Theres a check up. A headlines on Al Jazeera, former us Police Officer Dairy children has been sentenceD To 22 and a half years in prison for the murder of george floyd. 46 year old died after drove and knelt on his neck for 9 and a half minutes. Last year. Judge Peter K O says showing abuse his Power Wall in a position of trust and already as sentence for cult one, the Court Committee to the cause, the commission of corrections for a period of 270 months as to 70. 00. That is, that Tenure Addition to the present sentence of a 150. 00 bumps. This is based on your abuse of opposition, of trust and authority. And also the particular cruelty shown to george floyd. Your granted credit for 199. 00 days already served. While George Florence Family has welcomed a sentence, they say that it brings the us one step closer to healing. They also say the case is exceptional, an accuseD The police of killing black people without consequence. Day after day, year after year. The u. S. President has met his afghan counterpart. National ghani, is us troops, affairs, to leave of got his son after 20 years afore gun. He said he respected Joe Bidens Decision anD That the partnership between the countries is entering a new phase. Afghans are going to decide their future what they, what they want, what they want, but it wont be for lack of us being help in the sense of violence has to stop, but its going to be very difficult. But were going to stick with you and were going to do our best to see to and you have to in the occupied westbank, the Funeral Procession has been held for an outspoken critic, palestinian president with our boss. These are been outside on thursday after being arrested and beaten by palestinian authority forces. He had accuseD The p, a human rights violations, and called on western nations to cut off aiD To the group. Those are the headlines on Al Jazeera inside story is coming up next. Thanks for watching. Bye bye. For now. Me. Ah, ah, ah. Ah, ah, microchips are an almost every electronic product. But theres a global shortage affecting cars, high tech gadgets, and even fighter jets. So why are supplies so low and coulD The rate to make up the shortfall ignite political tension . This is inside sort. Ah hello and welcome to the program. Im hammered, jim, jim, theyre in our smartphones, computers and cars, even appliances like coffee machines. Semiconductors are in almost every electronic item we use, but they are in short supply arounD The world. Taiwan is the dominant player with nearly 60 percent of the global market, but production has slowed because of measures to combat a Surgeon Cove at 19 infections. The islands, worst drought on record, is also having an impact as the industry uses large amounts of water. The Auto Industry is one of the most effective car makers, like ford and general motors have shut down factories, laid off workers and cut production. One manufacturer has warneD The disruption could lead until next year. The u. S. South korea and china are pumping money into their own industries to become more self reliant in march beijing wave taxes on imported semiconductor materials. But chinas main Ship Maker is under us sanctions for a ledge ties to which military the us senate recently approved 52000000000. 00 for america Semiconductor Industry. As part of a tech innovation bill. As a percentage of g d p, we spend less than half as much of the chinese communist party on basic research. We rely on foreign nations to surprise Credit Supply critical technologies that we invented, like semiconductors, that sony american optimism has flickered as well. The world is more competitive now than in any time since the end of the 2nd world war. If we do nothing, our days is the dominant superpower may be ending. The alright, lets re and i guess in sol, june park, a political economist and an east asia Voices Initiative Fellow at George Washington University in New York city. Jim anderson, ceo of social flow, a tech company, and in miami June Teufel, Dryer Professor of political science at the university of miami and editor of taiwan anD The era of citing when a warm welcome to you all june park. Let me start with you today. What is causing this shortage and why is the situation currently so dire . The panoramic that has begun at the end of 2019 has basically altereD The Business Planning cycles for many of the industries that we see in connection with the tip shortage. AnD The most vulnerable sector in this Chip Shortage Crisis was the automotive sector, the automobiles sector. Because usually when the chips orders are sent in the, the primary consideration was given to other products such as the mobile mobile phones or computers or any other equipment that we have used in order to get connected during the pandemic. So thats why we have the shortage at the moment. June teufel dryer, let me ask you, what is the overall impact of all of this . Im talking about the impact on businesses and also on consumers and just folks who want to get, you know, the latest smartphones. Well, we may have to wait for a long time. And i know my grandsons are at the age where they think they will die if they dont have the latest in the electronic equipment. AnD Theyre just going to have to get on a waiting list. But if i may add something, and by the way, ive never been on a program before with another june. So please just sort of neat. You did a lot of things are being blamed on the pandemic. And in truth, it did disrupt an awful lot of things, but i have to go with Mark Leo who is D T s M C Chairman the day, the guy who runs the day to day operations because now a marsh chung, the founder, although and very Jury Alert and hale and hearty, 89 year old has withdrawn a bit. And he said something interesting. And he saiD That it was only partially due to the Pan Demik and a but it was also due to Manufacturers Stock piling ships. AnD That you have to distinguish between real Demand And Stock piling for inventory. And he thinks a lot of this is because of stockpiling for inventory. Jim, let me ask you from your point of view, or how long is it going to take for production to catch up with the demand . There are some who suggest that this coulD Take at the very least 2 years. Does that timeline sound about right to you . Or do you think it could be even longer . Yeah, i think 18 to 24 months is a good estimate. But as june said, june 24 dryer, you know, there could very well be some stockpiling here. Supply chains are increasingly interconnected arounD The world. You know, who knows what individual companies are stock piling, what i suspect Supply And Demand as prices rise. You know, that certainly changes the dynamics. You know, you may be willing to wait for a Game Console where the price goes up on it that, that has an impact, but certainly there, there needs to be more capacity, more supply and 18 to 24 months, i think is a good estimate for that june park, the us, china and South Korea. They are giving incentives to try to ramp up local production. How are those efforts going thus far, and how long do you think thats going to take . Well as, as far as the Hallway Banner is concerned, is ongoing. At the moment and as much as the Decoupling Process continues. In this regard, china is going to keep on trying to build a Self Sufficiency within its domestic environments. South korea anD Taiwan are investing both in the us and in their homelands. South korea has recently launched a K Bell Cluster k chip bells cluster, which basically entails foreign companies such as do paul, S And Mel participating. But at the same time, some phone electronics basically s k high next memory chips and nan flash. Their focus is not just going to be on memory chips, but also on system chips. Taiwan, at the same time, is going to invest heavily with in taiwan while maintaining the leverage in the u. S. By expanding production facilities. So well have to see how this unfolds. Into 2023 and into a longer term, maybe the next 10 years june tore full dryer. Let me ask you. Taiwan, we know has almost 60 percent of the market when it comes to semiconductors. Is there any possibility that we could see taiwan . Try to use this shortage of semiconductors as a political tool. Well, the taiwan is very, very careful. The momentum recently, and i would say in the last 5 years, just because china has become so increasingly aggressive across the board are you really dont have time to get into a here, im sure, but united front work activities aimed at subverting the democratic process. AnD The number of countries and expansionist activities in the south trying to see in the east china sea. AnD They have really ramped up a, an anti China Coalition which is still nascent and, but this has benefiteD Taiwan. Since people now see, instead of china saying, we deserve taiwan, its ours, or ought to be ours. Theyre seeing a very aggressive china anD Therefore it becoming much more sympathetic to taiwan. So in a way, taiwan doesnt have to use this as a political tool. Its already got it and new here, people in the publication saying if china were to invade taiwan, which it keeps threatening to do, and is certainly making gestures in that direction, that would destroy taiwan semiconductors, manufacturing, corporation, and china would be the big loser as well. So in a Way Taiwan is in a good position in that sense and it doesnt have to be overtly look at what weve got and what youll lose because i think most of the world is already aware of what would be lost. Jim, are there any viable or concrete short term solutions that could help with this shortage . Not to producing more chips on other than, you know, making sure your capacities or your factories are at capacity if you can do over time shift those kinds of things. So im sure those things are already being done as they try to boost production. But in terms of building new plans, you know, its going to take you 18 to 24 months. Its a notoriously capital intensive build business. You know, there are thousands of steps involved anD Theres a significant amount of expertise and proprietary knowledge involved and developing these chips, which is how you end up with such a dominant company. You know, they just did it better than others and you ended up with a dominant market position. So i think you probably them, the bigger issue will be the Supply And Demand as prices rise. That will tenD To reallocate ships. Not entirely because we do have some stock piling, but that will tenD To reallocate chips to the highest value uses. And you may very well just end up waiting more for going Game Consoles or phone upgrades or those kinds of things, which is not, not a trivial issue. It has an economic impact, but certainly doesnt seem to at least have currently Structure Rise to a national security issue. In june park, i saw you nodding along to some of what jim was saying there. Did you want to jump in and expand, expand on the point that he was making what some of the dynamics between South Korea and japan have not been resolved. And i think in connection with what jim was mentioning, the export curves that began to years ago by japan on some of the crucial components of semiconductor production. Again, South Korea really reveals that the u. S. And japan are hoping to benefit from this. Theres a couple of process anD There is a g geopolitical dynamic in this because either you belong in this Supply Chain or you dont. So that will accelerate the geopolitical divide into the coming years anD The export curves are not ended. The Hallway Band is still in place. Well have to see not just the economic dimensions of this, but the geopolitical dimensions as well. June teufel, dryer, of course said June Parker was talking about the acceleration of the geopolitical divide. AnD That leads me to something i wanteD To ask you, which is coulD This race to make up for the shortfall ignite political tensions . Im not sure because he or chinese government of course is the, is the, the reason for most of these political tensions, things were going fine until the chinese began is to use computer chips and rare earth and all kinds of things as economic weapons. So i think there are or did political tensions are, are already there. And i dont think theyre going to get any worse because of this. But you know, time on have the money, Maurice Chang and is, i dont know whos the richest person in the world, but hes certainly up there not him personally, but his corporation does have the money. AnD Taiwan does have the talent. I remember when i was in college, the top of the class at mit was always on taiwan. Its the rope, half a dozen taiwanese in the top 10. AnD Theyve still got the talent, theyve got the money anD Theyve got the geo political impetus. You know, if we dont stay ahead on this, we could be obliterated. So i think the geo political cards are still in play anD Theyre not getting get any worse. But on the other hand, theyre not gonna get any better. Jim, if were talking about, you know, the geopolitical cards in play right now, from your perspective, how is this race playing out between countries for technological supremacy for technological independence, especially when it comes to semiconductors. Yeah, this is just one piece on the chessboard if you will, and it is an important piece. I mean, technology is become such an important part of our lives. And in many ways economic security is national security. But the thing i can help but, but thank is wow, 2 years to sort of correct an imbalance in supply of chips. Its an incredibly short time as it relates to geo politics. Were talking about things that unfold over decades as it relates to the say, the us china relationship. And i think there is bounD To be an oversupply, say 24 months down the road. You know, when you end up with a shortage of things and everybody rushes, and especially if theres a lot of Government Money at stake, to correct a supply and balance. What happens with the other side. And people who studies Supply Chains for a living have a bang for this is calleD The bowl wip effect, which means you know, you, you over correct the other way. So i have a sneaking suspicion that 24 months from now well be having a conversation about a massive oversupply of semiconductors and, and depressed prices anD The problems that result from that. So how that plays out geopolitically, you know, well have to see it, especially as it relates to china. But its, its a pretty short Term Issue as it relates to the geo politics, june parking, when it comes to making more chips and countries ramping up production. I mean, the reality really is that, you know, it is still going to take time. But even when it does happen, when orders are placed, it could still take several more months for those all to be delivered, right . Thats correct and say for example, when Tom Phone decides to build a factory with the 17000000000. 00 pledge that it made during the us. Okay. Summit in may or when taiwan finally expands the foundries within the united states. They have pledge 66 different places, including arizona, when these foundries have been completed, it woulD Take time until the completion, but when they are completed, you would imagine a different scale of production within the united states. With, with the wall a band or not, we are expecting to see a huge, huge Production Amount coming from the united states. Plus with the Innovation Drive that the u. S. Is pledging for itself. I think there would be a huge change a significant change upon the landscape of Semiconductor Industry. Then, what would be interesting to see is how europe responds to this the, the contact less economy will accelerate even during the, or Post Pandemic during the post period. The need, the, the demand for chips is not going away, it would only be expanded, anD The digital economy will continue to expand as well. June teufel, dryer, in your previous answer, you mentioned rare earth elements. And i wanteD To bring that up because you wrote a piece last year analyzing Chinas Monopoly on rare earth elements. So i wanteD To ask you how does that play into all the Semiconductor Industry concerns over shortages going forward . Well, it plays into china as a whole of Government And Whole of Society Attack on problems. And its a very, very well coordinated one no matter whether you are pro china or anti china, were just china. You have to admit they have playeD Their him brilliant way. Now, rare earth or non, a major component of semiconductor chips. They are mostly silicon, hence Silicon Valley and germanium which is not a rare earth. So, but at the same kinds of techniques are, are seen when china decides to do something, it decides to do it in a very coordinated way. AnD This is certainly a very coordinate way. AnD The problem with democracy is in general, anD This is a bigger problem for the e u, because theyve got so many democracy with different interests is coordination. 8, i have been tolD That a Foundry Cost between 10000000000. 00 and 12000000000. 00 to make just depending on what you want, what kind of check you want to produce, anD That after you make it, its going to take 5 years to become profitable. So in other words, Government Support is necessary. Now, china has the type of government that is willing to support dash. Joe biden says hes willing to support that. Its harder, obviously, because of the way our economy is structured with a lot of private input. And in the case of d, e. U really, really hard, because even though the french anD The germans, the british, which of Course Arent in the you anymore. PretenD To be very friendly. The national rivalries are still there. June park, i saw you reacting to some of what June Teufel dryer was saying. So i wanteD To get your reaction, but i also wanteD To ask you about, you know, is there a lot of worries or a lot of concern the china is hold on rare earth Elements Sector is so strong that it could be used against everyone else for the rare earth elements, i woulD Think that there have been previous cases in the W T O for china, because china with helD Them when there was a class between Japan And China over the sink of the i think with the islands anD That kind of precedents leads me to believe that in subsequent years, when the global Supply Chains are much more politicizeD Than now, there is a high possibility that currently the 100 day Supply Chain review does list rare earth as one of the elements that the u. S. Is, is very much going to be fixated on into the coming years. But its not really exercised as a band at the moment as in the form of se, hallway ban. So we would likely see some kind of Policy Mechanism to sort of secure some of the rare earth elements, especially coming from africa because china already possesses a huge, huge some of the rare, or its that if discoverable in africa. So there may be in fighting amongst countries that would be in, in need of the rarer gym. This dependency on taiwan when it comes to semiconductors. How worrying is that to western countries . I think its really worrying. I mean, when you talk about some conductors anD Technology in general, you know, having that kind of dependency, especially in a place where china clearly has ambitions, you know, i think that elevates the concern. Again, you know, from a geo political perspective, as we were talking about before you, i think, you think in terms of decades, not one or 2 years, but its just a lot of the kinds of dynamics they can play out. AnD The importance of these, the technology issues, especially in a sector where youre talking about 10. 00 to 12000000000. 00. I mean, thats a government level investment. Its very difficult for private companies to make 10. 00 to 12000000000. 00 investments with a 5 year payback. As jim was talking about without some form of form of Government Subsidy and, and actually very well stated, have been in a democracy. Its very harD To do that compareD To a more authoritarian state. So i think theres a pretty high degree of concern in general about this kind of dependency. Again, im not sure the acute concern is there, ive not heard anybody talking about, were not going to be able to be able to get the kind of military hardware we need or theres going to be a giant economic impact. Its more, its going to take you longer to get your Cell Phone is going to take you longer to get your playstation, which is a, is a concern, but its more about where it could go than it where it is today. June teufel, dryer, in terms of competition, how far ahead are the taiwanese several years and making steady progress. Theyre not sitting on their laurels at all. AnD Theyve got some amazing talent. Theyve got a very efficient educational system and you dont have to persuade, no, its not like hes not in states where we almost have to bribe students into Stem Stem Study product programs. Theyve got, theyre eager and willing. And so i think there are, anD They understand critically to this is important to their future as an independent sovereign state. So i think they are going to be able to maintain that momentum. Now there have been problems a taiwan company, micron from an employee. There was a found guilty of selling secrets to china, the high Tech Silicon Chip secrets to china. So its not perfect, but theyve got the momentum anD Theyve got the will to stay ahead. So i think they probably will. June park, aside from everything else weve discussed during the program today, i want to talk to you for a moment about specifically the coping 1900 outbreak in taiwan. DiD That further disrupt the Semiconductor Industry . And how much concern is there that that could really make things much worse, at least in the short term. I think the within time one, there may be an increase cases compare to the previous months that taiwan has experienced. But taiwan has had quite a model. The Model Sort of a good Example Case of the cobra. 19 adam, its recovery process. And i think that with vaccination provided by the united states, taiwan received Moderne La vaccines. And within several months, i think taiwan would be able to recover from its current phase and possibly into a more rapid pace into recovery. All right, we have run out of times, were going to have to leave the conversation there. Thank you so much to all of our guest, june park, Jim Anderson and June Teufel dryer anD Thank you for watching. You can see this and all of our previous programs again, anytime by visiting our website, Algebra Dot Com and for further discussion, go to our facebook page. Thats facebook dot com, forward slash ha inside story. You can also join the conversation on twitter. Our handle is at a j inside story for me and how much im doing the whole thing here. For now. The news news, news, no place inside gone was say, Press Brit treated of the car about a Media Hub and vital Vantage Point during the 1st truly televised war from the roof. We could see the declaration at the american embassy, where the most iconic images of the Conflict And Vietnam were transmitteD To the world. This was the front Row Seat to the final stages of the war saigon, caravel, a new episode of war hotels on Al Jazeera. Ah, l just neeD To know who left the middle east and build remarkable lights of finding success in germany of the united states. Yet never forgetting that homelands of the rock and palestine inspiring human story of the world, the designer of the atomic scientists. And just for ramirez and medina, families, the pain is unbearable. 4 of their relatives were killed last week and doing a military operation ordered by the venezuelan government. Security forces accused him of being part of a colombian Rebel Group and saiD They died and come, but the neighbors and family members in safety, they were innocent, taken from their homes and executed under pressure venezuelas, Defense Minister by the me to the you know, saiD The armed forces were obligeD To defenD The country from irregular groups that addeD The human rights needeD To be respected anD That the events at the border would be investigated. Ah this is val just there, im daddy and again with a check on your world headlines, former us Police Officer there, jovan has been sentenceD To 22 and a half years in prison for the murder of george floyd. The 46 year old died after over and knelt on his neck for 9 and a half minutes. Last year. The judge says, Jovan Abuse his Power Wall in a position of trust and authority. As them for one, the girl commit you to the cause, see the commission of corrections for a period of 270 months