Chips are Weapons
The Soviet Union used nearly 300 foreign agents, over 50 of them in Silicon Valley, in their attempts to steal chips during the 1970s and 1980s. Even after attempted and successful bribes to top-level engineers, and even as they stole hundreds of manufacturing machines, they couldn’t come close to the technological supremacy of the Americans.
Just like the Iraqi war showed the Soviets that their defenses – which Saddam Hussein relied on against cruise missiles and the stealth bomber – proved inept and ill-suited, so do their Russian-made chips achieve disastrous outcomes in Ukraine today.
Literally, the Russians are disassembling washing machines to get their hands on chips, because chips make the world go round.
After the Soviets realized how behind they were on chips, they surrendered to the United States, and American hegemony in the 1990s birthed the internet boom and hyper-globalization.
Outsourcing and open markets were praised as the way of the future and, any politician who raised his voice about the risks of making deals with the devil and selling chip superiority for cheap to the Asians, were criticized for thinking in the past tense.
Then, the risks became real.
Today, China and Taiwan are technological beasts.
Taiwan is the crown jewel in cutting-edge chip manufacturing and design (the more important aspect of this ultra-crucial industry), and China is also a big player.
China’s highest priority is to raise the income level of its population, so that they can afford to go to school and get educated.
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This is the reason China is trying to incentivize more of its citizens to consume and to grow its domestic economy.
They need Artificial Intelligence engineers, so they will not end up like the Soviet Union.
So, how does Taiwan come into the picture?
Forget anything you have heard or seen about TSMC up to this point and just memorize this next line: TSMC needs to be manufacturing chips uninterruptedly or we enter WW3.
Whoever interferes with TSMC will feel the wrath and might of the biggest military force this world has ever known.
China won’t invade Taiwan, because within minutes, it will face enormous bombings and scores of casualties and will regret every second of it.
What it may do instead is tempt fate and try to form some kind of blockade or siege of the island.
Chips are the most valuable commodity in our lives and if TSMC or ASML face manufacturing problems, the greatest depression in human history will ensue.
No government in the world can afford to remain indifferent about this subject, so every time you hear about Blinken or Yellen going to China, it is to make damn sure the stakes are understood by all.
So, China won’t invade Taiwan, but the back-and-forth between the countries will continue to entertain geopolitical enthusiasts, who interpret the chess match occurring between East and West.
I’m sure you can now assess for yourself why invading Taiwan is suicide and the better way to win the war is to lead the A.I. race.
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