Chip-War between US & China announcing India's Technical Growth
Today’s fast-moving world is fully dependent on electronics, information and technology. These high-end top-notch technologies are used through advanced electronic gadgets and in every gadget the center of foundation lies in the small microchips. These tiny chips have the conquering capacity and can dictate the modern military, economic, geopolitical scenarios. These microchips or integrated circuits are built from two niche metals- Gallium and Germanium. Microchips are present in almost all the needful demanding products of modern world from household appliances to sophisticated defense systems, mobile phones to cars, toys to high-end luxury products.
America is the most advanced country having all the cutting-edge technologies and it is leading and dominating the electronics industry because it has powerful computer chips. China has been battling neck-to-neck with superpower US regarding these microchips, which is known as Chip War. Economic historian Chris Miller in his book ‘Chip War’ reveals that United States perfectly grasped chip design, and how faster chips helped defeat the Soviet Union. It also mentioned that China spends more money importing chips than buying oil, and they are China’s greatest external vulnerability as they are fundamentally reliant on foreign chips. China is expecting to surpass US and for that reason this tiny little thing is needed badly.
Reports revealed that, 90 percent of the production of these microchips is done in Taiwan with the patronage of US. This incident is poking China’s self-respect, as Taiwan is a neighbor country and earlier it was included in China’s territory.The age-old series of cold war got a new turn when China curbed its export of two metals Gallium and Germanium. This tiny entity is acting as the nucleus of today’s new world and all the countries are racing each other for a share of the manufacturing and supply network. Globalization and digitization have fostered the adoption of highly advanced electronics and information and communication technology. Making Microchips demands a world class technology and high-end laboratories and advanced brains to put the right thing at their right place. Putting up all these factors together into a microchip industry, a nation needs a lumpsum amount of capital.
Until recently, the usage and significance of microchips was not very known to all the countries outside the tech ecosystem and its enthusiasts. The sudden perilous attack of Pandemic made it very clear why we need to move towards digital technology. The prolonged periods of lockdown, the ailing economy pointed out that holding the hands of broadband, information technology is pivotal to prevent such downfall. Prolonged lockdowns across the world brought the microchip industry to a standstill affecting heavily on the natural rhythm of demand and supply chain. The supply chain was drastically disrupted and on the contrary the demand for electronics gadgets like smartphones, laptops, and computers shot up owing to support work-from-home.
The immense shortage of microchips made these two powerful economic giants realize their dependency over the leading producer country, Taiwan. Taiwan produces more than 60 percent of semiconductors globally, and more than 90 percent of the most advanced ones, while US only produces 12 percent, and European Union collectively produces only 9 percent of the world produce. According to the report of Reuters, 90 percent of the microchips used by China are imported from foreign countries, where Taiwan is in the list of ‘Critical Supply Source’. The U.S. wanted to impact China’s A.I. industry and so this year they declared that, a license is requirement to export gallium and germanium, which are the rare-earth metals used in the manufacturing of semiconductor technologies, including computer chips, spy satellites, and artificial intelligence. This declaration backfired at the Biden administration’s mounting restrictions on microchip exports to China.
The Center for Strategic and International Studies report revealed, “China imported $350 billion worth of semiconductors in 2020, which lesser than the value of its crude oil imports. In 2021, China became the world’s largest consumer of semiconductor manufacturing equipment, accounting for 26 percent of global demand. China’s government banned the import of chips made by the US corporation Micron and imposed trade and investment sanctions on Raytheon Technologies and Lockheed Martin”. According to the data, in 2022, Japan and the Netherlands were among the top importers of China’s gallium products.
What is the hopeful side of this political chaos for India?
Chips are the lifeblood of the futuristic economy, and the brains of every electronic device and system, from iPhones to toasters, data centers to credit cards, television to refrigerators. Semiconductors are pioneering and driving force behind the innovations which is poised to revolutionize life over the next century, like quantum computing and artificial intelligence, machine learning, algorithm and so on. China has a remarkable dominance over such advanced electronics, but, their only weakness lies in the semiconductors as they don’t have any advanced manufacturing capabilities. This was one area where the U.S. thought they actually have a disproportionate leverage over the adversary.
Industrial revolution 5.0 would be incomplete if semiconductors are not there. The production of semiconductors will prove to be the bed of roses to reach to a nation with economic excellence. Cold war between US and China can be a golden opportunity for uplifting the economic status of our country. The tiniest, invisible game-changer of the 21st century has ushered in a new decade of industrial revolution and is already turning out to be the anchor of the industrial strength of a country.
According to Ashwini Vaishnaw, Minister of Communications, Electronics and Information Technology, “The first ‘Made in India’ chip should be ready by December 2024 from Micron, and there are two more units expected in the next 1.5 years from other companies in the country. The semiconductor units/ facilities are also getting 200 more partners as part of the ecosystem”.
Henceforth, India has pushed itself to compete in this bottleneck competition by announcing a $10-billion incentive plan to boost semiconductor manufacturing in the country, which is a way forward to PM Narendra Modi’s goal to establish ‘India as a semiconductor manufacturing hub’. For so long India has planned to establish laboratories for producing advanced chips.
Ray of Hope for India’s Tech-based Startups
• Recently, Foxconn Technology Group Chairman Young Liu has inked a memorandum of understanding with PM Narendra Modi and the duo signed a deal of $500 million for construction of two component factories in India. They have chosen southern state of Karnataka as the location for these factories.
• Micron Technology, a leading US semiconductor firm, announced a proposed investment of up to $825 million to build a facility in India, and Indian Government will invest $2.75 billion.
• These announcements have bestowed as blessings on India’s economy by giving birth to many innovative startups and generating 5,000 new direct and 15,000 indirect job opportunities in the next five years.
• Lam Research India Pvt. Ltd has declared that, they will train 60,000 Indian engineers through its Semiverse Solution virtual fabrication platform.
• An American organization Applied Materials, has proposed to invest $400 million to establish a collaborative engineering center in India.
Finally, as a responsible citizen of India we can hope that, this new wave of revolution can really unfurl the Indian flag proudly all over the world and will put a golden feather in the hat of excellence. But, before being delighted we have to remember and take lessons from the previous failed attempts like Foxconn-Vedanta joint venture, or Singapore’s IGSS. Constant supply of clean water with 24*7 steady electric supplies is needed to make microchips, so India needs to buck up.
Despite having created a few decent chip designs, India was not being able to come on top because it lacks in semiconductor fabrication unit. Only one government certified unit is there Mohali, Punjab.The government has already set-up a panel to support start-ups and SMEs (small and medium enterprises) in the sector, but no action was taken. It generally takes 10-20 years to prosper in this industry, but magically, through this political upheaval, India is unveiling a golden opportunity and positioning itself in the global chip war through numerous bilateral ties and agreement. Now, India needs to show its potentiality and it will prove to be a deserving nation to be positioned in the front row with the developed countries.
America is the most advanced country having all the cutting-edge technologies and it is leading and dominating the electronics industry because it has powerful computer chips. China has been battling neck-to-neck with superpower US regarding these microchips, which is known as Chip War. Economic historian Chris Miller in his book ‘Chip War’ reveals that United States perfectly grasped chip design, and how faster chips helped defeat the Soviet Union. It also mentioned that China spends more money importing chips than buying oil, and they are China’s greatest external vulnerability as they are fundamentally reliant on foreign chips. China is expecting to surpass US and for that reason this tiny little thing is needed badly.
Reports revealed that, 90 percent of the production of these microchips is done in Taiwan with the patronage of US. This incident is poking China’s self-respect, as Taiwan is a neighbor country and earlier it was included in China’s territory.The age-old series of cold war got a new turn when China curbed its export of two metals Gallium and Germanium. This tiny entity is acting as the nucleus of today’s new world and all the countries are racing each other for a share of the manufacturing and supply network. Globalization and digitization have fostered the adoption of highly advanced electronics and information and communication technology. Making Microchips demands a world class technology and high-end laboratories and advanced brains to put the right thing at their right place. Putting up all these factors together into a microchip industry, a nation needs a lumpsum amount of capital.
America Vs China-The Real Tough TussleInformation technology and business are becoming inextricably interwoven. I don't think anybody can talk meaningfully about one without the talking about the other ~Bill Gates
Until recently, the usage and significance of microchips was not very known to all the countries outside the tech ecosystem and its enthusiasts. The sudden perilous attack of Pandemic made it very clear why we need to move towards digital technology. The prolonged periods of lockdown, the ailing economy pointed out that holding the hands of broadband, information technology is pivotal to prevent such downfall. Prolonged lockdowns across the world brought the microchip industry to a standstill affecting heavily on the natural rhythm of demand and supply chain. The supply chain was drastically disrupted and on the contrary the demand for electronics gadgets like smartphones, laptops, and computers shot up owing to support work-from-home.
The immense shortage of microchips made these two powerful economic giants realize their dependency over the leading producer country, Taiwan. Taiwan produces more than 60 percent of semiconductors globally, and more than 90 percent of the most advanced ones, while US only produces 12 percent, and European Union collectively produces only 9 percent of the world produce. According to the report of Reuters, 90 percent of the microchips used by China are imported from foreign countries, where Taiwan is in the list of ‘Critical Supply Source’. The U.S. wanted to impact China’s A.I. industry and so this year they declared that, a license is requirement to export gallium and germanium, which are the rare-earth metals used in the manufacturing of semiconductor technologies, including computer chips, spy satellites, and artificial intelligence. This declaration backfired at the Biden administration’s mounting restrictions on microchip exports to China.
The Center for Strategic and International Studies report revealed, “China imported $350 billion worth of semiconductors in 2020, which lesser than the value of its crude oil imports. In 2021, China became the world’s largest consumer of semiconductor manufacturing equipment, accounting for 26 percent of global demand. China’s government banned the import of chips made by the US corporation Micron and imposed trade and investment sanctions on Raytheon Technologies and Lockheed Martin”. According to the data, in 2022, Japan and the Netherlands were among the top importers of China’s gallium products.
What is the hopeful side of this political chaos for India?
Chips are the lifeblood of the futuristic economy, and the brains of every electronic device and system, from iPhones to toasters, data centers to credit cards, television to refrigerators. Semiconductors are pioneering and driving force behind the innovations which is poised to revolutionize life over the next century, like quantum computing and artificial intelligence, machine learning, algorithm and so on. China has a remarkable dominance over such advanced electronics, but, their only weakness lies in the semiconductors as they don’t have any advanced manufacturing capabilities. This was one area where the U.S. thought they actually have a disproportionate leverage over the adversary.
Industrial revolution 5.0 would be incomplete if semiconductors are not there. The production of semiconductors will prove to be the bed of roses to reach to a nation with economic excellence. Cold war between US and China can be a golden opportunity for uplifting the economic status of our country. The tiniest, invisible game-changer of the 21st century has ushered in a new decade of industrial revolution and is already turning out to be the anchor of the industrial strength of a country.
According to Ashwini Vaishnaw, Minister of Communications, Electronics and Information Technology, “The first ‘Made in India’ chip should be ready by December 2024 from Micron, and there are two more units expected in the next 1.5 years from other companies in the country. The semiconductor units/ facilities are also getting 200 more partners as part of the ecosystem”.
Henceforth, India has pushed itself to compete in this bottleneck competition by announcing a $10-billion incentive plan to boost semiconductor manufacturing in the country, which is a way forward to PM Narendra Modi’s goal to establish ‘India as a semiconductor manufacturing hub’. For so long India has planned to establish laboratories for producing advanced chips.
Ray of Hope for India’s Tech-based Startups
• Recently, Foxconn Technology Group Chairman Young Liu has inked a memorandum of understanding with PM Narendra Modi and the duo signed a deal of $500 million for construction of two component factories in India. They have chosen southern state of Karnataka as the location for these factories.
• Micron Technology, a leading US semiconductor firm, announced a proposed investment of up to $825 million to build a facility in India, and Indian Government will invest $2.75 billion.
• These announcements have bestowed as blessings on India’s economy by giving birth to many innovative startups and generating 5,000 new direct and 15,000 indirect job opportunities in the next five years.
• Lam Research India Pvt. Ltd has declared that, they will train 60,000 Indian engineers through its Semiverse Solution virtual fabrication platform.
• An American organization Applied Materials, has proposed to invest $400 million to establish a collaborative engineering center in India.
Finally, as a responsible citizen of India we can hope that, this new wave of revolution can really unfurl the Indian flag proudly all over the world and will put a golden feather in the hat of excellence. But, before being delighted we have to remember and take lessons from the previous failed attempts like Foxconn-Vedanta joint venture, or Singapore’s IGSS. Constant supply of clean water with 24*7 steady electric supplies is needed to make microchips, so India needs to buck up.
Despite having created a few decent chip designs, India was not being able to come on top because it lacks in semiconductor fabrication unit. Only one government certified unit is there Mohali, Punjab.The government has already set-up a panel to support start-ups and SMEs (small and medium enterprises) in the sector, but no action was taken. It generally takes 10-20 years to prosper in this industry, but magically, through this political upheaval, India is unveiling a golden opportunity and positioning itself in the global chip war through numerous bilateral ties and agreement. Now, India needs to show its potentiality and it will prove to be a deserving nation to be positioned in the front row with the developed countries.
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