Computer chips are dominating conversations from the boardrooms of big tech and the forming of the x86 advisory group to the international stage of global politics.
More tech gadgets are destined for our homes as our inboxes fill with Black Friday and Cyber Monday emails. However, with every new Apple device being more about Apple Intelligence than the shiny new hardware, many believe that computer chips are becoming the new nuclear arms race.
In 2021, Reuters revealed a single point of failure, with Taiwan accounting for 92% of the world's semiconductor manufacturing capacity. These chips power everything from smartphones to self-driving cars and are one of the biggest reasons for Nvidia's success and the AI chip market, which is expected to reach $260B. In short, our dependency on all things digital or teaching has an insatiable thirst for better chips and semiconductors.
Chips become the shovels in the AI gold rush
Just as prospectors needed shovels to unearth gold during the gold rush of 1849, today's AI revolution hinges on semiconductor chips, and this time around, it's Jensen Huang selling the shovels in a leather jacket.
At the recent Lenovo Tech World event, Intel and AMD put their differences aside to launch the x86 advisory group, including Broadcom. The group was widely seen as the old guard joining forces in the wake of AI PCs running Arm chips. Elsewhere, Arm announced that it wanted to cancel Qualcomm's chip design license with a legal battle set to hit federal court in December.
A loss for Qualcomm could lead to the halt of shipments of new laptops that contain the arm chips with nearly 20 partners, including Microsoft. Although analysts believe a settlement is more likely, semiconductors are increasingly used as bargaining chips as global tensions continue to rise.
Russia's $2.54 billion plan for semiconductor independence by 2030
As China and the US find themselves in a semiconductor arms race, there are more than a few echoes from past global conflicts. The race for semiconductor supremacy can be traced back to the Cold War when Russia and the US recognized how semiconductors would impact everything from their military capabilities to economic strength.
Building upon the Cold War legacy, Russia recently revealed that it was spending $2.54 billion on domestic chipmaking tools by 2030 to reduce reliance on foreign technology.
Russia's semiconductor industry is constrained by outdated technology and dependence on chips outside the country. Something needed to change, with only 12% of production tools sourced domestically.
Unsurprisingly, The Russian Ministry of Industry and Trade (Minpromtorg) and MIET have set plans to localize around 70% of the tools and materials essential for semiconductor manufacturing. This move focuses on equipment, materials, and electronic design automation (EDA) tools for a range of technologies from 180nm to 28nm.
By 2026, Russia also aims to produce its own lithography equipment for 350nm and 130nm processes and electron beam lithography for 150nm nodes. Domestic silicon wafer production is also planned. By 2030, the goal is to manufacture lithography systems for 65nm and 90nm processes. But it's still lagging international standards by about 25 to 28 years.
It's a long road ahead, but this is the first step in Russia's journey to reduce its dependence on other nations. Expanding its microelectronics, photonics, and power electronics capabilities will be a massive step toward its goal of tech independence.
Chips and sanctions
In the US, lawmakers revealed plans to curb foreign influence on US chip manufacturing. A bipartisan bill was raised to prevent companies receiving CHIPS and Science Act funding from purchasing chipmaking equipment tied to China, Russia, North Korea, and Iran.
The new restrictions will apply to big industry players like Intel and Taiwan Semiconductor Manufacturing Co. The bill highlights a broader US strategy to safeguard domestic semiconductor production from geopolitical risks. Ultimately, this reinforces the goal of a secure and self-reliant supply chain as global tensions continue to rise.
The US made similar strategic moves last year when it banned exports of Nvidia and AMD's GPUs to some Middle Eastern countries after the United Arab Emirates (UAE) was accused of being a "transshipment point" for Russia to avoid sanctions.
Computer chips and the battle for tech sovereignty
The tiny chips in our devices are sparking boardroom debates and reshaping global alliances. Tech giants like Intel, AMD, and Broadcom find themselves dragged into a modern arms race with rising export and sourcing restrictions while attempting to adapt to AI-driven shifts.
Much like the Cold War, the competition for semiconductor dominance is at the heart of securing national interests. This intersection of technology policy, geopolitical tensions, and security concerns is driving nations toward self-reliance. But where is this taking us?
Efforts to gain control over semiconductor supply chains look set to intensify in 2025 and beyond. Recent headlines suggest the only thing that the world superpowers can agree on is an insular path forward that reduces reliance on foreign equipment while also keeping tech from getting into the hands of what it deems to be adversarial nations.
Semiconductors have evolved from small components to strategic assets, with sanctions tightening and tensions escalating around the world. With Russia and China retreating behind the so-called Great Firewall and the US previously talking about the need for a clean internet, the dream of a borderless internet runs the risk of being replaced by a splinternet.
Ironically, the biggest challenges facing us over the next few years stem from a battle around modern computer chips that have evolved into massive bargaining chips in a high-stakes global power game as old as time.
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