Consolidating The Chips

Consolidating The Chips

A brief look at the role of semiconductors in today’s world and why the U.S. should improve its production capabilities in the domain.

Anjali Krishnan
Anjali Krishnan

An Investor’s Business Daily/TIPP Poll conducted in late June/ early July asked over 1400 Americans how important it was for the U.S. to have a solid manufacturing base of semiconductor chips for robust national security.

A majority of those surveyed thought that it was indeed essential. The data reads:

  • 66% Important
  • 11% Not important
  • 23% Not sure
TIPP Poll Results, How important to americans is a strong semiconductor chip manufacturing base for national security, chart

What It Is

For those familiar with the term yet unsure of what it is, semiconductors make electronics as we know them today possible. By definition – "Semiconductors are materials which have a conductivity between conductors (generally metals) and nonconductors or insulators (such as most ceramics)." In practical terms, they are the critical components of a wide range of electronics – from Smartphones to MRI machines, rice cookers to automobiles, ATMs to hypersonic weapons. The list is vast and deep. It's smaller than a postage stamp, thinner than hair, and made up of multitudinous components.

What It's Made Of

Semiconductors, also called chips, are not just making these devices possible; it is making these electronics sleeker, faster and reliable.

The chips are chiefly made from two elements – Silicon and Germanium, a chemical element mined from sphalerite zinc ores or extracted from fly ash coal and copper ores.

The purest silicon, the second most abundant element on earth, is got from quartz rock. It is believed that the world's purest quartz is found in the quarry near Spruce Pine in North Carolina, US.

Where It's Made

The Semiconductor Industry Association (SIA) pegs the worldwide sales of semiconductors at $41.8 billion in April 2021. With those kinds of numbers, it is hard to believe that one Taiwanese company – Taiwan Semiconductor Manufacturing Co. (TSMC) – manufactures more than half of the world's semiconductors and the most advanced ones!

Only two other firms in the world, at present, have the capabilities to manufacture the most advanced semiconductors - Samsung of South Korea and Intel of the United States. One reason for such a narrow base of manufacturers is the massive capital investment needed for setting up semiconductor fabrication plants, known as fabs or foundries.

The pandemic has highlighted the folly of depending on a third party for something as crucial as semiconductors. The shortage of chips is likely to impact most manufacturers, and especially those in the automobile sector. Plus, pandemic-induced supply disruptions are expected to slow down economic recovery in many other industries.

Share of global semiconductor manufacturing, 1990-2030. Source: SIA
Share of global semiconductor manufacturing, 1990-2030. Source: SIA/Semiconductor Engineering

Why Reduce Dependence

Relations between Beijing and Washington have been tense for the past few years. The worsening U.S.-China trade war, increasing Chinese control over Taiwan - the worlds' supplier of chips, and rising tensions in the Taiwanese Strait, could place America in a vulnerable position.

Besides, China has set out an ambitious semiconductor agenda. Beijing is investing $150 billion to develop its domestic IC industry and improve its self-reliance on chips.

Unprecedented restrictions on the movement of goods due to the pandemic and the crucial role semiconductor chips play in areas as far-reaching as communications and defense have made it necessary for the United States to invest in R&D and manufacturing of semiconductors.

The U.S. administration has made it clear with recent legislation that it will invest promptly and heavily to maintain and boost its position in the semiconductor domain. The passing of the U.S. Innovation and Competition Act (USICA) will give a solid impetus to emerging technology like AI, quantum computing, and of course, chips. USICA includes $52 billion for the manufacturing, design, and research of semiconductors set aside in the CHIPS for America Act.

With that backing of Congress, copious investment, and inputs from the industry, America should strengthen its position in semiconductors that drive industries and protect its borders.


TIPP Takes

Pakistan: Bus Explosion Kills Chinese Nationals

Pakistan: Bus Explosion Kills Chinese Nationals

At least 13 people, including nine Chinese construction workers with a hydropower project, were killed in the blast in a remote region of northern Pakistan.

The Chinese Embassy in Pakistan said that "a certain project of a Chinese firm in Pakistan suffered an attack, which caused the deaths of Chinese nationals."

He called on Pakistan to "severely punish" the attackers.

The Pakistani Foreign Ministry said the blast was caused by mechanical failure resulting from a "leakage of gas," not a militant attack. China maintained the incident was a bomb attack.

No group has claimed responsibility for an attack, but Islamist militants linked to the Pakistani Taliban had previously targeted Chinese interests in Pakistan.


Putin Says Russia, U.S. Have 'Common Interests' On Climate Change

Putin

Moscow and Washington have a shared interest in battling climate change, the Kremlin said, in a rare area of common ground between the rivals.

Putin told the former Secretary of State, John Kerry, that Moscow "attaches great importance" to achieving the goals of the Paris Agreement and "advocates de-politicizing" dialogue on climate change.

Kerry pointed to Russia's role in addressing climate change in the Arctic Council and efforts to end emissions from coal, a State Department statement said.

Putin has made the development of Russia's Arctic region a strategic priority as its ice cover melts, opening up new shipping routes for Moscow.

Climate change is one of the few areas in which the United States and the European Union have said they are ready to engage with Russia amid high tensions over various issues, including Ukraine, cyber-attacks, and Moscow's human rights record.


Turkey, Israel Want To Improve Ties After Presidents’ Call: AKP

Erdogam-Herzog
Erdogan - Isaac "Bougie" Herzog

Turkey’s Erdoğan calls Israel’s new president, but both sides say the other must move first for any rapprochement.

Turkey and Israel agreed to improve their strained relations after a rare phone call between their presidents.

The two countries expelled ambassadors in 2018 after a bitter falling-out. Ankara has condemned Israel’s occupation of the West Bank and its treatment of Palestinians. At the same time, Israel has called on Turkey to drop support for the Palestinian group Hamas that governs Gaza.

In May, Erdoğan called Israel a “terror state” after Israeli police shot rubber-coated steel bullets and stun grenades towards Palestinian youths at Jerusalem’s Al-Aqsa Mosque compound.

Israel has accused Turkey of aiding members of Hamas, which is considered a “terrorist organization” by Israel and its Western allies.


Gut Microbiota Can Regulate Social Behavior

Gut Microbiota

Gut microbiota can regulate the social behaviors of mice via stress response mechanisms in the brain, which might shed new light on the treatment of psychiatric disorders, a study published by Taiwanese and US researchers in the journal Nature said.

Previous studies had explored the connections between mice’s gut microbiota and their social activities. Still, the gut-brain connections that regulate their social behaviors are unclear, Wu Wei-li, the study’s lead author, said.

Their experiments found that germ-free mice and mice whose intestinal microbiota were restricted appeared to be socially inactive. Their levels of corticosterone, a stress hormone, were higher, Wu said.

The study shows that gut microbiota influences health and neural and social activities, Ministry of Science and Technology Department of Life Sciences Director-General Chen Hong-chen said, expressing the hope that their findings would help advance precision medicine on related diseases.

There is a long way to go before their research model can be applied to humans, but their findings might inspire some new ways of thinking for similar research, he said

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