As tensions between the superpowers of the world increase, control over the latest advancements in computer chips becomes ever more important. However, with most semiconductor manufacturers concentrated in East Asia, the pressure is on America and Europe to compete with China for these resources.
From cars to appliances to infrastructure, almost every part of modern life is intertwined with computers. With Taiwan producing more than 90% of the world’s cutting-edge computer chips, a war with China can put the supply of computers and other electronics in peril. Due to Asian dominance in manufacturing, in the past 30 years, the US's world share of semiconductors manufactured has decreased threefold from 37% (1990) to 12% (2020).
Luckily, the American company Intel has historically had a large presence in the semiconductor industry. However, in recent years, Intel has fallen severely behind its competitors in Asia, such as TSMC (Taiwan Semiconductor Manufacturing Company) and Samsung. In semiconductors, compaction is key. And because Intel used 14nm semiconductors from 2015 to 2019 due to delays in 10nm, its 7nm advancement was delayed to 2023 while its major competitor, TSMC, moved onto 7nm, 5nm, and 3nm.
South Korea leads the world in flash memory production. The likes of Micron, Samsung, and many more produce most of the world’s storage and RAM. Leading tech companies such as Apple, AMD, and Nvidia design their semiconductors and then outsource them to the factories of TSMC and Samsung to manufacture. This has brought massive wealth and investments to these areas. Even Intel, which owns their foundries, began to outsource designs to TSMC.
Self-sufficiency? Outsourcing almost all production almost certainly leads to problems. Cracks have inevitably appeared during the pandemic. Products ranging from computer components to automobiles to flash storage disappeared from stores nationwide. Prices on reselling sites doubled the original MSRP. To rectify the situation, President Biden and many companies began pouring investments into domestic chip production.
The Chips Act aims to provide a 52 billion-dollar program to invigorate the US’s position in cutting-edge semiconductors. GlobalFoundries pledged 4.2 billion dollars to increase production in their Malta facility in New York. Excitingly, new factories are being constructed in the south. In Phoenix, AZ, TSMC is setting up factories that can produce 5nm chips that will open in 2024 and a 3nm factory in 2026. Samsung also aims to have an operational facility in Tyler, TX, by 2024. However, all this new development is not without a catch. By the end of 2022, TSMC will have already begun producing 3nm wafers for their most consistent customers. Apple’s recently announced iPhone 15 Pro already uses a 3nm processor. TSMC is on track to provide Apple with 2nm chips by 2025. The Taiwanese companies are still keeping their most advanced technologies close to home. While the demand for less sophisticated processors is met, these new factories do not help with the problem of equal technological prowess on the world stage. Intel is trying to keep up, and fortunately, the Intel 4 semiconductor (comparable to TSMC 5nm) will be released later this year, and the Intel 20A semiconductor (comparable to TSMC 3nm) is promised to be released in the second half of 2024. The production of silicon is ramping back up in the US. With new investments and a late recovery, the US should regain footing in international space. Full self-sufficiency may not be possible, but any steps closer will strengthen America’s presence in the market and mitigate dependency on foreign counterparts.