Core Viewpoint - The article discusses the strategic shift in the semiconductor industry between China and the U.S., highlighting China's transition from defensive strategies to proactive countermeasures in response to U.S. sanctions and regulations, particularly focusing on rare earth elements as a leverage point in the semiconductor supply chain [1]. Strategic Defense - The U.S. has escalated its control over the semiconductor supply chain, implementing stringent rules that have tightened from 25% to 0%, aiming to sever China's access to advanced manufacturing processes [2]. - In response, China's semiconductor industry adopted a flexible defense strategy, focusing on preserving resources and accumulating counterattack capabilities, particularly by developing mature process technologies above 28nm and achieving over 30% localization in key materials by 2024 [2][3]. - China's understanding of U.S. regulatory weaknesses allowed it to prepare for future counterattacks, akin to the Red Army's strategic maneuvers during historical conflicts [3]. Strategic Counterattack - The introduction of new rare earth regulations on October 9 marked a significant turning point in the "chip offense and defense conversion war," targeting critical components in high-end semiconductor manufacturing [6]. - China's counterattack strategy involved coordinated actions against U.S. semiconductor giants and military enterprises, leveraging its dominance in rare earth materials and enhancing its industrial capabilities [6][7]. - This shift from passive defense to active positioning reflects a broader strategy of mutual engagement and collaboration within the industry, emphasizing the importance of a robust supply chain [7]. Current Phase and Future Outlook - The semiconductor industry is now in a balanced phase, with a restructuring of global supply chains underway, indicating a shift in power dynamics [10]. - The U.S. sanctions are beginning to backfire, leading to a loss of domestic jobs as international equipment manufacturers relocate to maintain access to the Chinese market [10]. - For China's semiconductor sector, the focus must now be on adapting to changes, deepening expertise in automotive and industrial control chips, and fostering vertical collaboration across the supply chain [10][11]. - The article concludes that the evolution of the "chip offense and defense conversion war" illustrates the enduring value of strategic thinking, emphasizing the need for continuous innovation and collaboration to secure a competitive edge in the global market [13].