Taiwan is now Arrakis

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He who controls the spice controls the universe.


Yep, that’s the plot of Dune, by Frank Herbert.

It is, in fact, the plot of the entire Dune series of books, one of the ur-texts of modern science fiction. There’s this galactic empire, see, and interstellar travel requires access to a certain narcotic drug, colloquially called “spice”, which only exists on one barren world – Arrakis. So if you want to control the empire, you have to control the supply of spice. And if you want to control the supply of spice, you have to control Arrakis.

I thought about all this when I read this little gem in the aftermath of Intel’s self-immolation last week … you know, the earnings announcement where this crown jewel of American innovation and strength told us that they had decided to financialize themselves into oblivion. Or as I like to call it, “pull a GE”.


TSMC gets large Intel chip order, Apple R&D plant (Seeking Alpha)

Taiwan-based newspaper Commercial Times reports that Intel has ordered 6nm chips from TSMC for next year.

The unprecedented Intel order would reportedly include 180,000 wafers, only slightly behind the raised 200K order from AMD, major TSMC client and Intel rival.

TSMC’s leading-edge capacity is now fully-booked for the first half of next year.

In other news for the pure-play foundry, Economic Daily News says Apple is setting up a display tech R&D plant within TSMC.


The world’s principal supplier of semiconductors – the spice of OUR global empire – is now Taiwan.

Forget about Hong Kong. Forget about the Uighurs. Forget about the virus. Forget about the Trade Deal. Forget about the South China Sea. Forget about all the reasons you’ve been told that the United States should or could be at odds with China.

And by forget, I don’t mean that you should really forget. What I mean is that none of these reasons really matter anymore. None of these reasons are spice. None of these reasons are the supply of semiconductors – the sine qua non of modern global power.

There is no future where the United States can both maintain its existential national interests and allow the world’s principal supplier of semiconductors to come under the direct political control of China.

And there is no future where China can both maintain its existential national interests and allow the world’s principal supplier of semiconductors to remain outside its direct political control.

Thanks a lot, Intel. Thanks a lot, Bob Swan. Thanks a lot, Jack Welch. Thanks a lot, all you Wall Street wizards of financialization.

Taiwan is now Arrakis. It’s now the most important country on earth. And we WILL fight over it.


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Thomas Brophy
8 months ago

Interesting, TSMC is looking for land right now in the Phoenix-area for a huge manufacturing plant.

Nicholas Allen
8 months ago
Reply to  Thomas Brophy

Tariffs FTW I guess?

mwgjerde
8 months ago

We are Duned!

Eric Holmes
8 months ago

Ha! I just finished reading Dune yesterday; it’s been over 30 years since the last time I read it.

It is amazing how we find so many short-sighted ways to put ourselves at a long term disadvantage.

Good thing Taiwan is in such a defensible location….

james stewart
8 months ago

This is somewhat of a departure from Moore’s Law.

Victor K
8 months ago
Reply to  james stewart

Back in the late 60’s, I was an assembler language programmer on a 16 bit 64 KB Varian 620i. It was the size of a small refrigerator. Most programming errors (bugs) were initialization or reinitialization flag flaws. These flags were usually set with a single bit in one byte of core (ram).
Yesterday, my grandson showed me his toy camera which had a 32 GB mini-SD card smaller than my little fingernail. I don’t code anymore, but I would suspect flags today are still set with only a few bits in a byte. So I would suspect the real power (spice) will be manipulation of the flags, not the flag holders.
At this point, BenH might be thinking exactly right, it’s not about the supply, it’s about the backdoor intercept loop that only insiders are aware.

Victor K
8 months ago
Reply to  Victor K

(Interrupt loop)

Eric
8 months ago
Reply to  Victor K

Can you expand on the end there? Are you speaking metaphorically or literally? That is, do you mean it matters how the actual chips can be manipulated by state actors?

james stewart
8 months ago
Reply to  Eric

The users of the circuits can indirectly be utilised.

It is a food chain.

Victor K
8 months ago
Reply to  Eric

Yes – manipulated. An interrupt is one way A signals B. Since there are a lot of different signal sources, each source has a different ID. B has to know what A’s ID is in order to do an ‘if ID on, then goto’ instruction. This latter instruction is looped, so B is always testing for A. In my days, these operations were done by sequential executions of instructions (bytes) in core. These days the chips run some things autonomously e.g. graphic accelerators

ike
ike
8 months ago

Maybe we can ‘worm’ our way in.

Eric
8 months ago

Two things embedded in this piece that are worthy of further thought, IMO:

(1) if the world’s “most important commodity” is now information (yes, I know – oil is still foundational) than computer processors and say, search algorithms, are of strategic importance themselves (what you’ve said, obviously, with this entire piece and comparison to Dune) — truly living in an age of information though, processors and tech can change the balance of power instantly, like a digital Dreadnought, and

(2) the great, overarching, slow-motion story of the age is the conflict between the nation-state and non-state actors. This instance puts this idea in stark relief as corporations that are not constrained by national boundaries or dictates can cause “problems” for countries.

Just some thoughts.

Nicholas Allen
8 months ago

Well, “principal supplier of semiconductors” can be a transient thing. There’s still a lot of semiconductor manufacturing in the US, in Germany, and in other places, and while the percentage of semiconductors made in the US may have dropped significantly with Intel’s transition, Intel hasn’t been making competitive products for a few years now.

Furthermore, China has been maintaining its existential national interests with the world’s principal supplier[s] of semiconductors outside its direct political control for quite some time now. Why would they suddenly decide that a), that had to change soon, and b), rather than just stealing IP and DIYing it, they had to push the giant red button?

I think the article’s way overstating how big a deal this is, but I guess time will tell.

james stewart
8 months ago
Reply to  Nicholas Allen

Telelogical control of the supplied chips is the objective, not simply supply.

Nicholas Allen
8 months ago
Reply to  james stewart

Does mainland China somehow exert design control over Taiwanese manufacturers?

james stewart
8 months ago
Reply to  Nicholas Allen

There’s the rub.

Carl_Richards
8 months ago

It’s a strange new world. My neighbor (I live in a suburb of Houston) has been with Fluor(FLR) engineering and construction for 35 years. In the fall last year, was promoted in charge of Asia. He was 2nd in Asia before that working out of the Philippines, in process to move to Shanghai in January. About 8 weeks ago, FLR brought him back to Houston and shut down Asian operations. Expected some scaling back, did not expect just leave. Granted, they have made one misstep after another in the last 5 years, but Trump was supposed to change the world for them. Crazy how fast things change.

Clark
8 months ago
Guy Larri
2 months ago

1) Ben could you give us a few more words explaining what Intel said during their earnings call that indicated that they had “decided to financialize themselves into oblivion“.

2) Intel just hired Pat Gelsinger to be their CEO. He is a 30 year Intel veteran engineering leader. That makes me think that the Intel board was to get back to engineering excellence and product leadership (or I am naïve and the new CEO is a smokescreen).

3) TSMC is building a new fab in Arizona, to come on line in 2024.
I wonder if the TSMC execs got a greencard deal for themselves and their families, so some of the Spice production is coming to US soil.

4) … which is good news, because with China having sights trained on Taiwan, and North Korea having 100,000 munitions pointing at South Korea where Samsung’s fabs are, an awful lot of the world’s leading edge semiconductor fabs are in geopolitical peril.

5) I expect the Pentagon (think F16s and satellites) and the NSA (think code-breaking and automatic transcription of Arabic and Persian language telephone calls into English text) both care a lot about the USA maintaining a competitive domestic silicon manufacturing capability. I doubt Uncle Sam will let Intel’s fabs disappear.

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