral deals, joint ventures. These alliances decide who receives the next wave of advanced fabs.
Market Access
Tariffs, procurement rules, trade deals. The semiconductor supply chain is now regulated like energy.
3. China: The Elephant in the Room
October 2022 and October 2023 export controls were the hardest reset in modern semiconductor history.
China is now 3+ generations behind in HBM, blocked from:
leading-edge memory
AI-class GPUs
EUV lithography
advanced packaging
The results are predictable:
domestic GPUs (e.g., Biren) slowed or halted
model training capacity throttled
AI infrastructure expansion constrained
China cannot scale AI capability without HBM — and HBM is precisely what it can’t access. This is the strategic logic behind the controls: slow capability by starving memory, not compute.
4. The Geopolitical Insight
“HBM has become a chokepoint in great-power competition. Control HBM supply → control AI capability → control the future.”
Semiconductor policy is no longer industrial policy — it is national security policy. Nations aren’t just subsidizing fabs; they are shaping the geometry of the entire AI ecosystem by influencing where the bottlenecks form.
The heart of that bottleneck — as described in The AI Memory Chokepoint (https://businessengineer.ai/p/the-ai-memory-chokepoint) — is memory bandwidth, not compute. And the countries that can deliver that bandwidth determine the ceiling for global AI progress.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
