Category: Geo-politics

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129: CHIP WAR

Chips

We are a chip based society. Chips are tiny pieces of silicon with intricate circuits on them and they are the lifeblood of today’s economy. These clever semiconductors make our internet-connected world go round. In addition to iPhones and PlayStations, they underpin key national infrastructure and sophisticated weaponry. Chips are a foundational aspect of the future of artificial intelligence.

Semiconductors made from silicon wafers mounted with billions of microscopic transistors are the basic component of modern digital life and the building blocks of innovation for the future. They are arguably one of the world’s most important industries.

Controlling advanced chip manufacturing in the 21st century may well prove to be like controlling the oil supply in the 20th. The country that controls this manufacturing can throttle the military and economic power of others.

 

Chip Production

There are two types of semiconductor manufacturing companies in the chip industry. Some (like Intel, Samsung, SK Hynix, and Micron) design and make their own products in factories that they own. There are also foundries, which fabricate chips designed by consumer and military customers.

 

In sheer manufacturing capacity, Taiwan is number one followed by South Korea and U.S. in third place, with China gaining quickly. World’s top two chip companies are Taiwan Semiconductor Manufacturing Company (TSMC) of Taiwan and Samsung Electronics of South Korea.

 

The chips that TSMC makes are found in almost everything: smartphones, high-performance computing platforms, PCs, tablets, servers, base stations, game consoles, internet-connected devices like smart wearables, digital consumer electronics, cars, and almost every weapon system built in the 21st century. About 60 percent of the chips TSMC makes are for American companies.

 

Shortage. The severity of the global chip shortage has gone up a notch in recent times. The shortage is likely to last to last till 2022 or possible 2023. The reasons for the ongoing global chip shortage are complex and multifaceted.

 

Chip Wars

This was sort of expected. As the U.S.-China confrontation takes root, the ability to craft chips for everything from artificial intelligence and data centers to autonomous cars and smartphones has become an issue of national security, injecting government into business decisions over where to manufacture chips and to whom to sell them.

 

USA. A global semiconductor shortage and tensions with China have bolstered U.S. scrutiny of the supply chain and created a drive for it to regain leadership. The United States recently attacked China in trade war, by limiting Huawei’s ability to outsource its in-house chip designs for manufacture by Taiwan Semiconductor Manufacturing Company (TSMC), a Taiwanese chip foundry.

China. China uses 61 percent of the world’s chips in products for both its domestic and export markets. China recognized that its inability to manufacture the most advanced chips was a strategic Achilles heel. China devised two plans to solve these problems. The first one being  made in China 2025 plan of the country’s roadmap to update China’s manufacturing base from making low-tech products to rapidly developing ten high-tech industries, including electric cars, next-generation computing, telecommunications, robotics, artificial intelligence, and advanced chips. China’s second plan is the National Integrated Circuit Plan, a roadmap for building an indigenous semiconductor industry and accelerating chip manufacturing. The goal is to meet its local chip demand by 2030.

 

Taiwan. TSMC of Taiwan has established a R&D team to find a feasible path for development of semiconductors below 1-nanometer (nm). TSMC will also be expanding capacity as in places like Japan. About 20 Japanese companies, will work with Taiwan Semiconductor Manufacturing Co (TSMC) to develop chip manufacturing technology in Japan.

 

South Korea. South Korea’s strategy in the future of chips is more impressive than the U.S.  Through the so-called “K-Semiconductor Strategy,” the South Korean government said it will support the industry by offering tax breaks, finance, and infrastructure. South Korea has a commanding lead in memory chips with a 65% share, largely thanks to Samsung. South Korea’s investment is being led by two of its biggest chip firms: Samsung Electronics and SK Hynix. Samsung Electronics meanwhile is planning to invest 171 trillion won through 2030, raising its previous investment target of 133 trillion won, which was announced in 2019.

 

Future

Scientists have for a long time looked towards the potential of thin two-dimensional semiconductors in realizing high-performance electronic devices. However, there have been two significant problems to migrating semiconductor production to use this new tech. Firstly the materials had an inherent property of high contact resistance, and secondly they had poor current delivery capabilities. These issues seem to have been resolved. These are exciting times in the future of technology. Advances in chip technology and quantum computing would determine how global innovation moves forward.

 

There is much more to it than meets the eye: more coming up soon

 

value additions and comments are most welcome

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References

1. https://warontherocks.com/2020/06/the-chip-wars-of-the-21st-century/

2.http://www.obela.org/system/files/The_importance_of_chips_in_commercial_warfare.pdf

3. https://www.scmp.com/economy/china-economy/article/3102518/us-china-tech-war-battle-over-semiconductors-taiwan-stokes

4. https://theprint.in/world/why-the-us-china-conflict-over-chips-is-about-to-get-even-uglier/529373/

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126: Understanding China Better

 

PLA’s Strategy Textbook: Science of Military Strategy (SMS)

China has two premier institutes – the Academy of Military Sciences (AMS) and National Defence University (NDU). Over the last three decades, they have produced several editions of the publication titled Science of Military Strategy (SMS). SMS is the core textbook for senior PLA officers on how wars should be planned and conducted at the strategic level. The publication is considered to be a doctrinal teaching material and it provides a glimpse into the Chinese military thinking.

 

In August 2020, the latest version of SMS, influenced by structural military reforms adopted under Xi was published. The 2020 version as compared to the previous one of 2017 has some new additions. These include wartime political work, “intelligentisation” concepts, China’s military strategic guidelines, major war operations, joint logistics and the People’s Armed Police. The changes have been justified as necessity in order to “better adapt to the major trend in the form of warfare shifting from informationisation to intelligentisation.

 

The SMS is a 450 page document, divided into three parts with 24 chapters. The first part consists of general abstractions on strategic theory, planning, evaluation, and related topics. The second part covers special topics on strategic warfare, including crisis management and prevention, deterrence, war control, and operational guidance; it also includes chapters on military operations other than war and overseas operations. The third focuses on force development for each of the traditional services (army, navy, air force and rocket force), as well as space and cyber forces, the People’s Armed Police (PAP) and reserve forces.

Key Changes in the 2020 Version

 

Continue reading “126: Understanding China Better”

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122: Dragon Antics: Change of Heart or Change of Approach

 

Since 2002, the CPC Politburo has been convening monthly group study sessions conducted by professors and researchers. Speakers lecture on domestic affairs and share experiences from developed countries. Priority is given to economic issues, followed by political / ideological and social issues, and lastly, military issues and international relations.

 

In his recent speech at the 30th collective study session of the politburo, Xi instructed the country’s leaders to focus on a “trustworthy, lovable and respectable” image for China. He went on to suggest that the country should adopt a “humble” approach in relations with the outside world (“We should make friends, unite and win the majority, and continuously expand the circle of international public opinion friends who know China and are friendly to China”). Most of Xi’s remarks focused on redoubling Beijing’s efforts to create a more positive image of the Communist Party overseas by using social media, electronic media and other means.

 

There were swift reactions worldwide to the statement. Some wondered whether it was the end of China’s sharp-edged Wolf Warrior diplomacy. Others were cautious and hopeful that it could lead to real change. Essence of some of the reactions from various China watchers are as follows:

 

  • What Xi says cannot and should not be trusted. His regime is committing genocide and violating human rights, skirting responsibility for the global pandemic that killed thousands around the world, and building a military and threatening the world.

 

  • Xi’s comments don’t really change anything. It is just a change in approach, unless the words are put to action.

 

  • Maybe the change in tone is to avoid boycott of Olympics. The call for boycott of Olympics in China are increasing world over.

 

  • Xi’s speech is a slight turn and not a fundamental reorientation because the emphasis is still on promoting a positive image of China overseas. The news release of the event indicates that the speech meant to convey that “China should assert its views but do so in a more artful manner. Do not have to go all-out like a Wolf Warrior all of the time and can take a step back sometimes.”

 

  • One of the view is that Xi is serious about the change in approach, and he has urged everyone to “develop a voice in international discourse that matches with China’s comprehensive national strength and international status, presenting a true, multi-dimensional and panoramic view of the country.”

 

  • The reactions in US are divided with one school of thought suggesting that the China policy of US should not change, while the other suggesting that US should also tone down.

 

 

My Take

 

  • China cannot be trusted.
  • China is known for deceit and betrayal, changing its stance frequently.
  • This is just a change in approach and not its policies.
  • The change in tone is because of realisation that it has made too many enemies.
  • The change is to avoid damage to its economic growth (in turn growth in military power).
  • The change is in tune with its policy of two steps forward and one back.
  • The aggressive approach and belligerent behaviour would return again once it attains more power.

 

Titbits

 

Term Wolf Warrior diplomacy was inspired by China’s popular Rambo-like movies, “Wolf Warrior” and “Wolf Warrior II.”  The label has come to signify the tough, sharp-edged tone of many Chinese diplomats.

 

Value additions and comments are most welcome.

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References:

  1. https://www.politico.com/newsletters/politico-china-watcher/2021/06/03/xi-defangs-the-wolf-warrior-493098?nname=politico-china-watcher&nid=00000172-18aa-d57a-ad7b-5eafdd2b0000&nrid=3c46f8a6-d8dc-4af2-9727-6a8433d3e038&nlid=2674343
  2. https://www.nottingham.ac.uk/iaps/documents/cpi/briefings/briefing-27-collective-study-sessions-of-the-politburo.pdf
  3. http://en.people.cn/n3/2016/0204/c98649-9014098.html
  4. 4. https://www.politico.com/newsletters/politico-china-watcher/2021/06/03/xi-defangs-the-wolf-warrior-493098