The Race for Chip Supremacy Could Reshape the World

[Chewy_fox]

What You Need To Know

Carmakers from Tokyo to Detroit are slashing production. PlayStations are getting harder to find in stores. Even aluminum producers warn of a potential downturn ahead. All have one thing in common: an abrupt and cascading global shortage of semiconductors.

Semiconductors, also known as integrated circuits or more commonly just chips, may be the tiniest yet most exacting product ever manufactured on a worldwide scale. That level of cost and difficulty has fostered a growing dependence on two Asian powerhouses — Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. Rising tensions between the world’s two biggest economies have exacerbated the reliance, with the U.S. government cutting off supplies to certain Chinese customers.

Now world leaders from Washington to Beijing are making chip supplies a top priority for their governments, to keep factories running and ensure national security. Hundreds of billions will be spent in a plethora of sectors in coming years on a global “chip race” with geopolitical as well as economic implications.

Key Coverage

Jack Ma Crackdown Casts a Chill on China’s Tech Entrepreneurs

China Revs Up Grand Chip Ambitions to Counter U.S. Blacklistings

Chip Shortage Poses a Risk to the Global Economic Recovery

By The Numbers

$28 billionThe amount TSMC plans to spend on new plants and equipment this year.

81%Share of the semiconductor foundry business controlled by Taiwan and South Korea.

$61 billionEstimated lost auto-industry revenue in 2021.

Why It Matters

The global chip crisis is a wake-up call for countries around the world about the importance of semiconductors to their future.

Washington has seen that a handful of missing parts can close auto factories across the country, jeopardizing the security of workers and hurting the prospects for recovery from the Covid pandemic. Government officials from the U.S., Germany and Japan have gone hat in hand to Taiwan to plead for more chips to avoid economic disaster.

China has learned that the U.S. is willing to choke off chip supplies to its national champions, a vulnerability that Xi Jinping and the Communist Party view as intolerable. Beijing will pour more than $100 billion into efforts to build its own domestic chip industry. Xi has made technological development a national priority.

The result is that governments and companies will clash for years to come over semiconductor supremacy. Taiwan and South Korea are well positioned, giving them economic and geopolitical might. The U.S. and China will have to invest heavily to keep up with the industry’s best, or risk losing their world leadership.

[Silent Watcher]

Avoid unnecessary posts such as 'Thank you', 'Welcome', etc. Such posts will be deleted and user will be warned if it happens again. If caught spamming, the following actions are applicable -

• First time - Warning
• Second time - 5000 Points will be deducted
• Third time - Ban for 7 days
• Fourth time - Permanent Ban

If the post helped you, reward the user by reacting to the post like this -