Analytics Insight

US plans to gain control of AI chips could be in jeopardy because of Biden’s mistake

AI Chip Control

Biden and Cook announced plans to start using US-made chips to support AI chip control

US President Joe Biden and Apple CEO Tim Cook have revealed plans to start using US-built AI chips after a new processor factory was built in Phoenix, Arizona, to reduce reliance on China amid supply chain turmoil. At the TSMC factory in Phoenix, Arizona, Joe Biden and Tim Cook intend to produce semiconductors.

What are AI chips:

  • When training and inferring AI algorithms, AI chips are a thousand times faster and more efficient than general-purpose processors. However, general-purpose processors and AI devices increase both speed and efficiency by incorporating large numbers of small transistors. Because they operate faster and use less power than larger transistors, smaller transistors are preferred. The ability to provide computing power increases with the number of transistors in an AI chip. However, unlike CPUs, AI chips have design elements that have been tuned for AI, speeding up the calculations required by AI algorithms.

President Joe Biden visited Arizona to mark the opening of Taiwan Semiconductor Manufacturing Co’s new plant, with the chip factories TSMC building there touted as the largest foreign direct investment in US history , a sum of $40 billion tends to attract the attention of heads of state and business leaders. In addition to TSMC Arizona’s first plant, which will begin producing N4 process technology in 2024, the company has also begun building a second plant that will produce 3nm process technology in 2026.

Meanwhile, Apple’s CEO has said that in the future they will only use chips built in a US factory from TSMC. Apple CEO Tim Cook said at the event that the company is working with TSMC to produce the chips that power all of its products around the world. And as TSMC establishes new and stronger roots in America, we look forward to expanding that work in the years to come.

After the pandemic produced supply chain issues that resulted in shortages of auto chips and many other products, Biden tried to ramp up semiconductor production. American production of semiconductors represents only 12% of the world total, against 37% twenty years ago.

Concerns over Taiwan’s overreliance on the island have been raised in light of Taiwan’s leading position as a maker of semiconductors used in technologies ranging from cellphones and cars to planes. hunting, especially as China increases military pressure to bolster its sovereignty claims.

“Unfortunately, Mr President, this will not be a game-changer,” critics say because,

Capacity is no less important. 600,000 wafers will be produced each year at TSMC’s factories in Arizona. While that sounds good, it really isn’t. The Taiwanese manufacturer produced more than 14.2 million chip-filled 12-inch wafers last year, and it plans to produce 15.4 million this year. Arizona would only contribute 2.85% of its annual global production of 21 million in 2026 if it maintained the same average capacity growth of 8.1% it achieved in the previous five years. This does not change the situation.

AI War against China Chip:

Proponents of this project and the government incentives used to acquire these mills will notice that even a small amount of peak chip production on home soil is better than none. While this is somewhat true, it also exposes the US to China-Taiwan tensions.

All aspects of development, planning and execution will continue to be performed in Taiwan. These operations would be stopped if Beijing decided to attack, if not definitively. This would deprive TSMC Arizona of all the vital information it needs to exploit the meager capacity it has in the United States. Due to the breakneck pace of the semiconductor industry, it wouldn’t take long for a 7,000-mile war to threaten thousands of jobs and billions of dollars in infrastructure in Arizona.

Conclusion:

TSMC’s $40 billion investment may be the largest foreign direct investment, but it won’t be enough to ensure that the United States develops a self-sufficient semiconductor industry. It just buys bragging rights.

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