Today about a trillion chips are made a year, or 128 for every person on the planet. Ever more devices and machines contain ever more semiconductors: an electric car can have over 3,000 of them…For decades a vast network of chip firms has co-operated and competed to meet this growing demand; today they crank out $450bn of annual sales…When the supply chain misfires, economic activity can grind to a halt.
(The Economist, Jan 23)
Matthew Orf:
- The temptation for governments to provide subsidies could further hamper geographic diversification in cutting-edge manufacturing.
- The US lags here and the current manufacturing duopoly – Samsung and TSMC – is set to become stronger.
- There’s larger and longer-term geopolitical considerations here; chips are becoming the new oil, as access becomes increasingly vital.