President Donald Trump is right to be skeptical about former President Joe Biden’s chip subsidy provided to Taiwan Semiconductor Manufacturing Corporation (TSMC) to build chips here in America.
I say this as someone who has a long history of standing with Taiwan, and against current trade relations which have disadvantaged the U.S. economy and workers in favor of the communist Chinese regime in Beijing.
Taiwan Semiconductor Manufacturing Corporation operates as a monopoly, dominating 64 percent of the chip manufacturing industry in the world. Meanwhile United States companies only produce about 10 percent of the world’s semiconductors and none of the most advanced chips.
At a time when tech drives the future and chips are critical components, the United States has zero capacity to survive a genuine trade war, where the fastest chipsets in the world come from Qualcomm, a U.S. company, but the manufacturing of these chips is completely dependent upon foreign entities, largely TSMC.
In fact, Bloomberg reports that, “Taiwan Semiconductor Manufacturing Co. is the world’s biggest chipmaker and the sole provider of Apple Inc. and Nvidia Corp.’s most prized chips.” So it should be no surprise that an analyst raised the possibility of antitrust concerns on a recent earnings call. It’s a worthy point and something the Trump administration should explore.
It cannot be understated how precarious this position is. TSMC is Taiwan-based, an obvious vulnerability given Moaist China’s lust for destroying the heirs to the legitimate government of mainland China who thrive on a small island off the coast. To survive, TSMC has close ties to Beijing, and Beijing invests in TSMC’s success.
During his first term, President Trump rightfully cut the legs off of Beijing’s attempt to insert Huawei technology into most of the critical manufactured goods sold around the world, denying the Chinese People’s Liberation Army the ability to use backdoor shut off switches to hack critical infrastructure around the world. Yet, TSMC technology has been found in Huawei chips, once again demonstrating this dangerous partnership.
President Trump’s ire has been drawn toward a multi-billion dollar U.S. taxpayer grant to TSMC to build a chip manufacturing plant in Arizona – a plant that has been slow-walked and which the soon-to-be President is skeptical will ever meet its initial promise.
It has been clear since President Trump threw his hat in the ring for the presidency in 2015 that he is a deal maker with a strong opinion that many of the trade deals our government enters into don’t serve the best interests of the people. His spidey-senses are all over the Biden-TSMC grant to build chips in America and the dangers associated with the world’s dependence upon one, easily and potentially already compromised company’s chip manufacturing dominance.
In a world where the manufacturing and supply chain for Nvidia chips, for example, which are used in a significant amount of the world’s Artificial Intelligence processors, is critical for the survival of a first world economy, it is dangerous to have that capacity exist in a single company whose headquarters is closer to China, than Cuba is to Florida.
Several billion U.S. tax dollars are scheduled to be spent on encouraging chip manufacturing here in America. Sending a significant amount of that money to a business with a monopoly rather than building up home-grown chip manufacturers in many ways defeats the mid and long-term national security purposes of on-shoring high-end chip production.
For the world’s security, it should be hoped that a full-fledged war with China can be avoided. But in a world where communist Chinese hacks of critical infrastructure, including the U.S. Department of Treasury, are reported almost weekly, spending billions to help Google-Microsoft-Amazon chip manufacturing that have direct ties to the mainland Chinese government to build a manufacturing plant in Arizona feels like the equivalent of paying the fox to build a nest in the henhouse.
Among the many priorities that President Trump has for his new administration, he will need to once again get his arms around the reality of our cyber and hardware (semiconductor chips) vulnerabilities. Calling out the slow-motion Biden-TSMC chip making deal for special examination as well as TSMC’s monopoly position are important steps in this overall assessment.
Richard Manning is the President of Americans for Limited Government.
Reproduced with permission. Original here: Trump is Right to Call Out Biden Chip Deal
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