A new kind of conflict is brewing between China and the West, and it involves semiconductors instead of weapons and territory. The country's ministries have announced plans to expand its computing power significantly in the coming years, intending to hit 300 exaflops by 2025. This would require it almost to double its supercomputing power in the next two years, which is a goal the US would certainly like to prevent or at least slow down if possible.

The move by China is aimed at helping it maintain parity with the supercomputing power of the US. This long-running conflict has been given new life thanks to the recent push to build systems for training large language models (LLM) for AI applications. According to CNBC, six government ministries announced China's 300 exaflop goal, making it clear the country isn't backing down in its quest for computing supremacy despite broad US sanctions aimed at preventing it from acquiring advanced computing hardware. The country's ministries said its desire to obtain this level of computing power is fundamental to its goals in education and finance, which apparently isn't sarcasm.

Like the rest of the modern world in 2023, analysts say China's plans aim to boost its economy by integrating AI across its existing industries. One analyst told CNBC that the math checks out, too, as the country has found for every 1 yuan it invests in compute power, it gets 3-4 yuan back in economic growth. This has made advancing its AI aspirations a key pillar in its plans for future economic growth and a new front in its battle to become the world's biggest economy. It's currently the second biggest, coming in behind the United States.

The biggest obstacle China faces in its race to achieve computing dominance is sanctions placed on it by the West, which include a ban on powerful AI accelerators from Nvidia and other US companies. The ban also applies to US partners, which includes TSMC in some situations. For example, the Taiwanese foundry was recently forced to halt production of a Chinese-made GPU to comply with the ban. The Dutch company ASML, which makes the world's most advanced machines for chip manufacturing, also recently became banned from exporting its machines to China.

TSMC makes the world's most advanced semiconductors, is right next door, and is still a part of China. However, analysts have stated that the foundry would be useless to China in the event of an invasion unless it can somehow force the company to produce chips at gunpoint. That's also assuming the company's facilities aren't destroyed in the event of a takeover of the island by mainland forces.

Regardless, any aggression towards TSMC would devastate the global economy—especially US companies relying on it for advanced designs, including Apple and Nvidia. TSMC has begun moving some of its advanced nodes to the United States in anticipation of this move by China, but those fabs will take years to become fully operational.

By: DocMemory
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