Viswanathan K's Thoughts

For the foreseeable future, the economic prospects for the chip industry look great, writes Pranay Kotasthane in When the Chips are Down . AI, virtual and augmented reality, cloud gaming, EV (electric vehicles), autonomous cars and crypto mining are the new/growing applications in the horizon. These are in addition to the regular phones, tablets and PC/laptop market.   When there is a lot of money to be made, there will be new ideas and attempts.   Most chips use the x86 instruction set today, which is owned by Intel and Arm. This means huge licensing fees to those companies. Those costs are one reason for the attempt to shift to RISC-V instruction set, an open-source alternative. China pushes for RISC-V for another reason too – Intel is American, Arm is British. Anything non-Western is a safer bet for them.   Similar attempts at coming up with alternatives to chip design software are underway. For the same reasons. To save on license fees, and to shift the ...

In recent years, the US has switched to what it calls the “small yard, high fence” policy. What this means is that in most areas, it will be as business as usual. But in a handful of areas, which the US deems as relevant to its national security, it will impose a lot of restrictions on what can or cannot be made available to others. This policy was clearly framed with China in mind.   High-end semiconductor chips fall in this “small yard, high fence” category. As the name suggests, the constraints and bans apply only to the highest end chips. Since most of the other countries involved in key parts of the chip industry fall under the American sphere of influence (Europe and Japan mostly; South Korea a bit more reluctantly), the “small yard, high fence” policies are enforced by those countries as well.   Not surprisingly, at the highest end of chips, this is having a crippling effect on China and Chinese companies, says Pranay Kotasthane in When the Chips are Down . Hua...

In recent years, the US has started the “Chip Wars”. No, it’s not a physical war with planes and bombs. Rather, it is a war over various aspects of the ubiquitous semiconductor chips. For now, it focusses on these aspects: (1) Which kind of chips should be on the forbidden list? (2) Who should they not be sold to?   In When the Chips are Down , Pranay Kotasthane analyzes this new war. He concludes there were 3 major triggers for this. First , geopolitics. With China snapping at America’s heels, the US is very worried. Since China is far, far behind in the chip design and chip manufacturing sectors, the US decided to try and lock the Chinese out now, before it is too late. The other factor here is that the world’s highest-end chip manufacturer (TSMC) is located in Taiwan. The aggressive Chinese stance on Taiwan worries the US. If Taiwan were attacked or blockaded, the availability of all highest-end chips would be at risk.   Second , geoeconomics. The COVID-19 afterm...