Taiwan is now Arrakis
Epsilon Theory
July 27, 2020·37 comments·Politics
The world's most critical commodity for modern power is now concentrated in one place under precarious control. While American policymakers debate trade deals and regional disputes, the real leverage has quietly shifted. The gap between what we're told matters and what actually determines global dominance has become impossible to ignore.
- American semiconductor dominance has evaporated. Intel, once the crown jewel of US innovation, is now outsourcing advanced chip production to Taiwan. The world's principal supplier of semiconductors is no longer American.
- This wasn't inevitable. It was a choice. Financialization and short-term thinking pushed companies to outsource manufacturing rather than maintain domestic capacity. Years of decisions by corporate leaders prioritized quarterly returns over strategic resilience.
- Taiwan's TSMC now controls the bottleneck. The company's leading-edge capacity is fully booked. Intel orders 180,000 wafers. Apple is building R&D plants there. Every major tech company depends on one island's production.
- Both the US and China face the same impossible math. The United States cannot maintain global power without control over semiconductor supply. China cannot consolidate power without it. Neither can tolerate the other having it.
- Every other geopolitical issue becomes secondary. Hong Kong, trade disputes, the South China Sea, technology regulation. None of it compares to who controls the spice. The real conflict is no longer hidden. It's just not being openly discussed.
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Interesting, TSMC is looking for land right now in the Phoenix-area for a huge manufacturing plant.
We are Duned!
Ha! I just finished reading Dune yesterday; it’s been over 30 years since the last time I read it.
It is amazing how we find so many short-sighted ways to put ourselves at a long term disadvantage.
Good thing Taiwan is in such a defensible location…
This is somewhat of a departure from Moore’s Law.
Maybe we can ‘worm’ our way in.
Two things embedded in this piece that are worthy of further thought, IMO:
(1) if the world’s “most important commodity” is now information (yes, I know - oil is still foundational) than computer processors and say, search algorithms, are of strategic importance themselves (what you’ve said, obviously, with this entire piece and comparison to Dune) — truly living in an age of information though, processors and tech can change the balance of power instantly, like a digital Dreadnought, and
(2) the great, overarching, slow-motion story of the age is the conflict between the nation-state and non-state actors. This instance puts this idea in stark relief as corporations that are not constrained by national boundaries or dictates can cause “problems” for countries.
Just some thoughts.
Back in the late 60’s, I was an assembler language programmer on a 16 bit 64 KB Varian 620i. It was the size of a small refrigerator. Most programming errors (bugs) were initialization or reinitialization flag flaws. These flags were usually set with a single bit in one byte of core (ram).
Yesterday, my grandson showed me his toy camera which had a 32 GB mini-SD card smaller than my little fingernail. I don’t code anymore, but I would suspect flags today are still set with only a few bits in a byte. So I would suspect the real power (spice) will be manipulation of the flags, not the flag holders.
At this point, BenH might be thinking exactly right, it’s not about the supply, it’s about the backdoor intercept loop that only insiders are aware.
(Interrupt loop)
Can you expand on the end there? Are you speaking metaphorically or literally? That is, do you mean it matters how the actual chips can be manipulated by state actors?
The users of the circuits can indirectly be utilised.
It is a food chain.
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