China Continues To Financially Infiltrate Other Nations In Hopes Of Innovating Their Semiconductor Manufacturing Capabilities.

Members of the British parliament’s upper house have questioned the government about China’s planned takeover of one of the country’s largest semiconductor plants, warning that the deal could jeopardize the country’s “national resilience.”

Newport Wafer Fab (NWF) is a Welsh company that specializes in producing sophisticated compound semiconductors, which are a critical technology in 5G networks and facial recognition software.

Nexperia, a Dutch business completely owned by China’s Wingtech Technology, announced in July 2021 that it had acquired 100% ownership of NWF. Wingtech, whose stockholders include Chinese government-backed investors, provides processors to Chinese smartphone manufacturers such as Huawei.

On April 7, Liberal Democrat peer Lord Fox demanded that the government define its position on the takeover at a House of Lords session.

“The minister has previously stated that there are no specialist technologies at Newport Wafer Fab, but it misses the need for capacity, industrial capacity, to produce technology,” he told his peers.

“There is a debilitating shortage of microprocessors around the world, which has hampered manufacturing,” Lord Fox remarked. The EU and the US have plans in place to combat this. “It appears that we are waiting and seeing.”

Lord Callanan, the business minister, responded that the Department of Digital, Culture, Media and Sport (DCMS) is working on a semiconductor strategy that will be released “shortly.”

“There is simply no doubt—it is recognized across all our intelligence communities, Five Eyes, and everywhere—that this factory has strategic value and is strategically significant to our nation,” Lord West of Spithead, a Labour member, said.

He warned ministers not to “let this go through by some type of error,” and to “understand how significant this is in strategic terms.”

The factory, according to Lord Alton of Liverpool, a cross-bench peer, was “the United Kingdom’s biggest producer of microchips and semiconductors.”

“It’s about national resilience,” he continued, “and whether or not we want to become a completely owned subsidiary of the People’s Republic of China, which Elizabeth Truss, our Foreign Secretary, has accused of genocide.”

“I absolutely share his displeasure about this and totally agree with his words about the People’s Republic of China, the terrible human rights abuses that are going on there, and especially the treatment of the Uyghur people,” Lord Callanan responded. On that, there is no difference between us.”

However, he stated that this is a “quasi-judicial decision” that will be made by Business Secretary Kwasi Kwarteng under the National Security and Investment Act’s authority.

Prime Minister Boris Johnson requested national security adviser Sir Stephen Lovegrove to investigate the possible merger shortly after it was reported in July 2021.

However, the House of Commons Foreign Affairs Committee stated on April 5 that the anticipated probe does not appear to have commenced.

“I can confirm that the review is going place,” Lord Callanan responded when asked about the progress of the review.

Taiwan has already made sure to account for the CCP risk in recent months. As technology continues to innovate, nations become more advanced and more dangerous. China is set on exalting itself on the highest pedestal on the world stage. And it can’t carry out its promises of world domination without continuing its technological innovation. Semiconductor shortages have given us a glimpse at the sheer speed of the tech race, especially amid the COVID crisis.

Semiconductors are at the heart of the U.S.-China competition for tech supremacy. They are expensive and critical, and the Chinese regime has vowed to outspend the United States by almost 50 to 1 in developing semiconductors.

Semiconductors, or “chips,” are an integral component of the technological products, which drive a country’s economic development. They are generally made of nano-sized (one-billionth sized) crystals, the most common of which is silicon. Also called silicon wafers, semiconductors are thinner than a single strand of human hair and contain as many as 40 billion components.

Only a small number of firms are capable of producing the highest quality semiconductors, which are incredibly complex. In addition to requiring advanced scientific knowledge, their manufacture is also extremely capital intensive—semiconductors are very expensive to develop and produce.

Integrated circuits (ICs), which are made up of semiconductor material, are used in consumer electronics, including computers, mobile phones/smartphones, digital cameras, data center servers, televisions, washing machines, refrigerators, cars, and gaming consoles.

Semiconductors are also critical for military and defense hardware, and used in telecommunications, missile guidance systems, navigation systems, weapons simulators, range finding devices, and proximity fuses. The U.S. Defense Advanced Research Projects Agency (DARPA), which is responsible for the development of emerging technologies used for national defense, needs semiconductors for its electronic warfare programs.

China is the primary rival of the United States in the battle for semiconductors. The Chinese Communist Party’s (CCP) 14th five-year plan called for autonomy in semiconductor production. Shortly after the plan’s release, Chinese Premier Li Keqiang identified investments in core technologies, including chips, AI, and 5G, as a way of catching up with the United States.

The CCP is pumping money into the purchase of weapons, as well as research and development of semiconductors and advanced technology, to modernize its military. The United States, on the other hand, has drastically cut its research and development budget since the end of the Cold War with the Soviet Union.

Over the past 20 years, Chinese chipmakers have received over $50 billion in government subsidies. Consequently, in 2019, China’s chip exports hit $101 billion. The CCP has established a $58 billion semiconductor investment fund, while local governments have pledged an additional $60 billion. Additionally, semiconductor companies are provided with a 10-year corporate tax exemption.

The Chinese regime also acquires chipmakers and poaches talent away from foreign chip developers, particularly from Taiwan. Furthermore, Beijing offers subsidies and incentives to lure foreign chipmakers to relocate to China.

Taiwan is a world leader in semiconductors—responsible for 63 percent of the global market. The CCP will do almost anything to obtain talent and technology from the island nation. The reoccurring cyberattacks on Taiwan are an example of the lengths the CCP will go to, in order to steal Taiwanese chip technology. In response, four Taiwanese members of parliament, representing the Democratic Progressive Party (DPP), have proposed tightening the country’s commercial secrets law to prevent the CCP from obtaining Taiwanese semiconductor technology or human capital. The four lawmakers said that Beijing’s interest in stealing Taiwanese technology was not only financially motivated, but was also an attempt to make Taiwan poor and weak, and more susceptible to coercion.

China had some success with developing its own semiconductors. AI chips used in cloud computing have been developed by Alibaba. Huawei’s Kirin chip, which is used for 5G equipment and smartphones, is said to be as good as comparable chips made by Samsung and Qualcomm.

But China is still behind the United States in terms of chip manufacture. Huawei’s Kirin chipsets are actually manufactured by a Taiwanese company, Taiwan Semiconductor Manufacturing Corporation (TSMC), which uses American technology.

TSMC is the world’s leading firm, accounting for 54 percent of global semiconductors. Miniaturization is one of the most important aspects of chip development, and TSMC is presently working on a 3-nanometer (nm) production process. The company also hopes to have 2-nm chips available by 2025.

China’s largest chipmaker, state-owned Semiconductor Manufacturing International Corporation (SMIC), by comparison, only began producing 14-nm chips at the end of 2019, leaving China two generations behind the industry leaders.

According to the Center for Strategic and International Studies (CSIS), it will take China at least 10 years to catch up with the United States in chipmaking. CSIS said that the time frame could be extended if the United States cut off China’s access to technology and financing. CSIS recommends the United States to block exports of semiconductors and semiconductor manufacturing equipment, and prevent China from purchasing chips made with U.S. equipment and from acquiring U.S. chipmaking companies.

The United States has taken a number of steps to protect U.S. semiconductor technology and to slow China’s advance. The National Security Commission on Artificial Intelligence (NSCAI) has recommended strengthening U.S. legislation in order to prevent China from obtaining semiconductor technology. Washington has already placed sanctions on China’s SMIC because its chips had military applications.

On the domestic front, CSIS felt it was defense critical for the U.S. government to invest in chipmakers. And this is what the United States is doing. The Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act was a bill proposed in Congress to restore American leadership in semiconductor manufacturing, a goal which could be achieved by providing long-term economic incentives for research and development. Among other funding provisions, this bill called for the creation of a $10 billion fund to encourage investments in semiconductor manufacturing facilities.

The CHIPS bill was incorporated into the National Defense Authorization Act. It created a National Semiconductor Technology Center, which provides funding for private sector research and development. NSCAI has proposed $35 billion in grants and funding for chip research and manufacture. This is in addition to $37 billion already promised by President Joe Biden.

The CCP has vowed to outspend the United States 50 to 1 in developing semiconductors, but the United States is a much richer country. In 2019, the CCP imported $300 billion in computer chips, which is more than it spent on oil. The semiconductor war is looking very much like the military spending escalations of the Cold War with Russia.

We can expect a falling empire like the CCP to attempt to drag everyone down with them, because that’s what cowards do. If they don’t find the technological autonomy they’re looking for, and fast, they’ll be knocking down Taiwan’s back door demanding cooperation. These are the details required to have a firm grasp on the reality and restraints foreign nations must impose on each other to protect their own self interest. China however, has no interest in conducting any of it’s business without violating national security or provoking foreign super powers and they must be put in check. 1 Peter 4:12-14 Says this: “Beloved, do not be surprised at the fiery trial when it comes upon you to test you, as though something strange were happening to you. But rejoice insofar as you share Christ’s sufferings, that you may also rejoice and be glad when his glory is revealed. If you are insulted for the name of Christ, you are blessed, because the Spirit of glory and of God rests upon you.” Stay inquisitive in the word of God, and the world around you.