August 25, 2023 • 69 mins
The modern world runs on microchips and semiconductors. There's no way around it -- and the semiconductor business is perhaps one of the most important industries on the planet. But there are some serious problems (and conspiracies) on the horizon. In tonight's episode, Ben, Matt and Noel dive into a ticking time bomb of supply, demand, and conflict... discovering why these tiny chips may just be the thing that causes World War III.
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Episode Transcript
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Speaker 1 (00:00):
From UFOs to psychic powers and government conspiracies. History is
riddled with unexplained events. You can turn back now or
learn this stuff they don't want you to know. A
production of iHeartRadio.
Speaker 2 (00:24):
Hello, welcome back to the show. My name is Matt,
my name is Noah.
Speaker 3 (00:28):
They call me Ben. We're joined as always with our
super producer, Paul Mission Control Decant. Most importantly, you are you.
You are here, and that makes this the stuff they
don't want you to know. We're finally doing it. This
is our episode about chips, and thank goodness because we
talked about Yeah, we talked about chips a lot off air.
(00:52):
We were talking about on Instagram ad that some of
us have been getting for very very strange potato chips, really.
Speaker 4 (00:58):
Strange and exotic potato.
Speaker 5 (01:00):
Yeah.
Speaker 4 (01:00):
I think both you and I Ben have received one
for a Lais Shabu shaboo hot pot flavor, which seems delightful.
And of course you know you and I, I think
all four of us frequent Asian supermarkets quite a lot
like the super h marts of the world, and there
you'll see this insane variety of chips that you just
don't get in your you know, Humble, Kroger or Publics
(01:21):
or whatever. But we're not really talking about those kind
of chips today, though, are we.
Speaker 3 (01:27):
Yeah, Unfortunately, I guess we should rip off the band
aid now. The chips are amazing, potato chips in particular.
But there's another kind of chip that we're going to
explore tonight. It is the kind of chip that makes
civilization as we know it possible in the first place.
These chips are often referred to as semiconductors. Think of
(01:49):
them as the silent servants of the digital age. Depending
upon whom you ask, they may just trigger the next
World war. Here are the facts before we get any further.
What is a semiconductor? This is the land of no
dumb questions.
Speaker 2 (02:07):
Well, speaking of that, let's let's just do a little
upfront information here for everybody listening. Your boy Matt is
a dumb dumb and did all of his research on
LK ninety nine superconductor stuff that was going on in
the news. I literally I don't know where I crossed
my my semiconductors, guys, But I totally like, I have
(02:32):
no idea what's going on in this episode. So I'm
gonna be just completely I've lost.
Speaker 4 (02:39):
Sorry, Surely that knowledge will come in handy somewhere down there.
Speaker 2 (02:42):
I don't think it will. I don't think it will.
Speaker 3 (02:46):
I think it will. But like, okay, before we get
into semiconductors, Ben tell us a little bit about the
LK ninety nine because that news sort of rocked rocked
the digital world a few weeks back.
Speaker 2 (02:59):
Sure, well, today the news came out that officially, people
who've been trying to replicate this super this room temperature
superconductor technology, it came back and they said, no, it's
not actually a superconductor. It does have really cool things
going on about it, but it's not a room temperature superconductor,
(03:21):
which would would have changed the game for everything, including
and especially chips and semiconductors. So anyway, let's get into
the episode and talk about semiconductors. I apologize, guys.
Speaker 4 (03:35):
I guess that begs the question. We're talking about, first
and foremost the idea of conductivity, you know, and what
does it mean?
Speaker 5 (03:41):
You know?
Speaker 4 (03:41):
I mean not not to you know, state the obvious,
but you know, conducting materials are able to allow electricity
to pass through them and can be used for all
things like wiring and you know, it's you know, there
are materials that are conductive where it's not a good thing.
You know, you could it could be dangerous, you know,
and you have to be very careful about, you know,
having electricity around pools, like you know, don't don't blow
(04:06):
dry your hair in the bathtub and keep the toaster
far far away, because that's the recipe for disaster. But
the idea of like something that conducts better or less better.
Speaker 3 (04:18):
Yeah, don't live on the electric fence of conductors.
Speaker 4 (04:22):
Yeah, does urine and conduct electricity. It's got electrolytes in it, right,
would you would you if you really whizzed on the
electric fence, would you get zapped?
Speaker 6 (04:29):
I mean, it's not a good idea, probably not, because
we know water can conduct electricity, and urine is you know,
urines like laqua it's water with a little something extra.
Speaker 3 (04:42):
I don't know if Luquah wants us to portray them
that way. But on the other end of the spectrum,
there's the insulators, right, like glass is an insulator. Uh yeah, yeah,
electricity doesn't really vibe with those. So when it was
funny we're talking off air just before we recorded about
semi conductor, why would you want something that is in
(05:05):
this goldilocks zone between insulation and super conductivity. Well, it's
because it allows you to control the flow. It lets
you put some lets you put some if VENs, some
ones and zeros into the mix. And as you're listening
to tonight's show, there are billions of little semiconductor ones
(05:29):
and zeros making this possible. Even if it doesn't sound
like a bunch of ones and zeros, everything you do
electronically is that.
Speaker 4 (05:38):
I sort of made the comment off Mike that the
name semiconductor almost sounds kind of like a bit of
a self phone where it's like, I'm not that good
at conducting electrocity. I'm only semi good at it. But
that matters because we want to be able to, as
you said, Ben, kind of stem the flow of electricity
in ways that are conducive to certain technological processes, you know.
(06:02):
And those those billions of switches, I guess the ones
and zeros. If then's that's what's so important. And all
of that's contained within this tiny little piece of real estate.
Speaker 2 (06:13):
Yeah, oh, and that tiny real estate. And then let's
go back to what Ben, you were saying about conductors
and insulators and semiconductors. The problem with metal like copper,
or even when you get into things like silicon, when
you pump electrons through there, let's say, in copper, electrons
are just going willy nilly everywhere throughout that those atoms
(06:35):
of that copper, the electrons you go in, it goes everywhere.
That's why you get resistance. That's why you get heat
in anything. Right, Like we were just talking about my
computers being so hot. I've been having these recording problems.
It's because this thing is generating a ton of heat,
which is just the resistance the electricity lost basically due
(06:56):
to the materials used in the creation of this machine.
And that's why.
Speaker 4 (07:02):
And over time it's gotten less efficient I guess, or
the battery has lost some of its original oomph and
now it's sort of like generating way more of that
than it should and which is why it's time to
put that thing out to pasture.
Speaker 2 (07:15):
Well, it's also because the semiconductors that were manufactured back
in twenty twelve, twenty thirteen, you know, were of a
certain grade and they degrade over time, right.
Speaker 3 (07:26):
Yeah, one hundred percent.
Speaker 4 (07:28):
I mean.
Speaker 3 (07:28):
So the question is of course coming from a culture
where bigger, better, faster is always superior. It might seem
counterintuitive to have something less conductive, but having a semiconductor
material because of the way resistance works, it allows humans
to make amplifiers. It allows humans to make switches. And
(07:52):
shout out to professor of electrical engineering at Arizona State University,
Trevor Thornton has a great explainer on this with the
good folks at the conversation, and Thornton puts it this way.
He breaks down the chips in a very understandable way.
He says, these chips are typically made from thin slices
of silicon, and they have complex components laid out in
(08:16):
specific patterns. These patterns control the flow of current using
those switches we're talking about transistors, and Thornton says, it's
pretty much the same way you control the electrical current
in your home. The light switch is a literal switch
right turned off or on the flow of the electricity.
(08:36):
But the difference between the switches in our houses and
the switches in a semiconductor is that those semiconductor switches
are first off, very very tiny, and they're entirely electrical.
They need no mechanical components to flip, and there are
billions of switches, tens of billions in the sophisticated chips.
(08:59):
And this is an area not much bigger than your thumbnail,
not even know your thumbnail is probably your best fingernail,
not much bigger than your pinky nail.
Speaker 4 (09:06):
And that's the part where I just my mind just
kind of glazes over where I'm like, this is, for
all intents and purposes, might as well be alien tech
to me. Like I understand a circuit and the basics
of electronics, you know, and like the if then of
like a basic printed circuit board, like in a piece
of musical equipment, for example, and oftentimes those will incorporate switches,
(09:27):
you know, to turn a thing on or off, whether
it be blocking a signal path you know, or like whatever,
or turning on a certain filter or whatever it might be.
But this whole billions of switches in an area not
much larger than the size of a fingernail is just
I can't wrap my head around it.
Speaker 3 (09:44):
It makes me think, you know, at some point, well,
at some point, there will be a physical limit to
how many switches can be put onto a single chip.
When you get to the when you get down to
a single atom size. Right now, you can't. You can't
go much smaller. But if we could, eventually you could,
You might be able to make so many switches that
(10:06):
you can make a simulation of the entire observable universe.
I am not high, by the way.
Speaker 4 (10:12):
Well I'm not you there yet, but I have to
say too, Like, I mean, this is the amount of
these switches, the number or whatever that has to do
with how many processes a chip can do at one time.
So we're talking about evolution of chips over time. These
things I think they're called threads or whatever, like within
a computer processor. The higher power chips, the higher power
(10:34):
processors can do more of this can contain more of
these switches. I'm just again, I'm conjecturing. I'm pretty sure
that's right, though.
Speaker 3 (10:42):
One hundred percent. For a long time, people were following
something called Moore's law. And Moore's law is this stunning
observation that the number of switches or transistors in an
integrated circuit doubles or has doubled every two years. It's
a stunning and precipitous of a lie. Not all of
these chips are the same. We can think of rough categories.
(11:05):
Memory chips they store data and software as binary code.
Digital chips they manipulate the data based on instructions from software,
and then wireless chips receive data from high frequency radio transmitters,
convert those into electrical signals, and then it's back to
the chips. This is all run by the language of software.
(11:26):
All software does, even the very events stuff. It just
coordinates the ways in which these different chips work together.
Speaker 4 (11:34):
Would that include things like RF you know, using your
phone to tap on a thing to you know, pay,
or like the way you're receiving or transmitting short distance
kind of data.
Speaker 3 (11:44):
Yeah, man, it's it's pretty much. It's actually, it's weird.
It's almost easier at this point, I think to try
and name electronics without these sorts of chips, because they're
in everything your phone, your car, your TV remote, medical applications,
military applications. Back in the day, semiconductor chip evolution moved
(12:09):
with the cycles of PCs. So the more personal computers improved,
the more sophisticated they became, the more sophisticated chips became,
and then iPhones hit. iPhones were a big game changer.
At this point, I think we should shout out our
pal Jonathan Strickland, aka the Quister from tech Stuff. He's
had one of the longest running tech podcasts in the game,
(12:31):
and he explains this stuff in depth if you want
a less conspiratorial primer.
Speaker 2 (12:37):
But here the smart device that means there's one some
of this stuff in them, and that's literally smart anything.
Speaker 4 (12:44):
Yeah, right, your.
Speaker 2 (12:46):
Thermostat, your washer and drfrigerator, yeah, everything, your massage chair.
Speaker 4 (12:54):
So the wireless chip is also again I'm sorry to
be beating this in the ground, but like that's what
allows you to Wi Fi, so, like you know, and
so many of these smart devices have to be on
a network and don't have an Ethernet port on them.
So that's the kind of chip we're talking about here,
probably in addition to the digital chip. Maybe not memory chip,
I don't know. Memory chip is more like RAM on
a computer for temporary storage of data that's actually being
(13:18):
used in the moment.
Speaker 3 (13:19):
They all work together, and that's right. What's nuts about
it too, is if you think about, let's blow the
dust off our old taco bell analogy, from these basic ingredients,
you can make a panopoly of things that appear to
be very different items on the menu, right, Taco Bell
is like famous for having what four to five ingredients
(13:40):
and they'll sell you thirty things. That's kind of how
chips work.
Speaker 2 (13:45):
But in the end, isn't it weird? And I'm not
high to think that all of this, all of the information,
it's just an electrical current getting taken in different directions
and hitting different things at different at times. In it
all micro level, it becomes out of voices in your ears. Yeah,
(14:06):
it becomes your favorite television show on Max or whatever, like.
Speaker 3 (14:12):
Uh, well, the human brain is that too.
Speaker 4 (14:16):
I'm looking at a very simple piece of electronics right
next to me. That's a monophonic synthesizer that is just
signal flowing electricity that is filtered and boosted and the
different things that happened to it, and it makes a sound.
And that is literally a sound that we hear that
is just vibrations carried on the air, you know, I mean, yes, sorry, Matt,
(14:38):
it is mind blowing.
Speaker 3 (14:40):
Also, I gotta say on a soft folks, fellow conspiracy realist,
and also Paul, because Paul, you're listening to along here,
it might sound a little weird that we all three
took a moment to say we're not high as individuals.
But that's just because this stuff is so my blowing
(15:00):
when you think about it, it's ubiquitous, it's everywhere, it's
it breaks your head, right, So we know this evolution
is nuts. If you are a fellow nerd of a
certain generation, your first experience with semiconductors may have come
in the form of pocket calculators. Remember those old Texas
(15:21):
instruments things we all had to buy. What a monopoly,
that was a grift t I.
Speaker 4 (15:27):
Didn't learn until pretty recently how important Texas Instruments was
in the whole personal computer race. You know, there's a
really great show called Halt and Catch Fire that's sort
of like a fictionalized version of like the race for
like the PC and the laptop and stuff, and parts
of it are real. And one part of it that's
real is the whole inclusion of Texas instruments. And they
(15:48):
called it the Silicon Prairie, that area of Texas that
was really big in this stuff, really really fascinating. Even
before like you know, Silicon Valley became a thing, Texas
was kind of like the grounds zero for a lot
of this this this research and development.
Speaker 3 (16:03):
Yeah, and we've already clocked the substance silicon coming up
again and again really important. We're going somewhere with this, folks.
Those those pocket calculators like you mentioned that, like the
t I eighty fives and so on, eighty three fours.
Speaker 4 (16:18):
Eighty three on Snake, drug Wars, Drug Wars, Drug Wars.
It was just a text based like choose your own
adventure game, that's all it was. And you got to
be a drug kingpin. And I remember it was the
first time I saw the word ludes and I was like,
what is what are lads? I don't know what this.
Speaker 3 (16:38):
I also remember the old eight eight five trick, you
know it was it was boobs take that straight spare.
So those things only had a few thousand transistors per chips,
still very impressive for us. But now the largest ones
are going to have more than fifty billion transistors pushing
(16:59):
to the A. Jemore's laws and you know, naturally. Okay,
So this is one of the most important technologies in
modern civilization. Who makes them? Uh, this is where it
gets interesting. They're made at these compounds called foundaries. Back
in two thousand, about twenty three years ago, there was
something like twenty three companies that were doing this to
(17:20):
some degree. As of twenty twenty one, there were only
three major players in the game. As as the free
market dictates, they ate their own right, and there were
fewer and fewer competitors. The three big the three big boys,
the three chunkers in the field are Intel, you who
go US, Samsung Yeah, out of Korea, and then something
(17:47):
called Taiwan Semiconductor Manufacturing Company or TSMC. This is the
Kobe Bryant of the game.
Speaker 4 (17:54):
By fun interesting, Yeah, but that one sort of seems
to be I don't know, we'll get there if it's
changed names bad. I don't know that as a household
name like I do Intel. I do think it's funny
too or interesting that the term foundry, like that's a
really old term for like a place where you would
pour metal molten steel and things and like, you know,
make goods out of liquid metal, a foundry like picture
(18:17):
where the terminator gets lowered into the lava at the
end of T two spoiler alert for a twenty five
year old movie.
Speaker 2 (18:24):
Well, Well, let's let's stays up. Let's talk about that
one and the Taiwan sent me to conductor Manufacturing company.
It's in Taiwan and they make what is it, it's
over half of all the chips manufactured in the world, right.
Speaker 3 (18:37):
Yes, sir, yeah, round about fifty four percent currently. And additionally,
out of all the chips they make, and out of
all the chips in the world, TSMC makes the best ones,
the most sophisticated ones. When we're talking about the new
ones with fifty billion switches or transistors, those are coming
(18:57):
from Taiwan. And there are other players in the game.
But at present, if this one company goes under or
its operations are disrupted for any amount of time for
any reason, the world as you know it, folks, is
going to run into a lot of problems very very quickly.
(19:19):
So okay, you know, diversification is good in any field,
but sometimes you can't have it right. Sometimes you have
to live with a reality. And if Taiwan is indeed
the holy Grail or the holy font for this technology,
then I guess humans have to take care of Taiwan.
(19:42):
But that's kind of complicated because it turns out Taiwan
is a little bit more than a dope archipelago of
sci fi technology.
Speaker 2 (19:52):
Well, yeah, it's also a very let's say important and
strategic geopolitical location. How about we call it that? And
I mean really think about that. We're not joking when
we say most things now that you can purchase that
are above bargain basement, like the lowest level version of
(20:13):
a product, have a chip in it just as a standard.
And they are making fifty four percent of those chips
that go in all of the things. It's not an
Internet of things. It's a world of internet things.
Speaker 3 (20:29):
And if you ask any geopolitics wonk, any economist, any warhawk.
You know, even if you get the buttoned up alphabet
boys about three drinks in and you ask them what
will lead to World War three, They're going to have
a short list of things, and it's going to be
stuff like climate refugees. It's gonna be stuff like nuclear accountability,
(20:54):
potable water, and Taiwan. Because if things go if things
go just a little bit wrong, Taiwan is going to
be a huge problem. What do we mean, We'll tell
you after a word from our sponsors. Here's where it
gets crazy. A war for chips. Could World War three
(21:18):
break out over Taiwat? The answer, unfortunately is yeah, man.
Speaker 4 (21:25):
Yeah, I mean it's like a devil's bargain, right, you know,
you you make all this progress, you know, surrounding this
miraculous material that has a shelf life. I guess there's
a finite amount of the stuff and it's not just
available anywhere, and you know, you basically hang your entire
(21:47):
existence on this substance, on this material, and then there
becomes it becomes the most talking about chips. It's a
bargaining chip. It becomes the most outrageous bargaining chip you
could possibly imagine.
Speaker 3 (21:59):
Yeah, it's in. The scary part is even if you
don't hear about it often, if you're not in the
tech sector or the war sector, there is already a
war going on. It's a cold war for now as
we record, the West is throwing economic sanctions, China's throwing
(22:20):
economic sanctions. A lot of people are making big speeches, imposturing.
They're doing trade freezes that are specifically targeting the supply
chain of semiconductors. Stuff that's so specific it would sound weird,
like why is the US terrified that China is clamping
down on things like gallium? When's the last time you
(22:42):
were walking down the street and you thought, I wonder
how Gallium's doing or Germanium and.
Speaker 4 (22:47):
Ben I made the comment earlier that TSMC wasn't like
a household name to me, you know, and I think
that's true. But this still is This is the important,
you know, component of this converse is that company and
the fact that they're not a household name is interesting.
Mm hmm.
Speaker 3 (23:05):
They're selling. Yeah, you're not gonna you're not going to
buy their high end chips as an individual. You're going
to buy stuff from companies like Apple that have bought
chips from that company. They supply other businesses and governments
and militaries. I mean it sounds alarmist, right, but in
recent years, the idea of a chip war has become
(23:28):
a big, big concern in the US, Like people stay
awake at night worried about this because the PRC has
a really fraught, cartoonishly tense relationship with Taiwan and they
are super duper sensitive about it. Like even on this
little podcast, this whole free podcast, if if you're not
(23:52):
diplomatic when you talk about Taiwan, it can spell problems
for you in customs in MAINSTREAMCHI, like to the point
where they might let you in, like getting out becomes
a conversation that you don't want to have. It's tough.
I mean, like, Okay, a war could break out at
any given moment over any given thing. That's just the reality.
(24:16):
Human civilization is a house of cards. But this thing,
these chips, because the world is so dependent upon them,
they may be the proverbial feather on the camel's back.
The war might go hot because of this resource. Dude, Like,
I had no idea speaking of TSMC, I had no
idea just how important they are to the nation of Taiwan.
(24:40):
The street name for TSMC is Sacred Mountain. And it's
such a big deal that if you work for this
company you can apply to be exempted from military training
even if there's a war going on. You can say
I work for the chip company though, and they're like, oh,
crap man, what are you doing here? Get back to
(25:02):
the foundry make more chips.
Speaker 2 (25:04):
Well, yeah, it makes sense. If you're a war you
gotta make war stuff, and war stuff needs to be smart.
And if you don't have the chips, then you don't
got the war stuff.
Speaker 3 (25:15):
Right, which I think is the motto of t SMC. Right,
that's there, yep, that's like they're Intel bump.
Speaker 2 (25:21):
Yep.
Speaker 3 (25:23):
So, I guess we need to talk a little bit
about this situation between China and Taiwan. Why is it
so tense? Why why is it so I think it's
fair to say it can seem cartoonish to outsiders.
Speaker 4 (25:39):
Yeah, I've always had a sort of vague grasp on this,
so I'm super interested in getting a little more into
the details of the history there.
Speaker 2 (25:47):
Well, look, I'll break down just what I think I know,
and then Ben you swoop in.
Speaker 3 (25:54):
We'll three blind mice. Because we're not Taiwanese nor Chinese
and oh oh sorry, we are not Chinese, is what
we should say, yep.
Speaker 2 (26:04):
Because the country of China, the People's Republic of China,
has for a long time considered Taiwan just to be China,
and with the One China policy, everything that is China
is China, and that is it, end of sentence. So
Taiwan is China. It is a part of China's apps,
right except yeah, but the human beings that actually run
(26:30):
Taiwan disagree with that sentiment. Is that roughly what Kina?
Speaker 3 (26:36):
Yeah, now that that's and that's the right way to
put it. So you'll hear you'll hear it called Taiwan China,
Taiwan Province of China, or Taipei China. It dates back
to nineteen forty nine. There were there were two political
entities with the name China. They both laid claim to
(26:56):
the entirety of the land. The one uh the PRC,
the People's Republic of China. That's usually what folks in
the West mean when they say China. It's mainland China.
And then on Taiwan there was the Republic of China
or ROC, which is a very bad thing to say,
don't you know. Don't bring that up in Beijing, even
(27:19):
if you think you're chilling and everyone's cool at the
karaoke spot. Because of that split, the PRC, like like
you got, Like you said, the PRC considers Taiwan one
hundred percent part of its country, the way that the
US considers Hawaii one hundred percent part of the US.
And like you said, a lot of people in Taiwan
(27:42):
do not agree with that. And if if this was
not a pot of real possible cause for World War III,
it would be hilarious. The whole like Vonnegut Joseph Heller
esque Catch twenty two ness of it every single country
on the planet pretty much avoids talking about this issue.
(28:03):
Sometimes a Western politician will show their ass a little
bit and then they immediately step it back because China
does not play with this. You can even see this
is so weird to me. You can even see celebrities
totally not politicians, totally not diplomats or anything, just celebrities,
your favorite athletes and movie stars screwing up having a
(28:27):
slight accidental misspeak and apologizing to the world for daring
to refer to Taiwan as some sort of independent country
or entity. We have a clip of John Cena doing it.
We can play that, right, can.
Speaker 2 (28:41):
We play this? Is he speaking in Mandarin?
Speaker 3 (28:44):
Yes, yeah, let's play it. Who knew? Okay, we're playing at.
Speaker 5 (28:51):
The Clipina will be Shu shu Shanzaio will handul.
Speaker 3 (29:04):
So for anybody not speaking Mandarin, what John Cena is
doing here, it actually not terrible. Mandarin is apologizing to
the world, to the people in government of China uh
for accidentally referring to Taiwan as a country. And this
(29:25):
is not the only example of this. There are other
celebrities who have done the same thing. And why is
that important to play nice? With this government if you
are a celebrity or public figure, well, it's because it's
one of the biggest growing consumer markets on the planet.
That's why your favorite film studios are jumping through their
(29:47):
butts to get to get the Chinese government's permission to
show their films. Right, that's why I like in Uh,
I'm kind of alone in this, but I loved the
Pacific Rim films. Remember Giant, Oh they're good giant robots. Yeah,
thanks man, Yeah, I loved them. And you can really
(30:09):
tell that they that the studios wanted the approval of
the Chinese government in the second Pacific Rim film, because
there's this whole thing about Charlie Day not being able
to speak Mandarin but trying. There there's the insertion of
this whole Chinese government subplot as like the good guys
(30:29):
who actually saved the world. There's there's a lot of
play here. And the main thing is, no matter how
powerful you are as a government or as a company,
or even as a billionaire, you just don't talk about
the Taiwan thing. You just don't bring it up. It's
like if you're at your friend's house and you see
(30:50):
them yell at their kids. You just don't comment on it.
Speaker 2 (30:54):
Well, there's even been at least one UN resolution that
like tried to set this in stone, or maybe China
tried to set it in stone through the UN.
Speaker 3 (31:06):
Because they've got because China, as a result of World
War Two being on the winning side, China is one
of the few countries with a veto power, right, And
the United Nations had this white paper that came out
and they were the legal opinion that Taiwan is a
province of China with absolutely no separate status, and China
(31:27):
took that and ran with it. So our stage is set.
One of the most important technologies, probably the most important
technology in the modern world, is manufactured in a ticking
time bomb of an island. Right, the situation in Taiwan
is full stop, no caveats. It is unsustainable. It is
(31:51):
double plus on good. It's like if all the world's
important computers were made on a glacier and the glacier
was melting.
Speaker 4 (32:00):
Ask my question though, is like, is it about their
access to the material? Is it about their expertise and
manufacturing the product? Like why do they have such a
monopoly on it? Like why isn't it more diversified?
Speaker 3 (32:12):
The latter, it's it's their expertise in manufacturing the materials
that are used to make this stuff that goes to Taiwan.
But they don't. You're not going to see a bunch
of like gallium, germanium and silicon mines on Taiwan, but
(32:32):
they have.
Speaker 4 (32:34):
Yeah, so it's proprietary. Like so when we get advances
in the chip, it's because they figured it out or what.
Speaker 3 (32:42):
Yeah, it's just really really difficult to make things with
that level of precision.
Speaker 2 (32:49):
Yeah, and don't forget there are people at Intel and
you know all these other places that do manufactu facture chips,
just on a much smaller scale. They are also attempting
to make innovations, right, both in materials and in I
guess technique. Yeah, but this whole thing really does and
we've talked about this before, but it really does give
(33:09):
a perfect explanation for the country of China's practices of
resource extraction, specifically in Africa, of like where the materials
are coming from and where they are going.
Speaker 3 (33:22):
And credit where it's due. A lot of companies that
are not in Taiwan, right, like companies in the Netherlands,
in Japan and the US, they have the design know how.
So the boffins over at Intel can design a new
chip and they can have that conceptual breakthrough, but for
(33:44):
it to be manufactured, it is overwhelmingly likely it will
have to be manufactured in Taiwan. That's the choke point,
and it's a choke point. It comes in a bad time.
The US and China are Oh, they're not friends. They're
not friends. There are two people in a crowded restaurant
(34:06):
who are increasingly side eyeing each other, and they're making
these little moves that they can't really get in trouble
for yet. It's a huge technological arms race, and US
companies have a big, big dilemma. They need China, they
need it.
Speaker 4 (34:26):
But China needs the companies too. I mean, we're a
big client. You know, the money is coming from these
companies using their products. So it is it's you're right,
it's like this kind of like mannered sort of Cold War,
you know, where everyone's just sort of like, let's not
rock the boat too much. We don't have to like
each other, but we also have to figure out how
(34:47):
to keep doing business.
Speaker 3 (34:49):
Yeah, well said, it's.
Speaker 2 (34:51):
Kind of weird. Okay, So when I think about it,
and I may be way off here. I don't have
stats or anything, but it feels as though the US
companies like your apples and well, I guess Samsung is
not a US company, but your apples and the US
markets for products being produced by those companies is has
(35:11):
been huge historically, right, lots of that. But it's not
as though it's a growing market, right, because the US
has a certain number of people who are going to
buy let's say, a cell phone at a certain rate,
you know, every couple of years or something. You've got
you know, computers and cars and all these other things,
(35:34):
like major things, even appliances that use these chips. There's
you've got to set rate pretty much with a population
that is mildly growing but not enough that it's you know,
gonna change the world of the number of chips you
need to manufacture for them. But if you've got a
well again, correct me if I'm wrong here, But it
feels like the country of China with a population it has,
(35:57):
country of like India and the population it has, and
as the number of people buying new products increases in
those countries, that was that's probably one of the biggest
places that they're concerned about when it comes to new manufacturing.
Speaker 3 (36:13):
Yeah, yeah, very well. Put Matt, I would agree with that,
because if you want to make money from the Western perspective,
you need to be selling things in India and in China.
You know, they've got this exploding middle class. There's more
money to burn than there was historically, and they will
(36:35):
they will have that jump in consumption. The US and
a lot of other countries in a similar boat. Their
populations are undergoing a graying out right, even with immigration,
things are leveling off. The most apparent example would, of course,
be the nation of Japan, right, which is going to
(36:57):
have a lot of problems on the way. China may
encounter some of those same demographic challenges as the bill
of the one child policy comes due in future generations
and all the femicide it led to infanticide of women.
But right now China does need the US. The question
(37:18):
is for how long will they need the US as
their own domestic market grows. They have increasingly of the
PRC has increasingly put in strict rules about how foreign
companies can operate in their territory, and this leads to
sky high rates of industrial espionage. At least if you
(37:41):
listen to every government except for the government of China.
Speaker 4 (37:45):
And this isn't new, Like I may have mentioned this before,
but like there's a synthesizer that I have that's made
by a Japanese company called Roland, and the chips on
it that are like they're notorious for going bad and
you have to prepare them replace them. But the reason
they go bad is because they have this kind of
like coating on the top of them, like surrounding them,
(38:08):
covering the chip part where you can actually see, you know,
the shapes we're talking about, or those you know whatever,
like the path or whatever. They are manufactured with those
on it. Then it have to in order to repair them,
you have to soak them in acetone for like a
day and then it dissolves it. But the reason for
that is to prevent industrial espionage, because if you have
(38:28):
someone yeah, looking at them coming down the line, they
can't take a picture of what the circuit looks like
because it's covered in this kind of plasticy material. But
then that also causes it to trap moisture, and over time,
these chips burn out, so they're like a notoriously faulty part.
And now there are companies that make kind of clone
versions of them, because you know, once you have it,
(38:49):
you can take it off and do it. But when
this was a new product, they didn't want anybody to
steal it from.
Speaker 3 (38:54):
Them, right. And I would to say before you get
to this next part, I would to say the following,
not just because because I want things to go smoothly
and mainland customs, but because it is true, China is
a font of innovation. China makes a ton of chips
domestically on their own. They're just not the sophisticated chips right.
(39:17):
Mainland China makes them. Taiwan, of course, makes the world's
best chips. So there is innovation happening in China. There's
scads and scats of it. But the US government in
US companies in particular, feel they have uncovered a pattern,
a modus operandi. They what they see is that they
(39:38):
want to do Like let's say you're a car company
and you want to start a factory in China, right
because it's cheaper to manufacture some parts there. You will
be required to partner with Chinese firms, will be required
to hire Chinese nationals in certain key positions. And according
to these critics the entire time these other companies were
(40:01):
partnered with and these employees, they are scooping up all
the secret sauce, the manufacturing techniques, the proprietary strategies, all
that junk, and then when they have extracted that intellectual resource,
there we go. Then done. You know, you're an empty
(40:22):
juice box. So boom, boom, drink your milkshake, right, they
drink your milkshake.
Speaker 4 (40:27):
Yes, So, so I'm trying to understand fully the relationship
between China and Taiwan. So does China have unilateral control
over Taiwan? You say that Taiwan disagrees, but is China
still basically top dog or is there a dispute even
in that And is that the tipping point that's on
the edge of that particular dispute.
Speaker 3 (40:48):
It's funny, it's funny. I'm looking at Matt's face because
he's going, I could read your mind a little bit, Matt.
Matt's like, how are we going to handle this one?
It's a great question, It's a really good question.
Speaker 2 (41:01):
It's just difficult to answer.
Speaker 3 (41:04):
Yeah, yeah, because if you it depends upon whom you ask, Right,
if you ask some politicians in Taiwan then they will
say they'll give you probably one of three answers, depending
on their ideology. They'll say either one, Yes, Taiwan is
one hundred percent part of China, the way Alabama is
(41:27):
one hundred percent part of the US. Two they'll say
we're going for a kind of one country or one
party two systems kind of approach. So similar to how
Macau and Hong Kong have cultural differences, but there's still
everybody admits they're part of China. Hong Kong was British
(41:51):
into like nineteen ninety nine, but now it's officially Chinese.
Or the third one, the hot one, the one that
gets those Paul Titians in trouble. They will say, we
are fighting for Taiwanese independence, and the government of China
looks at that like as those words, yeah, as though
somebody in the government of Alabama was going, well, the
(42:13):
Kingdom of Alabama has always been.
Speaker 4 (42:16):
Like secessionism basically yes, right, but to the outside perspective,
especially since China isn't exactly forthcoming with this kind of information,
it's sort of a black box, right, like uh yeah, yeah, okay,
so I'm not alone in this confusion.
Speaker 3 (42:32):
Making sure dude, No, you're not alone. You are you
are with We are together on this, as is the
majority of the world. There's some awkward conversations at the
United Nations, you know what I mean. It's on the
level of trying to solve for stability in the Middle East.
That's how sensitive this is. That's what I was thinking. Yeah,
(42:54):
you're absolutely right, dude. So there was something came out
recently that I think everybody should check out. It was
a CNBC documentary called China's Corporate Spy War, and it's
an investigation into these US allegations. I keep saying us
because there are main rivals in this exploration, but making
(43:18):
a mistake. A lot of European countries feel the same way.
And of course Korea and Japan and China will never
get along unless like Aliens Land, they are not going
to be friends. So in China's Corporate Spywarp, this is
about an FBI sting operation. Do you hear about this one?
(43:40):
This surprised me.
Speaker 2 (43:42):
I don't know anything about this, but we can give you,
I guess a quote on a write up of this.
Ben I think that's what we're looking at right. This
is CNBC talking about it.
Speaker 3 (43:52):
Yeah, it's about a Chinese Ministry of State Security officer
named Shu yan Jun who turned out to be a spy.
And he wasn't spying on the US government. He was
spying on US companies.
Speaker 2 (44:09):
Yeah, and important companies with important technology like ge, Boeing
and Honeywell, here.
Speaker 4 (44:16):
Comes the quote. In twenty seventeen, Shoe yan Jun pursued
an engineer at GE Aviation who had valuable knowledge of
the company's jet engine composite fan blade technology. Closing as
an academic official and using a fake name, Shoe was
introduced to the GE engineer, who was visiting Nanjing, China,
to give a speech at a prestigious university. Shue began
(44:38):
a pressure campaign to get the engineer, who had family
in China, to reveal more and more information about the
engine tech the Chinese government had targeted.
Speaker 3 (44:50):
Hey, it's me, your friend Johnny last named blue jeans.
Speaker 4 (44:53):
Hello, fellow kids, it is I tell me of your
skateboard tricks.
Speaker 3 (45:00):
Really tell you about the engine technology. That's a shame,
because I can tell you your grandmother's home address.
Speaker 4 (45:08):
That's right, be a shame if something happened to me me.
Speaker 2 (45:12):
It sounds like a snoozefecter. You're talking about like composite
fan blades, technology and all this stuff, But it harkens
back to one of my favorite songs. Do you guys
remember down roaddeo from Rage Against the Machine? Yes, well, yeah,
I guess we'll give you a small quote from one
(45:34):
of the verses here if I'm gonna quote it correctly,
let's see. Let's okay, I found it here. It's a
thousand years they had the tools, we should be taking them.
F the g ride. I want the machines that are
making them right. So that's what we're talking about.
Speaker 4 (45:54):
That lyric that's good, Yeah.
Speaker 2 (45:55):
But that's exactly what we're talking about. But China is
attempting to get the sees, the means of production right,
the keys to production up.
Speaker 3 (46:03):
Yeah. Yeah, and I love I love a good, I
love a good Rage Against the Machine.
Speaker 4 (46:09):
That is one of the bands of that era. I
guess that you would call rap rock or whatever that
actually holds up because they were truly hip hop, like
truly you know, Zach de la Rocha, incredible lyricist, Tom Morello,
absolutely fabulous guitarist, and so many of those other bands
that kind of came after them boo. But Rage holds up.
Speaker 3 (46:27):
Yeah, Rage holds up. They gotta they've got a great
joint with Run the Jewels. Zach Del is on that. Anyway,
they're not gonna send us camping like they did my
Man for Hampton. Oh, Rage is so good anyway, Yes,
that and that's that's such astute point, Matt. That's a
beautiful point, because the idea is about empowerment. Right. Well,
let's let's get to the Chinese perspective in just a second.
(46:50):
In the case of this documentary, here's what the FBI did.
The FBI alerted General Electric and they said, you know,
you're compromised. There's a fox in the henhouse, right, there's
a fly in the ointment. And so they had this
really weird meeting and I think it was Cincinnati with
the engineer and they confronted him and they offered him
(47:12):
the age old classic choice. They said, you can face
the legal consequences of breaking numerous laws, or you can
keep doing what you're doing and just work for.
Speaker 2 (47:27):
Us, which I guess just needs a choice. Alert the
FBI of what information you're sharing and what instructions you're getting,
like that's literally it.
Speaker 3 (47:38):
And then the and then in turn, the FBI will
The way that you nail that, the way this stuff
works is you will report upon your activities, so you
give visibility right into what the enemy forces are asking for,
what they're prioritizing, compositive fan blades, et cetera. And then
as it gets a little more complicated, as you get
(47:59):
a little more switch in your chips of subterfuge, then
you'll start feeding them fake information. And the FBI, I'll
give you, will give you either, they'll give you. Okay,
I don't want to go too deep into this, but
this is kind of interesting. It's similar to how Hollywood
(48:19):
studios will control for script leaks. They'll they'll give crew
and cast different copies of a script with maybe certain
lines tweaked or changed, certain watermarking things Marvel does this,
or the mouse does this, and so they'll keep a
record of that, and then if any of it pops
(48:40):
up in the wild, they'll know exactly how to trace
sort of the chain of custody, very very smart.
Speaker 2 (48:47):
Then they'll waterboard those jokers.
Speaker 4 (48:51):
We know you leaked the script.
Speaker 3 (48:52):
Tell us what you know.
Speaker 2 (48:56):
Take the water.
Speaker 3 (49:00):
Perfect perfect and if you get that reference right in,
because it'll make our it'll make our evening.
Speaker 2 (49:08):
Perfect.
Speaker 3 (49:10):
No, surely not. They're bigger, mister Fry if we look
at the Chinese perspective. Just to be fair, the government
of China has replied to this in various ways, specifically
to this case we mentioned from twenty seventeen and to
the idea of intellectual espionage in general, and they say
(49:31):
it's pretty much cenophobic bullet. Their embassy said quote, the
Chinese government has never participated in or supported anyone in
any form in stealing commercial secrets. Some people and institutions
in the US have been making false accusations. We asked
the US side to handle the case without bias and
(49:53):
in accordance with the law and protect the lawful rights
and interests of Chinese citizens. Okay, totally sounds good, sounds
like real disclosure.
Speaker 4 (50:02):
I did not know the words cenophobic until.
Speaker 3 (50:04):
Just now, not xenophobic, which.
Speaker 4 (50:07):
Is a cenophobic.
Speaker 2 (50:08):
Yeah is new.
Speaker 4 (50:09):
This is new to me. Yes, means obviously anti Chinese
sentiments or but more bigger than that, like you know,
on some kind of level of racism, right, Like I mean,
it's the idea of like being anti Semitic Chinese.
Speaker 3 (50:24):
Yeah, that's the right idea.
Speaker 2 (50:25):
All right, guys, let's take a quick break here, word
from our sponsor and come back with I guess more
of the US perspective on this whole situation.
Speaker 3 (50:41):
USA, USA broud to be all right. So the US
perspective is this, Washington has two big concerns. First, they
are terrified that the Chinese government will catch up to
the US military or surpass it in key aspects, and
(51:01):
thanks to what's called asymmetrical warfare, that is a valid concern.
And secondly, they're very worried about some insult to injury.
They think that they think that China may leverage US
technology to do that. So crib the secrets, steal the research,
(51:22):
and then you're starting on third base for the next innovation. Right,
you can do what's called technological leap frogging. And that's
because President Jijinping said, look, China needs to be a
world class military by twenty forty nine. They're well on
the way. A big part of that push involves the whoop. Sorry,
(51:44):
I've got a lamp on a really JANKI hotel lamp.
I've got lamps on lamps. Keep that part in all right, Sorry,
we're on the road. But okay, so a big part
of them push involves developing a ton of miss weapons,
hypersonic missiles, using machine learning or you know, quote unquote
(52:05):
AI for all sorts of stuff, including cyber warfare and
so on. For those of us playing along at home
to Matt's earlier point, de Noel's earlier point, what do
all of those things need? Chip chips, delicious chips, the chips.
They need the chips, and China can't make the most
(52:26):
advanced ones. Yet outside of Taiwan, no one can really
make these super advanced semiconductors. So China has to play
the international trade game. The US has to play the
international trade game, and they have to make nice. It's
part of the reason they don't talk too much trash
(52:49):
about Taiwan and China, because if they do, and if
China decides to shut down the flow of the semiconductor's
spice milange, then it is just it's going to be
a storm. I know I'm cursing a lot in this one,
but we can't overemphasize that. And the US wants to
(53:11):
block all the other stuff. China needs to make a
pitchiffan yes, perfect when the chip hits the fan. The
Biden administration, current US President Joe Biden. In October of
last year, they put in they ratcheted up the trade war,
(53:32):
and they said, look, we're not going to allow you
to buy stuff with US origins. If you are a
US based business, if you want to do business in
the US, then you can't sell China certain things. And
they went to the Netherlands, they went to Japan. Both
countries have some pretty pretty mission critical like manufacturing processes
(53:56):
that are part of the semiconductor supply chain. And they
got Japan and the Netherlands to agree. China is pretty pissed.
They're pretty pissed about it.
Speaker 4 (54:07):
Yeah. President she in particular as accused the United States
of waging a Cold War style series of containment strategies, right,
And he's not wrong, you know, But that's also that
it's one of the tools in the in the tool belt, right.
I mean, something has to be done, wouldn't he say, Ben,
(54:29):
I mean, this isn't an outright aggressive move. This is
something that's like thinking ahead and trying to keep things
from just ballooning out of control with this relationship, right,
sort of like drawing a line in the sand. I
don't know.
Speaker 2 (54:41):
Well, it's so weird to me because it's coming on
the tales of news you've probably read about specifically about
the US if you're in the US, about specific Chinese companies.
We're not allowed to do business with any anymore. We're
not allowed to have their software on our hardware, talk
to anyone. We're not allowed to use their hardware to
(55:04):
access you know, any networks. I mean, it's again, these
are like but it's almost like soft rules that are
coming forward or bands. And it's very strange because the
same thing is happening on the other side, right, m hmm.
Speaker 3 (55:18):
Yeah, it's an escalating tit for tat. People are increasing
or sorry, these governments are increasingly trying to shut down
points of access for everything you need to make chips
and earlier this year, in response to US actions, China said, look, Raitheon,
(55:39):
lockeed Martin, they're US companies, so TUPAC style, they said,
you and anyone who rides with you, so right.
Speaker 4 (55:49):
Doesn't if Raitheons sound like a Star Wars monster, I
mean it really always.
Speaker 3 (55:55):
Hey, we talked about it too, like defense industries, those
companies have a weird habit of picking kind of agro names.
Speaker 4 (56:04):
I know it's true, wouldn't you say that at this point,
like our governments, you know, between China and America and
in the US, are like pretty openly distrustful and suspicious
of one another. I mean, it's it's it's gotten to
the point where they're barely even trying to hide it anymore.
Speaker 3 (56:21):
Yeah. Well also, I mean that's why it's important to
understand both perspectives, because they're raising valid points, even though
they're both intensely nationalistic. It's their job. If you're a
politician for a country, you need you're trying to rep
your country's interest if you're doing if you're doing your
job correctly. However, one of the issues is that China
(56:44):
as a culture has a very long memory the West
has committed atrocities in China. The Opium Wars were entirely
to force the people of China into becoming a nation
of drug addicts. That's something that you know, if you
if you're in the Chinese government, you're not going to
forget that, and you should not. So, of course they
(57:05):
don't trust each other. For a lot of these folks,
the Cold War never ended. It's very much a zero
sum game. And the Chinese Ministry of Commerce to that
point about resource extraction. They just clamped down on gallium
and germanium, these two elements that you need to make
computer chips, fiber optics, solar cells, et cetera. Right now,
(57:26):
both sides are still having diplomatic talks. Janet Yellen went
over there. As a matter of fact, Henry Kissinger went
over to China in a surprise visit and he kind
of punked US politician John Kerry when he did it.
Speaker 4 (57:43):
Janet's always yelling she needs a pipe down, and just joking.
That was a dad joke. That was a dad joke.
I liked it. That's cringing with his hand in his
head and just like shaking it.
Speaker 3 (57:56):
Matt's hoping his computer doesn't explodecerned. So here's why this
is such a big, big problem. When push comes to shove,
as diplomatic avenues get exhausted, two of the world's most
powerful militaries make no mistake, they will go hot for
(58:19):
these chips if it's seen as a necessity, and they
do have the capability to rain fire. It's not a
good situation. And that's why war nerds on either side
are already mapping it out. We don't have to get it.
We're running a little long. We don't have to get
into this war game. But if you have time, and
if you're interested, check out check out some work by
(58:39):
a US think tank called Center for New American Security.
There's a great New York Times article about it from
last year. And they imagined this. They said, Okay, what
if three Taiwanese semiconductor foundries, not all of them, three
of them, What if they just failed? What would happen?
(59:00):
How would the world react? First, everything would go sideways. Secondly,
the West would assume that there was some kind of
cyber warfare, possibly from China. This would ramp up tensions
and there would be an international crisis as both countries
attempt to secure their continued supply of chips and get
(59:23):
control over over Taiwan, real physical control. And what they found.
Don't let game fool you. These are world class experts.
What they found was outside of straight up military intervention,
the US couldn't do much on its own. It's years
away from making chips anywhere near the level of Taiwan.
(59:45):
To your point, nol earlier, it might be impossible for
them to catch up at this juncture. And one line
that really stuck out to us about this is, again,
these are the world experts on this whole proper. They said,
the US is more dependent on semiconductors now than it
(01:00:06):
was on oil from the Middle East during the height
of the fossil fuel glory days.
Speaker 4 (01:00:12):
And you know, given what we were talking about too earlier,
in terms of how quickly this you know, on the time,
on a timeline, compared to oil, our reliance on this
stuff is very is a blip, right, So that's why
it's just not being talked about in the same way
we all understand about our dependence on oil. Everybody understands
that's its own thing, because it's historically just a longer timeline,
(01:00:33):
and this has been an issue. It feels to me
like your average person on the street has no idea.
Speaker 3 (01:00:39):
What's brewing here. Mm agreed. I mean, and before you know,
you can we can dismiss this as alarmist, right, we
can say, oh, people are doing performative political theater because
they want more money for their think tank or their
research or what have you. But before we dismiss this
as talk, let's all collectively remember what Uncle Sam did
(01:01:04):
the last time people threatened oil supplies. This is no different.
It's just a little bit more of a complicated supply
chain and hopefully that'll change right now. You know, you
can logically ask at the end of this why hasn't
Taiwan been the subject of an incursion, right of a
(01:01:27):
real hot war invasion takeover? Look at me, I own
the foundry now kind of situation. It's because of what's
called the silicon shield theory. This industry is so important
to Chinese manufacturers and so important to US consumers that
no one wants to tip the boat just yet. Like
(01:01:49):
imagine being stuck in an elevator. It's your only way
out of the building and you're there with someone you
absolutely hate.
Speaker 2 (01:02:01):
Hey, this is kind of a non sequitor, but I'm
just thinking about this episode overall. We love when I'm
looking at the structure, like what we just talked about.
Do you guys remember the Immortal Technique song Peruvian Cocaine?
Speaker 3 (01:02:16):
Yes, great posse track.
Speaker 4 (01:02:18):
Okay, so I don't know his work very well.
Speaker 2 (01:02:21):
Well, No, it is an amazing track that literally tracks
where cocaine originates in like in this case in Peru,
and then how it travels on its way to the
United States, what entities. Yeah, but it tells that story
with different characters who are in that supply chain as
(01:02:42):
it makes its way through, and it culminates with you know,
somebody on the street who's selling it and who ends up,
you know, getting a long prison sentence for selling cocaine on.
Speaker 3 (01:02:51):
The streets, probably scared, not prepared to do years like
Javier Yeah yeah, yeah, Okay, So we need.
Speaker 2 (01:02:57):
What does a call out directly to you, Immortal or Felipe.
We need more of that style song like explainers of
things like that for just everything. What we need. It's like,
let's start printing proving Cocaine as a as a song
type on different topics like this one.
Speaker 3 (01:03:21):
And sugar and chocolate everything. Yeah, yeah, yeah, everything. That's
that's a great idea. And now, of course immortal technique
may not be for everyone. But even if you don't
consider yourself a fan of hip hop, even if you
consider yourself even if you have some differences ideologically from
(01:03:43):
that artist is a very very talented, very very smart individual,
and Proving Cocaine in particular is a song that is
worth your time. It just slaps.
Speaker 4 (01:03:56):
You might also know Jack White you know, the singer
for the White Stripes, and he owns a record company,
he owns record pressing plants, and he named his solo
tour the supply Chain Tour because it took place kind
of like when there was all these issues with record
pressing plants being overwhelmed because of like artists like Adele
(01:04:18):
that were, you know, basically using up all of their
bandwidth to print their you know, massive, you know, huge
selling records. Because vinyl has become a really popular medium
now much much. I think it's the highest selling physical
medium of any anything. CDs are basically non existent anymore.
But that's a supply chain too, And it used to
be that, like the plants that made vinyl records were
(01:04:39):
all these old legacy plants, and only just now have
we started having smaller companies build new record pressing plants,
and that's sort of helping to take the pressure off
of these legacy ones. But even still they can't build
them fast enough. And I'm I'm only using this as
a as a parallel to a much less you know,
critical with If we don't get our viral records, that's sad.
(01:05:01):
I would make me sad, but it's not going to
cause a war. But these things, the supply chain things
are are very.
Speaker 2 (01:05:07):
Real, similar things happening with helium. If we were going
to talk about superconductors today, which we deny.
Speaker 3 (01:05:15):
Yeah, the helium shortage, though, is very real thing. You
should think about that every time you go in a
grocery store and you see those birthday balloons. One day
they might be something you talk about and later generations say,
you're full of it. Why Why would someone waste helium
in a recreational balloon? The issue is with the semiconductor shortages.
(01:05:46):
The issue is also it's very, very very expensive to
try to build new foundries, not even the top notch ones,
just foundries that can make you know, pocket calculator chips.
It's incredible, prohibitively expensive. It may lead to a war.
We'll have to see how long the silicon shield theory holds.
(01:06:08):
We'll have to hope that the US and China can
navigate a peaceful way out of this conundrum.
Speaker 2 (01:06:16):
And of course.
Speaker 3 (01:06:18):
War and instability. Statistically speaking, at this point they are
on the horizon. It's due to a number of factors.
Destabilizing governments, rise of fascism and inequality, climate refugees, food crisis,
water crisis. But semiconductor chips, those tiny, tiny things may
(01:06:38):
well be the spark that sets the whole sets the
whole party going. We can only hope that's not the case.
We want to hear your thoughts. Going to try to
bring up the intonation at the end to sound a
little more positive. Big big thanks to Semiconductors for making
this show possible, and big big thanks to you for
(01:06:59):
tuning in. Yeah, folks, would what do you think? Do
you think this conflict would ever go hot? It seems
like it be super terrible for the majority of the world.
But as the old quote goes, when elephants wage war,
it is the grass that suffers. We can't wait to
hear from you. We try to be easy to find
online as long as our little transistors keep transisting.
Speaker 4 (01:07:21):
Ah, the little transistor that could. You can find us
in a myriad of places on the social network platform
formerly known as Twitter, on YouTube and on Facebook at
the handle Conspiracy Stuff, on TikTok and Instagram where Conspiracy
Stuff show Hey.
Speaker 2 (01:07:38):
You can also call us. Our number is one eight
to three three st d WYTK. It's a voicemail system.
You give yourself a cool nickname. You say whatever you
want for three minutes. Just do include if we can
use your name and voice on one of our listener
mail episodes. If you've got or net Yeah.
Speaker 3 (01:07:57):
That quick energe. Actually though, I think some of our
fellow listeners might enjoy this.
Speaker 4 (01:08:03):
Uh.
Speaker 3 (01:08:04):
We're big fans of the phone line and I can't
wait to hear the special voicemail voicemail edition that you
you annulted. Also confession sometimes I call the phone line myself.
Speaker 2 (01:08:20):
Really all right, I'm gonna sift through. I've got more
to do today on that. Oh man, Ben, it's just brought.
Why did that bring? I was listening to way too
much moral technique? So it was Revolutionary volume two and
it's Point of No Return that has some of the
(01:08:41):
most just the best lyrics I've ever heard in my life,
Like so so good. And for a conspiracy show that
we make, like those lyrics, you're just like, oh wait,
what did they find underneath the table of Solomon?
Speaker 5 (01:08:55):
Wait?
Speaker 3 (01:08:55):
What what? Alexa? The name is doucle Wincident.
Speaker 2 (01:09:00):
Yeah exactly, Oh yeah, okay, anyway, yes, I'm gonna check
for you on the phone lines as well as everybody else.
And uh yeah. If you don't want to do that stuff,
why not instead send us a good old fashioned email.
We read everything that we receive.
Speaker 3 (01:09:17):
We are conspiracy at iHeartRadio dot com.
Speaker 2 (01:09:39):
Stuff they don't want you to know. Is a production
of iHeartRadio. For more podcasts from iHeartRadio, visit the iHeartRadio app,
Apple Podcasts, or wherever you listen to your favorite shows.
From UFOs to psychic powers and government conspiracies. History is
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learn this stuff they don't want you to know. A
production of iHeartRadio.
Speaker 2 (00:24):
Hello, welcome back to the show. My name is Matt,
my name is Noah.
Speaker 3 (00:28):
They call me Ben. We're joined as always with our
super producer, Paul Mission Control Decant. Most importantly, you are you.
You are here, and that makes this the stuff they
don't want you to know. We're finally doing it. This
is our episode about chips, and thank goodness because we
talked about Yeah, we talked about chips a lot off air.
(00:52):
We were talking about on Instagram ad that some of
us have been getting for very very strange potato chips, really.
Speaker 4 (00:58):
Strange and exotic potato.
Speaker 5 (01:00):
Yeah.
Speaker 4 (01:00):
I think both you and I Ben have received one
for a Lais Shabu shaboo hot pot flavor, which seems delightful.
And of course you know you and I, I think
all four of us frequent Asian supermarkets quite a lot
like the super h marts of the world, and there
you'll see this insane variety of chips that you just
don't get in your you know, Humble, Kroger or Publics
(01:21):
or whatever. But we're not really talking about those kind
of chips today, though, are we.
Speaker 3 (01:27):
Yeah, Unfortunately, I guess we should rip off the band
aid now. The chips are amazing, potato chips in particular.
But there's another kind of chip that we're going to
explore tonight. It is the kind of chip that makes
civilization as we know it possible in the first place.
These chips are often referred to as semiconductors. Think of
(01:49):
them as the silent servants of the digital age. Depending
upon whom you ask, they may just trigger the next
World war. Here are the facts before we get any further.
What is a semiconductor? This is the land of no
dumb questions.
Speaker 2 (02:07):
Well, speaking of that, let's let's just do a little
upfront information here for everybody listening. Your boy Matt is
a dumb dumb and did all of his research on
LK ninety nine superconductor stuff that was going on in
the news. I literally I don't know where I crossed
my my semiconductors, guys, But I totally like, I have
(02:32):
no idea what's going on in this episode. So I'm
gonna be just completely I've lost.
Speaker 4 (02:39):
Sorry, Surely that knowledge will come in handy somewhere down there.
Speaker 2 (02:42):
I don't think it will. I don't think it will.
Speaker 3 (02:46):
I think it will. But like, okay, before we get
into semiconductors, Ben tell us a little bit about the
LK ninety nine because that news sort of rocked rocked
the digital world a few weeks back.
Speaker 2 (02:59):
Sure, well, today the news came out that officially, people
who've been trying to replicate this super this room temperature
superconductor technology, it came back and they said, no, it's
not actually a superconductor. It does have really cool things
going on about it, but it's not a room temperature superconductor,
(03:21):
which would would have changed the game for everything, including
and especially chips and semiconductors. So anyway, let's get into
the episode and talk about semiconductors. I apologize, guys.
Speaker 4 (03:35):
I guess that begs the question. We're talking about, first
and foremost the idea of conductivity, you know, and what
does it mean?
Speaker 5 (03:41):
You know?
Speaker 4 (03:41):
I mean not not to you know, state the obvious,
but you know, conducting materials are able to allow electricity
to pass through them and can be used for all
things like wiring and you know, it's you know, there
are materials that are conductive where it's not a good thing.
You know, you could it could be dangerous, you know,
and you have to be very careful about, you know,
having electricity around pools, like you know, don't don't blow
(04:06):
dry your hair in the bathtub and keep the toaster
far far away, because that's the recipe for disaster. But
the idea of like something that conducts better or less better.
Speaker 3 (04:18):
Yeah, don't live on the electric fence of conductors.
Speaker 4 (04:22):
Yeah, does urine and conduct electricity. It's got electrolytes in it, right,
would you would you if you really whizzed on the
electric fence, would you get zapped?
Speaker 6 (04:29):
I mean, it's not a good idea, probably not, because
we know water can conduct electricity, and urine is you know,
urines like laqua it's water with a little something extra.
Speaker 3 (04:42):
I don't know if Luquah wants us to portray them
that way. But on the other end of the spectrum,
there's the insulators, right, like glass is an insulator. Uh yeah, yeah,
electricity doesn't really vibe with those. So when it was
funny we're talking off air just before we recorded about
semi conductor, why would you want something that is in
(05:05):
this goldilocks zone between insulation and super conductivity. Well, it's
because it allows you to control the flow. It lets
you put some lets you put some if VENs, some
ones and zeros into the mix. And as you're listening
to tonight's show, there are billions of little semiconductor ones
(05:29):
and zeros making this possible. Even if it doesn't sound
like a bunch of ones and zeros, everything you do
electronically is that.
Speaker 4 (05:38):
I sort of made the comment off Mike that the
name semiconductor almost sounds kind of like a bit of
a self phone where it's like, I'm not that good
at conducting electrocity. I'm only semi good at it. But
that matters because we want to be able to, as
you said, Ben, kind of stem the flow of electricity
in ways that are conducive to certain technological processes, you know.
(06:02):
And those those billions of switches, I guess the ones
and zeros. If then's that's what's so important. And all
of that's contained within this tiny little piece of real estate.
Speaker 2 (06:13):
Yeah, oh, and that tiny real estate. And then let's
go back to what Ben, you were saying about conductors
and insulators and semiconductors. The problem with metal like copper,
or even when you get into things like silicon, when
you pump electrons through there, let's say, in copper, electrons
are just going willy nilly everywhere throughout that those atoms
(06:35):
of that copper, the electrons you go in, it goes everywhere.
That's why you get resistance. That's why you get heat
in anything. Right, Like we were just talking about my
computers being so hot. I've been having these recording problems.
It's because this thing is generating a ton of heat,
which is just the resistance the electricity lost basically due
(06:56):
to the materials used in the creation of this machine.
And that's why.
Speaker 4 (07:02):
And over time it's gotten less efficient I guess, or
the battery has lost some of its original oomph and
now it's sort of like generating way more of that
than it should and which is why it's time to
put that thing out to pasture.
Speaker 2 (07:15):
Well, it's also because the semiconductors that were manufactured back
in twenty twelve, twenty thirteen, you know, were of a
certain grade and they degrade over time, right.
Speaker 3 (07:26):
Yeah, one hundred percent.
Speaker 4 (07:28):
I mean.
Speaker 3 (07:28):
So the question is of course coming from a culture
where bigger, better, faster is always superior. It might seem
counterintuitive to have something less conductive, but having a semiconductor
material because of the way resistance works, it allows humans
to make amplifiers. It allows humans to make switches. And
(07:52):
shout out to professor of electrical engineering at Arizona State University,
Trevor Thornton has a great explainer on this with the
good folks at the conversation, and Thornton puts it this way.
He breaks down the chips in a very understandable way.
He says, these chips are typically made from thin slices
of silicon, and they have complex components laid out in
(08:16):
specific patterns. These patterns control the flow of current using
those switches we're talking about transistors, and Thornton says, it's
pretty much the same way you control the electrical current
in your home. The light switch is a literal switch
right turned off or on the flow of the electricity.
(08:36):
But the difference between the switches in our houses and
the switches in a semiconductor is that those semiconductor switches
are first off, very very tiny, and they're entirely electrical.
They need no mechanical components to flip, and there are
billions of switches, tens of billions in the sophisticated chips.
(08:59):
And this is an area not much bigger than your thumbnail,
not even know your thumbnail is probably your best fingernail,
not much bigger than your pinky nail.
Speaker 4 (09:06):
And that's the part where I just my mind just
kind of glazes over where I'm like, this is, for
all intents and purposes, might as well be alien tech
to me. Like I understand a circuit and the basics
of electronics, you know, and like the if then of
like a basic printed circuit board, like in a piece
of musical equipment, for example, and oftentimes those will incorporate switches,
(09:27):
you know, to turn a thing on or off, whether
it be blocking a signal path you know, or like whatever,
or turning on a certain filter or whatever it might be.
But this whole billions of switches in an area not
much larger than the size of a fingernail is just
I can't wrap my head around it.
Speaker 3 (09:44):
It makes me think, you know, at some point, well,
at some point, there will be a physical limit to
how many switches can be put onto a single chip.
When you get to the when you get down to
a single atom size. Right now, you can't. You can't
go much smaller. But if we could, eventually you could,
You might be able to make so many switches that
(10:06):
you can make a simulation of the entire observable universe.
I am not high, by the way.
Speaker 4 (10:12):
Well I'm not you there yet, but I have to
say too, Like, I mean, this is the amount of
these switches, the number or whatever that has to do
with how many processes a chip can do at one time.
So we're talking about evolution of chips over time. These
things I think they're called threads or whatever, like within
a computer processor. The higher power chips, the higher power
(10:34):
processors can do more of this can contain more of
these switches. I'm just again, I'm conjecturing. I'm pretty sure
that's right, though.
Speaker 3 (10:42):
One hundred percent. For a long time, people were following
something called Moore's law. And Moore's law is this stunning
observation that the number of switches or transistors in an
integrated circuit doubles or has doubled every two years. It's
a stunning and precipitous of a lie. Not all of
these chips are the same. We can think of rough categories.
(11:05):
Memory chips they store data and software as binary code.
Digital chips they manipulate the data based on instructions from software,
and then wireless chips receive data from high frequency radio transmitters,
convert those into electrical signals, and then it's back to
the chips. This is all run by the language of software.
(11:26):
All software does, even the very events stuff. It just
coordinates the ways in which these different chips work together.
Speaker 4 (11:34):
Would that include things like RF you know, using your
phone to tap on a thing to you know, pay,
or like the way you're receiving or transmitting short distance
kind of data.
Speaker 3 (11:44):
Yeah, man, it's it's pretty much. It's actually, it's weird.
It's almost easier at this point, I think to try
and name electronics without these sorts of chips, because they're
in everything your phone, your car, your TV remote, medical applications,
military applications. Back in the day, semiconductor chip evolution moved
(12:09):
with the cycles of PCs. So the more personal computers improved,
the more sophisticated they became, the more sophisticated chips became,
and then iPhones hit. iPhones were a big game changer.
At this point, I think we should shout out our
pal Jonathan Strickland, aka the Quister from tech Stuff. He's
had one of the longest running tech podcasts in the game,
(12:31):
and he explains this stuff in depth if you want
a less conspiratorial primer.
Speaker 2 (12:37):
But here the smart device that means there's one some
of this stuff in them, and that's literally smart anything.
Speaker 4 (12:44):
Yeah, right, your.
Speaker 2 (12:46):
Thermostat, your washer and drfrigerator, yeah, everything, your massage chair.
Speaker 4 (12:54):
So the wireless chip is also again I'm sorry to
be beating this in the ground, but like that's what
allows you to Wi Fi, so, like you know, and
so many of these smart devices have to be on
a network and don't have an Ethernet port on them.
So that's the kind of chip we're talking about here,
probably in addition to the digital chip. Maybe not memory chip,
I don't know. Memory chip is more like RAM on
a computer for temporary storage of data that's actually being
(13:18):
used in the moment.
Speaker 3 (13:19):
They all work together, and that's right. What's nuts about
it too, is if you think about, let's blow the
dust off our old taco bell analogy, from these basic ingredients,
you can make a panopoly of things that appear to
be very different items on the menu, right, Taco Bell
is like famous for having what four to five ingredients
(13:40):
and they'll sell you thirty things. That's kind of how
chips work.
Speaker 2 (13:45):
But in the end, isn't it weird? And I'm not
high to think that all of this, all of the information,
it's just an electrical current getting taken in different directions
and hitting different things at different at times. In it
all micro level, it becomes out of voices in your ears. Yeah,
(14:06):
it becomes your favorite television show on Max or whatever, like.
Speaker 3 (14:12):
Uh, well, the human brain is that too.
Speaker 4 (14:16):
I'm looking at a very simple piece of electronics right
next to me. That's a monophonic synthesizer that is just
signal flowing electricity that is filtered and boosted and the
different things that happened to it, and it makes a sound.
And that is literally a sound that we hear that
is just vibrations carried on the air, you know, I mean, yes, sorry, Matt,
(14:38):
it is mind blowing.
Speaker 3 (14:40):
Also, I gotta say on a soft folks, fellow conspiracy realist,
and also Paul, because Paul, you're listening to along here,
it might sound a little weird that we all three
took a moment to say we're not high as individuals.
But that's just because this stuff is so my blowing
(15:00):
when you think about it, it's ubiquitous, it's everywhere, it's
it breaks your head, right, So we know this evolution
is nuts. If you are a fellow nerd of a
certain generation, your first experience with semiconductors may have come
in the form of pocket calculators. Remember those old Texas
(15:21):
instruments things we all had to buy. What a monopoly,
that was a grift t I.
Speaker 4 (15:27):
Didn't learn until pretty recently how important Texas Instruments was
in the whole personal computer race. You know, there's a
really great show called Halt and Catch Fire that's sort
of like a fictionalized version of like the race for
like the PC and the laptop and stuff, and parts
of it are real. And one part of it that's
real is the whole inclusion of Texas instruments. And they
(15:48):
called it the Silicon Prairie, that area of Texas that
was really big in this stuff, really really fascinating. Even
before like you know, Silicon Valley became a thing, Texas
was kind of like the grounds zero for a lot
of this this this research and development.
Speaker 3 (16:03):
Yeah, and we've already clocked the substance silicon coming up
again and again really important. We're going somewhere with this, folks.
Those those pocket calculators like you mentioned that, like the
t I eighty fives and so on, eighty three fours.
Speaker 4 (16:18):
Eighty three on Snake, drug Wars, Drug Wars, Drug Wars.
It was just a text based like choose your own
adventure game, that's all it was. And you got to
be a drug kingpin. And I remember it was the
first time I saw the word ludes and I was like,
what is what are lads? I don't know what this.
Speaker 3 (16:38):
I also remember the old eight eight five trick, you
know it was it was boobs take that straight spare.
So those things only had a few thousand transistors per chips,
still very impressive for us. But now the largest ones
are going to have more than fifty billion transistors pushing
(16:59):
to the A. Jemore's laws and you know, naturally. Okay,
So this is one of the most important technologies in
modern civilization. Who makes them? Uh, this is where it
gets interesting. They're made at these compounds called foundaries. Back
in two thousand, about twenty three years ago, there was
something like twenty three companies that were doing this to
(17:20):
some degree. As of twenty twenty one, there were only
three major players in the game. As as the free
market dictates, they ate their own right, and there were
fewer and fewer competitors. The three big the three big boys,
the three chunkers in the field are Intel, you who
go US, Samsung Yeah, out of Korea, and then something
(17:47):
called Taiwan Semiconductor Manufacturing Company or TSMC. This is the
Kobe Bryant of the game.
Speaker 4 (17:54):
By fun interesting, Yeah, but that one sort of seems
to be I don't know, we'll get there if it's
changed names bad. I don't know that as a household
name like I do Intel. I do think it's funny
too or interesting that the term foundry, like that's a
really old term for like a place where you would
pour metal molten steel and things and like, you know,
make goods out of liquid metal, a foundry like picture
(18:17):
where the terminator gets lowered into the lava at the
end of T two spoiler alert for a twenty five
year old movie.
Speaker 2 (18:24):
Well, Well, let's let's stays up. Let's talk about that
one and the Taiwan sent me to conductor Manufacturing company.
It's in Taiwan and they make what is it, it's
over half of all the chips manufactured in the world, right.
Speaker 3 (18:37):
Yes, sir, yeah, round about fifty four percent currently. And additionally,
out of all the chips they make, and out of
all the chips in the world, TSMC makes the best ones,
the most sophisticated ones. When we're talking about the new
ones with fifty billion switches or transistors, those are coming
(18:57):
from Taiwan. And there are other players in the game.
But at present, if this one company goes under or
its operations are disrupted for any amount of time for
any reason, the world as you know it, folks, is
going to run into a lot of problems very very quickly.
(19:19):
So okay, you know, diversification is good in any field,
but sometimes you can't have it right. Sometimes you have
to live with a reality. And if Taiwan is indeed
the holy Grail or the holy font for this technology,
then I guess humans have to take care of Taiwan.
(19:42):
But that's kind of complicated because it turns out Taiwan
is a little bit more than a dope archipelago of
sci fi technology.
Speaker 2 (19:52):
Well, yeah, it's also a very let's say important and
strategic geopolitical location. How about we call it that? And
I mean really think about that. We're not joking when
we say most things now that you can purchase that
are above bargain basement, like the lowest level version of
(20:13):
a product, have a chip in it just as a standard.
And they are making fifty four percent of those chips
that go in all of the things. It's not an
Internet of things. It's a world of internet things.
Speaker 3 (20:29):
And if you ask any geopolitics wonk, any economist, any warhawk.
You know, even if you get the buttoned up alphabet
boys about three drinks in and you ask them what
will lead to World War three, They're going to have
a short list of things, and it's going to be
stuff like climate refugees. It's gonna be stuff like nuclear accountability,
(20:54):
potable water, and Taiwan. Because if things go if things
go just a little bit wrong, Taiwan is going to
be a huge problem. What do we mean, We'll tell
you after a word from our sponsors. Here's where it
gets crazy. A war for chips. Could World War three
(21:18):
break out over Taiwat? The answer, unfortunately is yeah, man.
Speaker 4 (21:25):
Yeah, I mean it's like a devil's bargain, right, you know,
you you make all this progress, you know, surrounding this
miraculous material that has a shelf life. I guess there's
a finite amount of the stuff and it's not just
available anywhere, and you know, you basically hang your entire
(21:47):
existence on this substance, on this material, and then there
becomes it becomes the most talking about chips. It's a
bargaining chip. It becomes the most outrageous bargaining chip you
could possibly imagine.
Speaker 3 (21:59):
Yeah, it's in. The scary part is even if you
don't hear about it often, if you're not in the
tech sector or the war sector, there is already a
war going on. It's a cold war for now as
we record, the West is throwing economic sanctions, China's throwing
(22:20):
economic sanctions. A lot of people are making big speeches, imposturing.
They're doing trade freezes that are specifically targeting the supply
chain of semiconductors. Stuff that's so specific it would sound weird,
like why is the US terrified that China is clamping
down on things like gallium? When's the last time you
(22:42):
were walking down the street and you thought, I wonder
how Gallium's doing or Germanium and.
Speaker 4 (22:47):
Ben I made the comment earlier that TSMC wasn't like
a household name to me, you know, and I think
that's true. But this still is This is the important,
you know, component of this converse is that company and
the fact that they're not a household name is interesting.
Mm hmm.
Speaker 3 (23:05):
They're selling. Yeah, you're not gonna you're not going to
buy their high end chips as an individual. You're going
to buy stuff from companies like Apple that have bought
chips from that company. They supply other businesses and governments
and militaries. I mean it sounds alarmist, right, but in
recent years, the idea of a chip war has become
(23:28):
a big, big concern in the US, Like people stay
awake at night worried about this because the PRC has
a really fraught, cartoonishly tense relationship with Taiwan and they
are super duper sensitive about it. Like even on this
little podcast, this whole free podcast, if if you're not
(23:52):
diplomatic when you talk about Taiwan, it can spell problems
for you in customs in MAINSTREAMCHI, like to the point
where they might let you in, like getting out becomes
a conversation that you don't want to have. It's tough.
I mean, like, Okay, a war could break out at
any given moment over any given thing. That's just the reality.
(24:16):
Human civilization is a house of cards. But this thing,
these chips, because the world is so dependent upon them,
they may be the proverbial feather on the camel's back.
The war might go hot because of this resource. Dude, Like,
I had no idea speaking of TSMC, I had no
idea just how important they are to the nation of Taiwan.
(24:40):
The street name for TSMC is Sacred Mountain. And it's
such a big deal that if you work for this
company you can apply to be exempted from military training
even if there's a war going on. You can say
I work for the chip company though, and they're like, oh,
crap man, what are you doing here? Get back to
(25:02):
the foundry make more chips.
Speaker 2 (25:04):
Well, yeah, it makes sense. If you're a war you
gotta make war stuff, and war stuff needs to be smart.
And if you don't have the chips, then you don't
got the war stuff.
Speaker 3 (25:15):
Right, which I think is the motto of t SMC. Right,
that's there, yep, that's like they're Intel bump.
Speaker 2 (25:21):
Yep.
Speaker 3 (25:23):
So, I guess we need to talk a little bit
about this situation between China and Taiwan. Why is it
so tense? Why why is it so I think it's
fair to say it can seem cartoonish to outsiders.
Speaker 4 (25:39):
Yeah, I've always had a sort of vague grasp on this,
so I'm super interested in getting a little more into
the details of the history there.
Speaker 2 (25:47):
Well, look, I'll break down just what I think I know,
and then Ben you swoop in.
Speaker 3 (25:54):
We'll three blind mice. Because we're not Taiwanese nor Chinese
and oh oh sorry, we are not Chinese, is what
we should say, yep.
Speaker 2 (26:04):
Because the country of China, the People's Republic of China,
has for a long time considered Taiwan just to be China,
and with the One China policy, everything that is China
is China, and that is it, end of sentence. So
Taiwan is China. It is a part of China's apps,
right except yeah, but the human beings that actually run
(26:30):
Taiwan disagree with that sentiment. Is that roughly what Kina?
Speaker 3 (26:36):
Yeah, now that that's and that's the right way to
put it. So you'll hear you'll hear it called Taiwan China,
Taiwan Province of China, or Taipei China. It dates back
to nineteen forty nine. There were there were two political
entities with the name China. They both laid claim to
(26:56):
the entirety of the land. The one uh the PRC,
the People's Republic of China. That's usually what folks in
the West mean when they say China. It's mainland China.
And then on Taiwan there was the Republic of China
or ROC, which is a very bad thing to say,
don't you know. Don't bring that up in Beijing, even
(27:19):
if you think you're chilling and everyone's cool at the
karaoke spot. Because of that split, the PRC, like like
you got, Like you said, the PRC considers Taiwan one
hundred percent part of its country, the way that the
US considers Hawaii one hundred percent part of the US.
And like you said, a lot of people in Taiwan
(27:42):
do not agree with that. And if if this was
not a pot of real possible cause for World War III,
it would be hilarious. The whole like Vonnegut Joseph Heller
esque Catch twenty two ness of it every single country
on the planet pretty much avoids talking about this issue.
(28:03):
Sometimes a Western politician will show their ass a little
bit and then they immediately step it back because China
does not play with this. You can even see this
is so weird to me. You can even see celebrities
totally not politicians, totally not diplomats or anything, just celebrities,
your favorite athletes and movie stars screwing up having a
(28:27):
slight accidental misspeak and apologizing to the world for daring
to refer to Taiwan as some sort of independent country
or entity. We have a clip of John Cena doing it.
We can play that, right, can.
Speaker 2 (28:41):
We play this? Is he speaking in Mandarin?
Speaker 3 (28:44):
Yes, yeah, let's play it. Who knew? Okay, we're playing at.
Speaker 5 (28:51):
The Clipina will be Shu shu Shanzaio will handul.
Speaker 3 (29:04):
So for anybody not speaking Mandarin, what John Cena is
doing here, it actually not terrible. Mandarin is apologizing to
the world, to the people in government of China uh
for accidentally referring to Taiwan as a country. And this
(29:25):
is not the only example of this. There are other
celebrities who have done the same thing. And why is
that important to play nice? With this government if you
are a celebrity or public figure, well, it's because it's
one of the biggest growing consumer markets on the planet.
That's why your favorite film studios are jumping through their
(29:47):
butts to get to get the Chinese government's permission to
show their films. Right, that's why I like in Uh,
I'm kind of alone in this, but I loved the
Pacific Rim films. Remember Giant, Oh they're good giant robots. Yeah,
thanks man, Yeah, I loved them. And you can really
(30:09):
tell that they that the studios wanted the approval of
the Chinese government in the second Pacific Rim film, because
there's this whole thing about Charlie Day not being able
to speak Mandarin but trying. There there's the insertion of
this whole Chinese government subplot as like the good guys
(30:29):
who actually saved the world. There's there's a lot of
play here. And the main thing is, no matter how
powerful you are as a government or as a company,
or even as a billionaire, you just don't talk about
the Taiwan thing. You just don't bring it up. It's
like if you're at your friend's house and you see
(30:50):
them yell at their kids. You just don't comment on it.
Speaker 2 (30:54):
Well, there's even been at least one UN resolution that
like tried to set this in stone, or maybe China
tried to set it in stone through the UN.
Speaker 3 (31:06):
Because they've got because China, as a result of World
War Two being on the winning side, China is one
of the few countries with a veto power, right, And
the United Nations had this white paper that came out
and they were the legal opinion that Taiwan is a
province of China with absolutely no separate status, and China
(31:27):
took that and ran with it. So our stage is set.
One of the most important technologies, probably the most important
technology in the modern world, is manufactured in a ticking
time bomb of an island. Right, the situation in Taiwan
is full stop, no caveats. It is unsustainable. It is
(31:51):
double plus on good. It's like if all the world's
important computers were made on a glacier and the glacier
was melting.
Speaker 4 (32:00):
Ask my question though, is like, is it about their
access to the material? Is it about their expertise and
manufacturing the product? Like why do they have such a
monopoly on it? Like why isn't it more diversified?
Speaker 3 (32:12):
The latter, it's it's their expertise in manufacturing the materials
that are used to make this stuff that goes to Taiwan.
But they don't. You're not going to see a bunch
of like gallium, germanium and silicon mines on Taiwan, but
(32:32):
they have.
Speaker 4 (32:34):
Yeah, so it's proprietary. Like so when we get advances
in the chip, it's because they figured it out or what.
Speaker 3 (32:42):
Yeah, it's just really really difficult to make things with
that level of precision.
Speaker 2 (32:49):
Yeah, and don't forget there are people at Intel and
you know all these other places that do manufactu facture chips,
just on a much smaller scale. They are also attempting
to make innovations, right, both in materials and in I
guess technique. Yeah, but this whole thing really does and
we've talked about this before, but it really does give
(33:09):
a perfect explanation for the country of China's practices of
resource extraction, specifically in Africa, of like where the materials
are coming from and where they are going.
Speaker 3 (33:22):
And credit where it's due. A lot of companies that
are not in Taiwan, right, like companies in the Netherlands,
in Japan and the US, they have the design know how.
So the boffins over at Intel can design a new
chip and they can have that conceptual breakthrough, but for
(33:44):
it to be manufactured, it is overwhelmingly likely it will
have to be manufactured in Taiwan. That's the choke point,
and it's a choke point. It comes in a bad time.
The US and China are Oh, they're not friends. They're
not friends. There are two people in a crowded restaurant
(34:06):
who are increasingly side eyeing each other, and they're making
these little moves that they can't really get in trouble
for yet. It's a huge technological arms race, and US
companies have a big, big dilemma. They need China, they
need it.
Speaker 4 (34:26):
But China needs the companies too. I mean, we're a
big client. You know, the money is coming from these
companies using their products. So it is it's you're right,
it's like this kind of like mannered sort of Cold War,
you know, where everyone's just sort of like, let's not
rock the boat too much. We don't have to like
each other, but we also have to figure out how
(34:47):
to keep doing business.
Speaker 3 (34:49):
Yeah, well said, it's.
Speaker 2 (34:51):
Kind of weird. Okay, So when I think about it,
and I may be way off here. I don't have
stats or anything, but it feels as though the US
companies like your apples and well, I guess Samsung is
not a US company, but your apples and the US
markets for products being produced by those companies is has
(35:11):
been huge historically, right, lots of that. But it's not
as though it's a growing market, right, because the US
has a certain number of people who are going to
buy let's say, a cell phone at a certain rate,
you know, every couple of years or something. You've got
you know, computers and cars and all these other things,
(35:34):
like major things, even appliances that use these chips. There's
you've got to set rate pretty much with a population
that is mildly growing but not enough that it's you know,
gonna change the world of the number of chips you
need to manufacture for them. But if you've got a
well again, correct me if I'm wrong here, But it
feels like the country of China with a population it has,
(35:57):
country of like India and the population it has, and
as the number of people buying new products increases in
those countries, that was that's probably one of the biggest
places that they're concerned about when it comes to new manufacturing.
Speaker 3 (36:13):
Yeah, yeah, very well. Put Matt, I would agree with that,
because if you want to make money from the Western perspective,
you need to be selling things in India and in China.
You know, they've got this exploding middle class. There's more
money to burn than there was historically, and they will
(36:35):
they will have that jump in consumption. The US and
a lot of other countries in a similar boat. Their
populations are undergoing a graying out right, even with immigration,
things are leveling off. The most apparent example would, of course,
be the nation of Japan, right, which is going to
(36:57):
have a lot of problems on the way. China may
encounter some of those same demographic challenges as the bill
of the one child policy comes due in future generations
and all the femicide it led to infanticide of women.
But right now China does need the US. The question
(37:18):
is for how long will they need the US as
their own domestic market grows. They have increasingly of the
PRC has increasingly put in strict rules about how foreign
companies can operate in their territory, and this leads to
sky high rates of industrial espionage. At least if you
(37:41):
listen to every government except for the government of China.
Speaker 4 (37:45):
And this isn't new, Like I may have mentioned this before,
but like there's a synthesizer that I have that's made
by a Japanese company called Roland, and the chips on
it that are like they're notorious for going bad and
you have to prepare them replace them. But the reason
they go bad is because they have this kind of
like coating on the top of them, like surrounding them,
(38:08):
covering the chip part where you can actually see, you know,
the shapes we're talking about, or those you know whatever,
like the path or whatever. They are manufactured with those
on it. Then it have to in order to repair them,
you have to soak them in acetone for like a
day and then it dissolves it. But the reason for
that is to prevent industrial espionage, because if you have
(38:28):
someone yeah, looking at them coming down the line, they
can't take a picture of what the circuit looks like
because it's covered in this kind of plasticy material. But
then that also causes it to trap moisture, and over time,
these chips burn out, so they're like a notoriously faulty part.
And now there are companies that make kind of clone
versions of them, because you know, once you have it,
(38:49):
you can take it off and do it. But when
this was a new product, they didn't want anybody to
steal it from.
Speaker 3 (38:54):
Them, right. And I would to say before you get
to this next part, I would to say the following,
not just because because I want things to go smoothly
and mainland customs, but because it is true, China is
a font of innovation. China makes a ton of chips
domestically on their own. They're just not the sophisticated chips right.
(39:17):
Mainland China makes them. Taiwan, of course, makes the world's
best chips. So there is innovation happening in China. There's
scads and scats of it. But the US government in
US companies in particular, feel they have uncovered a pattern,
a modus operandi. They what they see is that they
(39:38):
want to do Like let's say you're a car company
and you want to start a factory in China, right
because it's cheaper to manufacture some parts there. You will
be required to partner with Chinese firms, will be required
to hire Chinese nationals in certain key positions. And according
to these critics the entire time these other companies were
(40:01):
partnered with and these employees, they are scooping up all
the secret sauce, the manufacturing techniques, the proprietary strategies, all
that junk, and then when they have extracted that intellectual resource,
there we go. Then done. You know, you're an empty
(40:22):
juice box. So boom, boom, drink your milkshake, right, they
drink your milkshake.
Speaker 4 (40:27):
Yes, So, so I'm trying to understand fully the relationship
between China and Taiwan. So does China have unilateral control
over Taiwan? You say that Taiwan disagrees, but is China
still basically top dog or is there a dispute even
in that And is that the tipping point that's on
the edge of that particular dispute.
Speaker 3 (40:48):
It's funny, it's funny. I'm looking at Matt's face because
he's going, I could read your mind a little bit, Matt.
Matt's like, how are we going to handle this one?
It's a great question, It's a really good question.
Speaker 2 (41:01):
It's just difficult to answer.
Speaker 3 (41:04):
Yeah, yeah, because if you it depends upon whom you ask, Right,
if you ask some politicians in Taiwan then they will
say they'll give you probably one of three answers, depending
on their ideology. They'll say either one, Yes, Taiwan is
one hundred percent part of China, the way Alabama is
(41:27):
one hundred percent part of the US. Two they'll say
we're going for a kind of one country or one
party two systems kind of approach. So similar to how
Macau and Hong Kong have cultural differences, but there's still
everybody admits they're part of China. Hong Kong was British
(41:51):
into like nineteen ninety nine, but now it's officially Chinese.
Or the third one, the hot one, the one that
gets those Paul Titians in trouble. They will say, we
are fighting for Taiwanese independence, and the government of China
looks at that like as those words, yeah, as though
somebody in the government of Alabama was going, well, the
(42:13):
Kingdom of Alabama has always been.
Speaker 4 (42:16):
Like secessionism basically yes, right, but to the outside perspective,
especially since China isn't exactly forthcoming with this kind of information,
it's sort of a black box, right, like uh yeah, yeah, okay,
so I'm not alone in this confusion.
Speaker 3 (42:32):
Making sure dude, No, you're not alone. You are you
are with We are together on this, as is the
majority of the world. There's some awkward conversations at the
United Nations, you know what I mean. It's on the
level of trying to solve for stability in the Middle East.
That's how sensitive this is. That's what I was thinking. Yeah,
(42:54):
you're absolutely right, dude. So there was something came out
recently that I think everybody should check out. It was
a CNBC documentary called China's Corporate Spy War, and it's
an investigation into these US allegations. I keep saying us
because there are main rivals in this exploration, but making
(43:18):
a mistake. A lot of European countries feel the same way.
And of course Korea and Japan and China will never
get along unless like Aliens Land, they are not going
to be friends. So in China's Corporate Spywarp, this is
about an FBI sting operation. Do you hear about this one?
(43:40):
This surprised me.
Speaker 2 (43:42):
I don't know anything about this, but we can give you,
I guess a quote on a write up of this.
Ben I think that's what we're looking at right. This
is CNBC talking about it.
Speaker 3 (43:52):
Yeah, it's about a Chinese Ministry of State Security officer
named Shu yan Jun who turned out to be a spy.
And he wasn't spying on the US government. He was
spying on US companies.
Speaker 2 (44:09):
Yeah, and important companies with important technology like ge, Boeing
and Honeywell, here.
Speaker 4 (44:16):
Comes the quote. In twenty seventeen, Shoe yan Jun pursued
an engineer at GE Aviation who had valuable knowledge of
the company's jet engine composite fan blade technology. Closing as
an academic official and using a fake name, Shoe was
introduced to the GE engineer, who was visiting Nanjing, China,
to give a speech at a prestigious university. Shue began
(44:38):
a pressure campaign to get the engineer, who had family
in China, to reveal more and more information about the
engine tech the Chinese government had targeted.
Speaker 3 (44:50):
Hey, it's me, your friend Johnny last named blue jeans.
Speaker 4 (44:53):
Hello, fellow kids, it is I tell me of your
skateboard tricks.
Speaker 3 (45:00):
Really tell you about the engine technology. That's a shame,
because I can tell you your grandmother's home address.
Speaker 4 (45:08):
That's right, be a shame if something happened to me me.
Speaker 2 (45:12):
It sounds like a snoozefecter. You're talking about like composite
fan blades, technology and all this stuff, But it harkens
back to one of my favorite songs. Do you guys
remember down roaddeo from Rage Against the Machine? Yes, well, yeah,
I guess we'll give you a small quote from one
(45:34):
of the verses here if I'm gonna quote it correctly,
let's see. Let's okay, I found it here. It's a
thousand years they had the tools, we should be taking them.
F the g ride. I want the machines that are
making them right. So that's what we're talking about.
Speaker 4 (45:54):
That lyric that's good, Yeah.
Speaker 2 (45:55):
But that's exactly what we're talking about. But China is
attempting to get the sees, the means of production right,
the keys to production up.
Speaker 3 (46:03):
Yeah. Yeah, and I love I love a good, I
love a good Rage Against the Machine.
Speaker 4 (46:09):
That is one of the bands of that era. I
guess that you would call rap rock or whatever that
actually holds up because they were truly hip hop, like
truly you know, Zach de la Rocha, incredible lyricist, Tom Morello,
absolutely fabulous guitarist, and so many of those other bands
that kind of came after them boo. But Rage holds up.
Speaker 3 (46:27):
Yeah, Rage holds up. They gotta they've got a great
joint with Run the Jewels. Zach Del is on that. Anyway,
they're not gonna send us camping like they did my
Man for Hampton. Oh, Rage is so good anyway, Yes,
that and that's that's such astute point, Matt. That's a
beautiful point, because the idea is about empowerment. Right. Well,
let's let's get to the Chinese perspective in just a second.
(46:50):
In the case of this documentary, here's what the FBI did.
The FBI alerted General Electric and they said, you know,
you're compromised. There's a fox in the henhouse, right, there's
a fly in the ointment. And so they had this
really weird meeting and I think it was Cincinnati with
the engineer and they confronted him and they offered him
(47:12):
the age old classic choice. They said, you can face
the legal consequences of breaking numerous laws, or you can
keep doing what you're doing and just work for.
Speaker 2 (47:27):
Us, which I guess just needs a choice. Alert the
FBI of what information you're sharing and what instructions you're getting,
like that's literally it.
Speaker 3 (47:38):
And then the and then in turn, the FBI will
The way that you nail that, the way this stuff
works is you will report upon your activities, so you
give visibility right into what the enemy forces are asking for,
what they're prioritizing, compositive fan blades, et cetera. And then
as it gets a little more complicated, as you get
(47:59):
a little more switch in your chips of subterfuge, then
you'll start feeding them fake information. And the FBI, I'll
give you, will give you either, they'll give you. Okay,
I don't want to go too deep into this, but
this is kind of interesting. It's similar to how Hollywood
(48:19):
studios will control for script leaks. They'll they'll give crew
and cast different copies of a script with maybe certain
lines tweaked or changed, certain watermarking things Marvel does this,
or the mouse does this, and so they'll keep a
record of that, and then if any of it pops
(48:40):
up in the wild, they'll know exactly how to trace
sort of the chain of custody, very very smart.
Speaker 2 (48:47):
Then they'll waterboard those jokers.
Speaker 4 (48:51):
We know you leaked the script.
Speaker 3 (48:52):
Tell us what you know.
Speaker 2 (48:56):
Take the water.
Speaker 3 (49:00):
Perfect perfect and if you get that reference right in,
because it'll make our it'll make our evening.
Speaker 2 (49:08):
Perfect.
Speaker 3 (49:10):
No, surely not. They're bigger, mister Fry if we look
at the Chinese perspective. Just to be fair, the government
of China has replied to this in various ways, specifically
to this case we mentioned from twenty seventeen and to
the idea of intellectual espionage in general, and they say
(49:31):
it's pretty much cenophobic bullet. Their embassy said quote, the
Chinese government has never participated in or supported anyone in
any form in stealing commercial secrets. Some people and institutions
in the US have been making false accusations. We asked
the US side to handle the case without bias and
(49:53):
in accordance with the law and protect the lawful rights
and interests of Chinese citizens. Okay, totally sounds good, sounds
like real disclosure.
Speaker 4 (50:02):
I did not know the words cenophobic until.
Speaker 3 (50:04):
Just now, not xenophobic, which.
Speaker 4 (50:07):
Is a cenophobic.
Speaker 2 (50:08):
Yeah is new.
Speaker 4 (50:09):
This is new to me. Yes, means obviously anti Chinese
sentiments or but more bigger than that, like you know,
on some kind of level of racism, right, Like I mean,
it's the idea of like being anti Semitic Chinese.
Speaker 3 (50:24):
Yeah, that's the right idea.
Speaker 2 (50:25):
All right, guys, let's take a quick break here, word
from our sponsor and come back with I guess more
of the US perspective on this whole situation.
Speaker 3 (50:41):
USA, USA broud to be all right. So the US
perspective is this, Washington has two big concerns. First, they
are terrified that the Chinese government will catch up to
the US military or surpass it in key aspects, and
(51:01):
thanks to what's called asymmetrical warfare, that is a valid concern.
And secondly, they're very worried about some insult to injury.
They think that they think that China may leverage US
technology to do that. So crib the secrets, steal the research,
(51:22):
and then you're starting on third base for the next innovation. Right,
you can do what's called technological leap frogging. And that's
because President Jijinping said, look, China needs to be a
world class military by twenty forty nine. They're well on
the way. A big part of that push involves the whoop. Sorry,
(51:44):
I've got a lamp on a really JANKI hotel lamp.
I've got lamps on lamps. Keep that part in all right, Sorry,
we're on the road. But okay, so a big part
of them push involves developing a ton of miss weapons,
hypersonic missiles, using machine learning or you know, quote unquote
(52:05):
AI for all sorts of stuff, including cyber warfare and
so on. For those of us playing along at home
to Matt's earlier point, de Noel's earlier point, what do
all of those things need? Chip chips, delicious chips, the chips.
They need the chips, and China can't make the most
(52:26):
advanced ones. Yet outside of Taiwan, no one can really
make these super advanced semiconductors. So China has to play
the international trade game. The US has to play the
international trade game, and they have to make nice. It's
part of the reason they don't talk too much trash
(52:49):
about Taiwan and China, because if they do, and if
China decides to shut down the flow of the semiconductor's
spice milange, then it is just it's going to be
a storm. I know I'm cursing a lot in this one,
but we can't overemphasize that. And the US wants to
(53:11):
block all the other stuff. China needs to make a
pitchiffan yes, perfect when the chip hits the fan. The
Biden administration, current US President Joe Biden. In October of
last year, they put in they ratcheted up the trade war,
(53:32):
and they said, look, we're not going to allow you
to buy stuff with US origins. If you are a
US based business, if you want to do business in
the US, then you can't sell China certain things. And
they went to the Netherlands, they went to Japan. Both
countries have some pretty pretty mission critical like manufacturing processes
(53:56):
that are part of the semiconductor supply chain. And they
got Japan and the Netherlands to agree. China is pretty pissed.
They're pretty pissed about it.
Speaker 4 (54:07):
Yeah. President she in particular as accused the United States
of waging a Cold War style series of containment strategies, right,
And he's not wrong, you know, But that's also that
it's one of the tools in the in the tool belt, right.
I mean, something has to be done, wouldn't he say, Ben,
(54:29):
I mean, this isn't an outright aggressive move. This is
something that's like thinking ahead and trying to keep things
from just ballooning out of control with this relationship, right,
sort of like drawing a line in the sand. I
don't know.
Speaker 2 (54:41):
Well, it's so weird to me because it's coming on
the tales of news you've probably read about specifically about
the US if you're in the US, about specific Chinese companies.
We're not allowed to do business with any anymore. We're
not allowed to have their software on our hardware, talk
to anyone. We're not allowed to use their hardware to
(55:04):
access you know, any networks. I mean, it's again, these
are like but it's almost like soft rules that are
coming forward or bands. And it's very strange because the
same thing is happening on the other side, right, m hmm.
Speaker 3 (55:18):
Yeah, it's an escalating tit for tat. People are increasing
or sorry, these governments are increasingly trying to shut down
points of access for everything you need to make chips
and earlier this year, in response to US actions, China said, look, Raitheon,
(55:39):
lockeed Martin, they're US companies, so TUPAC style, they said,
you and anyone who rides with you, so right.
Speaker 4 (55:49):
Doesn't if Raitheons sound like a Star Wars monster, I
mean it really always.
Speaker 3 (55:55):
Hey, we talked about it too, like defense industries, those
companies have a weird habit of picking kind of agro names.
Speaker 4 (56:04):
I know it's true, wouldn't you say that at this point,
like our governments, you know, between China and America and
in the US, are like pretty openly distrustful and suspicious
of one another. I mean, it's it's it's gotten to
the point where they're barely even trying to hide it anymore.
Speaker 3 (56:21):
Yeah. Well also, I mean that's why it's important to
understand both perspectives, because they're raising valid points, even though
they're both intensely nationalistic. It's their job. If you're a
politician for a country, you need you're trying to rep
your country's interest if you're doing if you're doing your
job correctly. However, one of the issues is that China
(56:44):
as a culture has a very long memory the West
has committed atrocities in China. The Opium Wars were entirely
to force the people of China into becoming a nation
of drug addicts. That's something that you know, if you
if you're in the Chinese government, you're not going to
forget that, and you should not. So, of course they
(57:05):
don't trust each other. For a lot of these folks,
the Cold War never ended. It's very much a zero
sum game. And the Chinese Ministry of Commerce to that
point about resource extraction. They just clamped down on gallium
and germanium, these two elements that you need to make
computer chips, fiber optics, solar cells, et cetera. Right now,
(57:26):
both sides are still having diplomatic talks. Janet Yellen went
over there. As a matter of fact, Henry Kissinger went
over to China in a surprise visit and he kind
of punked US politician John Kerry when he did it.
Speaker 4 (57:43):
Janet's always yelling she needs a pipe down, and just joking.
That was a dad joke. That was a dad joke.
I liked it. That's cringing with his hand in his
head and just like shaking it.
Speaker 3 (57:56):
Matt's hoping his computer doesn't explodecerned. So here's why this
is such a big, big problem. When push comes to shove,
as diplomatic avenues get exhausted, two of the world's most
powerful militaries make no mistake, they will go hot for
(58:19):
these chips if it's seen as a necessity, and they
do have the capability to rain fire. It's not a
good situation. And that's why war nerds on either side
are already mapping it out. We don't have to get it.
We're running a little long. We don't have to get
into this war game. But if you have time, and
if you're interested, check out check out some work by
(58:39):
a US think tank called Center for New American Security.
There's a great New York Times article about it from
last year. And they imagined this. They said, Okay, what
if three Taiwanese semiconductor foundries, not all of them, three
of them, What if they just failed? What would happen?
(59:00):
How would the world react? First, everything would go sideways. Secondly,
the West would assume that there was some kind of
cyber warfare, possibly from China. This would ramp up tensions
and there would be an international crisis as both countries
attempt to secure their continued supply of chips and get
(59:23):
control over over Taiwan, real physical control. And what they found.
Don't let game fool you. These are world class experts.
What they found was outside of straight up military intervention,
the US couldn't do much on its own. It's years
away from making chips anywhere near the level of Taiwan.
(59:45):
To your point, nol earlier, it might be impossible for
them to catch up at this juncture. And one line
that really stuck out to us about this is, again,
these are the world experts on this whole proper. They said,
the US is more dependent on semiconductors now than it
(01:00:06):
was on oil from the Middle East during the height
of the fossil fuel glory days.
Speaker 4 (01:00:12):
And you know, given what we were talking about too earlier,
in terms of how quickly this you know, on the time,
on a timeline, compared to oil, our reliance on this
stuff is very is a blip, right, So that's why
it's just not being talked about in the same way
we all understand about our dependence on oil. Everybody understands
that's its own thing, because it's historically just a longer timeline,
(01:00:33):
and this has been an issue. It feels to me
like your average person on the street has no idea.
Speaker 3 (01:00:39):
What's brewing here. Mm agreed. I mean, and before you know,
you can we can dismiss this as alarmist, right, we
can say, oh, people are doing performative political theater because
they want more money for their think tank or their
research or what have you. But before we dismiss this
as talk, let's all collectively remember what Uncle Sam did
(01:01:04):
the last time people threatened oil supplies. This is no different.
It's just a little bit more of a complicated supply
chain and hopefully that'll change right now. You know, you
can logically ask at the end of this why hasn't
Taiwan been the subject of an incursion, right of a
(01:01:27):
real hot war invasion takeover? Look at me, I own
the foundry now kind of situation. It's because of what's
called the silicon shield theory. This industry is so important
to Chinese manufacturers and so important to US consumers that
no one wants to tip the boat just yet. Like
(01:01:49):
imagine being stuck in an elevator. It's your only way
out of the building and you're there with someone you
absolutely hate.
Speaker 2 (01:02:01):
Hey, this is kind of a non sequitor, but I'm
just thinking about this episode overall. We love when I'm
looking at the structure, like what we just talked about.
Do you guys remember the Immortal Technique song Peruvian Cocaine?
Speaker 3 (01:02:16):
Yes, great posse track.
Speaker 4 (01:02:18):
Okay, so I don't know his work very well.
Speaker 2 (01:02:21):
Well, No, it is an amazing track that literally tracks
where cocaine originates in like in this case in Peru,
and then how it travels on its way to the
United States, what entities. Yeah, but it tells that story
with different characters who are in that supply chain as
(01:02:42):
it makes its way through, and it culminates with you know,
somebody on the street who's selling it and who ends up,
you know, getting a long prison sentence for selling cocaine on.
Speaker 3 (01:02:51):
The streets, probably scared, not prepared to do years like
Javier Yeah yeah, yeah, Okay, So we need.
Speaker 2 (01:02:57):
What does a call out directly to you, Immortal or Felipe.
We need more of that style song like explainers of
things like that for just everything. What we need. It's like,
let's start printing proving Cocaine as a as a song
type on different topics like this one.
Speaker 3 (01:03:21):
And sugar and chocolate everything. Yeah, yeah, yeah, everything. That's
that's a great idea. And now, of course immortal technique
may not be for everyone. But even if you don't
consider yourself a fan of hip hop, even if you
consider yourself even if you have some differences ideologically from
(01:03:43):
that artist is a very very talented, very very smart individual,
and Proving Cocaine in particular is a song that is
worth your time. It just slaps.
Speaker 4 (01:03:56):
You might also know Jack White you know, the singer
for the White Stripes, and he owns a record company,
he owns record pressing plants, and he named his solo
tour the supply Chain Tour because it took place kind
of like when there was all these issues with record
pressing plants being overwhelmed because of like artists like Adele
(01:04:18):
that were, you know, basically using up all of their
bandwidth to print their you know, massive, you know, huge
selling records. Because vinyl has become a really popular medium
now much much. I think it's the highest selling physical
medium of any anything. CDs are basically non existent anymore.
But that's a supply chain too, And it used to
be that, like the plants that made vinyl records were
(01:04:39):
all these old legacy plants, and only just now have
we started having smaller companies build new record pressing plants,
and that's sort of helping to take the pressure off
of these legacy ones. But even still they can't build
them fast enough. And I'm I'm only using this as
a as a parallel to a much less you know,
critical with If we don't get our viral records, that's sad.
(01:05:01):
I would make me sad, but it's not going to
cause a war. But these things, the supply chain things
are are very.
Speaker 2 (01:05:07):
Real, similar things happening with helium. If we were going
to talk about superconductors today, which we deny.
Speaker 3 (01:05:15):
Yeah, the helium shortage, though, is very real thing. You
should think about that every time you go in a
grocery store and you see those birthday balloons. One day
they might be something you talk about and later generations say,
you're full of it. Why Why would someone waste helium
in a recreational balloon? The issue is with the semiconductor shortages.
(01:05:46):
The issue is also it's very, very very expensive to
try to build new foundries, not even the top notch ones,
just foundries that can make you know, pocket calculator chips.
It's incredible, prohibitively expensive. It may lead to a war.
We'll have to see how long the silicon shield theory holds.
(01:06:08):
We'll have to hope that the US and China can
navigate a peaceful way out of this conundrum.
Speaker 2 (01:06:16):
And of course.
Speaker 3 (01:06:18):
War and instability. Statistically speaking, at this point they are
on the horizon. It's due to a number of factors.
Destabilizing governments, rise of fascism and inequality, climate refugees, food crisis,
water crisis. But semiconductor chips, those tiny, tiny things may
(01:06:38):
well be the spark that sets the whole sets the
whole party going. We can only hope that's not the case.
We want to hear your thoughts. Going to try to
bring up the intonation at the end to sound a
little more positive. Big big thanks to Semiconductors for making
this show possible, and big big thanks to you for
(01:06:59):
tuning in. Yeah, folks, would what do you think? Do
you think this conflict would ever go hot? It seems
like it be super terrible for the majority of the world.
But as the old quote goes, when elephants wage war,
it is the grass that suffers. We can't wait to
hear from you. We try to be easy to find
online as long as our little transistors keep transisting.
Speaker 4 (01:07:21):
Ah, the little transistor that could. You can find us
in a myriad of places on the social network platform
formerly known as Twitter, on YouTube and on Facebook at
the handle Conspiracy Stuff, on TikTok and Instagram where Conspiracy
Stuff show Hey.
Speaker 2 (01:07:38):
You can also call us. Our number is one eight
to three three st d WYTK. It's a voicemail system.
You give yourself a cool nickname. You say whatever you
want for three minutes. Just do include if we can
use your name and voice on one of our listener
mail episodes. If you've got or net Yeah.
Speaker 3 (01:07:57):
That quick energe. Actually though, I think some of our
fellow listeners might enjoy this.
Speaker 4 (01:08:03):
Uh.
Speaker 3 (01:08:04):
We're big fans of the phone line and I can't
wait to hear the special voicemail voicemail edition that you
you annulted. Also confession sometimes I call the phone line myself.
Speaker 2 (01:08:20):
Really all right, I'm gonna sift through. I've got more
to do today on that. Oh man, Ben, it's just brought.
Why did that bring? I was listening to way too
much moral technique? So it was Revolutionary volume two and
it's Point of No Return that has some of the
(01:08:41):
most just the best lyrics I've ever heard in my life,
Like so so good. And for a conspiracy show that
we make, like those lyrics, you're just like, oh wait,
what did they find underneath the table of Solomon?
Speaker 5 (01:08:55):
Wait?
Speaker 3 (01:08:55):
What what? Alexa? The name is doucle Wincident.
Speaker 2 (01:09:00):
Yeah exactly, Oh yeah, okay, anyway, yes, I'm gonna check
for you on the phone lines as well as everybody else.
And uh yeah. If you don't want to do that stuff,
why not instead send us a good old fashioned email.
We read everything that we receive.
Speaker 3 (01:09:17):
We are conspiracy at iHeartRadio dot com.
Speaker 2 (01:09:39):
Stuff they don't want you to know. Is a production
of iHeartRadio. For more podcasts from iHeartRadio, visit the iHeartRadio app,
Apple Podcasts, or wherever you listen to your favorite shows.
Stuff They Don't Want You To Know News
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Matt Frederick
Ben Bowlin
Noel Brown
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