Chip Wars

[John Clark]

I highly recommend the new book "Chip War: The Fight for the World's Most Critical Technology" by Chris Miller. It clearly explains that the small island of Taiwan, only 100 miles off the coast of mainland China, is vital to the world's economy because TSMC's chip fabrication plants there, which use hyper advanced hyper precise machine tools manufactured by the Dutch company ASML, is the only place in the world capable of mass producing chips at the cutting edge of technology such as those used by Apple in their phones. The US still designs the world's most advanced chips but it no longer manufactures them, by contrast no company in Taiwan designs chips they just manufacture them. INTEL once prided itself on its mastery of the chip manufacturing process but in recent years it has fallen behind and is currently incapable of making the advanced chips that TSMC can, and Micron, the only other company that makes chips on US soil, only makes commodity memory chips that were never on the cutting edge of technology.

Miller points out that it's dangerous to tie the national security of the US to the fate of an island that mainland China insists they own. Just one of TSMC's factories, FAB #18, cost well over $25 billion and is the most expensive factory that human beings have ever made, and just one drone armed with a few hundred pounds of conventional explosives could disrupt all the very delicate equipment in it and send the entire world into a deep recession. China spends far more money importing foreign made chips than it does importing oil and is way behind Taiwan, and even the US, in its domestic chip manufacturing capabilities. And Russia is way behind China. Since ASML is not allowed to sell any of their most advanced chip making equipment to China, Miller estimates it would be a decade and cost several trillion dollars to reach the level Taiwan is currently at, but TSMC is not standing still and is spending furiously on R&D, so after a decade China still wouldn't be on the cutting edge. China knows all this of course, that's why in recent days it's been regarding Taiwan with envious eyes and is slowly and surely drawing their plans against it.

 John K Clark    See what's on my new list at  Extropolis

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[spudb...@aol.com]

So, what would you recommend to the leaders of the US to do based on your current knowledge?

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[Brent Meeker]

The obvious thing to do is build chip fabrication plants in the U.S.  We've got designers, we've got markets and we can buy from ASML.  $25e9 is not big bucks spread of over a few years.

Brent

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[spudb...@aol.com]

Now are the Ruling class game for this based on the security threat when Taiwan becomes....unavailable? 

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[John Clark]

On Sun, Nov 6, 2022 at 8:37 PM <spudb...@aol.com> wrote:

> So, what would you recommend to the leaders of the US to do based on your current knowledge?

The recently passed Chips And Technology bill that gives federal aid to constructing domestic chip fabrication factories will help, but it's only $10 billion and a lot more than that will be needed and even that modest request had to withstand vigorous political opposition despite the fact that a secure source for the most advanced silicon microprocessors is vital for the national security, and one short range drone attack from China armed with just a few hundred pounds of conventional explosives on just one building could bring the world's economy to its knees.

On the bright side Intel seems serious about regaining the ground it lost in manufacturing expertise, everybody is desperate to get one of ASML's next generation EUV Lithography Machines when they become available in about two years but Intel, not Taiwan's TSMC, has the contract to receive the very first one.  

Intel orders ASML system for well over $340 mln in quest for chipmaking edge

John K Clark    See what's on my new list at  Extropolis

xxr

[spudb...@aol.com]

I stumbled across this development as well. Maybe the powers that be are sending a message about not withdrawing from the Pacific?

US to Japan: We'll help you make chips. Now about that China ban... (msn.com)