Short - The Impending Taiwan conflict

Courting conflict.

This is the super-short piece I mentioned in the piece below.

Beyond Mathematical Probability - 0 chance events, everywhere

Taiwan raids Chinese firms in latest crackdown on chip engineer-poaching

Taiwan authorities raided ten Chinese companies suspected of illegally poaching chip engineers and other tech talent this week, the island's Investigation Bureau said on Thursday, the latest crackdown on Chinese firms to protect its chip supremacy.

An engineer holds a chip at the Taiwan Semiconductor Research Institute in Hsinchu, Taiwan, February 11, 2022. REUTERS/Ann Wang

This is truly the most important piece of news this entire month, and even in retrospect when you go through all the data, information and events, this is still the most meaningful one.

Taiwan has been lowkey provoking China, and baiting the West into its future conflict, similar to Ukraine, but arguably Taiwan is more important for most nations than Ukraine, and it should be clear by now why. Semiconductors and microchips.

My first Beyond Mathematical Odds was about this subject, chips. And there I mentioned the shortage would last till 2024 minimum, regardless of whatever happens, whichever fabs (factories specialized in semiconductor and chip production) they promised to build.

Semiconductor Shortage May Be Here to Stay

Intel CEO Pat Gelsinger has cautioned that the semiconductor shortage will last until 2024, a scary reality for manufacturers, businesses and consumers alike.

Semiconductor chips, or microchips, are essential for many digital consumer products. Anything that processes information uses these chips and with the exponential growth of technology, there has been a massive increase in demand. 

“The rapid acceleration of the internet of things (IoT) to date and to come forever moves semiconductors ahead of oil as the world’s key commodity input for growth,” according to economic investment firm TS Lombard. 

Although the U.S. leads the world in developing and selling semiconductors, manufacturing has shifted to Asia. Taiwan and Korea account for 83% of global processor chip production and 70% of memory chip output, according to the Semiconductor Industry Association. 

In many of these Asian economies, harsh lockdown measures were put in place in response to COVID-19, causing bottlenecks in the supply chain. As a result, certain manufacturing tools are unavailable, limiting chipmaking capacity. 

The shortage was originally projected to last until 2023, but Gelsinger now predicts that it will roll into 2024. 

“The shortages have now hit equipment and some of those factory ramps will be more challenged,” Gelsinger explained.

Another source for the same article.

Something I did not touch upon even once here was a quiet, but meaningful shortage that has been building up since mid-2021, the equipment and parts shortage. And this one has been impactful in many industries, not just chips one. Bayer had a massive disruption a few months ago because its supplier of one of the main chemicals to produce Round-Up had one of its machines brokedown and it would take 3 months to get it fixed.

The same occurred in some chip factories, where some of the very specialized tools had big wait times for replacement (up to 12 weeks sometimes). Even tool manufacturers were facing the same, a huge portion of this damage because of the lockdown last year in China.

China has been on war footing for months now, and all the signs are there, and Taiwan is overplaying its hands, and over-relying on the USA to come to the rescue. Keep an eye on Taiwan.

A virus post coming tomorrow, maybe a longer one, maybe a short one, undecided, prefer not to send two e-mails every single day.

I hope all of you have a great weekend, get off the internet. Go enjoy life, and do something you like.