IFF is the acronym for Identification Friend or Foe, a sophisticated system for fighter jets that was developed during WW2 to allow you know whether another fighter jet was friendly or an enemy.
Obviously since 2020, all the alliances negatively teeter, trust and fairness become rare values.
Who are the real Friends when more Foes unexpectedly appear out of the blue without highly developed IFF instruments to identify the degree of incoming danger.
Many countries update the statement made by Winston Churchill, “Never let a good crisis go to waste”, and use it to fulfill their own agenda and old forbidden ambition.
Everyone for himself, and God for us all.
The rules set by liberal economy don’t apply anymore, with suspicions at all stages. Entire sectors of industry become under monitoring due to their very high strategic value, to avoid any dependence risk.
In case of “crisis” or “high political, strategic, diplomatic or industrial” interest, egoist short time frame rules apply, and here we are.
Bad habits from “counter parts” get out of the shadows. Spying, over protectionism, unfair business, “coups bas” can not be hidden anymore as it explodes to public eyes…
Many parts of the supply chain enter high strategic values. Food. Energy. Transport. Medicines. Communication… And, last but not least, Microchips, as almost any item used in our daily life is digital, microchips, few cm² big, represent cornerstones of our world.
Lately, an old man names Morris Chang stated that:
"Globalization seems to be a bad word and 'free market economy' is beginning to carry conditions"
He also added.
"Taiwan needs to build a secure and resilient supply chain with trusted partners, especially in the electronics sector"
Who is Morris Chang? A very respectable 91 years old Taiwanese, billionaire. A billionaire because he founded one of the main semiconductor manufacturers in Taiwan (TSMC) in the 90s, before that he earned a PhD at Stanford, a master at the MIT, and prolific career at Texas Instrument.
A “wise man” of the microchip industry whose words bring precious future insights.
Morris Chang has seen every single step of the rise of microelectronics, being often one of the main actors of this achievement, firstly on the American side, and later on the Asian side.
His company, TSMC, allowed many USA computer companies to outsource their production, especially the most important one, microprocessors. The brain of any electronic device.
Taiwan holds about 90% of the market share of microchips, and most of the rest of all electronic products are also made in Asia.
But with his last statement, he foresees rightfully what should come within the next months, along with other entire sides of the global and strategic economy of the world, since the stress tests that we live with the Covid crisis followed by the war in Ukraine.
The statements made by Morris Chang about Taiwan can easily be extended to the World, as the stress test Covid plus War in Ukraine revealed at daylight what was hidden or naively tolerated.
This year, we reached a milestone in craziness, as car manufacturers bought some washing machines (500 to 1000$) in order to get their microchip, and use them as their prices on the market reached indecent sums.
Microprocessor is one of the most critical parts of any electronic item, and as nowadays, almost each item is digital, it needs a chip to be programmed upstream. Semiconductors are a matter of national security for many countries and industries.
No microchips, no usable tech items. Period.
As western industries since the late 80s outsourced most of their production in Asia, where they built a good and efficient know-how in electronics for a lower price, Europe found itself in a delicate position as they lost too much know-how, fabrics and therefore their independence, years after years.
The USA were not in a better position, but they reacted for a longer time, in parallel to the historical presence of heavy weights of this industry such as Intel, Microsoft, Apple, IBM, Cisco that resisted many storms and kept their domination over the years.
President Trump has started the move to decrease the Chinese dependence of the USA on semiconductors, his successor, President Biden seems to be even tougher.
In this sense, Apple, the indisputable leader in his branch (with almost 200 billions $ in cash reserve), is bringing back hardware manufacturing of semiconductors to the USA.
Before that, the MacPro chain production in Texas allowed the writing of “Designed in California and Made in Texas” stickers on the packaging. https://www.apple.com/newsroom/2019/09/apples-new-mac-pro-to-be-made-in-texas/
The point of no return emerged early 2019, with the upgrade of the phone network to the 5G. The leader at that time was Huawey.
Trump, with the elegance that characterizes him, stopped Huawei and China's monopoly on the 5G communication system. 5G being more complex, a stack of routers and switchers, directly controlled by constantly upgraded software, suffers therefore of a greater vulnerability, with high risk of spying, especially from a company founded by a former Colonel of the Chinese Army.
What was artisanal with Echelon, could become a mass industrial security issue with 5G.
The Western World sees at last, that Globalization is changing, aggressively.
The Dogma from the EU in early 2000, such as expressed by Mr Moscovici (named in 2014, European Commissioner for Economic and Financial Affairs, Taxation and Customs), claiming that the EU should not become a fortress becomes obsolete.
What the USA started for a decade comes at last to life in Europe, as the inconvenient truth comes to public eyes.
Few real friends, some obvious foes, but many partners with all levels of trust, and flip flop when they need to.
Identical to Apple, the french ST Microelectronic along with US GlobalFoundries partner, will invest a couple of billions of € near Grenoble, a traditional hot spot of electronics know-how in the french alps in order to increase French and European capacity production.
France welcomes new chips production site in bid to become global player
Infineon, a spin-off of Siemens, invests billions into their future fabric in Germany.
Even if investors claim their concern about the environment, to produce chips that are energy costly to produce, the initial goal remains the desire and need to increase their independence.
Independence from not so friendly countries (that could use this dependence as a leverage tool), but also from friendly countries that could suddenly and unexpectedly face serious issues, such as virus blocking chain of production (https://www.ft.com/content/598c81b7-bbc7-40f2-ba04-eed0dddfb989), political instability, war threat, natural catastrophes (as Global Warming will increase their rate).... The list is long.
It was about time for this European Chip Act to come to life, copying the American one, but we still have a long way to go as we outsourced too many of our assets since the late 80s.
Will it be worth all the taxpayer money? Some estimate not, as the efforts will require years to give visible and tangible results.
The core of most high tech companies gather in central north Europe, France, Germany, Benelux…. Though, many success stories appeared here and there, such as Skype (Estonia), Ericsson (Sweden), Nokia (Finland), Picsart (Armenia), PeopleCert
(Greece), as much on the hardware part than the software. Even though the hardware part suffered a lot, and did not make it through since the telecom boom in the 90s, with almost no presence on the market nowadays, swallowed by cheaper but good Asian concurrency and elitist Apple products that strongly emerged and flooded Western countries for more than 10 years.
Europe should not become a fortress, but as the threats come from all sides, and as it becomes very hard to distinguish who are the friends from the foes, any political decision, European wise, to increase our digital independence should be praised.
Each product coming into European market should be sharply evaluated, on a strategic point of view, and even more when it comes to high tech, as we become fully dependent on a few cm2 microchips.
Author: Regis Robert DANIELIAN is a French-Armenian physicist graduated from Sorbonne University. He is a Network State citizen and a project manager at the Network State Energy Infrastructures department.