Microchips and the Macro World: Semiconductor Shortage Ushers in East-West Tech War


28-02-21 10:40:00,

WASHINGTON — A worldwide semiconductor shortage has upended the best laid plans of several major industries — including automobile, TV and laptop manufacturers — which have been forced to cut back on production and delay shipments as they try to weather the storm hitting one of the cornerstones of the global supply chain.

On Wednesday, President Joe Biden announced a 100-day review of “key products including semiconductors and advanced batteries used in electric vehicles” as part of an executive order signed one day after Majority Leader Chuck Schumer directed the relevant Senate committees to “start drafting a legislative package to outcompete China,” based on a bill he introduced in May of last year called the Endless Frontiers Act.

Earlier this month, General Motors was forced to shut down three plants and slow down production at a fourth as a result of the semiconductor crisis. Automakers across the globe are facing similar problems, with Ford, Honda and Volkswagen – the world’s largest car maker – all slashing production as they try to find alternative suppliers of the critical piece of technology, which has been dominated by Taiwan since it overtook Intel as the largest manufacturer a few years ago.

Some have laid the blame for the $60 billion shortfall in chips on Covid, attributing the bottleneck to pandemic-related issues like remote-work logistics at car manufacturing plants and the diverting of chip production capacity to consumer electronics. That shift came in response to rising demand in the wake of “virtual working patterns” resulting from lockdown policies, according to Ford’s chief product platform and operations officer Hau Thai-Tang.

This narrative conceals the deeper realities of Washington’s pernicious influence in Taiwan and the impact of Trump’s trade war with China, with its direct attacks on Chinese technology company Huawei in particular, which set the stage for the shortage itself and possibly undermined America’s own position of strength in the Taiwanese semiconductor industry.


End of an era

The Taiwan Semiconductor Manufacturing Corporation (TSMC) controls “half of the world’s foundry chip capacity” and maintained a position of dominance in the sector even before surpassing Intel, according to China-U.S. policy expert Peter Lee,

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