Part One

The semiconductor industry is currently at the center of rising imperialist rivalries between giant capitalists US and China. The rhetoric of "free trade" has been set aside as the imperialist states take a direct role in their race to control the production and distribution of this key technological product.

This conflict is part of the intensifying competition between the giant monopoly capitalists. This involves not only a race in production technologies, but moreso involves political and military power against rivals. This mirrors the severe crisis of the global capitalist system marked by anarchy in production, giants gobbling up smaller capitalists and intensifying exploitation of workers.

The Semiconductor Industry

Semiconductors are one of the key components in electronic products. These are also called ICs (integrated circuits), electronic chips or microchips. Its capacity to control the flow of electrical signals in its circuitry enables it to control (or serve as the "brains") of computers, smartphones, hard drives, television sets, cameras, as well as "smart" appliances, modern vehicles, drones, military hardware and a lot more.

There are three types of companies in the semiconductor industry: there are those who design the chip's circuitry (such as Qualcomm and Nvidia); those who carry out the actual manufacturing or production (such as the Taiwan Semiconductor Company or TSMC and the Semiconductor Manufacturing International Corporation or SMIC); and those who do design and production (such as Intel and Samsung).

In 2020, semiconductor sales were led by Samsung Electronics (South Korea), Intel (US) and TSMC (Taiwan). Eight of the leading companies are from the US. The biggest Chinese company comes in at 19th position.

But the biggest manufacturers of semiconductors are in Asia. Sixty-three percent of global semiconductor supply are produced in Taiwan, led by TSMC which produces 51.5% of global supply. Of the total, 18% comes from South Korea, and 5-6% comes from China.

Currently, various fields of capitalist production are being bogged down by the lack of supply of semiconductors. This started in the latter part of 2020 with the sudden spike in demand for computers and electronic gadgets in the face of lifestyle and workstyle changes brought about by the pandemic. This also arose as vehicle production restarted without prior orders after months of being forced to shutter by drop in sales at the outset of the pandemic. The supply shortage also came about as the US prohibited SMIC, China's biggest microchip producer, from selling semiconductors to American companies.

One of the most affected by the semiconductor shortage is the production of vehicles. It is estimated that up to 2.5 million cars were not manufactured in the first half of 2021 because of supply problems. This also affected the production of new electronic products.

Part Two

The US and China are now pouring new investments in a race to dominate the semiconductor industry. Presently, both leading imperialist countries do not have enough capacity to produce enough semiconductors and rely on imports from Taiwan and Japan. Aware of growing importance of semiconductors, they are pushing for "insourcing" (opposite of "outsourcing") to bring semiconductor production within their countries.

China relies heavily on semiconductor imports. Local production covers only 15.7% of the country's requirements in 2018. In 2020, it imported $350 billion worth of semiconductors, 14.6% higher than in 2019. Sourcing of semiconductors severely affected the smartphone production of Huawei. Due to US pressure, the Taiwan Semiconductor Company or TSMC stopped supplying Huawei of advanced microchips, causing the latter to stop manufacturing its advanced smartphone models.

China declared its Made in China 2025 with declared aim of attaining capacity to produce 70% of required semiconductor supplies. China is anticipated to invest billions upon billions of dollars to subsidize companies to construct new facilities. However, because of US sanctions and its allies, China will face difficulties to achieve its goal of manufacturing advanced microchips (the equipment for the production of which is solely produced by the ASML company of The Netherlands, a US ally).

Meanwhile, the Biden government is pushing to bring semiconductor production within US soil. It has announced plans to allot $50 billion in the form of subsidies, tax incentives, infrastructure building and other investments in the industry. The White House is directly intervening in the name of "rebuilding America." The bill CHIPS for America Act has been filed before the US congress with the aim of dominating global capacity in the manufacturing of advanced semiconductors.

The big capitalists are now racing to fill the semiconductor shortage which is expected to last up to 2023. There is high demand for microchips leading to increasing revenues for manufacturers. There are now plans to establish 29 new factories: 19 this year and 10 in 2022, with eight each in China and Taiwan, six in America, three in Europe and the Middle East, and two each in Japan and South Korea. Europe aims to cut produce 30% of global semiconductor supply.

Taiwan controls the bulk of semiconductor production and is the principal manufacturer of advanced microchips. Taiwanese semiconductor companies were primarily established by multinational corporations, including the biggest, TSMC, which was established by Philips. There is growing anxiety in the US that China will take over Taiwan. Thus, the US is strengthening its presence around Taiwan to protect US interests and ensure that China will not get hold of advanced technology.

Wringing Workers

Because of the rush to fill the shortage, production in semiconductor factories are on high tempo. This is resulting in intensification of labor. In Taiwan and Singapore, factories are on a 24-hour shift despite the dangers posed by the pandemic.

In Taiwan, workers mostly migrants from the Philippines, Indonesia, Malaysia, Thailand and other countries, are being compelled to stay in dormitories inside company compound to enforce a military-style factory "discipline." These dormitories, where 8-10 workers are packed in every room, have served as vectors for the rapid transmission of Covid-19 infections.

While the core part of semiconductor production using advanced technology are in the capitalist countries, a large part of the manufacturing process are carried out in the "economic zones" of backward countries like the Philippines. This is where parts of the manufacturing process have been outsourced requiring intense labor-power, particularly, assembly, packaging and testing. This is also where parts of the manufacturing process are located where workers are exposed to harmful chemicals banned in western countries.

Semiconductor manufacturing maintains a "clean" image drawn from how workers wear personal protective equipment (PPE) typically seen in hospitals. But the PPEs, in fact, are not for the protection of workers, rather for the equipment they use. Their PPE are not enough to protect them from the chemicals which they directly handle or from the fumes of which they inhale.

Since the 1980s, it is common that majority of workers in these factories are women. Here they exposed and inhale poisonous and carcinogenic chemicals used in production. Different studies have discovered that women workers in semiconductor factories have a higher rate of abortion compared to the general population. Various forms of cancer such as leukemia and breast cancer are prevalent. Studies have also shown high cases of visual impairment or blindness of longtime workers in semiconductor production.

In the face of rivalries of big capitalists to control the semiconductor industry, workers must unite firmly to defend their welfare and interests against intensified exploitation.

Addendum

The Technology Of Semiconductors

Semiconductor production technology in terms of fitting more circuits in limited space advances interminably. In the 1950s, an electronic chip had only ten circuits. This increased a hundredfold in the 1960s. It is said that the capacity of chips rises every two years. In the end of the 1980s, a stamp-sized could contain 16 million circuits. In the past years, up to 7 to 10 billion circuits could be fitted in this small space.

Special technologies are used to etch circuits on silicon wafers (8-12 inches). The most advanced machines could print 7 nanometer circuits. (In comparison, the diameter of common human hair is 80,000 to 100,000 nm.) The capacity to print 5 nm and 3 nm circuits are now being developed.