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