The US and other major chip-producing nations are joining forces to secure semiconductor supply. They aim to stop China from overtaking them as the leader.
Nations unite to secure Semiconductor supply
The US, Japan, Taiwan, and South Korea are attempting to form an alliance based on crucial technology, semiconductors. The collaboration throws light on the significance of semiconductor supply and its significance to national security and the economy. Additionally, it is also aiming to halt China’s technological growth. “The immediate reason for all this is definitely China,” stated Pranay Kotasthane. Kotasthane is the director of the High Tech Geopolitics Programme at Takshashila Institution.
China is the current market leader and the largest importer of semiconductor chips in the world. The US, despite having a stronghold in the tech market has lost its dominance in the manufacturing sector. Over the last decade, South Korea’s Samsung and Taiwan’s TSMC are dominating the manufacturing sector. However, Intel, the largest chipmaker in the US is falling behind. South Korea and Taiwan are currently making up 80 percent of the global foundry sector. Foundries are facilities manufacturing chips designed by other firms.
Why is the alliance important?
Semiconductors are a vital part of things we use in everyday life. They are also crucial for smartphones, refrigerators, vehicles computers, and several everyday technologies. They are also important for armament and artificial intelligence. The pandemic induced a shortage of these chips in addition to the increasing demand for electronics. The supply chain delays and interruptions brought out the significance of their shortages. Governments across the nation realized the importance of having hold of the semiconductor supply.
“What has happened is there are many companies spread across the world doing a small part of it, which means there’s a geopolitical angle to it, right? So what if one company doesn’t supply the things that you need? What if, you know, one of the countries sort of puts things about espionage through chips? So those things make it a geopolitical tool,” explained Kotasthane. “The other geopolitical significance is just related to Taiwan’s central role in the semiconductor supply chain. And because China-Taiwan tensions have risen, there is a fear that you know, since a lot of manufacturing happens in Taiwan, what happens if China were to occupy or even just that there are tensions between the two countries? (https://www.solidstonefabrics.com) ” he added.