The chip wars are heating up.
It’s a challenge that’s been building for some time, but new reports today are showing the extent to which countries and governments are racing to speed up chip production, in order to serve industries like automotive production and consumer electronics.
Reuters reports today that shortages have major activity happening in Taiwan, a point of conflict between China and the U.S.
“Governments in the United States, the European Union and Japan are contemplating spending tens of billions of dollars on cutting-edge ‘fabs,’ or chip fabrication plants, as unease grows that more than two-thirds of advanced computing chips are manufactured in Taiwan,” write Douglas Busvine and Mathieu Rosemain for Reuters. “Earlier this week, a top U.S. military commander told U.S. lawmakers that a Chinese takeover of the island was the military’s foremost concern in the Pacific.”
Meanwhile, Busvine and Rosemain report that China has created a $29 billion investment fund for chip-making, and that the United States has some $30 billion on hand in potential subsidies for new chip fabrication plants in the U.S.
As for U.S. efforts, Busvine and Rosemain point to new to building by Intel in the U.S., and existing U.S. facilities owned by Samsung. In addition, they report, Taiwan’s TSMC is looking to build a $12 billion fabrication plant in Arizona.
In the short term, for those who are trying to supply industries, all of this new building is good news. However, a source mentioned in Busvine and Rosemain’s reporting note the prospect of some potential disaster situations long-term.
In talking to the reporters, VLSI Research CEO Dan Hutcheson describes one scenario of overproduction, where out-of-control chip-making will lead to shuttered facilities down the road, and major economic disruptions in these stakeholder countries.
But there’s also a kind of ‘Cold War’ scenario that Hutcheson mentions that points to alarming intersections between cybersecurity and the nuclear arms race.
“From a taxpayer perspective, it really begins to be this question of, do we really want to start another Cold War, where semiconductor fabs are the equivalent of nuclear weapons, where we’re wasting all these resources?” Hutcheson says.
Semiconductor chips and nuclear weapons?
Linking a new chip race to the existing international building of nuclear weapons brings some unsettling scenarios related to cybersecurity and nuclear war.
“In January 2018, details of the Trump administration’s Nuclear Posture Review (NPR) were posted online by the Huffington Post, provoking widespread alarm over what were viewed as dangerous shifts in U.S. nuclear policy,” wrote Michael T. Klare in a rare evaluation at the Arms Control Association site in November of 2019. “Arousing most concern was a call for the acquisition of several types of low-yield nuclear weapons, a proposal viewed by many analysts as increasing the risk of nuclear weapons use. Another initiative incorporated in the strategy document also aroused concern: the claim that an enemy cyberattack on U.S. nuclear command, control, and communications (NC3) facilities would constitute a ‘non-nuclear strategic attack’ of sufficient magnitude to justify the use of nuclear weapons in response.”
Hopefully, the new chip wars will be resolved for economic stability – and the old nuclear race will be resolved, for the protection of humankind.
Back to chip making, though. Demand is unnaturally high. Keep this in mind as you navigate the tech market.
