- Scientists in the United States built the first silicon transistor in the 1940s.
- America used to lead the market, but U.S.-based chip manufacturing has declined to about 10% of global capacity.
- If China seized control of Taiwan’s semiconductor factories, the global economic loss would be “mutually assured destruction.”
President Joe Biden was in Phoenix this week to celebrate a Taiwanese semiconductor company’s decision to build two factories in Arizona, and political leaders on the left and right couldn’t express enough how important this is for America’s economy.
It almost made me believe we’re a united nation again.
Republican Gov. Doug Ducey gushed, “There is no better proof of how important this facility will be than by President Biden’s visit.”
Biden, who signed the bipartisan CHIPS and Science Act in July to boost domestic manufacturing of computer chips and to counter China’s edge, noted the presence of the CEO of Apple, which has announced plans to buy chips made at the north Phoenix facility: “These (will be) the most advanced semiconductor chips on the planet. The chips will power iPhones and MacBooks, as Tim Cook can attest.”
The Taiwan Semiconductor Manufacturing Co.’s $40 billion investment in Arizona means more jobs, more business and more innovation. But it not only benefits the state where I, an Arizona State University grad, grew up. It’s good news for all of America, too.
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How tiny semiconductors cast a world wide web
Scientists in the United States built the first silicon transistor in the 1940s, and America used to lead the market. But U.S.-based chip manufacturing has declined to about 10% of global capacity.
Americans didn’t notice the decline until COVID-19 threatened the global supply chain, driving home how much of what we depend on – cellphones, cars, home appliances – depends on these chips. The raw materials come mostly from Japan and Mexico, and the chips are mostly made in Taiwan, South Korea and China.
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It’s not only about economic strength. It’s also about America’s national security.
“All major U.S. defense systems and platforms rely on semiconductors for their performance,” the Center for Strategic and International Studies reports. “Consequently, the erosion of U.S. capabilities in microelectronics is a direct threat to the United States’ ability to defend itself and its allies.”
What keeps me up at night
Guess which country we depend on for chips to power our drones and missiles? Taiwan, which produces most of the world’s advanced semiconductors.
And guess which manufacturer makes the best? Taiwan Semiconductor Manufacturing Co. (TSMC), which The New York Times’ Jeff Sommer says “may be the most important company that most people in the United States have never heard of.”
But what nation with a population of 1.4 billion looms just over 100 miles off the island nation of Taiwan, population 24 million? What nation views Taiwan as a breakaway territory and keeps threatening its independence, encouraged by Russia’s invasion of Ukraine?
China, which ruled my birth nation of Vietnam for a thousand years.
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The center of the world
In Vietnamese, heavily influenced by Mandarin, the term for China is “Trung Quoc” – meaning central nation.
China still considers itself the center of the world, and President Xi Jinping has been growing his nation’s military and economic influences to challenge both the United States and Russia.
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And guess which country China depends on for the most advanced chips to power its economic and military engine?
“China is similarly reliant on the highest-end chips produced in Taiwan,” writes Dexter Filkins at The New Yorker. “If China seized control of Taiwan’s semiconductor factories, it could conceivably force local workers to run them. But the factories depend on a constant flow of Western material, software, expertise, and engineers, without which production would cease in a matter of weeks.”
One industry executive told Filkins that the global economic loss would be “mutually assured destruction.”
Semiconductors are the new oil
U.S. political and corporate leaders know this: Semiconductor manufacturing is now as crucial as oil production has been.
It’s why, in the mission to return chip manufacturing to America, new plants have been announced from Arizona to Idaho to Ohio to New York.
It’s why this divided Congress united to pass the CHIPS and Science Act, giving roughly $52 billion in incentives to the semiconductor industry.
Tuesday was Biden’s first visit to Arizona as president. In his remarks, he called Morris Chang, 91, a graduate of MIT who founded TSMC in 1987, “a pioneer.”
“As we build the stronger supply chain, our allies and partners are building it alongside us as well,” Biden said. “What we’re doing here in Arizona matters across the country and around the world.”
What matters is that more semiconductors will be made in America again.
Thuan Le Elston, a member of USA TODAY’s Editorial Board, is the author of “Rendezvous at the Altar: From Vietnam to Virginia.” Follow her on Twitter: @thuanelston
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