Dr Gulrez Sheikh
Apple introduced its first Mac computers since 2005, without an Intel microprocessor. Intel—has botched its transition to sub-10-nanometer chips and are still behind.
But, if Intel is a few years behind, China’s lag may be closer to a decade.
And if it wasn’t enough, to rub salt on the Chinese wounds, Apple is getting its processors from Taiwan.
Last year China produced only 16% of the semiconductors it consumed domestically. In 2014, China announced a National Integrated Circuit Plan promising to spend $150 billion to expand local semiconductor manufacturing.
It didn’t work; you can’t throw money at the problem. It takes state-of-the-art equipment & homegrown expertise.
On geopolitical angle- If China’s self-reliance initiative fails, & a Biden administration continues an advanced chip embargo—China would be in a bind. China’s military, in an arms race with the US, has to be nervous about being locked out of sub-10-nanometer chips.
Finally, the CCP-PLA is likely to calculate the costs & benefits of bringing Taiwan’s capacity under its control (by force), even as the U.S. weighs defending it. TSMC (Taiwan Semiconductor Manufacturing Co., Ltd) has five fabs on a single campus, Hsinchu Science Park.
But even the forced control would likely fail almost right away. It’s not just another manufacturing. The formula might be written down but is really in the head of TSMC’s engineers and is tweaked almost daily.
A forced Taiwan takeover would crater output even if China brought in mainland engineers. It’s more art than science.
Plus a forced takeover could generate hefty shock waves capable of damaging China’s economy even more than the pandemic did.
In short, the CCP-PLA have been technologically pushed back at least by a decade. And meantime, the cracks in the global order can be filled.