Chips are a difficult shortage to solve

Chips are one of the buzzwords. There is a lot of talk and writing about it, but I think that in general very few people have clear ideas.

The chips were created in the 1960s in the USA, with Texas Instruments being one of the first companies to manufacture them. First there were special analog circuits and shortly after the micro-processors (already digital) appeared, and with them the enormous development of personal computing.

Quite quickly the analog world evolved into the digital world, and today the vast majority of chips are digital, and as we all know they are components found in all kinds of products. The more complex the product, the more powerful, complex and expensive chips are inside.

Over time, in Asia and especially in Taiwan, they specialized in the manufacture of chips, accepting that the design be done elsewhere, and they lowered the prices of the chips, with which they managed to manufacture more every day.

As time has passed, chips have become more and more complex, and means (machines, installations, etc…) are required that are very expensive to manufacture, and that are also complex to manage.

It is a job that not everyone can do without having a few years of experience. In other words, it is not something that can be easily moved from one place to another, since it is something that costs a lot of time, a lot of money and a lot of experience for the people who work in the production processes.

Today Taiwan manufactures more than 80% of the most complex chips used in the most powerful machines, followed by Korea, Japan and China. Some are made in the USA, but many are designed and then shipped to Asia for manufacturing.

And almost suddenly (just after COVID-19), developed countries find that a very critical supply for their day-to-day life comes from a country that is far away and is also in "conflict" with China, and that is they could have supply problems in the more or less near future.

This wake-up call has made politicians in Western countries. with the USA in the lead, to begin preparing to promote the manufacture of chips in their countries of origin, but when they indicate the measures to be taken, they speak of investments of a few billion dollars, thinking that with small change the problem will be solved.

And it is not like that, because it is not only money (and a lot of it) that is needed, but also time (years) to train the workers of these new production plants, and time to stock up on new machines that have delivery times of much more than a year.

As almost always, politicians tend to simplify things and believe that they can be resolved in a short time. What has been done wrong for many years cannot be reversed overnight. We have a problem with a long solution, and I think chips are going to be talked about for a long time.

When a country loses an industrial (and technological) know-how, it does not recover from one day to the next. And the West has lost a lot by outsourcing many of its needs to the East. Today we are weaker and we depend more on others, who are also very far away.

It is one thing to collaborate, and another to depend absolutely on others.

Have we learned the lesson?