Pointed out that semiconductor manufacturing is no longer a ``political problem'' beyond technology and economy

Semiconductors are becoming more and more important in modern society, and semiconductors are present in all aspects of life, such as PCs, smartphones, automobiles, and home appliances. Regarding the situation surrounding such semiconductor manufacturing, analyst Ben Thompson , who analyzes the impact of technology on society, said, 'Semiconductor manufacturing has entered a political era beyond technology and economics.' .

Political Chips – Strategyery by Ben Thompson
https://stratechery.com/2022/political-chips/

In July 2022, the stock price of Intel , a major American semiconductor manufacturer, fell, and AMD , a major semiconductor company , surpassed Intel's market capitalization . Both companies occupy an important position in the semiconductor industry, but while Intel manufactures semiconductors in its own factory, AMD is a fabless company that only designs semiconductors, and manufacturing is done by external semiconductor manufacturers ( foundries ). The big difference is what you are doing.

In his 2004 book, Seeing What's Next , American businessman Clayton Christensen said that Intel's rigorous manufacturing processes allowed it to flexibly provide customized products to its customers. He pointed out the problem that it is difficult to adapt to future changes in the sales cycle. Mr. Thompson picked up this point and said that the problem as pointed out actually occurred in subsequent Intel. On the contrary, fabless companies such as AMD, which do not have their own factories, have made progress thanks to more flexible changes in product processes.

Also, although Intel had the correct knowledge about PCs and servers, the appearance and spread of smartphones was unexpected. Unlike PCs and servers that run on power supplied from a power supply, smartphones that run on batteries emphasize efficiency over performance, which was not in Intel's chip manufacturing outlook. It has been delayed to adapt to the chip design for

Meanwhile, foundries such as Taiwan-based TSMC and South Korea-based Samsung were more flexible and able to accommodate new chip designs that emphasized efficiency over performance. For these reasons, the presence of foundries in the semiconductor industry has increased in recent years.

A particularly important turning point, Thompson points out, was TSMC's introduction of extreme ultraviolet lithography (EUV lithography) in 2014, when Intel still considered it expensive and difficult to implement. EUV lithography is a device that uses various rays to form ultra-small circuits on a chip, and the market capitalization of the only manufacturer, the Dutch manufacturer ASML , already exceeds Intel.

What is the precision machine of a Dutch company that holds the key to the US VS China semiconductor development competition? -GIGAZINE

Mr. Thompson pointed out that the first stage of the Internet was defined by 'technology' and that figuring out 'what is technically possible' was an important key. And he argues that the second stage of the Internet, which has entered a few years into the 21st century, is defined by the 'economy'.

Contrary to initial assumptions, the Internet is working in the direction of concentrating economic power rather than dispersing it. The Internet, defined by economics, would allow competition without geographical or economic limits, and the winners would be those with economies of scale that justified massive investment. thing. This growing economy has stalled Intel's integrated design-to-manufacturing approach and has led to the rise of foundries like TSMC.

However, Mr. Thompson predicts that the Internet will enter the third stage after that, not just the second stage. Thompson says that it is 'politics' that defines the Internet in the third stage, and the semiconductor industry is already entering an era that is influenced by politics.

In August 2022, U.S. House Speaker Nancy Pelosi and others visited Taiwan during a tour of Asia, which sparked strong opposition from China. At the time, Pelosi held talks with TSMC Chairman Liu De-yin, and Taiwanese President Tsai Ing-wen said, 'Taiwan and the United States not only share the values of democracy, freedom, and human rights, but also promote economic development and democratic development.' We will continue to cooperate in the supply chain,' he said.

Mr. Pelosi ``Democracy in Taiwan, determined to protect'' Mr. Tsai Ing-wen welcomes ``Unite'': Asahi Shimbun Digital
https://www.asahi.com/articles/ASQ834VHVQ83UHBI01S.html

US House Speaker Pelosi to talk with Taiwan TSMC Chairman = WP | Reuters
https://jp.reuters.com/article/usa-chna-pelosi-tsmc-idJPKBN2P81ZR

Regarding the proximity between the political world and TSMC, Mr. Thompson said, ``The United States supports Taiwan for reasons of democracy, freedom, and human rights. pointed out. It is TSMC that has the ability to manufacture the most advanced chips in the world, and that it is in Taiwan, which China can reach, is a very painful problem for the United States.

Liu, chairman of TSMC, also recognizes the importance of the company in the economic field, saying, 'If China invades Taiwan, TSMC's factories will stop and economic turmoil will occur not only in Taiwan but also in China. It will happen,' he warned.

Liu Deyin, chairman of major chip maker TSMC, warns that ``If you invade Taiwan, there will be confusion in China.''-GIGAZINE

by Fritzchens Fritz

China is investing a lot of money to improve its semiconductor manufacturing technology, but US pressure has stopped the sale of EUV lithography, and the range of sales bans has also been extended to deep ultraviolet lithography (DUV lithography). There is a movement to In this way, the semiconductor industry is already deeply entwined with political speculations, and dynamics that go beyond mere corporate activities are at work.

The United States appeals to the Netherlands not to sell DUV equipment used for semiconductor manufacturing to China - GIGAZINE

Still, China's largest semiconductor manufacturer, SMIC, reported in July 2022 that it had begun manufacturing 7nm processes, even though it was prohibited to import high-performance equipment necessary for semiconductor manufacturing of 14nm processes and above. was given.

It turns out that the Chinese semiconductor maker 'SMIC' is mass-producing 7 nm chips that even Intel struggled with, and is rapidly growing into the world's third largest foundry - GIGAZINE

Meanwhile, the US Senate will provide $ 52.7 billion (about 7.7 trillion yen) in five years to semiconductor manufacturers such as Intel and GlobalFoundries that compete with Asian manufacturers ' CHIPS Act (semiconductor subsidy bill) ” was passed. The bill, which is expected to be passed by the House of Representatives soon, prohibits companies receiving support from expanding semiconductor manufacturing capacity beyond the 28nm process in countries such as China, and increases semiconductor manufacturing capacity in the mainland United States. I have a strong desire to try.

US to Stop TSMC, Intel From More Advanced Chip Production in China - Bloomberg
https://www.bloomberg.com/news/articles/2022-08-02/us-to-stop-tsmc-intel-from-adding-advanced-chip-fabs-in-china

“It is important to note that the CHIPS Act is distorting the semiconductor market,” Thompson said. It will become a political issue,' he said.