Bloomberg | Inside China’s Accelerating Bid for Chip Supremacy
What’s the difficulty in manufacturing chips?
The smaller transistors are, the more you can fit into a chip which in turn will offer more computing power. But making these chips has gotten so incredibly complicated and expensive that it’s difficult to keep up. That’s why the number of manufacturers at the industry’s cutting edge has fallen from over 25 in 2000, to just three (TSMC, Samsung, Intel). There are fewer and fewer companies actually producing leading-edge silicon for a very simple reason. You need to spend 15–20 billion dollars in just one semiconductor factory, and that factory is obsolete within five years. That means you need to be running that plant 24–7. It needs to produce hundreds of millions of devices a year, and those devices need to be selling at a very high premium, otherwise you are losing money. (Excerpted from Bloomberg)
*Obsolete
(adj.) not in use any more, having been replaced by something newer and better or more fashionable; (Sen.) Gas lamps became obsolete when electric lightingwas invented. (Resource: Cambridge Dictionary)
Why could TSMC succeed?
TSMC takes much more than capital and human resources. It takes time. TSMC was founded in 1987, and it has spent more than 30 years in developing and creating its own manufacturing technology. It is just not very likely that you can’t create a comprehensive semiconductor ecosystem overnight. And unlike the U.S or China, Taiwan’s economy is largely built around semiconductors. TSMC is located in the small town of Hisnchu, which hosts a whole ecosystem of other well established chip manufacturing and packaging companies. And the industry also attracts Taiwan’s best talent. One of Taiwan’s best paying job is the semiconducting industry. With that incentive, a lot of school children would see the electrical engineering or anything that related to the semiconductor manufacturing as their top choice when they decide which university department they want to go to.
What’s the perspectives of China and the U.S.A. concerning the trade war?
From Washington’ s perspective, China’s rise as a superpower in technology is regarded as a threat to very fundamental American interests. They are military foes and the last thing Washington wants is also to see a technological foe with the wherewithal or capabilities to wage technological warfare on the United States. But the sanction of the U.S. might not be such a simple solution. China is the largest purchaser of chips in the world, as well as a manufacturer of less sophisticated chip for companies like Qualcomm and other American companies.
From Beijing’s perspective, U.S. sanctions are a way to keep China at the bottom end of the supply chain, forever stuck as a low-tier manufacturing hub. That’s why China is determined to become self-sufficient and is shifting into its highest gear. During its annual NPC meeting in 2021, President Xi Jinping pledged 1.4 trillion to accelerate their tech industry to become totally independent from foreign technology.
*Foe
(N.C.) an enemy; (Sen.) They were bitter foes for many years.
*Wage
(V.T.) to fight a war or organize a series of activities in order to achieve something; (Sen.)Doesn’t the president need Congress’ permission to wage war on another country?
*Pledge
(V.T.) to make a serious or formal promise to give or do something; (Sen.) Both sides have pledged to end the fighting.
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