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The New Arms Race: Semiconductors (Microchips a.k.a. CHIPS)–Pt. 2

In my August 23rd post, I described the challenge the U.S. and the West are up against with 90 percent of the world’s most advanced chips coming from Asia.

In this post, I thought it would be helpful to show how advanced chip production came to be dominated by Taiwan and South Korea, respectively, and how the U.S. and the West are trying to bring more balance to the market.

Why Should We Care?

Because semiconductors are the foundation of technology. Again, without chips, nothing technological will work. Nothing.

Very Brief Chip History

First, it sure is ironic that the U.S. fell so far behind in advanced chip manufacturing since it started in the U.S., and, in fact, the U.S. had the largest share of the global chip market at one time.

That’s how the California community known as “Silicon Valley” originated, after all. (Silicon is the most prominent material used in the manufacture of semiconductors.)

Why Did the U.S. Fall So Far Behind?

According to experts, the U.S. fell so far behind because we tried to be equally efficient at the design and manufacture of chips.

U.S. tech companies forgot to develop and build the manufacturing facilities we needed to keep up with the production of our chip designs. We took our eye off the ball—so to speak.

What Has Been Asia’s Production Strategy?

The approach Taiwan’s TSMC (in particular) took was to only focus on manufacturing and left designing to the U.S.

As a result, they built massive state-of-the-art facilities called “Fabrication Plants” or “Fabs”, and advanced methods to manufacture chips. (Not chip design.)

Isn’t One Chip Like Any Other Chip?

Not at all.

We can produce chips for our microwaves, coffeemakers and refrigerators, but we don’t produce chips advanced enough for our iPhones. (Reportedly, Apple gets the bulk of their chips from Taiwan.)


There’s something called nanometers in chips.

The lower the number of nanometers, the more advanced the chip is. So, for example, a coffee maker may only need a 28-40 nanometer chips, but our most sophisticated fighter jets need 5-nanometer chips, and the U.S. cannot make 5-nanometer chips (yet) and neither can China.

The smallest transistors in a chip are 10,000 times smaller than a human hair.

50 Billion transistors fit in the average chip, which is about the size of a thumbnail, according to Rick Cassidy, TSMC’s senior executive in the U.S.

How is the U.S. Proceeding?

The U.S. has made $52 billion in subsidies available to U.S. companies to advance our chip manufacturing capacity.

One U.S. company has partnered with a Taiwan’s TSMC to build a fab in Arizona. That fab will cost 12 billion and a few years to build.

Other U.S. tech companies are doing the same in other parts of the U.S.

Why Do We Need Fabs in the U.S.?

With the fluid geopolitical situation in Asia, building Fabs on U.S. soil helps to minimize supply chain disruption.

Bad Actors Want Chips Manufacturing Tech Bad

And that’s why bad-actors will ratchet up its theft of chip technology (IP) any way it can.

This is serious stuff. This is the new arms race indeed.

Note: A few days ago, the U.S. government announced that any U.S. company that receives subsidies through the Chip and Science Act is barred from building chip facilities in China.

DisclaimerIPProbe.Global is a service to the professional IP community. While every effort has been made to check information in this blog, we provide no guarantees or warranties, express or implied, regarding the content provided in IPProbe.Global. We disclaim all liability and responsibility for the qualification or accuracy of representations made by the contributors or for any disputes that may arise. It is the responsibility of the readers to independently investigate and verify the credentials of such persons and the accuracy and validity of the information provided by them. This blog is for general information only and not intended to provide legal or other professional advice.

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Ron Alvarez is an IP investigations and protection consultant and writer in New York City. He is a former NYPD lieutenant where he investigated robbery, narcotics, internal affairs, and fine art theft cases. Ron has since coordinated the private investigation of international fraud and money laundering cases, as well as IP-related investigations and research involving the four pillars of IP: copyright, patents, trademarks, and trade secrets. Ron is a graduate of the FBI National Academy and earned a B.A. in Government and Public Administration from John Jay College of Criminal Justice in Manhattan. He has written a number of articles for various investigative publications, as well as published "The World of Intellectual Property (IP) Protection and Investigations" in November 2021.

2 comments on “The New Arms Race: Semiconductors (Microchips a.k.a. CHIPS)–Pt. 2


    This is a clear and amazing presentation of the CHIP situation
    we did take “our eye off the ball”
    I am in no measure convinced we have reset our focus
    I have no doubt as to the seriousness of the situation
    I have great doubt that our “leadership” is competent to handle this matter in an effective manner.
    Good Work

  2. Pingback: The New Arms Race: Semiconductors (Microchips a.k.a. CHIPS) Pt: 3 – IP PROBE – Blog

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