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Join Alexander and Jason as they discuss how geopolitical tensions are destabilizing the chip manufacturing industry - and what this means for the future of technology.

Continued Geopolitical Tensions Affect Chip Supply

Chips are important for cars, smartphones, and medical equipment. The world is currently experiencing a chip shortage, which has led to limited production of new vehicles and smartphones. This means that people must grapple with higher prices for these products.

One main reason behind the shortage is the geopolitical tension between Taiwan and China.

Taiwan is home to more than 90 percent of the manufacturing capacity for the world’s most advanced semiconductors, which are a crucial component for making chips. In addition, the Taiwan Semiconductor Manufacturing Company is also the world’s largest and most critical chip manufacturer.

China’s refusal to recognize Taiwan as a sovereign country, as well as its own means that the rest of the world must work with restricted access to this stronghold of chip manufacturing.

Honing American Competitive Edge in Chip Manufacturing

In anticipation of the decrease in chip supply, the United States Congress has passed the CHIPS and Science Act, signed by Joe Biden, which would have more than $200 billion invested in semiconductor chip manufacturing over the next five years.

These latest measures to stimulate the local chip manufacturing industry raise concerns on whether taxpayers’ money is going to be used to create a monopoly for existing companies. This would stifle competition and create a situation similar to Wall Street, where the industry would eventually become “too big to fail.” A collapse in chip manufacturing would cripple the entire economy.

Furthermore, Alexander and Jason point out the need for American manufacturers and data centers to offer competitive wages to workers. The wage gap between the jobs offered locally and the ones offered in Taiwan can make the move to another country more tempting. The resulting loss of talent would have a clear impact on the US.

If the United States is to succeed in its goal of becoming a big player in the chip manufacturing industry, it will need better protections against monopolistic mega industries and unfair labor practices.

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