Date: 04/02/2023
Relevance: GS-3: Science and Technology- developments and their applications and effects in everyday life.
Key Phrases: Semiconductors, GPS, Email, Artificial Intelligence, ChatGPT, Chip Wars, Technological Future, Manufacturing, Supply Chain, China, US, Russia.
Context:
- Geopolitical conflicts related to semiconductors are reaching dangerous levels that could lead to serious and potentially fatal outcomes.
Introduction:
- Humans have fought wars among themselves since the beginning of their evolution. Many of them have been fought over territory, such as those around Palestine, many more for Empire as the British did or as Russia is doing now.
- "In the past, conflicts and wars have erupted over seemingly trivial
things like pastries, pigs, potatoes, and even football.
- However, according to geopolitical experts, the next war could be sparked by something that can only be seen under a microscope—a semiconductor chip or transistor.
- The tensions surrounding these microscopic components have reached extreme levels, raising concerns about potential deadly consequences."
Why Are Chips So Important?
- "The modern world is powered by tiny semiconductor chips, which are
integral to our daily lives and are found in devices such as mobile phones,
cars, and fighter jets.
- These chips enable us to use social networks, GPS, email, and even artificial intelligence technology like ChatGPT.
- The global chip industry produced more transistors in 2021 than the total quantity of all goods produced by all other industries throughout human history, as stated by Chris Miller in his book Chip Wars.
- This minuscule piece of silicon technology has the power to drive the world today, shape our technological future, and potentially ignite World War III.".
Do You Know?
- "Manufacturing semiconductor chips is a complex and capital-intensive task that is considered one of the most challenging manufacturing feats ever achieved by humans.
- The construction of a chip fabrication factory, also known as a 'fab', can cost over $20 billion and requires a sophisticated supply chain ecosystem.
- Only a few companies and countries have managed to master the intricate process of producing advanced 3 and 5 nanometer chips, with 92% of these chips being produced by Taiwan Semiconductor Corporation Ltd (TSMC).
- This company finds itself at the center of a major geopolitical conflict between the US and China, with the winner set to shape the future of technology.
- While the battle might be for the future, its roots lie in political history, with China refusing to recognise Taiwan’s independence and claiming it to be an ‘inalienable’ part of itself. It has long coveted Taiwan’s territory. Now it also seems to covet its superconductors.
The Battle Has Been Brewing For Decades:
- While this battle has been brewing for decades, a few recent events have pushed it front and centre on the world stage.
- The growing geopolitical conflict over semiconductors has been propelled to the forefront due to a few key events:
- The race for artificial intelligence (AI) dominance: Every major
country wants to lead in AI, recognizing that semiconductors are the
backbone that makes AI possible.
- For instance- Vladimir Putin has declared that the nation that leads in AI “will be the ruler of the world.
- Both Xi Jinping and Joe Biden have brought national policies to win the AI race. They have also realized that the engine that makes AI possible, the ‘new oil’, are semiconductors and the country that controls chips will shape the future.
- US efforts to control chip production globally: The unprecedented
moves that the US has made to corral chip production assets worldwide into
its own camp
- The US has established a $52 billion fund and enacted laws to incentivize chip-making in the US and ban exports to China.
- Most of the chip supply chain is controlled by the US and the West, notably the US, Netherlands and Japan, and they have united towards this effort.
- Biden has gone as far as to disallow US citizens and even Green Card holders working for Chinese chip companies.
- The Russian invasion of Ukraine: This event serves as a precedent for territorial conflicts and adds to the growing tensions in the chip industry.
Conclusion
- The impact of a Chinese invasion or blockade of Taiwan on the world economy would be immense, potentially bringing the production of high-end electronics, weapons, and internet data centers to a standstill.
- While TSMC is working to diversify its production, it is keeping its
highest-end chip production in Taiwan due to the economic advantages of its
supply chain and talent base.
- Additionally, TSMC believes that if China were to attack Taiwan, this would force the US to defend it.
- Currently, this "chip war" is focused on trade and talent, but it has the potential to escalate into a violent conflict, joining the ranks of history's strange and senseless wars fought by humanity.
Source: Live Mint
Mains Question:
Q. The semiconductor chip war, currently being fought over trade and talent, has the potential to explode over an actual ‘hot’ war. Analyze (150 words)
