In an attempt to restrict China from having access to cutting-edge technology, various countries involved in making semiconductor chips are coming together. South Korea, Japan and Taiwan are contemplating forming an alliance. These countries are known to be the important centre point in the chip manufacturing chain. Recently, the governor of Arizona state of the US visited Taiwan in connection with a semiconductor partnership.
Semiconductors are also an important point for discussion among Quad cooperation, an alliance of four Countries namely Australia, India, Japan, and the USA. Recently the USA also announced the Chip 4 alliance consisting of the USA, South Korea and Japan and Taiwan, the dominant players in the semiconductor supply chain.
Semiconductor Role In Geopolitics
Semiconductors are believed to play an important role in geopolitics today. A semiconductor has to undergo processes from design to manufacturing aided by critical tools, before coming out as a final product. The manufacturing of semiconductors is not an isolated activity. Countries across, the globe are dependent on each other for the supply of critical components. The growing unease between China and USA over Taiwan highlights the geopolitical angle. Hence semiconductors have taken the center stage in geopolitics today.
“What has happened is there are many companies spread across the world doing a small part of it, which means there’s a geopolitical angle to it, right? What if one company doesn’t supply the things that you need? What if, you know, one of the countries sort of puts things about espionage through chips? So those things make it a geopolitical tool,” Kotasthane said. Pranay Kotasthane, chairperson of the High Tech Geopolitics Programme at the Takshashila Institution.
The world is recovering from the semiconductor shortage crisis it recently underwent. The semiconductor shortage occurred due to the restriction imposed during the coronavirus lockdown. The problem was further aggravated by the spike in demand for computers during the period. Restrictions imposed by the USA on Russia also contributed to the shortage.
Leading Semiconductor Producers
Today Taiwan and Samsung have taken the mantle from the USA to surge ahead in manufacturing chips. The United States of America once a pioneer in manufacturing chips for fifteen years has been overtaken. According to estimates, the foundries market has been dominated by Taiwan and South Korea which constitute 80% of them.
China’s Stand
Reports suggest that China in recent years has invested a huge sum of money to boost its domestic production of semiconductors. While China has improved in certain areas it is still dependent on other countries for a large part of manufacturing. According to experts going forward for China would be an uphill task, considering its relationship with its neighbour and because of the alliance taking shape.
