USA vs China: The Microchip War

Summary

Highlights

• The U.S and China are locked in a non-traditional war over microchip technology, which is critical for both economic and military power ⚔️
• Microchips, known as semiconductors or integrated circuits, are essential for virtually all technology 📲
• Taiwan's TSMC is a central player, producing a significant portion of the world's advanced chips, making it a geopolitical hotspot 🌎
• The U.S. has enforced export controls to limit China's access to advanced chips, intensifying the economic conflict 🏛️
• China's growth in technology and military power is driving its push to develop its own chip capabilities 🚀

Key Takeaways

• Microchips are the backbone of modern technology and military power 🌐🔧
• The U.S. and China are embroiled in a strategic conflict over microchip leadership 📈
• Taiwan plays a crucial role as a major chip producer, influencing global politics 🇹🇼
• Economic interdependence is reshaping how conflicts are waged on a global scale 💼🌍
• The battle for microchips is redefining the nature of geopolitical power 🏆

Overview

Chapters

• 00:00 - 03:00: The Invisible War over Microchips The chapter discusses the ongoing 'invisible war' between the U.S. and China over microchips, which are also known as semiconductors or integrated circuits. Unlike traditional warfare, this conflict takes place in government offices and company boardrooms, using rules and regulations as weapons to prevent rivals from obtaining critical technology. The chapter emphasizes the significance of microchips in this global struggle.
• 03:00 - 06:00: The Importance and Pervasiveness of Silicon The chapter explores the critical role of microchips, which are tiny pieces of metal considered to be 'magic,' in running our modern world. It highlights the geopolitical conflict between the US and China centered around these vital components. This conflict is expected to dominate global attention for the coming years, demonstrating how seemingly mundane trade regulations and business rules can escalate to significantly impact everyday life, underscoring the dependency on chips.
• 06:00 - 09:00: Historical Evolution of Microchip Technology Silicon is the foundational material in microchips, essential for all 'smart' technologies.
• 09:00 - 12:00: Semiconductors as a Geopolitical Asset The chapter explores the pervasive presence of silicon in everyday technology, emphasizing its foundational role in modern devices such as microwaves, digital clocks, and the internet. Silicon's critical importance is highlighted by its omnipresence in virtually all electronic equipment, underscoring its significance as a key technological enabler.
• 12:00 - 15:00: Taiwan's Strategic Move in the Chip Industry Microchips are essential not only for consumer technology but also for military purposes.
• 15:00 - 18:00: The Modern Global Chip Supply Chain The chapter discusses the current state and issues of the global chip supply chain. Highlighting the geopolitical aspects, it mentions House Speaker Nancy Pelosi's visit to Taiwan, which prompted a reaction from China, indicating the delicate international relations involved. It also touches on the importance of the semiconductor industry to national security and the broader implications on warfare. Additionally, it briefly reflects on the role of the internet in acquiring skills and advancing one's professional development, emphasizing personal experiences.
• 18:00 - 21:00: US-China Tensions Heighten over Chip Technology The chapter discusses the rising tensions between the US and China regarding advancements in chip technology. Despite the transcript focusing on a sponsorship promotion for Scalar, an accelerator program enhancing programming skills, it is implied that technological advancements such as these might be contributing to broader geopolitical issues, highlighting how technology and skills developments are intertwined with global economic and political dynamics.
• 21:00 - 24:00: US Strategic Measures to Curb China's Chip Advancements The chapter discusses strategic measures by the US to curb China's advancements in the semiconductor industry. It emphasizes the importance of skill development and mentorship to stay competitive in the technology field. The focus is on educational programs like curated computer science courses and one-on-one mentorship from industry professionals. These initiatives are highlighted as crucial for professionals wanting to advance in rapidly evolving technological fields.
• 24:00 - 27:00: Potential Consequences and China's Counter Moves The chapter discusses the importance of entering the right opportunities to stay current with technological advancements, emphasizing the ability to develop skills independently through online resources. It highlights the philosophy of bypassing traditional educational institutions in favor of self-directed skill enhancement, a principle supported by the organization Scalar. Scalar is described as a platform that helps software professionals improve their skills to secure desired roles in the industry.
• 27:00 - 30:00: The New Age of Economic Warfare The chapter titled 'The New Age of Economic Warfare' opens with an invitation to a free live webinar, sponsored by Scalar, which is connected to upcoming insights on microchips. The narrative takes the reader back to the year 1959, a pivotal moment in history for the U.S., when computers were just emerging, albeit in a rudimentary form with numerous wires.
• 30:00 - 33:00: Reflections on the Chip Conflict's Broader Implications The chapter discusses the early development of electronic systems, which relied on sending precise electronic signals for complex problem-solving. This process was initially inefficient until two American engineers independently conceived a transformative idea to eliminate the cumbersome wires in these systems. They utilized a new technology called a transistor, likened to a precise on-off switch, capable of controlling electrical pulses with high precision. This innovation marked a significant step toward enhancing electronic system efficiency.
• 33:00 - 34:30: Closing Remarks and Channel Information The chapter discusses the development of transistors and the innovation of using silicon to improve their efficiency. Initially, transistors were large and cumbersome with many parts. To address this, the idea was to create smaller, on and off switches on silicon, a material that's abundant on Earth but a poor conductor on its own. By mixing silicon with other elements, it becomes a semiconductor, which is crucial for precisely managing electricity flow. This advancement marks a significant step in transistor technology.

USA vs China: The Microchip War Transcription

• 00:00 - 00:30 the U.S and China are fighting a war it's not a war that you can really see and it's not a traditional Battlefield war with soldiers at least not yet this is a war that's being fought in government offices and Company boardrooms it's a war that's being fought with rules and regulations and it's meant to stop Rivals from getting their hands on the most important technology in the world microchips you might hear them called semiconductors microchips or integrated circuits these are all the same thing we're going to call them chips
• 00:30 - 01:00 microchips tiny pieces of metal that are magic and that run our world this is a big thing that's happening in geopolitics right now and I want to help you understand the stakes of this new conflict between the US and China it's going to be the center of global attention for years to come what we're seeing right now is how boring trade regulations and business rules can escalate to something that can impact your everyday life because your life depends on chips whether you know it or
• 01:00 - 01:30 not in fact let me show you everything has silicon in it anything that has any technological smartness to it is a product of silicon that's our tone [Music] oh and it's not just like The Usual Suspects techy things yep microchip my refrigerator silicon my microwave silicon
• 01:30 - 02:00 no I'm just playing with you this doesn't have silicon in it [Music] this is just a few little things I found around the office but like Silicon is in your refrigerator your microwave like it is in your digital clock it is what makes our world go round I mean we are speaking through silicon right now like you are watching this on the internet that is made possible because of silicon on a screen that is being fired by a silicon chip like everything is silicon
• 02:00 - 02:30 in our world besides like the forest or something or like you know analog cameras so microchips make our economy possible but it's not just Tech it's not just a consumer Tech it's also military the military needs microchips the microchips for weapon systems getting microchips for intelligence they need microchips for AI they need microchips to stay ahead of their rifles microchips represent geopolitical power because they represent military power
• 02:30 - 03:00 that's something to just keep in mind as we go through the story House of Representative Nancy Pelosi is in Taiwan tonight China is already responding lead the world in future Industries protect our national security we're in the middle of one of the most fundamental changes in the character of war in the history of mankind tape pause I feel really strongly that the internet is a place where you can learn to level up your professional skills I learned all my skills on the internet that is how I know how to
• 03:00 - 03:30 animate and edit and film and do all of these things the sponsor of today's video also believes this thank you scaler for sponsoring today's video scalar is a place where you can go and level up your skills as a programmer or engineer scalar is a short-term accelerator program it's like 8 to 11 months and it's meant to enhance the coding skills of software professionals basically make you way better at your job and then to help you get a better job a big part of the scalar program is to hack the job recruitment process to make you better interviews to get you in the right doors so that you can get
• 03:30 - 04:00 better skills and then a better job in this industry in addition to their curated computer science course they offer one-on-one mentorships with like software professionals who are like on the front lines of this industry that give you referrals it really is just like a One-Stop shop if you want to level up as a software professional if you like me have a career in a very quickly changing Tech technology-based field you know that things are always leveling up and the best way to stay on the front lines is a program like scalar that will accelerate you that will help
• 04:00 - 04:30 you get in the right doors and that will give you the skills that you need to stay on The Cutting Edge of all this stuff I am a giant proponent like philosophically of the idea that you can bypass big institutions where education is usually done and learn to level up your skills on the internet like giant fan it's like a principle for me and that's what scalar is doing here they're giving you access to level up your skills to become a better equipped software professional and then to go get the job that you want in this industry so if you are a software professional who's ready to grow their skills scalar is the place for you there's a link in
• 04:30 - 05:00 my description clicking that link gets you in on a free live webinar where you can go get a flavor for this trust me your career will thank you thank you scalar for sponsoring today's video Let's dive back into microchips [Music] in 1959 the U.S was about to get very lucky computers at the time were becoming a thing but they kind of looked like this tons of wires connecting
• 05:00 - 05:30 everything all of them sending little precise electronic signals to each other to solve tedious complex math problems it was clunky it was inefficient it wasn't very special yet but then two American Engineers that were working separately at two totally different companies had a very similar idea the idea was to get rid of this all these wires there was this new technology that had cropped up called a transistor it was like a really precise reliable on and off switch allows you to control pulses of electricity super precisely
• 05:30 - 06:00 but at first transistors looked like this they were big and clunky lots of parts so the idea was what if we start carving these little on and off switches onto a material called silicon it's like a super abundant metal like material inside of Earth's crust but it's actually a horrible conductor of electricity if you mix silicon with other elements it conducts electricity really well it is a semiconductor of electricity exactly what they needed to precisely control the flow of electricity very accurately no more
• 06:00 - 06:30 clunky long wires let's just carve our little transistor switches onto the Silicon chip a single circuit that way we can fit a lot more into one place all close together so that's what they did and then the world changed forever with the transistor man has gone far toward matching some of the capacity of the human brain okay real quick aside here we're gonna get to the geopolitics and stuff but I was so curious about one thing why does being able to precisely control the on and off switch or like
• 06:30 - 07:00 the flow of electricity do anything to change the world well it turns out this is where my mind bends a little bit just stick with me here so transistors can turn on and off and they send a signal that results in one of two things a one or a zero when it gets to the other side super boring and useless if you just have one little transistor sending a one or a zero but if you have a thousand of these switches all sending little signals in the right order suddenly you have something that kind of resembles a little brain firing signals in a
• 07:00 - 07:30 coordinated system that can actually solve logical mathematical problems and literally remember things this is kind of how our brain works it's pulses lots of pulses and now we're talking about Computing this is how computers work [Music] the first light the more pulses of electricity you can control the more you can do with technology and suddenly there's a new gold rush in the United States but the gold is now silicon and the rush is to put as many of these little switches onto that silicon chip
• 07:30 - 08:00 as possible so that we can make our technology do more and more sophisticated stuff and now people have smarter clocks and TVs and radios and video games and calculators things that you can hold in your hand and press a bunch of buttons and suddenly the Silicon chip is solving math problems for you instantaneously what is happening this is Magic oh and it's not just Tech Bros in the 60s who are loving this the US Military and NASA are first in line to get their hands on these new Chips they dream of using them for more sophisticated weapons or going to the
• 08:00 - 08:30 Moon chips were becoming a currency for National Power we've got to protect him thinks the USA luckily the USA didn't really have to do much to protect him at first they were killing it they were the global leaders of this chip making stuff every year U.S companies crammed more and more transistors onto this little piece of silicon more calculations per second more and more companies are now cropping up to make dreams come true with their new magical microchips lots of this action was happening right here in
• 08:30 - 09:00 central California in a valley that would soon take on the name of the material that enabled all this magic to happen by the mid-1980s they were carving nearly 300 000 little on and off switches onto a piece of silicon oh and look it's Steve Jobs and Bill Gates yeah they're using these more sophisticated silicon chips to change the course of history home Computing color televisions more advanced satellites and smaller and smaller electronic devices of all kinds there's a revolution happening and over the next 30 Years the number of transistors that
• 09:00 - 09:30 they can fit onto a piece of silicon starts to become ridiculous and it's like the 90s and these things are getting faster and smaller and now humans have computers in their homes that are more advanced than the ones that were used to land on the Moon Not only do they play the typical computer games that all the kids enjoy but their curiosity for learning has skyrocketed and look it's even smaller now it fits in your pocket and we are calling it iPhone thank you none of this is possible without these
• 09:30 - 10:00 little magical brains made of silicon okay but then a problem arises and it has to do with these these look like just factories where they make microchips right no these are not just factories we have a special name for these they're called Fabs and they are a central part of this story because listen cramming tens of millions of transistors onto a piece of metal-like substance from the earth is hard to begin with but as the number of transistors continues to double and double and double making them becomes incredibly complicated I mean look at these operations this is inside of a Fab
• 10:00 - 10:30 and the reason why it looks like they're doing open heart surgery here is because even a single Speck of dust that gets into this Fab and onto one of these chips can totally ruin it so yeah it was American companies who are designing and making chips but every year they have to spend more and more on these tedious Fabs these factories on steroids they're getting really spendy like billions of dollars spending meanwhile an ocean away you've got a couple of economic Miracles happening in all of these countries in
• 10:30 - 11:00 East Asia that are rapidly developing and they want in on this microchip Gold Rush foreign countries is Japan where a bunch of new tech companies were getting really good at making chips and they could make them and sell them for way cheaper than the US oh and by the way this was with the help of the Japanese government who's like subsidizing this governments love microchips that's going to be a theme in this video
• 11:00 - 11:30 the US is hating this they're kind of freaking out that Japan is getting in on all the chip gold rush they got to do something about it so it's 1987 and the US government basically says no more Japanese chips they put a 100 tax on Japanese chips coming into the U.S which not surprisingly just crushes Japan's chip industry too bad so sad Japan said the president at the time who was wait what the hell Ronald Reagan the profit of free markets and free trade what's
• 11:30 - 12:00 going on here our aim is to increase our national wealth so all will have more Well turns out that chips are really important so important in fact that Mr free market economics abandoned his principles to protect American ships this is a theme we're going to see a lot more of it okay so let's move on meanwhile another Asian economic Miracle country is growing super fast and wants to get in on this but they also were looking over Japan and they're like we don't want the US to squash us for trying to compete with them so if we can't beat them let's join them
• 12:00 - 12:30 [Music] oh and this is a really important foreshadow here Taiwan is looking over here at their neighbor China who's also getting really rich and more serious about making good on their lifelong promise to eventually invade Taiwan and quote reunite it with China kind of scary so in the back of taiwan's mind they're also kind of looking for a way to get the West to protect them so they
• 12:30 - 13:00 made a bet a freaking brilliant bet that solved all their problems at once at the time a bunch of engineers in Taiwan were actually leaving Taiwan to go to the U.S to go to university there and then to actually work for U.S companies in The Cutting Edge microchip economy Texas Instruments Intel so the first thing the Taiwanese government does is lure them back they guarantee them jobs they pay for their travel costs to give them tax breaks to create companies their goal is to create a Silicon Valley in Taiwan and
• 13:00 - 13:30 it totally works it's like a reverse brain drain thousands of Engineers returned to Taiwan to start companies and to help build the microchip industry in Taiwan and one of those Engineers is the one who actually changed the game it's this guy named Morris Chang he had the best idea of all of them he had seen that American chipmunkers were hating how much money they had to invest in these Fabs these really complicated factories to make microchips his idea was instead of trying to compete with the United States in the chip industry and get crushed like Japan did let's become their friend let's solve their
• 13:30 - 14:00 problem we won't design chips we won't make devices we won't make the software here we will just make the chips themselves we will become the masters of Fabs the tedious expensive job of getting more and more transistors onto a piece of silicon so he starts a company called Taiwan semiconductor Manufacturing Company tsmc super promising and creative name Morris and the government of Taiwan is super into it because now they can get in on the
• 14:00 - 14:30 chip Gold Rush and instead of pissing off the United States they actually will solve the US's problem and crucially make the US reliant on them so now they have protection a silicon shield to protect them from their big aggressive neighbor the government gave nearly half of the startup costs to Morris Chang to start this new Venture they connected them to venture capital and according to Chang himself the prime minister of Taiwan even called a super rich Taiwanese investor to force him to invest in tsmc whoa okay uh yeah wow like you can see
• 14:30 - 15:00 just how vital chips are a little piece of silicon with a bunch of on and off switches tsmc was basically a state-owned company from the beginning so yeah taiwan's now in the game and semiconductors are now becoming a geopolitical bargaining ship ship a geopolitical bargaining chip I kind of regret it [Music] go in here and I'm tired I believe I'm
• 15:00 - 15:30 going to be the nominee so it's like the early 2000s and semiconductors are now squarely a part of geopolitics but meanwhile in business World in Silicon Valley they are loving this Taiwan situation because now instead of having to do all of this expensive tedious Fab stuff they can just do the design and the software and the business side of it and they can just ship it off to tsmc and they do the rest taking on the expensive tedious work of maintaining their Fabs and keeping them up to The Cutting Edge which requires billions of dollars every year like to keep some
• 15:30 - 16:00 perspective look at this graph this is the number of transistors on a piece of silicon by 2010 they're now getting a billion transistors onto a piece of silicon the size of your fingernail and the only way to do that is to make each one of these insanely small so let's just take a moment to blow our own minds here each transistor is becoming smaller than a width of a human hair wait no sorry that's actually way too big of a scale a human hair is like 90 000 nanometers thick we need to go smaller like a red blood cell Wait no that's still too big seven thousand nanometers
• 16:00 - 16:30 okay a virus something that's not even totally alive it's so small wait that's 14 nanometers still too big I mean we are getting into insane scales here IBM recently revealed the chip with transistors that are two nanometers thick making them literally smaller than a strand of DNA so in these Fabs the reason it looks like this is because they have to figure out how to do this and to keep doing it and keep making it smaller and smaller providing the world with the most advanced chips and this is
• 16:30 - 17:00 why we have have nice things your entire world revolves around what is happening on these little strips of silicon [Music] for more and more U.S chip companies don't actually have Fabs they design them they do all the software and the machinery and the selling and the business but the actual making of the chip happened in Taiwan but as 92 percent of all advanced chips are now
• 17:00 - 17:30 made in Taiwan what this means is that the US is completely reliant on tsmc basically and finally we're getting to the conflict this is where China becomes really important because China the most populous country is suddenly very rich and they want new tech too so they become actually a giant customer of all these chips buying 40 of all the chips in the world meaning that they are now reliant on the US who is reliant on Taiwan to design and make their chips so
• 17:30 - 18:00 let's look at the Modern chip industry as it all comes together which is going to set the stage for how this conflict is playing out today here's a very simplified version of the supply chain again very simplified it's just insane I'm not going to go into the full thing the US is the one that manufactures the machines the software and the designs Japan makes metals and chemicals for chips the Netherlands makes this crazy UV laser machine that you use to carve the chips and Taiwan crucially does the expensive tedious job of actually making the chip almost all of the most advanced
• 18:00 - 18:30 ships in the world are made in Taiwan and then you have China who is the giant customer in all of this they're the ones who are buying more and more chips to grow their economy I mean look at this beautiful supply chain you've got a bunch of countries that are involved now everyone has a part to play and everyone depends on each other for chips globalization is great economic interdependence is a recipe for peace and mutual prosperity right I mean it used to be but there's something else happening with the supply chain that might be hard to see in this diagram which is that the
• 18:30 - 19:00 US is still the Kingpin of this system they're the most important player they have the most important ingredients the best designs the best software and the most machines to make chips Taiwan their bestie has the second most important ingredients in all of this the Fabs that actually make the chips China on the other hand is in a position of weakness their role is basically the big hungry chip consumer totally reliant on their Frenemy the United States and their annoying neighbor Taiwan who they want to invade but now they're reliant on for
• 19:00 - 19:30 Cutting Edge chips and what's at stake here for China well it's not just their economy they don't want chips just so they can have a bunch of cool Tech they want it because more and more they need Advanced chips for their military [Music] it's like the 2010s China's military is getting kind of scary but it's not that scary since the us we're not that worried we'll always be ahead of China when it comes to controlling the supply chain and our military gets first dibs on all the best chips China has no
• 19:30 - 20:00 chance of catching up ever and this is true China was truly behind they did not have the tech and the designs and the companies and the ability to make advanced chips they were reliant on the United States if China pissed off the US they could just take away their chips and now we have a rising conflict on our hands China this big superpower is not going to let this happen they realize that they have to do two things number one they have to start making their own chips they want to break free and stop relying on the US for anything make their own chips so that the US doesn't
• 20:00 - 20:30 have leverage over them and number two and deeply related is they want to continue to build up their military to modernize it to build more warships and satellites in high-tech missiles and drones and eventually AI all of this needs Advanced chips which they don't have so they're like we are going to make them on their own and the US is like good luck China you're so far behind good luck trying to figure out how to do this thing that we've spent the past 60 years figuring out how to do make really expensive chips experts in software and machinery and Fabs like you
• 20:30 - 21:00 have no chance so how is China going to catch up lucky for them in China there's a blurry line between businesses and the military it's all kind of overseen by the state and also lucky for them there are loads of U.S tech companies that are addicted to making money by selling microchip technology to China so instead of invented themselves they see an opportunity here need software and equipment for your new chip industry get it from the US need fancy chip designs and software U.S companies have you covered need those high-tech chips
• 21:00 - 21:30 produced for your military projects American companies will sell them to you and yes tsmc in Taiwan will make them for you wait China is using U.S technology to get ahead of U.S technology what in 2021 The Washington Post reported that China was building super Advanced Laboratories to test scary new weapons including nukes and guess what they were using American Semiconductor Tech to do this it started to become clear that American companies were selling Tech and chips and software to Chinese tech companies that were
• 21:30 - 22:00 actually just a front for the military wow yikes the U.S chip industry is now allowing China to get ahead this was starting to happen but I think what really woke up the U.S is when this happened a huge step forward in China's military China conducted two tests of a Hypersonic missile system technology that would allow it to fire a nuclear warhead faster than anyone else the U.S does not currently have the ability to even track this weapon much less to feed
• 22:00 - 22:30 it U.S military generals wake up one morning to discover that China has just tested a new weapon a missile that flew around the entire world going five times the speed of sound a mile a second oh and it's really hard to see because it flies below radar range it's super Nimble maneuverable and has the ability to carry nukes the U.S had been working on something similar but China beat them to it by years and it was American microchip technology that helped them
• 22:30 - 23:00 build it oh yikes I've totally caught them off guard says that U.S intelligence Services had no idea that China was so far ahead it turns out that while the US government thought that they were running faster and that they were fine they were actually fueling the rise of their biggest rival by giving them the technology that they need to get ahead so the U.S decides that they've got to do something China is ahead on these missiles and they might get ahead on things like Ai and they're doing it with
• 23:00 - 23:30 our Tech no more free trade no more free markets the government is jumping back into the chip game to sort this out fundamental change is taking place today politically economically and technologically all right Joe Biden's like rolling up his sleeves he's like what do we do here step one cut them off no more chips for China the Biden Administration published a large set of export controls on Friday in order to slow beijing's technological and Military advances and restrictions will limit Chinese companies access to
• 23:30 - 24:00 Advanced computer chip dude and here we are back in the fun bureaucratic paperwork Department of Commerce Bureau of industry and security docket number 220930-0204 certain Advanced Computing and semiconductor manufacturing items supercomputers and semiconductor and use entity list modification this is just a bunch of rules that says
• 24:00 - 24:30 no more chips to China all those Cutting Edge chips that China was buying from U.S companies blocked restrictions will limit Chinese companies access to Advanced computer chips manufacturing equipment they need to make their own chips block all that us-made vital software that Chinese companies need to design their own chips block block block we will bring these jobs back to our Shores and end our dependence on far and chip in fact the bite Administration went super far to say that any company
• 24:30 - 25:00 globally that uses U.S tech to produce chips is now blocked from doing business business with Chinese firms to cut China off from certain semiconductor chips made anywhere in the world with U.S equipment why stop there Americans are now forbidden from working for Chinese chip companies this is huge news like this is huge news this is happening this is like we're in the middle of this right now but let's go back to that visual of the whole supply chain if you cut off this then yeah you hurt China but you also hurt the other side of this
• 25:00 - 25:30 line U.S chip makers like one example this U.S chipmaker Nvidia they went from selling tons of chips to China to suddenly being banned from doing so this has led to a 400 million dollar loss in Revenue in just one quarter poof up in smoke one of the biggest chip makers now totally cut off from their big Customer because Joe Biden is afraid of the Chinese military and for good reason which leads to step two of this policy the bind Administration wasn't going to leave these tech companies out dry so
• 25:30 - 26:00 they gave billions of dollars to American chip makers to say hey yes sorry we cut you off from your main custom summer because we're kind of getting scared of their military but we have to protect our chips here's a bunch of money Congress passed the chips act which gives billions of dollars to these companies to create Fabs back in the United States this time it wasn't Russia but China another rival power would get way ahead of us if we didn't pull out all the stops and this legislation is the first large step in pulling out all of those stops government wants the Fabs
• 26:00 - 26:30 to come home to ensure that this most valuable technology isn't solely reliant on outside countries and we're talking giant payouts 50 billion taxpayer dollars go to companies like Intel which is now opening a new Fab in Ohio we are going to build the most advanced stuff in the world right here in Ohio or even tsmc themselves which is based in Taiwan but is now opening a new Fab in Arizona keep it in the family okay so this is economic War and the Biden
• 26:30 - 27:00 Administration just did a huge move reminder that the reason why this is important is because it's not just about like business or even missiles this is about chips chips are not just chips chips are the future chips are power yes chips mean economic growth and new cool technology but chips also mean new weapons chips are the currency of geopolitical power kind of like what oil used to be but now it's freaking silicon with a bunch of on and off switches on it the US is taking control of its valuable resource and cutting China off
• 27:00 - 27:30 so the US makes this big move Cuts China off and that you know this is geopolitical conflict they just made the move the ball's in China's court now how will they respond and this is where Taiwan comes back into the picture [Music] Taiwan this small country that finds itself in the crossfires of this conflict 92 of all advanced chips are made here mostly by tsmc the US is totally reliant on them a few months before the Biden Administration was doing all of this making it illegal to
• 27:30 - 28:00 sell chips to China Congresswoman Nancy Pelosi visited Taiwan not just to like shake hands with political leaders no she was there to visit tsmc the chip fab what Pelosi was really doing here was signaling to Taiwan that they are vital to American Security U.S relies on this and will protect it came to Taiwan to make unequivocally clear we will not abandon our commitment to Taiwan and we were proud of our enduring friendship and in doing so she shows us what
• 28:00 - 28:30 China's counter move might be in all of this it might be Taiwan are you willing to get involved militarily to defend Taiwan if it comes to that yes a commitment we made okay but wait what this doesn't mean is like China is going to invade Taiwan and like take all the chips or like take over the Fab or something that scenario doesn't make any sense if China invaded Taiwan all they would find is a bunch of empty Fabs if they weren't bombed already they wouldn't know how to operate them they wouldn't have all of the engineers in the software and the all of the supply chain stuff that they would need to
• 28:30 - 29:00 actually make chips they would likely be fighting a war and the US would probably get involved I made a whole video about it you can go check it out anyway the effective counter move here for China would be to operate right on the edge of active warfare to strike back at the U.S without provoking a military response this is how big nuclear powers do it they don't actually Clash they want to just sort of poke at each other one scenario would be China sending a bunch of its Navy ships to set up in the ocean right around here creating a kind of partial blockade that could stop cargo
• 29:00 - 29:30 ships that are coming to and from the island kind of just slowing everything down but really holding the Silicon hostage making it hard for the supply chain to actually work I mean just remember like the covid-19 chip shortage or like supply chain shortage or even like the Suez Canal blockage from a couple years ago imagine those supply chain issues but like on steroids totally debilitating and being used for a hostile purpose to strike back at the U.S like Biden forbidding American companies to sell chips to China the blockade would be a way to strike at
• 29:30 - 30:00 your nuclear-armed rival without going too far without risking too much escalation or a miscalculation it's incumbent upon us to stay number one to lead the world in future Industries protect our national security we are going to build the most advanced stuff in the world that's where we're at we're in the middle of another economic war between big nuclear Powers we don't know what happens next but one thing that feels clear to me is that cold war Vibes are back as these two great Powers with different ideologies about the world compete with each other this fight
• 30:00 - 30:30 over chips will continue and this idea in international relations that I kind of took for granted which is that like globalization and interdependence is good and will lead to less conflict it's being seriously challenged economic interdependence is being used as a weapon that's what we're seeing here and not just here I made a video a couple months ago about how Vladimir Putin is cutting off Natural Gas to Europe frankly it's not that much different than Joe Biden cutting off microchips to China I mean it is different in a lot of ways blah blah blah we get it but like
• 30:30 - 31:00 the the big mechanics of how this conflict is playing out peculiar and is becoming a part of how conflict looks today so even as this old school style war continues to rage in Ukraine we're seeing an evolution of how conflict Works in our world where once a lot of conflict revolved around natural resources like oil most recently the currency of power we've moved to an Era where a magical piece of metal-like substance called silicon whole scene ones and zeros is kind of the new oil the new currency of power the new thing that we should protect to protect our
• 31:00 - 31:30 military Supremacy so in a big shift of the trend of globalization countries are now turning inward to protect their stuff leading to a new era of distrust severed connection and Rising tensions okay okay semiconductors is over that's it I'm now going to eat a Reese's Peanut Butter Cup from Trader Joe's um
• 31:30 - 32:00 um that's the end of the video um thanks to scaler one more time for sponsoring this video there's a link in the description that gets you on a free class if you want to try that out I have a couple things I want to tell you about thanks for watching I like to speak into a microphone at the end because it makes me feel like I'm a podcaster should I start a podcast people are asking me to start a podcast what should I talk about on my podcast anyway thanks for watching everyone so um we should probably talk about The Newsroom so we make a video an extra video every month it's a behind the scenes Vlog where we
• 32:00 - 32:30 like capture how all this is made there's a big team of people lots of cool fun personalities lots of very skilled people who touch these videos I'm just like one Cog in the machine that video goes live every month and it's available to people who are members of The Newsroom uh which is what we call our patreon I just like to call The Newsroom because it's like cooler on The Newsroom you also get access to my scripts which are like big things that if maybe if you're like a journalist or a video Storyteller like could be useful for you you also get access to Tom fox tracks Tom Fox is our composer you get
• 32:30 - 33:00 royalty free music that you can use in your videos if you are a member of The Newsroom and you get the warm fuzzy feeling of supporting independent journalism so um The Newsroom is over on patreon.com Johnny Harris another thing that I should mention is that we have Luts and presets which are like a thing that you can buy and then you can color your video or your photos in the way that we color it we worked with the professional colors to develop these things they're basically presets and they are for photo and video and they look really nice because I like things
• 33:00 - 33:30 to look nice and welcome to all the new subscribers here there's been a lot of new people around the channel lately and um it's fun to have this community grow um so I'm gonna keep telling stories and being curious and learning and looking for evidence and data and questioning my assumptions and I appreciate you all being here so um I'll see in the next one bye [Music]