THE FATE OF THE CHIPS WILL DETERMINE THE FATE OF THE NATIONS

 OPINION

Every major economic superpower is using its money and its best mind to win this silicon battle .
A Human hair is 50-180 microns while novel coronavirus 0.1-0.5 micron. In comparison, today’s most advanced chips are about half the size of the novel coronavirus in diameter and are shrinking rapidly. The fate of nations depends on this infinitely small piece of silicon, which can devastate and shape our lives in myriad ways reliance on chips

Let’s consider three different scenarios. First, Apple’s new A16 chip has more than 16 billion transistors. And Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading manufacturer of chips, just put one quintillion (ie 1 followed by 18 zeros) transistors on the iPhone chip. Every message we send, every picture we take, every call we make, all depends on some kind of chip.

Apple uses its chips Cirrus Logic, Kioxia, Skywords and  buys from TSMC, It’s designed in-house, and the super complex processes running the iPhone operating system make Apple a force of nature. But even a trillion dollar company like Apple is not able to manufacture its own chips. The A16 is built by a company in the same building called Building 18 in Taipei. TSMC’s fab is probably the most expensive and valuable factory in the world. Chips are manufactured today in only a few countries: Taiwan, South Korea, the US, Japan, the Netherlands and China.

Second, Russia appears to be unable to dominate Ukraine in the war, partly because it is using more stubbornness than brain. Ukraine is using precision-guided missiles to fight Russia, which it recently bought from its Western allies. These missiles are powered by chips. While Russia does have some precision-guided missiles, it is unable to manufacture these on the required scale due to Western trade sanctions. Ukraine and US officials claim that what Russia has is a combination of some of the stolen chips, some made indigenously and some imported in the past. The US government’s well-known entity list ensures that this technology does not reach China and Russia and they cannot advance in the race for chips.

Third, earlier this year, Toyota temporarily halted production on assembly lines at five domestic group plants in Japan due to a shortage of chips. If you are looking to buy a new car in the US, the wait times are really long.

What is common in these scenarios is the importance of the chips. Not only the ability to make chips, but also the ability to integrate and synthesize them into complex systems will determine the fate of nations in the coming decades. Today, critical sectors such as defence, telecommunications, electronics and mobility are highly affected by chip shortages, which according to research studies will not end until 2023. If a natural disaster ever occurs in South Korea or Taiwan, it can add to the crisis. The US, the European Union, Japan, India and China have invested about $ 200 billion in the semiconductor sector, but its impact will not be visible now. America was ready to defend Taiwan, if there was aggression from China then perhaps no country in the world has the capacity to produce better and faster chips than Taiwan (and South Korea).

‘Don’t be Foxcond’

While India has taken a far-sighted move to subsidize chip manufacturing through a production-linked incentive scheme, there is a caveat that it should heed as it pursues global chip makers. It has been named ‘Don’t Be Foxcond’. Like Brazil and Vietnam in the past, in June 2018, Racine County in Wisconsin in the US was led to the proverbial garden path by Foxconn President Terry Gou along with US President Donald Trump and Governor Scott Walker. Mr. Gou secured a subsidy of about $5 billion and promised thousands of jobs and the world’s best LCD manufacturing plant. But everything remained on paper only. Despite people being uprooted from their homes to build a new factory, not a single chip or LCD panel was made there. Mr Trump also called the Wisconsin Valley Science and Technology Park the eighth wonder of the world. A manufacturing facility in municipal records, its designation was quietly changed to a ‘storage facility’ last month.

Indian states, which are competing for chip manufacturing investment, should also keep in mind that setting up a chip unit requires static electricity and billions of gallons of clean water, which none of them offer today. Can do. Even LCD panel manufacturing is a dream for the future. For example, the proposed Racine plant that requires about seven million gallons of water per day was being called a violation of the Great Lakes Compact by environmentalists. For manufacturing chips, even more will be needed. If all goes well, India will reach there in the coming decade with prudent strategies and sensible leadership.

The cost of a chip manufacturing plant is $15 billion-$20 billion that takes years to recover profitably, even if it runs throughout the year. With the turmoil in global supply chains due to COVID-19 and the Ukraine war, the game of chips has now become even more complicated. Every major economic superpower is using its money and its best mind to win this silicon battle. It will affect the lives of citizens in more ways than one. India can lose this war at its own risk.
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Vinay Kapoor thru Social Media