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Manish Tewari | Flea wars

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One of the least analyzed reasons for the Chinese aggression in eastern Ladakh since April 2020 is access to freshwater sources. While there has been some discussion and dissection of this school of thought in the rarefied echelons of strategic policy deliberations, the issue has never really traveled within the larger framework of public dialogues. It has something to do with semiconductors or the ubiquitous chip that powers our everyday existence.

A chip or microchip is a semiconductor wafer typically made from silicon that combines an assortment of electronic circuits, incorporating resistors, transistors, capacitors, and diodes that interlock to perform a required task. A single integrated circuit can include thousands to millions of such electronic circuits depending on the computing power required.

Semiconductors dominate the world today. Optimizing and producing faster, thinner and more formidable semiconductors will be critical in shaping the outcome of many of the economic and geopolitical conflicts of our time. As Steve Bank, the mentor of the Lean Start up movement, prophesied, “seizing semiconductors could be the 21st century equivalent of supplying oil in the 20th century.” It is the strategic resource that all the emerging and great powers of the world are in a race to both secure and control.

The omnipotent and captivating silicon shield is what protects Taiwan. Taiwan Semi Conductor Manufacturing Company (TSMC) is the world’s largest third-party chip manufacturer. It has 55 percent if not more dominance of the global market share as it relates to the production of microchips. These semiconductors don’t just power cell phones and laptops, they’re essential to the operation of virtually everything from automobiles to weapon systems.

The fact that TSMC produces the microchips that run the electronics of the Lockheed Martin F-35 Lightning II stealth multirole fighter jet, the US Air Force’s latest gem, is a prime example of the extent of importance strategy of the resource and its supply chain. If Taiwan’s semiconductor industry collapsed, it would not only pose a threat to the national security of the United States, but also to the entire star-shaped security architecture designed by the United States in the world. Thus, Taiwan’s silicon shield is in itself a deterrent weapon for Taiwan, especially against an increasingly expansionary China in the 21st century.

The United States and China are both trying to be self-sufficient when it comes to semiconductor chip manufacturing. If the United States were for some reason deprived of access to Taiwan’s smelters, America’s defense and consumer electronics industries would be in decline by at least half a decade, if not more.

As China invests heavily in establishing its own chip foundries, it could become the world leader in this technology over the next decade. That’s why, one of the first decisions made by the Biden administration was an executive order, issued in early 2021, to address both the chip shortage and shortcomings in its supply chain to the states. -United. This gap is critical for the United States, as its global share of chip manufacturing is only 12%. Much of the U.S. government’s sanctions against Huawei are singularly focused on inhibiting the company’s access to the world’s most modern chip-making technology – Taiwan’s TSMC.

China had foresight that its initial success as the world’s low-cost factory would run its course and that other countries like Vietnam and Bangladesh, to name a few, would soon occupy this space. . As a result, China had to build more advanced and sophisticated products to be on par with the United States. However, most of these products required custom chips – and China lacks the domestic manufacturing capacity to produce them.

China uses 61% of the world’s chips in its products for both its domestic and export markets, importing around $ 310 billion in 2018 alone. China was quick to realize that its inability crafting these fancy chips might just turn out to be the proverbial flaw in its armor.

Beijing has always had great incentives to develop its own local capacity. In total, $ 1.4 trillion has been set aside in the 2021 budget alone for the development of the semiconductor industry. By 2025, the target is that 70% of the chips used in China will be made in China under the National Integrated Circuit Plan. Over 70 projects have been launched using capital spending in recent years alone. China’s semiconductor industry has grown from zero to 16 percent of global chips.

But how does all of this fit together with the larger geopolitical conflicts between India and China? There is a growing realization that the battle between the United States and China for leadership in semiconductor manufacturing is going to divide the world between the haves and the have-nots of microchip manufacturing. This is where India fits into the Chinese plans. The semiconductor industry needs two key resources, sand and fresh water. These are the basic raw materials. 10,000 liters of fresh water are needed to make a 30 cm silicon wafer.

China’s Achilles heel is this availability of fresh water. Major Chinese hydrographic systems such as the Yangtze, Huang Ho and Mekong rivers are teeming with effluents. This is how Kashmir, Aksai Chin and Ladakh became crucial for China. The Taklamakan Desert (located at Aksai Chin) not only provides abundant sand, but also huge reservoirs of fresh water from Himalayan rivers and glaciers. The Shaksgam Valley alone is home to 242 glaciers that can serve as a large reservoir of fresh water for making Chinese crisps. It therefore becomes imperative to see the Sino-Indian impasse through this technological lens as well.

Since 2011, the UPA government has made chip manufacturing a priority. In September 2013, two consortia, including IBM and ST Microelectronics, had offered to build semiconductor wafer manufacturing plants in India for $ 8 billion. However, the proposals died after the NDA / BJP government took office in 2014. Finally, in June 2020, the government finally announced a performance-related incentive for the promotion of electronic components and semiconductors and clusters. manufacturing of electronic products. However, as is the case with the current exemption, it is always too little too late.

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