Chips are everywhere. And they are essential in all of them.
In the car.
On mobile.
Even in the toaster.
But not everything is the same. Some are more critical than others. And in the midst of military tensions between powers that have not been seen for decades, both in Eastern Europe and in the Far East, concern is growing about their access to the most essential chips for the most sophisticated weapons.
For the missiles.
For the drones.
For fighters and satellites, decryption and optoelectronic systems and an endless etcetera, even more so every time they delve into artificial intelligence.
In the midst of the war in Ukraine, the tension between the US and China in the Pacific and widespread rearmament, semiconductors smaller than 10 nanometers, those so tiny that they cannot be seen with the naked eye, the most powerful and efficient and needed for state-of-the-art weapons, are produced in just two countries: 92% in Taiwan and the remaining 8% in South Korea, according to the Boston Consulting Group.
The US does not produce any. Not any European country. Not Chinese. Not Russia.
Access to the most advanced chips depends on a Taiwanese and Korean duopoly, basically two private companies, TSMC and Samsung Foundry, respectively, that focus on selling to third parties. Its price and quality are unbeatable in the sector.
The West has relied on them year after year. Until dependent.
Now there are nerves.
“Tension between the US and China will remain high because economic interdependence is no longer a stabilizing factor; now it is a competition area. Xi Jinping has called on Chinese companies to storm the fortifications of key technology, which means trying to overtake Western technology leadership in every possible sphere. And semiconductors, in which China spends more money each year importing than in oil, are a central field of competence”, summarizes Chris Miller, professor at the American University of Tufts and author of Chip War: The fight for the World's most critical technology.
It was expressed in writing in the conclusion of an independent commission of the US Congress already in March 2021, a year before the beginning of the Russian invasion of Ukraine: “If a potential adversary were to overtake the US in semiconductors in the long term or if it cut off for With full access to state-of-the-art chips, it could take advantage in all domains of warfare."
The different expert reports repeat it and repeat it. Even more so in 2022 due to military needs in parallel to the war in Ukraine (whose horizon already points to winter) and due to the latest maneuvers around Taiwan by the Chinese People's Army.
Some and others take steps in weapons and surveillance systems increasingly advanced. And so do the components that give them life, semiconductors less than 10 nanometers that are produced almost exclusively on this island claimed by China.
Although they are designed by Apple. Although to melt they require the photolithography machinery that only ASML produces in the Netherlands, one more unit. Washington, in fact, asked The Hague not to export its systems to China and this has happened.
Today all semiconductors smaller than 10 nanometers are melted down in Asia. It is no coincidence that Taiwan is the largest exporter of integrated circuits in the world, worth more than 135,000 million dollars annually and obtains about 15% of its GDP from microchips, according to different economic research centers. It is not by chance that China is Taiwan's main market for these components, more than twice as far from the US, according to data from the Observatory of Economic Complexity. Or not by chance those minuscule semiconductors account for almost half of TSMC's sales.
Beyond its chips there is very little.
And worse: they all face the disputed coasts in front of China, the sea in which the Asian Giant and Washington see their friction increase and increase. The latest tensions in the area, including massive military exercises after the recent visit to the island by the Speaker of the US House of Representatives, Nancy Pelosi, have only aggravated it.
The Taiwanese Minister of Economic Affairs, Wang Mei-hua, already warned in September 2021: The sector “is not only part of our economic security. It is also connected to our national security.”
What would happen in case of blockade of the island? What would happen if Beijing chose to invade the island and with it its technology?
"It is a direct threat," quoted a report from the Center for Strategic and International Studies (CSIS) in Washington last June and with defense experts who are references in the country.
One of them, a consultant to several governments on the matter and an academic at Georgetown University, Charles Wessner, insists in a conversation with La Vanguardia: "The demand of the army, although it is strategically important for the US and Europe, continues to be very small compared to that of phones, computers, games or cars. Reliable manufacturers have been relied on for years to produce for the military, and for the most advanced chips, Taiwan is relied on, just like China does.”
The shortage of chips for cars, smartphones or video game consoles, however, has forced these and many other sectors to strike and delay their production chains in recent months.
In response, China has plans to produce them on its territory. Also the USA. Also the EU. The announced investments from the hand of state incentives are billionaires.
“Building more foundries around the world is a natural market decision. It is not treated as a risk for the industry in Taiwan,” Kuan-Neng Chen, an electronic engineer and one of the greatest experts in this field on the island, both in public and private institutions, tells this newspaper. “Taiwan's strength is the node of advanced technology of 10 nanometers and below, semiconductors that are difficult to access. Experience and the availability of abundant talent are keys to its success. This is not easy to solve by simply building new foundries”, he concludes.
Any step requires in all of at least the medium term. And large amounts of investment. Making a single chip with the entire infrastructure in place, in fact, takes more than three months.
“I'm relatively confident that the US has or can produce what it needs in semiconductors. But restarting the production lines for some weapons systems will take time, and unfortunately the world has become a more dangerous place,” Wessner continues.
Meanwhile, the war in Ukraine faces a critical winter. And tensions over Taiwan continue unabated. There are nerves. Because if the problem in access to chips is general in the military field, it escalates.
