Power of the Tiny: Microchips & World Landscape

In the bygone days of my youth, I fondly recall my uncle unveiling a hulking mobile phone, its battery rivalling the proportions of today's iPhone 15 Pro, necessitating its removal for recharging. Fast forward to the present, where our handheld devices have evolved into veritable Swiss Army knives, capable of myriad tasks from shopping to pet monitoring, all while slimming down to imperceptible dimensions.

This radical transfor mation owes its debt to the tiny marvels known as microchips, whose revolutionary impact has elevated once rudimentary devices into intelligent gadgets, marking a watershed moment in human ingenuity.

Indeed, the microchip stands as a testament to human innovation, propelling us into an era where the futuristic marvels of yesterday now reside comfortably in our pockets.

At its core, a microchip orchestrates a ballet of minuscule transistors, arranged on polished semiconductor via a process called photolithography.

This process engraves intricate patterns onto semiconductor disks coated with light-sensitive substances. In the annals of technological history, 1959 stands as a seminal year, with Texas Instruments ushering in the era of commercial microchips, subsequently powering the first electronic portable calculator.

Simultaneously, Intel blazed its own trail in 1957 with the creation of the first microprocessor, a marvel housing 2,300 transistors within circuits thinner than a human hair, all packed into a thumbnail-sized package.

Today's microchips, exemplified by Apple's M1 Ultra, boast an astonishing 114 billion transistors on a single chip, with dimensions dwindling to a mere 5nm.

Since the dawn of the semiconductor age, nations worldwide have been captivated by the allure of microchip technology.

Russia, for instance, attempted numerous times to clandestinely acquire this coveted technology, only to be outpaced by the breakneck advancements in microchip innovation.

Despite the United States' pioneering role in microchip development, its manufacturing capacity has dwindled, now comprising a mere 12% of the global share.

Meanwhile, China has emerged as a voracious consumer and producer of semiconductors, albeit trailing behind US giants like Intel in technological prowess.

This asymmetry has spurred concerns over national security, igniting a protracted chip war between the US and China since 2018, characterized by punitive sanctions and export restrictions.

The genesis of the chip conflict can be traced back to the US' apprehensions regarding China's military integration of semiconductor technology.

Military applications have long been intertwined with semiconductor advancements, with the Pentagon playing a pivotal role in early funding.

Notably, during the US-Vietnam War, the Thanh Hoa Bridge posed a formidable challenge, remaining impervious to countless attacks until 1972 when semiconductor-powered guidance systems finally breached its defences.

China's strides in military innovation, including the development of its aircraft carrier fleet, have only compounded US anxieties.

Amid the tumult of the chip war, corporations are strategically shifting production facilities to alternative locales like Malaysia, particularly in the wake of disruptions exacerbated by the COVID-19 pandemic, which laid bare the risks of overreliance on Chinese manufacturing.

Malaysia, boasting a storied legacy in the semiconductor industry dating back to Intel's investment in Penang in 1972, stands poised to capitalize on this trend by pivoting towards higher value-added activities, as outlined in initiatives like the New Industrial Master Plan 2030.

Presently, most of the Malaysia’s manufacturing activities is in assembly, test, and packaging (ATP). Semiconductor Industry Association (SIA) estimates that 90% of value-added of chip is split evenly between design and manufacturing activities, with the final 10% of value added is for ATP activities.

Furthermore, the burgeoning demand for more potent semiconductors, fuelled by the ascendancy of Artificial Intelligence (AI), bodes well for Malaysia's semiconductor sector, with projected investments exceeding USD1 trillion by 2030, marking a significant leap from USD574 million in 2022.

Backed by robust institutions, diligent research and development endeavours, and better infrastructure, Malaysia is primed to entice investors seeking to diversify their manufacturing operations.

The Global Innovation Index (GII) of 2023 underscores Malaysia's standing, ranking it 36th globally, outpacing regional counterparts, further underscoring Malaysia's appeal as a strategic investment destination poised for sustained growth and innovation.

To date Malaysia has managed secure investment from several massive companies involved in semiconductor industries.

Micron, for example, has pledged to invest USD2.0 bil to build its state-of-the art assembly. These investments would benefit local companies too.

According to the government, apart from conducive business environment and attractive packages offered by government, foreign companies also seek for local companies to be part of their supply chain to minimize the risk of supply disruptions as they had faced during the COVID-19.

The extraordinary influence wielded by a tiny component on technology, geopolitics, economics, and our daily routines is truly striking. It serves as a poignant reminder of the immense capability housed within the human mind, signifying that the journey ahead, while brimming with anticipation, also harbours elements of concern.