Showing posts with label Taiwan. Show all posts
Showing posts with label Taiwan. Show all posts

Wednesday, April 13, 2022

The West's Technological Edge in Geopolitical Competition

The US and its allies enjoy a significant technological advantage over China and Russia.  The Chinese are working hard to catch up but the West is not standing still. It is making huge investments in research and development to maintain this edge as it becomes increasingly clear that the outcome of the ongoing international geopolitical competition will largely be determined by technology. 

East-West Comparison of GDP, R&D. Source: IMF (GDP), OECD (R&D) via WSJ

In 2019, the United States and its allies invested $1.5 trillion in research and development, far outpacing the combined Chinese and Russian R&D investment of half a trillion USD.  This gap will likely narrow if the East's GDP continues to grow faster than the West's, allowing for higher investment in technology. 

After the Russian invasion of Ukraine, the US, EU, Japan, South Korea and Taiwan have made it clear that the Western allies can and will use technology sanctions to control the behavior of China and Russia. 

Taiwan Semiconductor Manufacturing Company (TSMC) will no longer fabricate computer chips for Russia, according to media reports. The ban will particularly affect Russia's Elbrus and Baikal processors, unless China agrees to step in to manufacture these chips, and risk additional US sanctions itself. Both Russian processors use mature 28 nm technology. The world's most advanced TSMC fabrication technology today is 5 nanometers. The best US-based Intel can do today is 7nm technology. China's SMIC (Semiconductor Manufacturing International Corporation) has the capability to produce chips using 14 nm technology.  Semiconductor chips form the core of all modern systems from automobiles to airplanes to smartphones, computers, home appliances, toys, telecommunications and advanced weapons systems.  

While China is the  biggest volume producer of semiconductor components in the world,  the Chinese design centers and fabs rely on tools and equipment supplied by the West to deliver products. Western companies dominate all the key steps in this critical and highly complex industry, from chip design (led by U.S.-based Nvidia, Intel, Qualcomm and AMD and Britain’s ARM) to the fabrication of advanced chips (led by Intel, Taiwan’s TSMC and South Korea’s Samsung ) and the sophisticated machines that etch chip designs onto wafers (produced by Applied Materials and Lam Research in the U.S., the Netherlands’ ASML Holding and Japan’s Tokyo Electron ), according to the Wall Street Journal. 

There is no question that the current western technology sanctions can seriously squeeze Russia. However, overusing such sanctions could backfire in the long run if the US rivals, particularly China and Russia, decide to invest billions of dollars to build their own capacity. This would seriously erode western technology domination and result in major market share losses for the US tech companies, particularly those in Silicon Valley. 

Related Links:

Haq's Musings

South Asia Investor Review

Pakistani-American Banker Heads SWIFT, the World's Largest Interbank Payment System

Pakistani-Ukrainian Billionaire Zahoor Sees "Ukraine as Russia's Afghanistan"

Ukraine Resists Russia Alone: A Tale of West's Broken Promises

Ukraine's Lesson For Pakistan: Never Give Up Nuclear Weapons

Has Intel's Indian Techie Risked US Lead in Semiconductor Technology?

US-China Tech Competition

Can Pakistan Benefit From US-China Tech War?

Ukraine's Muslims Oppose Russia



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Sunday, March 28, 2021

Is "Ever Given" Container Ship's Indian Crew At Fault For Blocking the Suez Canal?

Ever Given container ship that ran aground and blocked all shipping traffic through the Suez Canal, the busiest waterway in the world, has just been re-floated.  The mega cargo ship's captain and the entire crew are Indian, the owners and shipbuilders are Japanese, the operator is German, the insurance company is British, the charterer is Taiwanese and the cargo is Chinese, according to media reports. The ship was reported blown aground by strong winds. 

Ever Given Stuck in Suez Canal. Source: Bloomberg

The 200,000-ton, 1,312 ft-long, 175 ft-wide cargo ship got stuck in the Suez Canal last Tuesday. About 30% of global cargo ship traffic remained blocked with 50 ships added to the jam every day the vessel remained stuck, As of yesterday, there were $10 billion worth of goods with nowhere to go with more than 300 ships carrying products across multiple industries now stuck in the gridlock.

This is a major incident that will undoubtedly be investigated to prevent its recurrence. Early reports, however, indicate that there were significant errors made by the crew which might have contributed to the problem. Moments before the ship ran aground, the Ever Given was apparently traveling faster than the speed limit set by the Suez Canal Authority, Bloomberg reported. The ship's last recorded speed was 13.5 knots, logged 12 minutes before it grounded, according to Bloomberg, which cited its own data. The maximum allowed speed through the canal was between 7.6 knots and 8.6 knots, the report said. The Japan Times also reported the ship was traveling 13.5 knots, adding that two canal pilots were onboard when the ship hit land.  

A Wall Street Journal report said that this is not the first time Ever Given has had problems at sea. On Feb. 9, 2019, the container ship ran into the 75-foot Finkenwerder, a pleasure ferry that was moored alongside a pontoon along the Elbe River in a suburb of Hamburg, Germany. It couldn't be learned if the current Indian captain of the ship was its captain when it hit the ferry.   


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