The semiconductor industry is a key player in the world economy and has a major impact on a country’s strength on the global stage. American engineers invented the first semiconductor chip in the 1950s, sparking a race to advance computing power. Today the industry is Dominated by two major players, China and the United States, they find themselves locked in a struggle for security and supremacy.
Evolution of the Semiconductor Industry
In the early days of the industry, semiconductor chips improved at an exponential rate, with the number of transistors on a chip doubling every year. The earliest companies dedicated to making chips were based in the United States and mainly served the US government. The U.S. government views computing power as It is an important aspect of its national power, so it has established in-depth cooperation with chip companies to ensure access to the most advanced technology.
Initially, chip companies were responsible for the entire supply chain of designing, manufacturing and assembling chips within the United States. However, as the industry grew and demand for consumer products such as enterprise computers increased, chip companies began shifting their manufacturing and assembly operations to Countries with cheaper labor such as Japan, Taiwan, South Korea and Hong Kong. The U.S. government encourages these moves and deepens ties with allies and partners, but also prohibits chip companies from sharing technology with their rivals, the Soviet Union and China.
The Rise of China as a Major Player in the Industry
By the 1970s and 1980s, Toshiba in Japan and Samsung in South Korea were designing and manufacturing chips that rivaled those in the United States. In the 1990s, a Taiwanese company, TSMC, became a chip-making specialist and began producing some of the world’s most advanced chips. At the same time China China began investing in its own chip companies, and it is now a major player in the industry and a formidable competitor to the United States.
The Battle for Security and Supremacy
The current China-US semiconductor industry dispute has nothing to do with market share or tariffs. It’s about safety. In 2012, Yu Zongchang, an engineer at ASML, the world’s most advanced semiconductor chip company, left his job and established two new companies in China. America and China. Lawyers for the U.S. and ASML later claimed that Yu had recruited other ASML engineers to his U.S. firm, who brought stolen information about ASML machines, all backed by the Chinese government.
This story is just a small part of China’s massive effort to transform the world’s most important global semiconductor industry. China’s efforts are increasingly locked into a struggle with the United States, a struggle over security. the us government sees Computing power is an important aspect of its national power, and it worries about its dependence on foreign sources for its most advanced chips. China, on the other hand, is determined to catch up and eventually overtake the US in this critical industry.
The Future of the Semiconductor Industry
The semiconductor industry is a growing field, and the competition between the U.S. and China is likely to continue. As computing power continues to advance, the two countries will vie for leadership in this key industry. The outcome of this struggle will be With far-reaching implications for the global economy and the power dynamics of countries around the world.
In conclusion, the semiconductor industry has been a key player in the global economy, with a significant impact on the power of nations. The US was initially the dominant player in the industry, but China has emerged as a major rival in recent years. The competition between these two nations is driven by security concerns and a desire to maintain or gain supremacy in this critical industry. The future of the semiconductor industry is uncertain, but one thing is clear: the outcome of this struggle will have significant ramifications for the world’s economy and power dynamics.
The sad part is, we would all profit without this rivalry and “intellectual property” stuff.
If China wold build more chips, this would not just increase supply (there make them cheaper) but also if more brains have access to more advanced computers there is a higher chance for further innovation.
People defend intellectual property with the argument that it provides a reason to invest in innovation but it’s just holding us back.
China “getting” to 7NM is not the same as getting there without an unacceptable percentage of defects in their node process, or being cost competitive vs TSMC, Samsung and other fabs & node processes. If China could, it would already be doing so.
Let me give you a perspective from a neutral point of view: Basically what happens is that the Netherlands have sold its most advanced microchip producing EUV litho machines capable of single digit architecture to key microchip-producing nations that are the US allies including Japan, South Korea, and Taiwan. The US has lobbied the European Union and Natherlands NOT to export same machine to China for fear of losing competitive advantage and that China could catch up with the US too soon technologically. This is clearly a violation of international free trade, using politics to influence commerce. As the EUV machine produced by ASML used extensive resources contributed by EU member nations over many years, it is so technologically superior that China could never replicate it at least in a short span of time, so it basically lost out to this whole microchip battle.
Before 2004, the United States led the world in semiconductor technology, and foundries had to pay IBM’s technology license fees. But in 2004, TSMC took the lead in developing 0.13-micron copper process technology ahead of IBM, ushering in the era of Taiwan’s semiconductor technology leading the world. In 2014, IBM withdrew from the foundry business, and TSMC considered buying IBM’s fab in New York State. However, even though IBM’s technology has lagged behind Taiwan by a decade, the US Department of Defense and IBM, still worried about the already fading American technology influx into Taiwan, rejected the deal. High-tech semiconductor technology is the result of Taiwan’s efforts to develop, and now the United States claims to “bring back” semiconductor production to the United States.
China’s bet on itself 10 years ago was that its 300mm fabs would be easily 90% yields but in reality 30%, there’s so much scrap. I’ve worked TSMC KYEC Ardentec Freescale TI etc in Taiwan for 15 years. TSMC, and others know when, not if, China takes over Taiwan it’s for its 99% yields not the people not the island but the pure fact China can’t get the important yields Taiwan has enjoyed for 20 years plus. So TSMC and others have established and are continuing to be Stateside, but and its a big BUT setting up a wafer fab in the Arizona Desert isn’t the easiest thing to do…the fab needs water! So, time will tell for both the invasion of Taiwan and how TSMC ramps up in the USA.
The company senior officials at AMSL would not totally go with the U.S. demand to disengage the company’s operations in China . This company from the Netherland has warned that China would develop the lithography machine eventually, on its own whether foreign sources are involved or not., as China has the resources, RD skills & know how to make similar chip making machines. The future of the chip war imposed on China by the U.S. would be in China’s favour in the long run while US might have short term gains. AMSL is one chip company that would not leave the Chinese market as it cannot afford to lose its current market share; knowing well that once AMSL leaves , it won’t be able to regain the lucrative china market and remain competitive anymore.
US is ahead but they’re not winning, china can catch up eventually and something that isn’t mentioned in the article is that Moore’s law is slowing down because we’re reaching a limit. Semiconductors are getting close to atomic sizes and reaching a cap on how small we can make them. This is why quantum computers are being researched so much now due to how their memory capacity functions thanks to qubit superpositions allowing for more states than just 0 and 1.