The world runs on computer chips. From the phone in your hand and the fridge in your kitchen to car companies' manufacturing equipment and the military's missile systems, almost every part of today's digitally run society relies on the tiny, intricate devices known as semiconductors.
Semiconductors are also incredibly difficult to make — especially the most advanced chips. They require massive, delicate machines, hard-to-find materials, and a staggering amount of technical know-how. Right now, production of these chips is made up of a complex web of companies and facilities around the globe — with a few key choke points. For instance, Taiwan's TSMC controls 90% of the physical production of the highest-end chips.
The critical importance of semiconductors and the delicate manufacturing process have combined to turn these chips into the main battleground in a new race between the US and China for the future of technology. If the first Cold War was defined by the development of nuclear weapons, this Tech Cold War is defined by the computer chip.
"Strategists in Beijing and Washington now realize that all advanced tech — from machine learning to missile systems, from automated vehicles to armed drones — requires cutting-edge chips," Chris Miller, an associate professor of international history at Tufts University, wrote in his recent book, "Chip War."
The Tech Cold War between the US and China, along with the recent surge in pandemic-induced chip shortages, has triggered a massive push by the federal government to bring semiconductor manufacturing to the US. But the reality of onshoring chip production has been far less glamorous than the patriotic aspirations of outpacing a geopolitical rival.
The rush by states, counties, and cities to get in on the semiconductor gold mine has resurfaced old fights about how best to create jobs and exacerbated local battles over housing, public schools, and business development. While revitalizing parts of the country that are struggling economically is an admirable goal, the frenzied pace of the chip war is resulting in billions of dollars getting funneled to corporations, while locals are left with vague promises and underfunded public institutions. In the scramble to seize the future of technology, governments are ignoring the problems of today — and leaving many of their constituents out to dry.
Building the 'Silicon Heartland'
America's position as a semiconductor powerhouse has been eroding for decades. According to the Semiconductor Industry Association, a lobbying group, the share of chips made in the US fell from 37% in 1990 to just 12% in 2020. To reverse this decline, governments have been pulling out all the stops to attract chipmakers to bring their new factories to the US. On the federal level, Congress passed the CHIPS Act in August, which provides $280 billion in new funding to accelerate domestic research and manufacturing of semiconductors.
This pool of cash, along with a wave of incentives from state and local governments, has already helped push companies to bring projects to the US. Intel, America's leading semiconductor maker, is spending $20 billion to build the world's largest chip factory, in a suburb of Columbus, Ohio, which the company says will employ at least 3,000 people after it's completed in 2025. "We helped to establish the Silicon Valley," Intel CEO Pat Gelsinger told Time when the facility was announced in January 2022. "Now we're going to do the Silicon Heartland." Intel considered 38 other sites across the country before choosing New Albany. In addition to the proximity to plenty of fresh water, which is needed to make computer chips, the suburb is prime for the new middle-class plant workforce. The affluent suburb is home to data centers for Amazon, Google, and Facebook, and the median household income is over $200,000. Early reports say the plant's average salary will be $135,000, with 70% of the jobs consisting of manufacturing technicians, a position that requires at least a two-year STEM degree.
Read More at https://www.businessinsider.com/us-china-tech-war-computer-chips-semiconductor-plants-costing-americans-2023-1