Blood For Microchips? What Happens if China Threatens To Cut Off The World's Semiconductor Supply?

There's a global shortage of semiconductors. It's affecting appliances, automobile manufacturing, medical devices, any business that needs a truck, and, well, practically everything that has an "On / Off" switch.

There are few products - and barely any economic transactions - that don’t involve microchips nowadays. And almost none of the chips are made in the United States. To their everlasting shame, America’s most brilliant thought leaders and corporate globalists decided that relying on foreign semiconductor production was a good idea.

In 1990, 37% of global microchip manufacturing was done in the US. That dropped to 12% by 2020, and it’s under 10% today. So where did all the production go? Mainly to Taiwan (aka “Republic of China” ) which currently manufactures 66% of all global microchips, with South Korea at 19% and Communist China at 6%. That totals 91% from just three countries whose fates are pretty much determined by the Chinese Communist Party, with over 70% from China and Taiwan alone.

Do you remember “No blood for oil?” We may soon be discussing whether to spill American blood abroad to maintain the flow of microchips.

Communist China has been saber-rattling about Taiwan for a long time. What would happen if it were to invade Taiwan now? Do we engage in a naval fight with China to protect Taiwan – and the supply of microchips? Or do we stand down and let China have Taiwan, just to keep the microchips coming?

Or, think about this - if China were to simply blockade Taiwan, global manufacturing would come to a screeching halt. And with it, so would global economic activity. So, would China risk the damage it would cause its own economy by blockading Taiwan? Maybe. Or would it only have to hold on long enough until the free world agreed to hand over Taiwan?

Not surprisingly - unless you’re a naive globalist who thinks communist tyrants are just well-intentioned “citizens of the world” - Communist China is hell-bent on becoming self-sufficient in microchip production.

China is positioned to become the largest producer by 2030: its latest five-year plan sets the goal of meeting 70% of its semiconductor needs by 2025.

Gosh. Wouldn't it be nice if America's best and brightest minds thought that way about domestic production of critical goods here in the US?

Compounding the chip shortage problem is that global shipping has been disrupted and there is also a global container shortage. Principled Free Traders™ were completely blindsided by the failure of the Just-In-Time-Inventory gimmick when combined with a vulnerable supply chain coming from the other side of the globe.

On top of that, we have the issue of virtually all semiconductor production coming from one vulnerable little corner of the globe - a corner of the globe with a hegemonic superpower in an expansionist mood. Even children learn not to put all their eggs in one basket, but that concept is somehow alien to the mal-educated executives that roam corporate C-suites. So we're in a situation now in which as Taiwan goes, so goes manufacturing throughout the free world.

Principled Free Traders^TM sometimes mumble that despite their zeal to offshore and outsource everything, they draw the line at national security. But since you can't fire a semi-conductor or eat a microchip, it never crossed their minds that chip manufacturing is a national security issue - that is, if you consider the ability to grow food in the United States as something essential to our national well being.

The biggest factor impacting the ability of U.S. farmers to produce the food we need has nothing to do with the weather, the markets, trade, regulations, or disease. The worldwide shortage of computer chips will impact all aspects of agriculture for the next two years and beyond. Almost every piece of farm equipment, like most everything else in our lives, needs a computer chip to operate.

Those American globalists who determined that microchip manufacturing is not essential to America's national security are as dangerous and ignorant as the government officials who felt qualified to determine which businesses were "non-essential" during the Covid shutdowns.

No blood for microchips. Domestic chip production is critical to our national security. Let's bring it home.

(buck.throckmorton at protonmail dot com)

posted by Buck Throckmorton at 01:12 PM

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