Are Semiconductors Connected To National Security? Experts Discuss At WEF 2024

Chips- also known as semiconductors- are the building block of all electronic products. They are essential to both everyday lives and contemporary economies. Interestingly, a series of events have propelled semiconductors' significance and role to the forefront of the country's national security policymaking. 

The functioning of the global semiconductor supply chain has been questionable due to several factors, including lockdowns prompted by the Covid-19 pandemic in various nations, strategic competition between China and the US and the conflict between Russia and Ukraine.

The US semiconductor industry has been growing and becoming more globalised for the past 40 years and while this has been perfectly fine. Arati Prabhakar, Director, White House Office of Science and Technology Policy (OSTP) stated that the industry has become dangerously concentrated in one region of the world, which poses a geopolitical risk to the US. "We were aware of this for decades. It was a matter of national security concern as well as economic concern for us," Prabhakar said.

She added that in the summer of 2022 on a bipartisan basis, Congress passed the Chips and Science Act, which took the first and most significant step that the government has ever taken to focus on semiconductor manufacturing in the United States. Notably, that was a package of USD 52 billion. 

When asked about how India is navigating itself in the semiconductor battle, Ashwini Vaishnaw, Minister of Communications, Electronics and IT said, "If you look at how India has conducted its foreign policy and its economic policy. The entire world has developed a very big amount of trust in India. On semiconductors, we have signed a memorandum of cooperation with the US, Europe and Japan. We are also working with the South Korean government and companies. It's like practically every possible company wants to collaborate with India in one way or the other."

The minister added that semiconductor is a very important industry and India is the right place for developing it because India has a very large pool of talent. Close to 3 lakh design engineers, designing practically every complex chip which is manufactured in the world. 

On mistakes India is making in its plan to manufacture chips, Chris Miller, Assistant Professor of International History, Fletcher School of Law and Diplomacy (Tufts University) said that most political leaders want a picture of themselves in front of a big manufacturing facility. Most of the money in the chip industry accrues to people who design them and don't manufacture them. 

He added that countries like Taiwan and South Korea started their journey of manufacturing chips a half-century ago and today they're among the world leaders. There is no doubt that India is beginning to follow that path. There is a major interest among investors at every stage of the supply chain in India.

"The chips act is is very good strategy for the European Union for different reasons. It's the first time that we have chosen that we need to have a supply chain, which is of strategic importance. Europe should do more about these critical technologies we have and what we need for the future," said Micky Adriaansens, Minister of Economic Affairs and Climate Policy, Netherlands on geopolitics of Europe regarding chips.

The minister added that chips are the most important product to act upon because of the dependencies and what we see of the risk to national security.