While the prospect of a third world war is something no one hopes for, it’s a scenario that forces every industry to think through its vulnerabilities and strategic importance. In the case of the electronics industry in the United States, the impacts of such a conflict would be profound and far-reaching. From power electronics and secure communications to consumer tech and startup ecosystems, the consequences would span the entire value chain. Some sectors would face severe disruption, while others could see a surge in demand unlike anything experienced in decades.
This article outlines the potential consequences of global warfare on the U.S. electronics sector, identifying which components and markets might see accelerated growth, and which areas could suffer setbacks.
Defense and Military Electronics: A Strategic Boom
If global tensions escalate into full-scale conflict, the U.S. would inevitably shift substantial national resources toward defense. This would lead to a surge in demand for electronic systems used in military and aerospace applications.
Key sectors likely to benefit include:
- Radar and RF systems: These are critical for battlefield awareness, targeting, and surveillance. Components like power amplifiers, RF filters, and antennas would be in high demand.
- Secure communications: Hardware encryption modules, SDRs (Software Defined Radios), and trusted boot processors would become essential for battlefield and command infrastructure.
- Autonomous systems: Drones and unmanned ground vehicles would need advanced AI processors, vision systems, and low-latency data links. FPGAs, edge processors, and high-speed interconnects would play a major role here.
- Power electronics: GaN and SiC technologies would see accelerated deployment for their high-efficiency, high-temperature capabilities. These would support everything from vehicle powertrains to radar systems.
- Radiation-hardened and rugged components: The need for survivable electronics in extreme conditions would boost demand for rad-hard ICs, rugged sensors, and shielded connectors.
Companies already serving defense, aerospace, or space sectors would likely see contract expansions, and government partnerships would play a pivotal role in ramping up production.
Semiconductors and Fabrication: Accelerated but Constrained
A geopolitical conflict would instantly increase the urgency of domestic semiconductor manufacturing. The U.S. has already begun efforts to bring chip fabrication onshore, and a war would turbocharge those efforts.
Expectations include:
- New fabs fast-tracked: Existing investments in fabs by Intel, TSMC, and others in the U.S. would receive even more support through the Defense Production Act and similar emergency measures.
- Increased demand for mature nodes: Military and industrial electronics often rely on older, proven process nodes rather than bleeding-edge 3nm designs. Fabs capable of 28nm and above would be essential.
- Packaging and testing bottlenecks: The U.S. still lacks domestic capacity for advanced packaging and test services, many of which are concentrated in Southeast Asia. These would need to be re-shored or rapidly developed.
- Priority allocation: Civilian fabs and commercial ICs could be deprioritized in favor of defense-related chips, causing ripple effects throughout the tech sector.
Who Suffers: Consumer Electronics and Commercial Startups
While defense and infrastructure applications would thrive, many consumer tech sectors would face serious challenges:
- Smartphones, tablets, and PCs: Assembly often occurs in China or Southeast Asia. Wartime trade restrictions or embargoes would significantly impact availability.
- Smart home and IoT gadgets: These typically rely on just-in-time global supply chains. Disruptions would delay launches, limit inventory, and increase costs.
- Electric vehicles: EVs are especially vulnerable due to their reliance on advanced batteries and high-voltage semiconductors, many of which are globally sourced.
- Startups without defense ties: Smaller tech companies without government contracts may find themselves cut off from vital components, struggling with cost overruns, and last in line for foundry access.
The talent pool would also constrict, as more engineering resources shift toward government-directed projects. This could lead to delays in innovation and R&D across the commercial sector.
Raw Materials and Rare Earths: A Strategic Choke Point
A large-scale conflict would disrupt access to rare earth elements and critical raw materials used in everything from magnets to capacitors to lithium-ion batteries. The U.S. currently depends heavily on imports from countries like China, which may restrict access during wartime.
Expect aggressive moves toward:
- Material stockpiling
- Recycling and reclamation programs
- Increased investment in domestic mining and refining
Without these measures, everything from EV drivetrains to magnetics for power supplies could face severe material constraints.
Cyber and electronic warfare would play a central role in any modern conflict. This would drive demand for:
- Cybersecurity hardware and firmware: Secure enclaves, HSMs (hardware security modules), and cryptographic co-processors would see mass deployment.
- EMP protection systems: Defense against electromagnetic pulse (EMP) threats would require special shielding for communication networks, energy infrastructure, and data centers.
- Redundant, fail-safe control systems: Critical infrastructure—power grids, water systems, manufacturing—would need redundant, secure control architectures. Embedded systems with real-time OS and radiation shielding would become the norm.
This could also spur upgrades to aging public infrastructure, aligning national security with industrial modernization.
If tensions escalate, engineers across all sectors could find themselves working on problems of national importance. Key skills would include:
- Signal integrity and RF design
- Power efficiency and thermal management
- Secure embedded systems
- Mixed-signal and low-latency processing
- Materials science and packaging innovation
Expect a resurgence of investment in hands-on hardware development and a deeper integration of AI with physical systems.
We should never hope for war, but we can prepare our industries to be resilient in the face of instability. For the U.S. electronics sector, a global conflict would catalyze a massive reorganization—diverting talent, funding, and supply chains toward defense and secure infrastructure.
While this could accelerate innovation in military-grade technologies and domestic manufacturing, it would come at a cost to consumer tech, global collaboration, and supply chain fluidity.
In the best-case scenario, engineers and policymakers alike will use peacetime to build a more self-reliant, secure, and strategically diversified electronics ecosystem—without needing a global conflict to force the issue.
