I am from Ugwunta (“the small hill”) in Ovim, Abia state. Our tribe is the ancestral warriors of the Ovim kingdom. The Obi Ovum, the traditional head of Ovim, comes from the Ugwunta tribe. (Ovum was the original name, but the English colonists renamed it Ovim in the district documents). Ugwunta hosts the Anwuriwi – the war dance. Whenever a war breaks, the Ikoro sings, putting the community on highest alert, and then men will rush to beat the war dance. The Anwuriwi is powerful – hearing the sound will turn simple men into human warriors. They can climb palm trees with bare hands, and raze down houses in minutes. The sound pulsates the mind, pushing humans to overcome fear. Yes, men can walk through fire!
Obi Ovum lives on a hill. That is strategic because to protect the castle (‘his throne”), a moat is needed. The moat is the hill – no enemy in ancestral Igbo land could get to the hill easily as the Ugwunta warriors had an edge: from the hill they could see many neighboring communities many miles away. So, before the enemies could reach Ovim, they would do an ambush! Legends have it that Ovim never lost a war!
That takes me to the United States which has been exposed to supply chain risks on high end microchips. The two best chip factories in the world are in Taiwan (TSMC) and South Korea (Samsung Electronics) – and both are near China. TSMC is the largest contract manufacturer of integrated circuits in the world. Should a war break between the U.S. and China, those factories will be strategic targets since U.S. companies, and by extension its military, need those factories to make some of their best precision electronic parts. The factories in the U.S., including the ones maintained by Intel, a non-contract semiconductor chip manufacturer, across many metrics cannot match what TSMC and Samsung have put together.
As Trump was trying to curtail Huawei, it was also working to manage the biggest supply chain risks for the U.S. military. If the U.S. cannot have access to make the most advanced chips during wars, the U.S. will struggle in any confrontation with China.
Then on chip manufacturing, while we hail TSMC, Globalfoundries and Samsung Electronics, all of them depend on semiconductor tools supplied by American companies. Without those companies, these companies cannot operate.
So, to cripple Huawei, the U.S. recently said that no American semiconductor machinery can be used by any semiconductor foundry that does business with Huawei. Magically, nearly all foundries in the world became affected; TSMC is rumored to have dropped Huawei. If Huawei cannot get a foundry to help on its chip fabrication, it has a big challenge. At the moment, it does not have the capacity to build these factories without relying on American machinery and equipment. This is Huawei’s biggest test! With this ban, it is now an asymmetric warfare and I expect a surrender even as the UK plans to wean itself off of Huawei by 2023, on 5G.
So what is the game plan? Get TSMC which seems to be the only company in the world that can build foundries which can serve thousands of chip designers, not just its own home IC designers as we have with Intel, to build a plant in the U.S. With this, even if war breaks, U.S. chip designers will have access to make chips which can be deployed in fighter jets, satellites, and anything used in modern warfare.
On Friday, Taiwan Semiconductor Manufacturing Co (TSMC) announced that it will build a $12 billion semiconductor plant in the United States. The announcement came amidst growing tension between China and the US that is threatening to disrupt its Asia-based supply chain.
TSMC said the project will commence in 2021, and will have the capacity to employ 1,600 workers as the factory focuses on the production of the latest in semiconductor technology, the 5-nanometer chips.
“This project is of critical, strategic importance to a vibrant and competitive U.S. semiconductor ecosystem that enables leading U.S. companies to fabricate their cutting-edge semiconductor products within the United States and benefit from the proximity of a world-class semiconductor foundry and ecosystem,” TSMC said in a statement.
For securing this supply chain, Trump has a huge supply chain legacy, militarily. This is important because China, unlike U.S,. is actually building a modern factory of its own: Semiconductor Manufacturing International Corporation (SMIC). SMIC could have tilted the balance towards Asia more, implying that the best chips can only be manufactured in that region. Possibly, when TSMC finishes its factory, in the U.S., a balance will emerge.