Wasn't sure where to put this one: it concerns the economic policy of one of the stalwart US tech companies, HOWEVER, with what we've seen with
supply chain disruptions from COVID and now the brinkmanship with China, this to me feels like a major political issue.
I read a story today that Intel, the world's leading processor company by
, (I believe this includes both personal
computer and enterprise/data center chips), is contemplating
outsourcing all processor
outside the United States.
Think long and hard about the implications of this. The US has a number of edges on other global powers in economic prestige: control of the Petro-$,
control of the most prestigious and widely-followed equity market indices (Wall Street) in the world, of course the leading military supplier /and/
buyer, and technology, and on top of that, leading global producer of software and /some/ computer hardware (see below).
You may or man not have realized it, but already large chunks of the semi-conductor, microprocessor, and data storage manufacturing infrastructure is
concentrated all over Asia. China has secured a good amount of the fabrication and creation of hardware for mobile phones and tablets. South Korea is
another huge player (Samsung). in both mobile and pc/server industry. Other developing countries are rapidly beginning to host hardware companies that
might be leaving China, for political and economic reasons.
Guess what Asian company already hosts a large chunk of processor production for traditional PC and server markets? China you might think. Wrong (and
in some historical contextual way, a little right). It's Taiwan. And guess the leading contender where Intel is considering moving their processor
fab plants to?
Many of these processors are made at facilities in Oregon, Arizona and New Mexico. If Intel outsources this work, it would likely be done by Taiwan
Semiconductor Manufacturing Co., which focuses on production and is currently the world leader. It’s based in Hsinchu, one of the closest
Taiwanese cities to China, which considers the Asian island a rogue province rather than an independent country.
They are kicking around the thought of moving their manufacturing operations to Taiwan. Yes, that minuscule island country right off the coast of
China. The one that is always in the news as a source of tension between US and China. The place that many analysts believe China is poised to
military invade at some point soon.
There is so much to unpack with this story.
Think above about where much of the computer hardware technology is created today, particularly the mobile and consumer-focused sectors. Now, imagine
if ALL processor hardware, including chips like Intel Xeon which is a major workhorse for US and really global tech and business enterprises, is
produced by and large mostly in Asia. Go into many data centers around the globe,and you will see that little sticker 'Intel Inside' plastered on
all the computer racks in the building.
Consider, as noted in the linked article, what an exodus from US would do to tech jobs at Intel plants, around the West Coast and Pacific North West.
Gone, vaporized, nada. Those states would take big hits economically.
This is really just small potatoes from national context and US perspective. Think about the next COVID, or the next typoon that wreaks havoc on key
Asian cities where computer hardware is made (2011 flooding that
, driving up hard drive prices). These
events already disrupt US tech and business operations, and I have seen this first hand. Imagine now that a Black Swan event takes out processor
manufacture in Taiwan, natural disaster, war, terrorism. Where does that leave the US companies needing to build server-grade machines??
That leads into the political arena. Taiwan is so close to China, so vulnerable, it'd be very easy for China to either try to capture or just plain
annihilate the processor fab plants there.
Maybe now folks are getting a sense of why such a small, tiny island country so far away is always so prominent in geo-political issues. Everyone is
so concerned with China infiltrating mobile and tablet platforms, at the firmware/device level. Just wait until the control all or 90+% of the worlds
processor production. "All your data belongs to us"
If you are a US citizen, think long and hard about what you've seen with supply shortages from COVID, or from other disruptive events in
Asia-Pacific. If you work in the tech sector, this should really make you think about where things are heading. Without a leading edge in technology
production, the US is VULNERABLE, vulnerable economically, vulnerable militarily (even US military uses a lot of commercial grade processors for
This is a bad idea, from the US perspective, particularly with how tensions with China are ramping up.
But hey, it's no big deal right? All our other stuff is made "off shore", why not one more item?
"The Capitalists will sell us the rope with which we will hang them.”
- attributed to V. Lenin, USSR