Have you noticed that your car, your mobile, your TV and your rice cooker have something in common? No, it’s not that all of them make your life easier (or more difficult, depending on how you look at it). It is that all of them have tiny little gadgets called microchips or semiconductors inside. These “little gadgets” are the brains of smart technology, making devices think, talk, and work the way they’re supposed to.
But it turns out that there is a tremendous mess with microchips that is causing chaos in many sectors of the economy and consumers. Because? What happened? Who is guilty? How does it affect us? There’s a solution? These are some of the questions we are going to try to answer here.
The microchip problem is due to several reasons that have come together to create a perfect storm.. On the one hand, the Covid-19 pandemic has made people buy more electronic products, such as computers, consoles, mobile phones and tablets, to work and have fun from home. On the other hand, the automotive industry, which also needs a lot of chips for its navigation, sensor and entertainment systems, has revved up faster than expected after an initial slump.
This caused a mismatch between what is offered and what is asked for microchips, which was further complicated by other problems such as trade rows between the United States and China, natural disasters that affected some factories in Asia and the lack of raw materials. and packaging.
The consequence is that there is a shortage of microchips on the market and manufacturers cannot keep up with the demand. This is noticeable in delays, price increases, and the lack of some technological products, such as graphics cards, mobile phones, consoles, cars, and household appliances. Consumers may have to wait longer to buy what they want or shell out more money for it.
The solution is not simple or quick. Building new microchip factories requires a lot of time, money and know-how. Besides, Microchip technology is peaking and innovation is needed to create more powerful, faster and cheaper chips.
Meanwhile, chipmakers and their customers have to adjust to the situation and find ways to improve production, vary sources of supply and prioritize larger orders.
The microchip crisis teaches us how hooked we are on these tiny gizmos and how exposed we are to their lack. Maybe it’s time to change our relationship with technology and appreciate more what we have. Or maybe not, and we continue buying like crazy the latest that comes on the market. After all, we are human.
But the microchip crisis is not only a problem of how many there are and how many are wanted, but also who is in charge and who defends himself. And it is that the microchip market is dominated by a few countries and companies that have the capacity to design and manufacture the most beautiful chips. And among them there is one that shines with its own light: Taiwan.
Taiwan is the world champion in the production of microchips of the finest, thanks to its flagship company: TSMC(Taiwan Semiconductor Manufacturing Company). TSMC takes 84% of the chip market with the smallest and most efficient circuits, and has such important clients like Apple, Qualcomm, Nvidia or AMD. TSMC is capable of making two-nanometer chips, while its closest competitors like Samsung or Intel are still at five or seven nanometers.
This makes Taiwan a key player in the global technology race, but also a strategic target for its rivals, especially for China. China sees Taiwan as a rogue province that must go back to its corral, and its pulse does not tremble to achieve it. China also wants to depend less on foreign microchips and create its own domestic industry, but it is running into sanctions and restrictions imposed by the United States, which wants to stop the technological and military advance of its main enemy.
The United States is the world leader in microchip design, but has lost steam in manufacturing. For this reason, he seeks to take care of his technology and his national security, and at the same time support his Taiwanese colleague, who he considers an exemplary democracy and a wall against Chinese expansion. The United States has put measures in place to prevent China from having or being able to produce high-end microchips, citing the danger that it will use them for military or espionage purposes. It has also announced plans to invest in developing its own semiconductor industry and to encourage TSMC and other Asian manufacturers to set up factories on its territory.
But the United States and China are not the only ones playing on this board. The European Union also wants to have a more relevant role in the microchip market, and for this it has launched a very ambitious strategy to increase its production and its technological autonomy.. The EU wants to make 20% of the world’s microchips by 2030, up from 10% today, and develop chips of two nanometers or less. To do this, it has the help of companies such as ASML, the Dutch company that manufactures the most sophisticated machines to produce microchips, or Infineon, the German company that is a leader in automotive chips.
The geopolitics of microchips is a battle for control of a key sector for the 21st centurywhich is measured in nanometers and has Taiwan as the great crack. A battle that can affect global stability and security. What can we do? Well little. Just hope that those who rule agree and don’t leave us without our gadgets. Or let us know so we can buy them before. Because life without microchips would be very boring. What would we do without our cell phones, computers, cars, or rice cookers? Would we go back to using letters and newspapers? How awful! Better not think about it. Let’s cross our fingers that the crisis is resolved and we can continue with smart technology. Or at least with technology.
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