Taiwan's Microchip Dominance is forcing America to Save the World, Again!

World War I and World War 2 forced American isolationism to end in order to save the world from fascism and communism.  Fast forward to the 2020s, and Communist Russia and China are back trying to attain global dominance once again.  The majority of the advanced microchips that run the world are made in disputed territory, Taiwan.  

"If China annexes Taiwan, it would suddenly gain control of more than two-thirds of the global supply of microchips, allowing it to choke off access to them to any country it likes," says Cassidy Warner, Australian writer living and working in Sydney. She has a BA with Distinction from the University of New South Wales, dual majoring in English and Politics. 

Russia has added territory from its region. Currently, about 20 percent of Georgia is under Russian occupation.   It now controls 40,000 sq miles of Ukrainian land, entirely in the south and east.

China claims it owns almost all of the 1.3 million square miles of The South China Sea, while six governments beg to differ, including the Philippines, Vietnam, Malaysia, Indonesia, Brunei, and Taiwan.

Russia’s Vladimir Putin and China’s Xi Jinping declared a “new era” in the global order while each acknowledge their rights to respective territorial ambitions in Ukraine and Taiwan. The world’s two most powerful dictatorships, NEO Communists,  made known their opposition to the NATO pact. 

Taiwan produces over 60% of the world's semiconductors and over 90% of the most advanced ones. Most are manufactured by a single company, Taiwan Semiconductor Manufacturing Corporation (TSMC).

The world had a precursor to the fragility of microchip dependence on Taiwan during Covid 19 during the second quarter of 2020.  As of March 2023, 714,600 vehicles have been cut from global production plans this year due to chip shortages, according to the company. It expects that figure to rise to about 2.78 million vehicles by the end of the year.   More than 10.5 million vehicles were cut from production in 2021, and in 2022, 4.3 million cars were cut from their production. 

In Germany, Bosch invested more than $1 billion in 2022 to increase production and has plans to spend another $3 billion toward more production.  Semiconductors.org has announced more than $200 billion in investment since the passing of the CHIPS Act (Passed by Congress in August 2022, the CHIPS Act provides $39 billion in federal funding for companies across the semiconductor value chain to bolster domestic production capabilities). 

A Counterpoints Research study has determined that TSMC has 28% of the market share in matured nodes (40nm and below), making it the world leader in the global semiconductor manufacturing market. UMC, SMIC, and Samsung take second, third, and fourth place with market shares of 13%, 11%, and 10%, respectively.

Taiwan Semiconductor Manufacturing Co. TSMC expects to receive $7 billion to $8 billion in tax credits under the CHIPS Act, in addition to $6 billion to $7 billion in grants for its Arizona plants.

“Today we barely produce 10 percent of the computer chips, despite being the leader in chip design and research,” Mr. Biden said. “And we don’t have the ability to make the most advanced chips now — right now. But today, 75 percent of production takes place in East Asia. Ninety percent of the most advanced chips are made in Taiwan. China is doing everything it can to take over the global market so they can try to outcompete the rest of us and have a lot of applications — including military applications.”

Taiwan accounts for half of the overall production of microchips that are critical to the functioning of mobile phones, consumer electronics, cars, military equipment, and more. South Korea, the nearest competitor, has about 17 percent of the overall market. But Taiwanese chips are the smallest and fastest, and its foundries account for 92 percent of the most advanced designs. (NY Times)

Will The Chips Act be America's chance to save the world again?