Semiconductors 101: Computer chips shortages lead to national security concerns

Computer chips, in any other case referred to as semiconductors, are rapidly turning into a high national security precedence for the United States and international governments, in accordance to an nameless business insider who spoke completely with the Fox Investigative Unit. 

And they argued the stakes could not be greater, to each the non-public sector and authorities our bodies, when it comes to securing the provision chain of those fingernail-sized constructing blocks of practically each side of the fashionable world. 

“Whoever wins the race for the next generation of semiconductor products eventually will have a major military, and maybe a dominant political and economic force on the global stage,” warned the unidentified business insider with greater than 1 / 4 century of expertise within the tech and semiconductor sector(s). 

They insisted throughout an unique interview with Fox News, at an undisclosed location with their face and voice disguised to shield their identification, “That’s how high the stakes are.”

President Joe Biden holds up a silicon wafer as he participates virtually in the CEO Summit on Semiconductor and Supply Chain Resilience in the Roosevelt Room of the White House, Monday, April 12, 2021, in Washington. (AP Photo/Patrick Semansky)

President Joe Biden holds up a silicon wafer as he participates nearly within the CEO Summit on Semiconductor and Supply Chain Resilience within the Roosevelt Room of the White House, Monday, April 12, 2021, in Washington. (AP Photo/Patrick Semansky)

Here’s the rationale: semiconductors may be discovered within practically all the things digital. From cell telephones, to Ford Mustangs. From residence home equipment, to F-35 fighter jets and demanding infrastructure techniques. 

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The gravity of latest pandemic-related semiconductor shortages, and the doable implications (together with however not restricted to these outlined by the whistleblower), isn’t misplaced on leaders in Washington.

“Literally everything that has an off and on switch depends on semiconductors … 90% of which are made in Asia, 63% alone are made in Taiwan,” defined Senator John Cornyn, R-Texas, co-sponsor of the $52 billion CHIPS for America Act. 

“When we last convened the industry on the chip shortage in May, I heard from many of you that things were going to improve… Four months later, the situation seems to be getting worse.”

— Commerce Secretary Gina Raimondo, Sept. 23, 2021

In an interview with Fox News, Cornyn argued “that’s a huge vulnerability for the United States let’s say, in the case of another pandemic, or natural disaster, or should military conflict break out.” 

Commerce Secretary Gina Raimondo held a digital roundtable on Sept. 23 to tackle the worldwide chip scarcity, the second such assembly since May. She informed members inside the first few sentences that “the situation seems to be getting worse,” in accordance to her ready remarks. 

Among the attendees of the roundtable have been representatives from Taiwan Semiconductor Manufacturing Company (TSMC), an organization liable for some two thirds of the semiconductor chips on the earth. The firm has reportedly pledged to broaden manufacturing over the following three years to meet international demand. Sources informed Fox News over the summer season that worth will increase of up to 20% is also coming from TSMC, a transfer that will have international implications.

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Experts have additionally been warning for months a couple of doable army takeover of Taiwan by China, which would depart them in charge of a vital supply-chain at a time when the U.S. is imposing sanctions designed to maintain semiconductor expertise out of their arms. 

Taiwan’s minister of financial affairs mentioned in a latest interview mentioned, “Taiwan has helped foster a great chip manufacturing ecosystem with three decades of efforts against the backdrop of globalization,” and that “The global community should take Taiwan’s security more seriously” within the face of such theories. 

It’s a state of affairs that Cornyn and others definitely hope won’t ever come to fruition, but it surely’s a actuality that have to be ready for, in accordance to the nameless business whistleblower. “Imagine for a second if China recaptures Taiwan and suddenly takes over all of these TSMC facilities that feed the entire world with the most advanced microprocessors. Again, I will leave it up to you to kind of imagine the consequences, it’s a little bit scary,” they added.

GLOBAL MICROCHIP SHORTAGE HAS CHINA EYEING TAIWAN 

The case of TSMC is not the one indicator of how susceptible the semiconductor provide chain is. The international chip scarcity due to largely pandemic-related components resulted in delayed manufacturing at U.S. automakers, and diminished working hours for American workers. The state of affairs grew to become so dire it impressed President Biden to signal an government order in February 2021, however Cornyn and others are nonetheless sounding the alarm months later. 

“This is a huge vulnerability that was exposed by COVID, and we just simply need to bring back some of that manufacturing capacity on shore,” Cornyn mentioned.

Visitors carefully observe various kinds of chips are exhibited at different booths by semiconductor companies at the 18th China International Semiconductor Expo, Shanghai, China, 14 October 2020.  (Imaginechina via AP Images)

Visitors rigorously observe numerous sorts of chips are exhibited at totally different cubicles by semiconductor corporations on the 18th China International Semiconductor Expo, Shanghai, China, 14 October 2020.  (Imaginechina by way of AP Images)

The scramble to reignite home semiconductor business is sort of ironic, contemplating the U.S. origins of the expertise. Silicon Valley was even named for the fabric that semiconductors are made from: silicon. 

“The designs of the chips, the technology, the software, the U.S. still dominates in that sector,” defined Professor George Calhoun, director of the Quantitative Finance program on the Stevens Institute of Technology. “But when that design has to be then translated into a physical product … that part of the business now is dominated by Taiwan,” Calhoun added. 

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Calhoun identified that whereas he believes a takeover of Taiwan by the Chinese authorities isn’t a probable situation, he additionally thinks that this can be a case the place anticipating the surprising is perhaps the very best plan of action. 

“A takeover of Taiwan is not going to solve China’s vulnerability … but the Chinese leadership has been, in my view, making a lot of inexplicable blunders in the past couple of years,” Calhoun mentioned. Still, he cautioned that “there may be adventures that would turn into misadventures here in terms of trying to secure the semiconductor position that Taiwan has, and use that to bolster China’s world power.”

This hypothetical could also be much less pressing than a number of the techniques already being deployed, in accordance to the nameless whistleblower who spoke with Fox News: “A startup company … approached us with a request for funding. We took about two weeks to get back to them with a proposal. By the time we told them that we were ready to invest … they said, ‘We already have an offer of 20 million from a Chinese investor …’ After about a year or two, they relocated the headquarters from California to China. Then they replaced the American CEO with the Chinese CEO. And now they are in full control of that technology.”



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