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HomeBUSINESSAll-out war for control of chips, the world's most important resource

All-out war for control of chips, the world’s most important resource


The heart of the world Electronic in chips, in fact Chris Miller The author of ‘Chip War’ points out that it is a battle for control of the world’s most important resource. The United States and China are the two giants vying for power smallest scale In the order of nanometers. Matthew ValeroProfessor of Computer Engineering at the Polytechnic University of Catalonia and director of the Center for Supercomputing in Barcelona highlights that “the coronavirus is ten to fifty times larger than the most advanced chips.”

Thus, the ability to evolve tests national security, military supremacy, and the supply chain, especially after tensions with Taiwan, with a crucial role in this war, as it produces 90% of the most advanced chips. The conquest of this rebellious island means Heart attack of the global economy. problem for everyone.

Washington claimed that the new export controls on semiconductors to Beijing are due to the fact that they are used “to produce advanced military systems, including Nuclear weapons of mass destruction and hypersonic speed»; From autonomous drones to advanced electronic warfare systems and computing power will rely heavily on semiconductors.

Miller explains that “a single missile against Taiwan’s most advanced manufacturer, TSMC, which is the largest manufacturer of high-performance chips, will cause losses estimated at hundreds of billions due to delays in the production of phones, data centers, vehicles, telecommunications, networks and other technologies. For all this, the United States according to Chip and science law It has asked some of its major advanced chip manufacturers to halt shipments to China. It banned the export of tools used to make them, along with a ban on “made in the US” talent working with Chinese chip companies. At the same time, it boosted the production of semiconductors on domestic soil by 280 thousand million dollars.

Subsidies benefit American companies such as Nvidia, Qualcomm or Intel, as well as the Taiwanese company TSMC, which will build a $12,000 million plant in Arizona. Manuel MunizThe dean of IE University and dean of the School of Global Public Affairs points out that China is highly dependent on imports, and does not have its own manufacturing capacity in the field of the most advanced chips.

The idea of ​​the United States, with its restrictive measures on trade and technology transfer, is to create a bottleneck and slow down the technological development of the Asian giant in very strategic sectors. Since Muniz explained that “China’s tech rise is extraordinary, it is so The biggest challenge the United States has ever faced. Since it has become a superpower. In the technology sector, the Chinese have a “Made in China 2025” strategy where they have made clear that they want to dominate artificial intelligence, advanced robotics, aeronautics or supercomputing.”

The main company is Taiwanese TSMCvalued at $454,000 million. Furthermore, Taiwan gets 15% of its GDP from microchips. But Valero explains that “China wants Taiwan for TSMC and the US has said it has always done so.” It will defend Taiwan, but only until it reproduces its technology in the United States.». And China, realizing its importance, has employed more than 100 engineers from TSMC for semiconductor companies. as such talent theft It is another trick that China is playing to get access to the latest chip technology.

Nobody is an island

Xi Jinping intends that Chinese companies, with state support, transcend the hegemony of the West in all possible areas. As Miller explains to ABC: “Since then in China chips Spending more money than importing oil». Thus, it became the largest consumer of chips in the world. The domestic revenue of China’s semiconductor industry last year exceeded $157 billion, among the world’s 20 fastest growing semiconductor companies, 19 are Chinese.

Today, the United States and its allies and partners such as Taiwan, South Korea and Japan have a significant advantage in the chip industry over China. However, this Feature has been eroded little in recent years. Moreover, open source research has found ample evidence for this US chips in Chinese military systems. The new export controls are designed to make this more difficult,” Miller told ABC. The idea is that these restrictions must be deployed before the Asian giant becomes immune to its effects.

It was the 2021 test of a Chinese hypersonic missile based on high-performance chips that worried the United States. she was Sputnik moment General Mark S. Milley, the commander of the US Army, went so far as to say, referring to the Soviet satellite that fueled the space race during the Cold War. Not in vain, Moniz refers to the current standoff between China and the United States as the Cold War.

“With the conflict in Ukraine, the Asian country took a good note. But China’s economy is more globally integrated than Russia’s. Chile, for example, exports more to China than it exports to the United States and the European Union combined. The Asian giant already lends more to Latin American governments than the Inter-American Bank, the Latin American Development Bank and the International Monetary Fund combined. This is the case on other continents. It is a more relevant business partner than the United States,” explains the IE professor.

rowing team

The problem is that the measures Biden has begun will only be effective if his allies unite. However, given the dependence on the Chinese market, this will be difficult. Henry DanceIE, Professor of Innovation and Technology, comments: “If you try to control the flow of imports/exports from China, you will find that the same US companies – like Nvidia – protest because they have A very important market in the Asian country And they want to keep billing. You are also forcing US trading partners, such as South Korea or Taiwan, to give up the world’s largest market on their side. At the same time, American companies are finding certain chips for China and staying at the barrier of what can be exported.”

In fact, the New York Times reported that 30% Of the revenue of American semiconductor companies comes from sales to China, which imported more than 400 billion dollars of chips in 2021. However, this globalization is also detrimental to the Asian giant, because the manufacture of chips requires the presence of a large number of components and is subject to a process of Design, manufacture and assembly in many countries.

Therefore, in the face of the autonomy that China intends to achieve by 2025, Dance notes that “today no one is self-sufficient, and the future does not pass from there. Border is an old concept More and more and more sophisticated products are being supplied through value chains that come from everywhere.” The Boston Consulting Group reveals that if every region in the world wanted it Your value chain From manufacturing the chips, the cost, in investment only, would be a trillion dollars. And it would take about $100 billion a year to keep the industry going.

However, in the face of US sanctions, China can respond with the rhetoric of restricting the supply of minerals from rare earths Processing, which is used for chips. It went so far as to announce the suspension of the export of its products sand to Taiwan which is the source of silicon. Similarly, as Valero recalls, “Russia is the country in the world that uses the rarest materials to make chips.” That is, in the large supply chain where chips are supposed to be manufactured, geopolitical obstacles, or natural disasters such as the earthquake in Taiwan or drought problems, can arise, because chip manufacturing requires large amounts of water, so the United States urges shield.

Size issue

Boston Consulting Group has proven that 92% of chips smaller than 10 nanometers, which are the strongest, are produced in Taiwan and the remaining 8% in South Korea. In fact, Taiwan with TSMC and South Korea with Samsung account for 81% of the global market. The United States does not want the Asian Dragon to produce chips below 10 nanometers. However, the Chinese company SMIC He was denounced by TSMC for hacking its operations. The point is, while China will see the handbrake put into developing more advanced chips, it will benefit because it can continue to produce larger, more mature chips that are used in many industries.

While, YMTC Which is the largest maker of memory chips in China, and has long received financial support from the Chinese government. However, as Valero, of BSC points out, “Many different technologies are needed to make the chips. Most important of all is the lithography made by a machine from the Dutch company ASML, a spin-off of Philips, in which TSMC and Intel have invested. It prints the patterns on the silicon wafer and is the primary key.

The US trade firewall prevents China from accessing the latest model of this machine, given that some of the more than 1,000 parts of it are American, making it subject to Biden’s constraints, and therefore unrepeatable. however, ASML continued to sell older generation equipment to China, which in 2021 acquired 81 machines. ASML refused to follow the US ban, given that in 2021 alone, sales in China exceeded $2.7 billion.

This is how the Asian dragon gets Bypass US restrictions. Another mainstay in this industry is the British company, MRA It markets the architecture of chips, which are those used by Apple, Samsung or TSMC. The company’s CEO, Rene Haas, said in an interview with The Verge that “virtually everyone is in his customer portfolio.”

These names show that Transfer abroad of chip production and much of its concentration in Asia has been a serious miscalculation by the United States and Europe. Now, Miller notes, “the global economy depends on chips manufactured in geopolitical hotspots.” Consulting firm Kearney noted that the Old Continent suffers from a significant technological weakness. And in this war for chips, future Europe will have to choose one side or maintain contact with both.

In a shoot-out as tensions rise between the two countries, experts say China and the United States are using the “salami cutting” tactic. Consists of political actions aimed at weakening or annihilate the opponent and conquer spaces. Rework divide and conquer. Thus, for example, the United States was able to maintain its leadership in advancing artificial intelligence by isolating China. Because it is from Baidu. As a Chinese web search provider, ByteDance, the owner of Tik Tok, relies on chips from the American company Nvidia.

This means restating the uncertain results. What is clear is that, as Greg Allen, the former director of artificial intelligence at the Pentagon, commented to The Economist, “These are drastic measures that seek to cut every other head of chip-making hydra in China” in the past. all-out war that have been launched.

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