"Happy Monday everyone. Now you know the dirty little secret concerning our dirty little chips. Clean manufacturing is not so clean after all. And our supply woes might just be starting."
Trying to buy a car as of late? Good luck with that one. Especially a new car, loaded with computer chips. Computer chips? Yes, the new face of our supply chain hiccup. And here is the good news and the bad news. The good news, is besides your car, just about every appliance you have in your house (if it is new stuff), is loaded with computer chips. Welcome to the Internet of Things (IoT). The bad news, is most of the chips we use are made in Taiwan. They are the big gorilla in the room. Followed up by Red China. We still make some, but not many. Get ready for rough seas going forward.
Not too long ago, the United States made over 1/3 of the world's computer chips. Now we make 12% (and shrinking). Why? Here comes the dirty little secret with clean manufacturing. It ain't so clean after all. In fact, it uses a ton of water, and produces quite a bit of effluent byproduct. Did I mention the carbon footprint issue also?
Taiwan Semiconductor Manufacturing Company (TSMC) has become the godfather of chip manufacturers. They specialize in the most complex and highest capacity ships. In fact, they make 92% of all the world's most complex chips. But does it ever consume water! In 2019, this one chip manufacturer consumed 63 million tons of water. Not too much of an issue during that year. But this year, with a drought in Taiwan, it was a big issue. Does the precious water go to Taiwan farmers, or to the giant chip manufacturer?
Intel's plant in Arizona is small potatoes compared to TSMC in Taiwan. That being said, in the first three months of this year, that Intel chip plant in Arizona used over 900 million gallons of fresh water. Hello? Drought parched Arizona - remember how dry you were at the beginning of the year? Plus - the waste produced during the manufacturing process. I guess the NIMBY (Not In My Back Yard) was a factor in determining where chips are to be manufactured. Sorry Taiwan - you got stuck with the booby prize.
Back to IoT. It is estimated that by the year 2025 (right around the corner), there will be over 20 billion IoT devices. Whoa! That is a whole lot of computer chips! Yup, that is. And most of those will be manufactured across the big pond. Stretching our supply chain. So what is happening right now in buying a new car, can happen again in buying just about anything and everything.
Happy Monday everyone. Now you know the dirty little secret concerning our dirty little chips. Clean manufacturing is not so clean after all. And our supply woes might just be starting.
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