{"id":234776,"date":"2023-05-08T12:00:01","date_gmt":"2023-05-08T11:00:01","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=234776"},"modified":"2023-05-05T05:23:19","modified_gmt":"2023-05-05T04:23:19","slug":"you-are-reading-this-thanks-to-semiconductors","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2023\/05\/you-are-reading-this-thanks-to-semiconductors\/","title":{"rendered":"You Are Reading This Thanks to Semiconductors"},"content":{"rendered":"

\"\"<\/a><\/p>\n

27 Apr 2023 – <\/em>On 7 Oct 2022, the United States government implemented<\/a> export controls in an effort to hinder the development of China\u2019s semiconductor industry. An expert on the subject told<\/a> the Financial Times<\/em>, \u2018The whole point of the policy is to kneecap China\u2019s AI [Artificial Intelligence] and HPC [High Performance Computing] efforts\u2019. The next day, China\u2019s Foreign Ministry spokesperson Mao Ning said<\/a>:<\/p>\n

In order to maintain its sci-tech hegemony, the US has been abusing export control measures to wantonly block and hobble Chinese enterprises. Such practice runs counter to the principle of fair competition and international trade rules. It will not only harm Chinese companies\u2019 legitimate rights and interests but also hurt the interests of US companies. It will hinder international sci-tech exchange and trade cooperation and deal a blow to global industrial and supply chains and world economic recovery. By politicising tech and trade issues and using them as a tool and weapon, the US cannot hold back China\u2019s development but will only hurt and isolate itself when its action backfires.<\/p><\/blockquote>\n

As part of Tricontinental: Institute for Social Research\u2019s collaboration with No Cold War<\/a>, we studied the implications of these export controls with a focus on semiconductors. Briefing no. 7<\/a> teaches us about the vitality of semiconductors and why their use in the New Cold War will not bear the fruits anticipated by Washington.<\/p>\n

\"\"<\/p>\n

On 8 April, Chairman of the US House Foreign Affairs Committee Michael McCaul was asked<\/a> to explain \u2018why Americans\u2026 should be willing to spill American blood and treasure to defend Taiwan\u2019. His answer was telling: \u2018TSMC [Taiwan Semiconductor Manufacturing Company] manufactures 90% of the global supply of advanced semiconductor chips\u2019. The interviewer noted that McCaul\u2019s reasoning \u2018sounds like the case that [was] made in the 60s, 70s, and 80s of why America was spending so much money and military resources in the Middle East [when] oil was so important for the economy\u2019 and then asked whether semiconductor chips are \u2018the 21st century version\u2019 of oil \u2013 that is, a key driver of US foreign policy towards China.<\/p>\n

Semiconductor chips<\/a> are the building blocks of the world\u2019s most advanced technologies (such as artificial intelligence, 5G telecommunications, and supercomputing) as well as all modern electronics. Without them, the computers, phones, cars, and devices that are essential to our everyday lives would cease to function. They are typically produced<\/a> by using ultraviolet light to etch microscopic circuit patterns onto thin layers of silicon, packing billions of electrical switches called transistors onto a single fingernail-sized wafer. This technology advances through a relentless process of miniaturisation: the smaller the distance between transistors, the greater the density of transistors that can be packed onto a chip and the more computing power that can be embedded in each chip and in each facet of modern life. Today, the most advanced chips are produced with a three-nanometre (nm) process (for reference, a sheet of paper is roughly 100,000-nm thick).<\/p>\n

\"\"<\/p>\n

Charles Sheeler (United States), Classic Landscape<\/em>, 1931.<\/strong><\/p>\n<\/div>\n

The Semiconductor Supply Chain<\/strong><\/h3>\n

The commercial semiconductor industry was developed in Silicon Valley, California in the late 1950s, dominated by the United States in all aspects, from research and design to manufacture and sales. From the outset, this industry held geopolitical significance, with early manufacturers selling<\/a> upwards of 95% of their chips to the Pentagon or the aerospace sector. Over the subsequent decades, the US selectively offshored most of its chip manufacturing to its East Asian allies, first to Japan, then to South Korea and Taiwan. This allowed the US to reduce its capital and labour costs and stimulate the industrial development of its allies while continuing to dominate the supply chain.<\/p>\n

Today, US firms maintain a commanding presence in chip design (e.g., Intel, AMD, Broadcom, Qualcomm, and NVIDIA) and fabrication equipment (e.g., Applied Materials, Lam Research, and KLA). Taiwan\u2019s TSMC is the world\u2019s largest semiconductor manufacturer or foundry, accounting for an overwhelming 56% share<\/a> of the global market and over 90% of advanced<\/a> chip manufacturing in 2022, followed by South Korea\u2019s Samsung, which holds a 15% share<\/a> of the global market. In addition, the Dutch firm ASML is a critical player, holding a monopoly on extreme ultraviolet (EUV) lithography machines needed to produce the most advanced chips below 7-nm.<\/p>\n

The largest part of the semiconductor supply chain that lies outside of the control of the US and its allies is in China, which has developed into the world\u2019s electronics manufacturing hub and a major technological power over the past four decades. China\u2019s share of global chip manufacturing capacity<\/a> has risen from zero in 1990 to roughly 15% in 2020. Yet, despite its sizeable developmental advances, China\u2019s chip production capabilities still lag behind, relying on imports for the most advanced chips (in 2020, China imported<\/a> $378 billion worth of semiconductors, 18% of its total imports<\/a>). Meanwhile, China\u2019s largest semiconductor manufacturer, SMIC, only has<\/a> a 5% share of the global market, paling in comparison to TSMC.<\/p>\n

\"\"<\/p>\n

Giorgio de Chirico (Italy), Ettore e Andromaca <\/em>(\u2018Hector and Andromache\u2019), 1955\u201356.<\/strong><\/p>\n<\/div>\n

The US Campaign against China<\/strong><\/h3>\n

In recent years, the US has been waging an aggressive campaign to arrest China\u2019s technological development, which it views as a serious threat to its dominance. In the words<\/a> of US National Security Adviser Jake Sullivan, Washington\u2019s goal is to \u2018maintain as large of a lead as possible\u2019. To this end, the US has identified China\u2019s semiconductor production capabilities as an important weakness and is trying to block the country\u2019s access to advanced chips and chip-making technology. Under the Trump and Biden administrations, the US has placed hundreds<\/a> of Chinese companies on trade and investment blacklists, including the country\u2019s leading semiconductor manufacturer SMIC<\/a> and tech giant Huawei<\/a>. These restrictions have banned any company in the world that uses US products \u2013 effectively every chip designer and manufacturer \u2013 from doing business with Chinese tech firms.<\/p>\n

The US has also pressured governments and firms around the world to impose similar restrictions. Since 2018, Australia, Canada, New Zealand, and the United Kingdom have joined<\/a> the US in banning Huawei from their 5G telecommunications networks while a number of European countries have implemented<\/a> partial bans or restrictions. Importantly, in 2019, after more than a year of intense US lobbying, the Dutch government blocked<\/a> the key firm ASML, which builds and supplies the most advanced chip-making machinery to the semiconductor industry, from exporting its equipment to China.<\/p>\n

These policies do not only target firms; they also have a direct impact on an individual level. In October 2022, the Biden administration restricted<\/a> \u2018US persons\u2019 \u2013 including citizens, residents, and green-card holders \u2013 from working for Chinese chip firms, forcing many to choose between their immigration status and their jobs. The Centre for Strategic and International Studies, a leading Washington, DC think tank, characterised<\/a> US policy as \u2018actively strangling large segments of the Chinese technology industry \u2013 strangling with an intent to kill<\/em>\u2019 (our emphasis).<\/p>\n

Alongside its containment measures against China, the US has ramped up efforts to boost its domestic chip-making capacity. The CHIPS and Science Act, signed into law in August 2022, provides<\/a> $280 billion in funding to boost the domestic US semiconductor industry and reshore production from East Asia. Washington views Taiwan\u2019s role as the manufacturing hub of the semiconductor industry as a strategic vulnerability given its proximity to mainland China and is inducing TSMC to relocate<\/a> production to Phoenix, Arizona. This pressure, in turn, is generating its own frictions in the US-Taiwan relationship.<\/p>\n

However, US efforts are not infallible. Although China has suffered serious setbacks<\/a>, it has intensified efforts to promote its domestic capacity, and there are signs of progress despite the obstacles imposed by the US. For example, in 2022, China\u2019s SMIC reportedly achieved<\/a> a significant technological breakthrough, making the leap from 14-nm to 7-nm semiconductor chips, which is on par with the global leaders Intel, TSMC, and Samsung.<\/p>\n

\"\"<\/p>\n

Lu Yang (China), Delusional World \u2013 Bardo #1<\/em>, 2021.<\/strong><\/p>\n<\/div>\n

A Matter of Global Importance<\/strong><\/h3>\n

It is important to note that the US is not only targeting China in this conflict: Washington fears that China\u2019s technological development will lead, through trade and investment, to the dispersal of advanced technologies more broadly throughout the world, namely, to states in the Global South that the US sees as a threat. This would be a significant blow to the US\u2019s power over these countries. In 2020, the US Senate Foreign Relations Committee decried<\/a> that China was facilitating \u2018digital authoritarianism\u2019 because it has \u2018been willing to go into smaller, under-served markets\u2019 and \u2018offer more cost-effective equipment than Western companies\u2019, pointing to countries under US sanctions such as Venezuela and Zimbabwe as examples. To combat ties between Chinese tech firms and sanctioned countries, the US has taken severe legal action, fining<\/a> the Chinese corporation ZTE $1.2 billion in 2017 for violating US sanctions against Iran and North Korea. The US also collaborated<\/a> with Canada to arrest Huawei executive Meng Wanzhou in 2018 on charges of circumventing US sanctions against Iran.<\/p>\n

Unsurprisingly, while the US has been able to consolidate support for its agenda amongst a number of its Western allies, its efforts have failed<\/a> across the Global South. It is in the interest of developing countries for such advanced technologies to be dispersed as widely as possible \u2013 not to be controlled by a select few states.<\/p>\n

\"Skunder<\/p>\n

Skunder Boghossian (Ethiopia), The End of the Beginning<\/em>, 1972\u201373.<\/strong><\/p>\n<\/div>\n

If you are reading this newsletter on your smartphone, then you should know that this tiny instrument has billions of miniscule transistors that are invisible to the human eye. The scale of the developments in digital technology is staggering. Earlier conflicts took place over energy and food, but now this conflict has heated up over \u2013 amongst other matters<\/a> \u2013 the resources of our digital world. This technology can be used to solve so many of our dilemmas, and yet, here we are, at the precipice of greater conflict to benefit the few over the needs of the many.<\/p>\n

_______________________________________________<\/em><\/p>\n

\"\"<\/a> <\/em>Vijay Prashad is an Indian historian, editor and journalist. He is a writing fellow and chief correspondent at<\/em> Globetrotter. He is the director of <\/em>Tricontinental: Institute for Social Research<\/a><\/em> and a senior non-resident fellow at Chongyang Institute for Financial Studies<\/a><\/em>, Renmin University of China. He has written more than 20 books, including <\/em>The Darker Nations<\/a> and <\/em>The Poorer Nations<\/a>. His latest book is <\/em>Washington Bullets<\/a>, with an introduction by Evo Morales Ayma.<\/em><\/p>\n

Go to Original \u2013 thetricontinental.org<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

27 Apr 2023 – On 7 Oct 2022, the US government implemented export controls to hinder the development of China\u2019s semiconductor industry. \u2018The whole point is to kneecap China\u2019s AI and HPC efforts\u2019. The next day, China\u2019s Foreign Ministry spokesperson Mao Ning said:<\/p>\n","protected":false},"author":4,"featured_media":186469,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[216],"tags":[867,1733,1009,239,417,244,803,2788,1751,331,435,1126,1050,645,923,1043,461,339,70],"class_list":["post-234776","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology","tag-anglo-america","tag-artificial-intelligence-ai","tag-big-tech","tag-brics","tag-bullying","tag-china","tag-competition","tag-cyber-weapons","tag-cyberwar","tag-development","tag-free-trade","tag-hegemony","tag-imperialism","tag-international-trade","tag-sanctions","tag-sco","tag-technology","tag-trade","tag-usa"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/234776","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=234776"}],"version-history":[{"count":1,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/234776\/revisions"}],"predecessor-version":[{"id":234777,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/234776\/revisions\/234777"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media\/186469"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=234776"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=234776"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=234776"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}