You are currently viewing Transformational Trends in Energy and Data

Transformational Trends in Energy and Data

House Speaker Nancy Pelosi’s recent visit to Taipei, Taiwan sparked controversy when China issued warnings of consequences stemming from her trip. What led to President Pelosi’s visit in the first place is at the heart of two transformational trends unfolding today: energy and data. What is the link ? Half of the world’s semiconductor manufacturing comes from Taiwan Semiconductor Manufacturing Co (TSMC). And with Taiwan’s proximity to China (100 miles from the coast), fears of a Chinese takeover resembling Russia’s invasion of Ukraine are putting significant economic resources at risk. .

“The vulnerability of the United States to the supply of chips, it is the technology that processes data, limits economic growth,” said Michael Davies, analyst at Green Econometrics. “Because chips are embedded in everything from our devices to data centers, not to mention PCs, AI, smartphones, crypto mining, and more.”

Creating a precarious position with China brings other potential economic landmines, as China controls other energy resources, which would further impact the situation. “China is also the biggest processor of lithium, nickel and cobalt, the primary metals that make up AV batteries,” Davies said. “Chip and energy storage controls could limit EV adoption, and energy controls could further exacerbate concerns about economic growth.”

The global automotive market knows how badly chip shortages can impact an industry. Automakers have estimated that chip shortages will cost their industry $210 billion in lost revenue in 2021, and they expect challenges to remain through 2023. But what about states? -United ? Can he make up the shortfall? National production of semiconductors represents approximately 12% of world production, compared to 37% twenty years ago. Yet US demand for chips accounts for 24% of global consumption, which is growing.

A new law could help boost domestic production of semiconductor chips. President Biden signed the CHIPS and Science Act on August 9, 2022. This new law provides $10 billion for investments and tax credits for manufacturing semiconductors and related equipment. The legislation also provides $100 billion in scientific research spending over the next five years. The bipartisan law hopes to make the United States more competitive with China and help reduce reliance on semiconductors made in Taiwan and other parts of the world.

How fast can the U.S. expect a semiconductor recovery? Shortly after the signing of the CHIPS and Science Act, semiconductor company Micron and mobile chip company Qualcomm announced new initiatives to restart semiconductor production. Micron’s planned $40 billion investment in memory chip manufacturing estimates 40,000 new construction and manufacturing jobs and an increase in U.S. market share of memory chip production over the next decade . Qualcomm is partnering with GlobalFoundries to increase U.S. semiconductor production by up to 50% over the next five years.

Semiconductor production seems to have a positive long-term trend for the United States, but the elements needed for lithium-ion batteries could prove a trickier solution. China currently controls the processing of nearly 60% of the world’s lithium, 35% of nickel, 65% of cobalt and more than 85% of rare earth elements, according to Abigail Wulf, director of the Center for Critical Minerals Strategy at Securing America’s future energy. The United States must take steps to intensify supply chain and production efforts for a better position in the global battery market to avoid future crises.

Leave a Reply