U.S. President Joe Biden has adopted a two-pronged approach to constrain China’s high-tech progress, curbing Beijing’s access to leading-edge chips while bolstering domestic semiconductor production.

He is about to ratchet up the pressure further by shifting focus to an emerging arena of the contest for technological supremacy: the process of packaging semiconductors, which is increasingly seen as a path toward achieving higher performance.

Only the U.S. is not alone is recognizing the potential of so-called advanced packaging: China, too, is capitalizing on an area that is not subject to sanctions, capturing global market share and achieving progress denied it in the manufacturing of high-end chips.