Chip War | Microchips, Global Chaos | The Hidden Tech Struggle

Chip War | Microchips, Global Chaos | The Hidden Tech Struggle
Quizzed ESL Activities

Semiconductors: A Crucial Component in Modern Technology

Semiconductors are a vital component in modern technology, found in everything from autos to data centers, and are considered more important than oil. The production of these microprocessors is a highly strategic industry, with Taiwan being the world’s largest producer, creating geopolitical tensions, particularly with China.

Taiwan’s Dominance in the Industry

Taiwan’s dominance in the industry is attributed to its strong talent supply, infrastructure, and cost structure, with Morris Chang, the founder of TSMC, being hailed as a national hero for transforming the country into a vital pillar of the global economy. TSMC has become a dominant player, producing 90% of the most advanced processor chips for companies like Apple and Nvidia.

Global Semiconductor Shortage

The COVID-19 pandemic accelerated the demand for semiconductors, but the industry now faces an imbalance between supply and demand, with TSMC running at above full capacity for several years. The global semiconductor shortage, which began in 2021, has had a significant impact on various industries, including the automotive sector, with major companies like Apple losing over $1 billion and car manufacturers halting production lines.

Geopolitical Tensions and the US-China Technology War

The global semiconductor shortage has prompted leaders to reassess their technological dependence, with America, China, and Europe launching initiatives to develop their own microprocessor production capacity. Taiwan has become a focal point in the US-China technology war, with China seeking to expand its influence and potentially take over the island.

US Efforts to Produce Microprocessors

The US is strengthening its ties with Taiwan and countering China’s influence through significant investments in the semiconductor industry. Companies like TSMC and Intel are investing heavily in US-based chip manufacturing, with TSMC announcing a $30 billion investment in Arizona and Intel breaking ground on a new facility in Ohio. The US government has also allocated $80 billion to industry and research, including $52 billion for microprocessors, as part of the Chips and Science Act.

Europe’s Struggle to Regain Sovereignty

Europe is struggling to regain its sovereignty in the microprocessor production race, with the most modern factory, Fab 34, being built in Dublin by American manufacturer Intel, rather than a European company. The European Commission has launched the European Chips Act, backed by €43 billion in public investment, to strengthen its resilience.

Conclusion

The production of microchips is a highly expensive and profitable industry, with only a few companies like TSMC, Intel, and Samsung able to afford the $25 million overhead projectors required for manufacturing. Governments are being called upon to incentivize and partner with these companies to support the growth of the industry, which is crucial for innovation, sustainability, and national security, and to mitigate the risks of relying on a single region for such a critical component.



Term Definition Example Usage
Semiconductors Materials with electrical conductivity between that of a conductor and an insulator, used in microprocessors and other electronic devices. “The production of semiconductors is a highly strategic industry, with Taiwan being the world’s largest producer.”
Microprocessors Central processing units (CPUs) that contain the entire processing system of a computer, including the control unit, arithmetic logic unit, and registers. “TSMC has become a dominant player, producing 90% of the most advanced processor chips for companies like Apple and Nvidia.”
Geopolitical Tensions Strains or conflicts between nations or regions, often driven by political, economic, or cultural differences. “The global semiconductor shortage has prompted leaders to reassess their technological dependence, with America, China, and Europe launching initiatives to develop their own microprocessor production capacity.”
Technological Dependence A situation in which a country or region relies heavily on another country or region for technology, often creating vulnerabilities and risks. “Taiwan has become a focal point in the US-China technology war, with China seeking to expand its influence and potentially take over the island.”
Chips and Science Act A US law that allocates funding for the development of the semiconductor industry, including $52 billion for microprocessors. “The US government has also allocated $80 billion to industry and research, including $52 billion for microprocessors, as part of the Chips and Science Act.”
European Chips Act A European Union initiative aimed at strengthening the region’s resilience in the microprocessor production race, backed by €43 billion in public investment. “The European Commission has launched the European Chips Act, backed by €43 billion in public investment, to strengthen its resilience.”
Sovereignty The authority of a country or region to govern itself and make decisions without external influence or control. “Europe is struggling to regain its sovereignty in the microprocessor production race, with the most modern factory being built in Dublin by American manufacturer Intel.”
Resilience The ability of a system or organization to withstand and recover from disruptions, challenges, or crises. “The European Commission has launched the European Chips Act to strengthen its resilience in the microprocessor production race.”
Innovation The process of introducing new or improved products, services, or processes, often driven by technological advancements or changes in market demand. “The production of microchips is crucial for innovation, sustainability, and national security, and to mitigate the risks of relying on a single region for such a critical component.”
Sustainability The ability of a system or organization to maintain itself over time, often considering environmental, social, and economic factors. “The production of microchips is crucial for innovation, sustainability, and national security, and to mitigate the risks of relying on a single region for such a critical component.”




Semiconductors Vocabulary Quiz

Test your knowledge of semiconductors with this 5-question multiple-choice quiz.

1. What is the term for a company that is a dominant player in its industry, like TSMC in the semiconductor market?




2. What is the term for the lack of balance between the amount of semiconductors produced and the amount demanded by companies like Apple and Nvidia?




3. What is the term for the money given by a government to support a particular industry or project, like the $80 billion allocated to the semiconductor industry in the US?




4. What is the term for a company’s ability to produce goods or services without relying on other countries or regions, like Europe’s goal to regain sovereignty in microprocessor production?




5. What is the term for the process of working together and sharing resources between companies and governments to achieve a common goal, like the partnership between TSMC and the US government to produce microprocessors?




Answer Key:

  1. Dominant player
  2. Shortage
  3. Allocation
  4. Sovereignty
  5. Partnership

Modal Verbs for Speculation and Deduction


Modal verbs such as “may”, “might”, “could”, and “must” are used to express speculation and deduction. In the context of the semiconductor industry, these verbs can be used to discuss the potential consequences of the global shortage, the impact of geopolitical tensions, and the likelihood of companies achieving their production goals. For example, “The COVID-19 pandemic may have accelerated the demand for semiconductors” or “TSMC might be able to increase its production capacity to meet the growing demand.” The correct use of these modal verbs is essential to convey the intended meaning and to sound natural in English.

Quiz: Modal Verbs for Speculation and Deduction


Choose the correct answer for each question:

  1. The global semiconductor shortage ____________________ have a significant impact on the automotive sector. A) may B) must C) could D) might
  2. Taiwan’s dominance in the industry ____________________ be attributed to its strong talent supply and infrastructure. A) may B) could C) must D) might
  3. The US government ____________________ allocate more funds to support the development of the semiconductor industry. A) may B) must C) could D) might
  4. The European Commission ____________________ launch the European Chips Act to strengthen its resilience in the microprocessor production race. A) may B) could C) must D) might
  5. The production of microchips ____________________ be a highly expensive and profitable industry, with only a few companies able to afford the overhead costs. A) may B) must C) could D) might

Answer Key


  1. D) might
  2. C) must
  3. A) may
  4. C) must
  5. B) must

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