Not a single chip

The struggle for "chipization" entered the political arena. The United States is ready to discredit competitors for victory....

Turning sand into silicon is not our profile, replied Ren Zhengfei, founder of Huawei, a world-famous company that claims to be in the forefront in technology 5G and has already made an application for a breakthrough in the field of 6G. But it turns out that such political parties as the "four" consisting of Australia, India, the USA and Japan may well announce a "common initiative on semiconductors." No one in the world could even think that turning sand into silicon was "their profile." And then there is a coalition of cryptographers that ensure security in cyberspace. And on the horizon is the "union of nuclear submarine countries."

Coalition fungus

And all this in September. International "interest unions" are fruitful, like mushrooms. The diverse connections of elites, hidden in the depths of the English-colonial past, form invisible transoceanic "mushrooms of interest." Coalitions and alliances are growing on them, the correspondent of The Moscow Post reports. The first union has been for several years. This QUAD is a four-way security dialogue. At the invitation of Joe Biden, the leaders of Australia, India and Japan arrived in Washington for the first face-to-face QUAD summit.

A coalition is growing near QUAD, whose task is to help Australian submarine sailors master the intricacies of controlling nuclear attack submarines. Contracts for the construction of submarines pass from slow France to energetic Americans and Britons. A hat of a new union called AUKUS is breaking through to the surface of the Indo-Pacific region. This is the second fruit of the "coalition mushroom."

In the future, this bite union will oppose China, and maybe Russia, depending on the training of crews. But training, like Australia's presence of atomic submarines, is profitable and capital-intensive. In the meantime - and this is the whole idea - nuclear submarines can be rented. Or bought with the teams.

But the main thing is not even submarines and their crews, but cruise missiles, the handling of which NATO submarines will train Australian submarines. And then - this is the access of nuclear submarines of the two countries of NATO nuclear countries to ports (bases) in Australia, successfully located in relation to China and the DPRK. All this can happen much earlier than the promised deadlines for the construction of the first Australian nuclear submarine.

The French Foreign Ministry said that the deal to transfer technology for the construction of nuclear submarines to Australia requires verification of compliance with the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). Macron's exchange of views with Biden over the phone ended with agreements to hold "consultations aimed at creating conditions for confidence and proposing concrete measures to achieve common goals."

Further, circles went along the political smoothness of the two oceans. The Mushroom can give seedlings in Tokyo, left outside the AUKUS, but forced to think about Pyongyang's nuclear missile potential. Two candidates for the post of head of the ruling Liberal Democratic Party (LDP) spoke out for the Japanese self-defense forces to also acquire nuclear submarines. The Chinese Foreign Ministry noted that AUKUS not only violates the NPT, but undermines the efforts of China and ASEAN to maintain peace.

These are the first fruits of the "era of unrelenting diplomacy" on Joe Biden!

Chip Coalition and Encryption Union

Following the results of the summit of leaders of QUAD in Washington on September 24 the White House confirmed that "ways of development, development, managements and uses of technologies have to be defined by the general democratic values". Two new "thematic unions" have become products of "mushroom interests" in the field of microcircuits and cyber security.

Global chip shortages have led to serious problems in a number of industries, including the US and Japan automotive industries. The shortage was exacerbated by winter storms in Texas, where large chip manufacturing plants are located, as well as a fire at the factory of the Japanese company Renesas Electronics, which accounts for a significant part of the world supply. Chips are manufactured by Taiwan (58.8%), South Korea (18.8%). The share of the United States is a little more than 7% of total production.

In the "semiconductor" direction, it was announced: the "launch" of the initiative on the supply chain of semiconductors and their vital components necessary for the digital economy; stated support of expansion and diversification of systems of broadband communication 5G. Both of these areas coincide with the interests of the United States, give them international color, pull Japanese technologies and India's programming potential to cooperation.

In the area of cyber threats, the goal is to increase the sustainability of critical infrastructure by combining and implementing best practices in the field of common cyber standards and secure software, creating a safe and reliable digital infrastructure, and training personnel. The Quartet countries will create a special group to work together on these issues.

Taiwan: Between Market and Sanctions?

In the long term, the White House has set the task of creating its own "chip manufacturing capacity," as well as improving the sustainability of the supply chain. This was said to be crucial to improving economic competitiveness and national security.

Maybe this explains the persistent interest of the White House in Taiwan?

Taiwan Semiconductor Manufacturing Company (TSMC) has a 51% share in global chip production. Among competitors, the company ranks third in the world in capitalization ($265.5 billion), ahead of Intel, and controls more than half of the market for custom-made integrated circuits, in some segments it has become a monopolist. TSMC products are used by Apple, AMD, Qualcomm, Nvidia and hundreds of other companies. In 2021, the company plans to invest $25-28 billion in production, more than planned by Intel and Samsung.

TSMC accounts for 40-65% of all global revenue in the production of 28-65 nanometer (nm) components that are used in the automotive industry. TSMC occupies about 90% of the market in the production of high-tech 5-10 nm chips. Leading developers like Intel prefer to specialize in the design of microprocessors and transfer the production of silicon wafer blanks to enterprises such as TSMC. Outsourcing practice has led to the fact that TSMC has practically no competitors left. The most advanced technical process in 3 nm was mastered only by South Korean Samsung.

In 2020, TSMC, under pressure, agreed to build a plant in Arizona. The cost of the project is $12 billion, the capacity will be about 3-4% of the total production of the Taiwanese parent company, but the unit costs will be 8-10% higher than in Taiwan. Washington will compensate for the difference. Moreover, the plant will operate on 5-nm technology and when it comes into operation will lag behind 3-nm production in Taiwan. The products will be used by the Pentagon, which is very worried that semiconductor production is abroad. The US plant, they write, can help TSMC avoid export restrictions.

TSMC also has its factories in China. One (TSMC China Company Limited, Fab 10) is located in Shanghai, the second (TSMC Nanjing Company Limited, Fab 16) is located in Nanjing. The company receives about 60% of its revenue in the United States and about 20% in China.

Huawei, which annoys Washington

In the field of chips, microprocessors, and telecommunications equipment, China may also have been an incentive for Washington to form alliances and coalitions. In particular, Huawei claims to be superior in 5G technologies, making an application for a breakthrough in the field of 6G, accumulating experience in the use of 5G in industrial enterprises and infrastructure facilities, like airports.

According to Washington, spyware can be installed on Huawei devices. In this regard, a ban on the use of its equipment was introduced for state institutions. The government instructed providers, officials and all Americans not to use the products of Chinese companies of this profile at all. The UK a year ago abandoned Huawei as a supplier of 5G networks. The company is almost removed from the US market for national security reasons. Washington deprived her of access to important chips for smartphones.

Semiconductors play a key role in consumer electronics, automotive, and the defense sector. Nevertheless, "this is not our profile," said Ren Zhengfei, founder of Huawei.

The telecommunications giant ranks 44th in the Global 500 ranking this year, with a capitalization of $197 billion. For the six months of this year, revenue amounted to $46 billion, although losses from sanctions in the smartphone segment may exceed $30 billion. The company continues to grow its network of 5G in China, introduces its equipment in Africa, and studies artificial intelligence. The list of its devices is not limited to phones. This is only part of the product. In June, the company launched its HarmonyOS operating system, competing with Android and iOS, a series of new phones, tablets and smart watches.

It is a shame for the United States to lag behind China as manufactured equipment, to buy it from China - especially. While President Biden spoke at the UNGA session, Taiwan was preparing for the election. And he chose a new president. Zhu Lilun (Eric Zhu), chairman of the Kuomintang party, won. Chinese President Xi Jinping sent a telegram, expressed hope for inter-party cooperation "for the sake of the happiness of compatriots, peace in the Taiwan Strait and the unity of the nation." Zhu Lilun replied that he was ready to restore relations, create "platforms, as well as channels for interaction," possibly expanding it in the field of chips and telecommunications equipment.

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