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The Rise of Taiwan’s Bargaining Power with the US due to Semiconductor Shortage

The Rise of Taiwan’s Bargaining Power with the US due to Semiconductor Shortage

The US President, Joe Biden, signed an executive order addressing the prevalent global shortage of a semiconductor, which has affected smartphones and automobiles’ production. This executive order gives a directive that the federal government conducts a 100-day review on supply chains, focusing on specific products such as large-capacity batteries and computer chips.

According to Biden, it is to ensure that the United States can tackle all challenges it’ll face in this Pandean era and defend climate change, cybersecurity, and similar sectors. It’s best to do this by investing in the country to protect the country’s competitive edge. The shortage of chips is a result of various factors resulting from the COVID-19 pandemic. Online space is the new lifestyle, so consumer electronics manufacturers have noticed an increase in demand for gadgets like laptops. Chip production suffered because of the pandemic, and the trade war between the former President and China further made it harder for US companies to collaborate with Chinese chip producers. The outcome has increased concerns over the shortage by companies like AMD, Apple, Qualcomm, iPhone, and Sony.

The Outcome Of The Executive Order

The US President’s order is to secure supply chains of semiconductors for the production of high-tech hardware. It gives Taiwan, one of the major Chip providers globally, a big commercial boost and makes Taipei more relevant in free-trade talks. With this order, the United States will surmount a shortage of chips that has restricted the manufacture of vehicles, medical supplies, and consumer electronics. It will stir a review process resulting in policy recommendations on how best to reinforce supply chains.

Taiwan takes center stage as the birthplace of Taiwan Semiconductor Manufacturing Co., which produces more chips than any contract manufacturer, with the most sophisticated production processes in the world. They generate semiconductors that function with little power without hampering the speed of a device.

With the coronavirus outbreak in 2020, Telework and remote study increased the demand for chips rather than work with notebook PCs and other kinds of hardware. Global demand for chips is estimated to grow from $450 billion to $600 billion in 2024.

Taiwan has made moves on and off to seal a trade deal with the United States since 1994, being the second-biggest trading partner of Taiwan after China. In 2020, Trades between the U.S and Taiwan hit $90.9 billion. Americans buy Taiwanese goods like chips, machinery, and computers resulting in a trade surplus of $29.3 billion for the Asian manufacturing unit. Taiwan started allowing pork shipment from American pigs raised with ractopamine, a feed additive, and officials of the US complimented this as a huge improvement in trade relations.

The Biden administration has asked Taiwanese officials to push their chipmakers to increase semiconductors’ production despite the shortage of chips for automobiles. America’s demand for semiconductors will boost Taiwan’s position during trade talks by negotiators. Trade talks are expected to occur in a balanced way because of Taiwan’s impact on global semiconductors. Chipmakers in Taiwan will experience an inrush in business due to the shortage, although they’ll have struggles to rank customers by priority.

In 2018, Taiwan Semiconductor Manufacturing Co. hit new records on a $15 billion factory complex with expected volume production to reach full capacity. The complex will manufacture above 1 million wafers annually and give jobs to about 4,000 people. The firm has government clearance to establish a $12 billion factory in Arizona, a U.S state. This plant will produce about 20,000 wafers monthly. The Arizonan project and that in Taiwan are a step in the right direction. United Microelectronics Corp. and Power chip Semiconductor Manufacturing Corp. are producers of chips in Taiwan.

Uses Of Semiconductors

Semiconductors play a vital role in boosting products and services that help the economy and contribute to America’s innovation. With the role semiconductors play, it is important to strengthen the US’s position in semiconductor research, design, and production.

Properties Of Semiconductors

A semiconductor material’s electrical conductivity value falls between an insulator like glass and a conductor like metallic copper. The resistivity falls as temperature rides, but metals are the opposite. It is possible to change semiconductors’ conducting properties by adding impurities into the crystal structure, referred to as Doping. When two distinctly doped regions are in the same crystal, it forms a semiconductor junction. The behavior of ions, electrons, and electron holes at these junctions is the basis of transistors, diodes, and modern electronics. Examples of semiconductors are gallium arsenide, silicon, germanium, and elements close to the periodic table’s metalloid region. After silicon, the second most common is gallium arsenide, and it is used in solar cells, laser-diodes, microwave-frequency  I.C, and other units. Silicon is an essential element for fabricating electronic circuits.

Semiconductor devices can exhibit certain useful properties like the easy passage of current in one direction than the other, with variable resistance and heat or light sensitivity. Since it is possible to modify semiconductor material’s electrical properties by doping or applying light or electrical fields, semiconductor devices can function in switching, amplification, and energy conversion. Besides doping, semiconductor conductivity is improved by increasing its temperature. It is the opposite metal behavior where conductivity reduces with temperature increase. Modern understanding of semiconductor properties depends on quantum physics to explain how charge carriers move in a crystal lattice. Doping increases the charge carriers in a crystal lattice greatly. When a doped semiconductor has free holes,  it is referred to as p-type, and when it contains free electrons, it is called n-type. In electronic devices, semiconductor materials are doped under certain conditions to manage concentration and p- and n-type dopants. A semiconductor crystal can contain many p- and n-type regions, with the p-n junction causing useful electronic behavior. One can determine if a semiconductor is p- or n-type using a hot-point probe. The first application of semiconductor material was developing the cat’s whisker detector in 1904, an ancient semiconductor diode used for early radio receivers. Advancement in Quantum physics led to transistors’ introduction in 1947, the integrated circuit in 1958, amongst other inventions.

In conclusion, the production of Semiconductor chips is essential for use in the development of electronic devices. The present administration has made moves to tackle its shortage and foster better relations with chip manufacturers like Taiwan.

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