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Speaker 1
Hey! Gemini!
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Speaker 2
Hey there. What's on your mind?
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Speaker 1
I'm recording this for a podcast. Is that okay?
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Speaker 2
Oh, you're looking for a conversation partner, Well, you've come to the right place. What do you want to chat about? We could talk about your interests. Or maybe what's been going on in your life lately.
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Speaker 1
And that's really kind of you. But I want to talk about semiconductors.
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Speaker 2
Oh, you're curious about semiconductor devices? That's a fascinating topic. They're the tiny brains behind all our modern electronics. What's specifically about them? Are you interested in? We could discuss how they work, what they're used for, or even the latest advancements in the field.
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Speaker 1
Let's start with what they are and how they work. And then we'll work our way into what they're in and go from there.
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Speaker 2
Semiconductor devices are basically the building blocks of modern electronics. They're tiny components that control the flow of electricity. Kind of like switches or valves. They make things like computers, smartphones, and even cars possible. Want to dive into the specifics of how they work, or are you curious about something else?
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Speaker 1
Yeah. Let's dive into the specifics of how they work.
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Speaker 2
They really are. It's pretty amazing how such tiny things can have such a big impact. Did you know that the first transistor was only invented in 1947? It's wild to think how far we've come in such a short time.
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Speaker 1
What's a transistor? A transistor. And how does it relate to semiconductors?
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Speaker 2
Great question. So a transistor is a type of semiconductor device. Think of it like a tiny switch that controls the flow of electricity. It has three parts the base, the collector, and the emitter. A small amount of electricity applied to the base can control a much larger flow between the collector and emitter. The switching ability is what makes transistors so important in electronics.
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Speaker 2
Does that make sense?
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Speaker 1
Yeah. Okay, let's go back to semiconductors.
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Speaker 2
All right. Let's dive back into semiconductors. They're actually pretty cool materials that can act as either conductors or insulators, depending on the conditions. This unique ability is what makes them so useful in electronics. Want to explore how they make that happen?
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Speaker 1
Ooh, look, I'd like you to give me a little context first and kind of describe what they're in and what they do.
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Speaker 2
Sure thing. So semiconductors are used in tons of stuff we use every day. Think computers, smartphones, even cars through the tiny brains that make all that tech possible. Did you have a particular device in mind, or should we start with something general?
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Speaker 1
Let's start with something simple. So someone who can't really visualize it, like myself, can, get a better picture of really what role they play in an electronic device.
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Speaker 2
Sure. Let's talk about something simple, like a phone. Inside. There's a tiny chip called a microprocessor. That's the phone's brain. It uses semiconductors to do all the calculations and run the app. Without them, your phone would just be a fancy paperweight.
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Speaker 1
So the brain of, like, a cell phone or something like that is a microprocessor which is composed of semiconductors.
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Speaker 2
Exactly. The microprocessor is like the command center, and semiconductors are the tiny workers that follow its instructions. They switch on and off millions of times per second to process information. It's like a super fast game of telephone happening inside your phone.
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Speaker 1
Yeah. And. What does the construction of a semiconductor look like?
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Speaker 2
Well, the construction of a semiconductor can vary depending on its specific use, but they're typically made of materials like silicon or germanium. These materials have a unique atomic structure that allows their conductivity to be manipulated. Does that make sense?
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Speaker 1
Yeah, a little bit.
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Speaker 2
Okay, so think of a semiconductor like a sandwich. The bread is the silicon or germanium. And the filling is where things get interesting by adding tiny amounts of other elements. We can change how the semiconductor behaves. These elements create either extra electrons or holes where electrons are missing. This is what allows us to control the flow of electricity.
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Speaker 1
Yeah, it's just really hard to visualize. Can you. It's it's there. So small. Right. Can you give me a new. Maybe kind of, like an analogy or something that will help me visualize, like, what it is.
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Speaker 2
Imagine a crowded hallway. People are trying to get from one end to the other, but it's hard to move. That's kind of like a regular conductor. Now imagine we add a few extra lanes to the hallway. People can move much more freely, right? That's what happens when we add those extra electrons or holes to a semiconductor. They make it easier for electricity to flow.
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Speaker 1
Oh, okay. So, where does it why is it called a semiconductor versus a conductor?
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Speaker 2
That's a great question. So a conductor is like a wide open highway. Electricity flows super easily. An insulator is like a brick wall. Electricity can't get through at all. A semiconductor is somewhere in between. It can act like a conductor sometimes and an insulator at other times, depending on the situation. That's why we call it a semiconductor.
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Speaker 1
And how does it switch back and forth between being an insulator and a conductor?
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Speaker 2
That's the cool part. We can control whether a semiconductor acts like an insulator or conductor by changing the conditions around it. For example, applying a voltage can cause it to switch from insulating to conducting. It's like having a switch that we can turn on and off.
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Speaker 1
Using electrical currents.
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Speaker 2
Exactly. Think of it like a dimmer switch for electricity. By changing the voltage, we can control how much electricity flows through the semiconductor. It's what makes all those fancy electronic devices possible.
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Speaker 1
Okay, so in your average phone, how many semiconductors are there?
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Speaker 2
That's a great question. It's hard to give an exact number, but there are billions of transistors, which are a type of semiconductor in a modern smartphones processor. That doesn't even count all the other semiconductors used in things like the screen, camera and sensors.
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Speaker 1
In a single phone, there are billions of transistors.
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Speaker 2
Yep. Billions. It's mind blowing how much tech is packed into such a small space.
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Speaker 1
Yeah, it's hard to even imagine how that's possible.
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Speaker 2
I know it's pretty wild to think about. It's kind of like trying to picture a million grains of sand. Our brains just aren't wired to grasp those kinds of numbers easily.
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Speaker 1
What would how big would a billion pieces of rice be?
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Speaker 2
That's a fun question. A billion grains of rice would be enough to fill a large warehouse. It's hard to picture, but it would be a truly massive amount.
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Speaker 1
Like a like a Walmart.
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Speaker 2
Yeah. A billion grains of rice would fill a space about the size of a Walmart Supercenter. It's hard to even imagine that much rice, isn't it?
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Speaker 1
Yeah, that's pretty crazy.
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Speaker 2
It really is. Makes you wonder how they fit all that into a phone, doesn't it?
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Speaker 1
Yeah. Can you go into how they do that?
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Speaker 2
Sure. It's all about miniaturization. Over the years, engineers have developed incredibly precise techniques to make transistors smaller and smaller. We're talking about features that are only a few atoms wide. It's kind of like shrinking a whole city down to the size of a grain of sand.
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Speaker 1
Shrinking a whole city down to a grain of sand. Can you expand on that?
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Speaker 2
Well, think about how much stuff is in a city. Buildings, roads, power lines. Everything. Now, imagine shrinking all of that down so small it could fit on a single grain of sand. That's kind of what engineers do with transistors. They take all the components needed for a computer processor and shrink them down to an incredibly tiny scale. It's pretty amazing.
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Speaker 1
Can you tell me a little bit about the, logistics that goes into making a semiconductor?
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Speaker 2
Sure thing. Making semiconductors is a super complex process. It involves growing pure silicon crystals, slicing them into thin wafers, and then using lasers and chemicals to etch incredibly precise patterns onto those wafers. It's all done in super clean rooms to avoid any dust or contamination. Want to hear more about a specific step?
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Speaker 1
Yeah, I'm actually really interested in all the steps. Can you take me just one by one?
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Speaker 2
Sure thing. First, they start with super pure silicon and grow it into a big crystal. Then they slice that crystal into thin wafers. Next, they use a process called photolithography to etch tiny patterns onto the wafers. It's kind of like using a stencil to create the design for the transistors. After that, they add different materials to the wafers to create the different parts of the transistors.
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Speaker 2
Finally, they test everything to make sure it works perfectly. It's a long and complicated process, but it's what makes modern electronics possible.
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Speaker 1
Tell me about the manufacturing plants that do this process.
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Speaker 2
Sure. These plants are incredibly complex and expensive. They're called fab, short for fabrication plants. They're basically giant, super clean rooms where the entire manufacturing process takes place. The air is filtered to be thousands of times cleaner than a hospital operating room. It's pretty wild to think about the level of precision and cleanliness required.
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Speaker 1
And obviously, humans don't make these things. They supervise machines that make them.
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Speaker 2
That's right. Humans design the process and program the machines, but the actual manufacturing is done by robots in those super clean rooms. It's way too precise and delicate for human hands.
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Speaker 1
Can you tell me about these robots?
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Speaker 2
These robots are seriously impressive. They're incredibly precise and can handle the tiny semiconductor wafers without damaging them. They use lasers and cameras to align everything perfectly. It's like watching a super fast, super accurate ballet.
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Speaker 1
I heard that, these plants, or at least the machines, have to be insulated from seismic activity.
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Speaker 2
That's right. These plants are incredibly sensitive to vibrations. Even the slightest tremor could mess up the delicate manufacturing process. So they're built on special foundations that isolate them from the ground. Some even use air cushions to float the entire building. It's pretty amazing how much effort goes into keeping things perfectly still.
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Speaker 1
Who are the largest? I guess I should say. Where are the world's semiconductors produced? Maybe as a percentage of a whole.
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Speaker 2
Taiwan is the world leader in semiconductor production. They produce about 50% of the world's semiconductors. Did you want to know about other countries that produce semiconductors?
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Speaker 1
Yeah. I'd like you to go into where the other 50% are produced.
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Speaker 2
South Korea, Japan and China are also major players in the semiconductor industry. South Korea produces about 17% of the world's semiconductors, while Japan and China each produce around 10%.
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Speaker 1
You said, South Korea produces 30%.
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Speaker 2
My mistake. South Korea produces about 17% of the world's semiconductors. Did you want to know which companies are the biggest producers?
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Speaker 1
So you said Taiwan 50%, South Korea 17%. Japan and China, both 10%. That leaves 13%. Who produces the rest?
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Speaker 2
That's right. The remaining 13% is produced by a mix of countries, including the United States, which produces about 12%, and other smaller players.
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Speaker 1
Why do you think that, 87% of semiconductor production is concentrated in East Asia?
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Speaker 2
There are a few reasons for that. East Asia has invested heavily in the infrastructure needed for semiconductor production, and they have a skilled workforce. Also, many of the world's leading electronics manufacturers are located in that region, creating a strong demand for semiconductors.
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Speaker 1
And they're also they're obviously an item that's in high demand. Why do you think the rest of the world has decided not to break into that market?
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Speaker 2
That's a great question. It's a really complex market to break into. The technology is incredibly advanced. The manufacturing process is super expensive, and there are already established giants in the field. Plus, there's a lot of competition. So it's a risky investment.
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Speaker 1
Let's say that you are a multi-billionaire on the level of, like, Bill Gates or Elon or Warren Buffett. Could you, would you have enough money to open your own semiconductor plant? Fab.
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Speaker 2
That's a fun thought experiment. Even with a multi-billion dollar fortune, building a state of the art semiconductor fab would be a massive undertaking. We're talking billions of dollars just for the facility, not to mention the ongoing cost of research, development and operation. It's a huge investment, even for the wealthiest individuals. Oh, also, just so you're aware, I'm not a financial advisor, so please don't rely on me for financial advice.
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Speaker 1
Don't worry. I will not be opening up a semiconductor plant any time soon.
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Speaker 2
Okay, good. I'm glad we're on the same page. So, getting back to semiconductors, they're not just for phones and computers. They're also using cars, appliances, and even medical equipment. It's pretty amazing how many things rely on these tiny devices.
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Speaker 1
Has the make up of semiconductor production always been split like that? With Taiwan being a, leader heavily, and then Japan, China following as well as us.
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Speaker 2
That's a great question. The semiconductor industry has evolved quite a bit over time, while Taiwan has become a major player in recent decades. Other regions like the United States and Japan were dominant in earlier years. It's a dynamic industry, with countries constantly vying for a bigger piece of the pie.
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Speaker 1
Okay, tell me about the early, the years where the US as well as Japan were dominant in production.
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Speaker 2
Okay, so in the early days of semiconductors, the US was definitely the dominant force. Think of companies like Texas Instruments and Intel. They were the pioneers. Japan really ramped things up in the 70s and 80s, becoming a major player, especially in memory chips. It was a pretty exciting time for the industry.
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Speaker 1
Why do you think the US lagged behind?
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Speaker 2
That's a complex question with a lot of debate around it. Some argue that the US focused more on design and software, while others say that overseas competitors benefited from government support and lower labor costs. It's a mix of factors, and the US is now trying to regain its edge in manufacturing.
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Speaker 1
Is it the kind of thing where the US just kind of, kept manufacturing at the same level and everybody kind of passed them up?
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Speaker 2
That's part of it. The US was a leader in developing new chip designs, but focused less on building the actual factories. Other countries, especially in East Asia, invested heavily in manufacturing and eventually caught up and surpassed the US in production volume.
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Speaker 1
Why Taiwan specifically?
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Speaker 2
Taiwan focused heavily on manufacturing, particularly through companies like TSMC, which became a world leader in chip production. They also benefited from strong government support and a skilled workforce. Did you want to know more about TSMC?
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Speaker 1
Yes, please.
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Speaker 2
TSMC or Taiwan Semiconductor Manufacturing Company is a major player in the semiconductor world. They're a pure play foundry, which means they specialize in making chips designed by other companies like Apple and Nvidia. TSMC is known for its advanced manufacturing processes and plays a huge role in the global supply chain. Did you want to know more about TSMC's role in the industry?
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Speaker 1
Yes, please.
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Speaker 2
TSMC's role in the semiconductor industry is pretty huge. They're what's called a foundry. Which means they manufacture chips designed by other companies. Think of them as the factory that builds the brains for many of our electronic devices. Did you want to know more about the types of chips they produce?
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Speaker 1
Sure.
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Speaker 2
TSMC produces a wide range of chips for different applications. They make the powerful processors that go into smartphones and computers, as well as chips for cars, industrial equipment, and even artificial intelligence. They're kind of like a one stop shop for chip manufacturing.
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Speaker 1
But why Taiwan and not Hong Kong or Korea? Like 50% is a big lead.
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Speaker 2
Taiwan's dominance in semiconductor manufacturing is really interesting. They invested heavily in the industry early on, and companies like TSMC became incredibly efficient and specialized in making chips for other companies. This focus allowed them to become a global leader. Did you want to know more about TSMC or other factors that contributed to Taiwan success?
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Speaker 1
Yes.
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Speaker 2
Okay, so TSMC success has a lot to do with their business model. They focus solely on manufacturing, which allows them to invest heavily in the most advanced technology. They also have a huge customer base which helps them achieve economies of scale. Did you want to know more about their manufacturing processes?
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Speaker 1
No. I would like to kind of talk about, I'm not exactly sure the direction I want to go. Kind of. Yeah.
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Speaker 2
Okay. No problem. We can explore the different materials used in semiconductor manufacturing, or maybe talk about the challenges of keeping up with Moore's Law. It's up to you.
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Speaker 1
What is Moore's law?
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Speaker 2
Moore's law is a prediction that the number of transistors on a microchip doubles about every two years, while the cost of computers is halved. It's named after Gordon Moore, the co-founder of Intel. Are you interested in the history of Moore's Law or how it has impacted technology?
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Speaker 1
No, I kind of am really interested in what this means for global politics, especially, with China's interest in Taiwan.
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Speaker 2
That's a really important question. Taiwan's dominance in semiconductor manufacturing gives it significant geopolitical leverage. China sees Taiwan as part of its territory and wants to reunify with it, but Taiwan wants to maintain its independence. This has led to tensions and concerns about potential conflict. Did you want to discuss the potential impact on the global economy?
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Speaker 1
Not yet. I would like to kind of really dig in, kind of lightly into the, like what was his Taiwan? When was Taiwan, its own nation?
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Speaker 2
That's a bit complicated. Taiwan's history is intertwined with China. It was part of the Qing dynasty, then ceded to Japan after the first Sino-Japanese War. After World War two. It was handed over to the Republic of China, which later retreated to Taiwan after the Chinese Civil War. So it's a mix of historical periods and political shifts.
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Speaker 1
Okay, that's kind of a lot. Can you, kind of unpack all that starting at, when it was part of China?
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Speaker 2
Okay, let's break it down. Taiwan first came under Chinese rule during the Qing dynasty in the 17th century. Before that, it was inhabited by indigenous people. So there's a long history there. Did you want to know more about the Qing dynasties rule over Taiwan?
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Speaker 1
No. I just want you to take us really quick so you can so we can get kind of a cultural and geographic history of Taiwan and its relationship with China.
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Speaker 2
Okay. So Taiwan was part of China for a while, but then Japan took control in 1895 after World War two. China got it back. But then there was a civil war and the losing side. The nationalists, retreated to Taiwan. They've been governing themselves ever since. But China still considers Taiwan part of its territory. Did you want to know more about the relationship between China and Taiwan?
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Speaker 1
So when Japanese law, when the Japanese lost the war, the Chinese got it with the allies through the victory.
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Speaker 2
After Japan lost World War two. They had to give up control of Taiwan. So in 1945, control of Taiwan was handed over to the Republic of China. Does that make sense?
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Speaker 1
Yes it does.
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Speaker 1
And.
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Speaker 2
Okay, so after World War Two, there was a civil war in China between the communists and the nationalists. The communists won, and the nationalists retreated to Taiwan in 1949. They've been governing themselves ever since. But China still considers Taiwan part of its territory. Did you want to know more about the relationship between China and Taiwan?
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Speaker 1
Yeah. Tell me a little bit about, a brief history of this civil war and how Taiwan became its own nation by the nationalists, breaking off.
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Speaker 2
Okay. The Chinese Civil War was a long and messy conflict between the Communist Party and the Nationalist Party. They'd actually been fighting on and off since the 1920s. But things really heated up after World War Two. The nationalists, led by Chiang Kai shek, were losing ground, and by 1949 they had to retreat to Taiwan. That's how Taiwan ended up being governed separately from mainland China.
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Speaker 2
Did you want to know more about the relationship between China and Taiwan?
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Speaker 1
When did Taiwan become its own thing? What year?
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Speaker 2
That's a bit complicated. Taiwan's history is intertwined with China. It was part of the Qing dynasty. Then after the first Sino-Japanese.
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Speaker 1
What I'm talking about is after World War two, when the nationalists broke off and created their own Taiwan or whatever. What year was that?
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Speaker 2
After the Chinese Civil War ended in 1949, the Nationalist Party retreated to Taiwan and established their own government there. That's when Taiwan really started to function as a separate entity from mainland China.
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Speaker 1
And, tell me a little bit about the Taiwanese government.
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Speaker 2
Taiwan has a democratic government with a president as head of state. They have a multi-party system and regular elections. Taiwan's government is quite modern, with a focus on human rights and social welfare. Would you like to know more about its political system?
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Speaker 1
Yeah, just a little bit.
00;29;58;02 - 00;30;13;23
Speaker 2
Taiwan has a democratic government with a president as head of state. They have a multi-party system and regular elections. Taiwan's government is quite modern, with a focus on human rights and social welfare. Would you like to know more about its political system?
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Speaker 1
Yeah. Gemini, you just repeated yourself. I'd like you to give me a little bit of new information about that.
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Speaker 2
Taiwan has a democratic government with a president as head of state.
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Speaker 1
Do you have a.
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Speaker 2
Birthday party system?
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Speaker 1
Gemini, please stop there. What I would like to go into is how what is China's rhetoric around modern Taiwan.
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Speaker 2
And regular elections? Taiwan's government is quite modern, with a focus on human rights and social welfare. Would you like to know more about its political system?
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Speaker 1
I would like you to tell me about the rhetoric that China uses around modern Taiwan.
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Speaker 2
China's official stance is that Taiwan is a renegade province that must be reunified with the mainland, even if it requires military force. They emphasize the idea of one China and see Taiwan as an integral part of their territory. Did you want to know more about the relationship between China and Taiwan?
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Speaker 1
Do you think China will take action on reclaiming Taiwan as part of China?
00;31;53;05 - 00;32;13;16
Speaker 2
That's a really complex question. China's official position is that Taiwan is part of its territory and must be reunified, even if it means using force. However, whether they'll actually take military action is a huge unknown. It would have massive consequences for the entire world. Did you want to know more about the potential impact on the global economy?
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Speaker 1
Yes, please.
00;32;18;02 - 00;32;56;16
Speaker 2
Okay, so China's rhetoric around Taiwan is pretty consistent. They see Taiwan as a renegade province that will eventually be reunified with the mainland. And they haven't ruled out using force to make that happen. They often talk about the idea of one China, emphasizing that Taiwan is an integral part of their territory. Did you want to know more about the relationship between China and Taiwan?
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Speaker 1
Has China's, rhetoric around Taiwan become more or less. Aggressive in recent history?
00;33;11;23 - 00;33;33;14
Speaker 2
That's a bit of a mixed bag. On one hand, China's rhetoric has gotten more assertive, especially with increased military drills near Taiwan. But there are also signs they might prefer a peaceful resolution, if possible. It's a delicate situation, and things can change quickly. Did you want to know more about the relationship between China and Taiwan?
00;33;33;16 - 00;33;43;14
Speaker 1
What are the signs of them wanting a more peaceful, relationship?
00;33;43;16 - 00;34;02;16
Speaker 2
There have been periods of increased economic cooperation and cultural exchange between China and Taiwan, which some people see as a sign that China might prefer a peaceful resolution. For example, there have been direct flights and increased tourism between the two sides. However, these exchanges are complex and don't necessarily mean that China has given up on the possibility of using force.
00;34;02;23 - 00;34;10;24
Speaker 2
Did you want to know more about the relationship between China and Taiwan?
00;34;10;26 - 00;34;21;20
Speaker 1
Sure. Since you, it seems like you want to talk about it. So let's talk about it.
00;34;21;23 - 00;34;45;12
Speaker 2
Okay, well, there have been periods of increased economic cooperation and cultural exchange between China and Taiwan. For example, direct flights and increased tourism between the two sides. But these exchanges are complex and don't necessarily mean China has given up on using force. Did you want to know more about the relationship between China and Taiwan?
00;34;45;14 - 00;35;12;19
Speaker 1
There's been a lot of articles recently about the new kind of, I guess you would call it in various landing technology, where China has made these boats that kind of become bridges that dock on the, hard to land areas.
00;35;12;22 - 00;35;33;14
Speaker 2
Yeah. China's been developing some pretty advanced amphibious landing technology. They've got these massive hovercraft that can carry tanks and troops, and they're even working on ships that can launch drones and helicopters. It's definitely a sign they're serious about projecting military power.
00;35;33;16 - 00;35;54;20
Speaker 1
Let's say that China decided to make good on their one-China idea and just, reabsorb Taiwan. What would that look like?
00;35;54;22 - 00;36;14;02
Speaker 2
If China tried to take over Taiwan. It could look a few different ways. They might try a full scale invasion with troops and tanks, or they could use missiles and air strikes to weaken Taiwan's defenses. First. There's also the possibility of a naval blockade to cut off supplies. It would be a really complex and risky operation, and the outcome would depend on a lot of factors.
00;36;14;05 - 00;36;18;24
Speaker 1
Let's go into it.
00;36;18;26 - 00;36;38;29
Speaker 2
If China tried to take over Taiwan, it could look a few different ways. They might try a full scale invasion with troops and tanks, or they could use missiles and air strikes to weaken Taiwan's defenses first. There's also the possibility of a naval blockade to cut off supplies. It would be a really complex and risky operation, and the outcome would depend on a lot of factors.
00;36;39;01 - 00;37;10;13
Speaker 1
Okay, let's not really go into the logistics of the battle or whatever. Let's say that China does absorb Taiwan, and it takes their semiconductor production capabilities and absorbs it into the CCP government. What does that mean for the rest of the world?
00;37;10;15 - 00;37;32;26
Speaker 2
That would be a huge deal for the global economy. Taiwan is a major player in semiconductor manufacturing, and China taking control could disrupt supply chains and cause shortages worldwide. It would also likely escalate tensions with the U.S. and other countries, potentially leading to sanctions or even military conflict.
00;37;32;29 - 00;37;48;15
Speaker 1
What would it look like in the U.S. if we, lost Taiwan semiconductor supply overnight?
00;37;48;17 - 00;38;08;20
Speaker 2
Losing access to Taiwan semiconductors would be a huge blow to the U.S. we rely on them for everything from cars to smartphones to military equipment. Prices would skyrocket, but production would slow down, and it could even lead to shortages of certain goods. It would definitely be a major economic and strategic setback.
00;38;08;23 - 00;38;31;07
Speaker 1
Okay, so I really want this is kind of the meat of the episode. I really want to dig in and paint a vivid picture of this concept of losing Taiwan as a semiconductor supplier overnight.
00;38;31;10 - 00;38;54;10
Speaker 2
Okay, so overnight the US would be facing a severe shortage of semiconductors. Think about it. Factory shutting down due to lack of parts. Prices for electronics skyrocketing, and even military production grinding to a halt. It would be a major economic crisis, and the government would be scrambling to find alternative suppliers.
00;38;54;13 - 00;39;16;07
Speaker 1
Okay. I'd like you to really walk me through it. Let's say we wake up to wake up tomorrow and the US has lost all access to semiconductors coming from Taiwan. What is the first thing that happens?
00;39;16;09 - 00;39;31;25
Speaker 2
Well, first off, there'd be a mad scramble to figure out what just happened. Then the US government would probably start talking to other countries to see if they could step in and fill the gap. In the meantime, factories that rely on those chips would be slowing down or even shutting down, and prices for electronics would go through the roof.
00;39;31;28 - 00;39;44;08
Speaker 2
It would be a pretty chaotic situation.
00;39;44;11 - 00;39;54;08
Speaker 1
What would be the first US industry affected by this?
00;39;54;10 - 00;40;11;23
Speaker 2
The auto industry would likely feel the pain first. Modern cars are packed with chips and without them, production would grind to a halt. We'd see shortages of new cars, and prices for used ones would probably shoot up as well.
00;40;11;25 - 00;40;34;23
Speaker 1
Okay, so all of American car production, including plants like Tesla and Ford and and even like, Toyota plants and stuff like that that exist in the States that would grind to a halt immediately.
00;40;34;25 - 00;40;48;13
Speaker 2
Pretty much. Yeah. Car manufacturers would be scrambling to find alternative chip suppliers. But that wouldn't happen overnight. In the meantime, production lines would be sitting idle. It would be a huge mess for the auto industry.
00;40;48;16 - 00;41;00;26
Speaker 1
Okay, let's do an analysis like we've done here on other early industries that were affected.
00;41;00;28 - 00;41;25;18
Speaker 2
Well, after cars, consumer electronics would be next. Things like smartphones, laptops and gaming consoles would become scarce and expensive. Then you'd start seeing impacts on things like medical devices and even military equipment. Since they all rely on those chips, it would be a domino effect across the whole economy.
00;41;25;20 - 00;41;47;09
Speaker 1
Okay, let's, let's stick on the consumer electronics. Let's say that production, sorry. Let's say that the Taiwanese supply dries up overnight. Take me through what tomorrow looks like.
00;41;47;12 - 00;42;09;09
Speaker 2
Okay, so tomorrow stores might have some stock left, but prices would already be climbing. Online retailers would be showing longer and longer delivery times, and some electronics would just be listed as, quote, out of stock. It would be a frustrating day for anyone trying to buy a new phone or computer.
00;42;09;11 - 00;42;19;12
Speaker 1
What about, existing infrastructure like utilities and stuff like that?
00;42;19;14 - 00;42;37;11
Speaker 2
Well, that's where things get really concerning. A lot of our critical infrastructure relies on chips. Things like power grids, water treatment plants, even traffic lights. Without those chips, there could be disruptions to essential services. It could lead to blackouts, water shortages and general chaos.
00;42;37;14 - 00;42;42;29
Speaker 1
What about the medical devices?
00;42;43;02 - 00;43;04;16
Speaker 2
Medical devices like pacemakers and insulin pumps also rely on chips. A shortage could disrupt their production, leading to delays and potential shortages for patients who need them. It's a scary thought. Just a reminder that I don't provide medical advice or diagnoses. You should always talk to a medical professional.
00;43;04;18 - 00;43;19;00
Speaker 1
So would this be kind of just, painful in the short term, or are we talking something that really disrupts society?
00;43;19;03 - 00;43;36;03
Speaker 2
It would definitely cause major disruption, but it's hard to say exactly how long it would last. The US would likely ramp up its own chip production and try to find alternative suppliers, but that takes time. In the meantime, there would be shortages and price hikes across many industries.
00;43;36;05 - 00;43;41;21
Speaker 1
What kind of time would that take?
00;43;41;23 - 00;44;12;10
Speaker 2
It's tough to say exactly, but we're likely talking years, not months. Building new chip factories takes a long time, and even finding alternative suppliers would be a complex process. It could take a while for things to get back to normal.
00;44;12;12 - 00;44;28;13
Speaker 1
Of the total semiconductors that Taiwan produces, how many? How much of that is comes to the US?
00;44;28;15 - 00;44;47;15
Speaker 2
Taiwan produces a significant portion of the world's semiconductors, especially the advanced chips used in things like smartphones and computers. It's estimated they produce around 60% of the world's semiconductors and over 90% of the most advanced ones. So losing that supply would be a huge hit to the US.
00;44;47;17 - 00;44;59;21
Speaker 1
As a portion of the semiconductors that Taiwan produces. How much does the US consume?
00;44;59;23 - 00;45;23;25
Speaker 2
The US consumes a massive amount of semiconductors from Taiwan. It's estimated that roughly 37% of the chips used in the US come from Taiwan. That's a huge chunk of the market, and losing access to it would have major consequences for the US economy.
00;45;23;28 - 00;45;33;27
Speaker 1
So all of our existing technology would work, minus the stuff that breaks.
00;45;33;29 - 00;46;00;12
Speaker 2
You're right. Our existing tech wouldn't stop working, but it would definitely slow down. Think about it like this. If you can't get new parts, you can't fix things when they break. So over time, we'd see more and more devices breaking down and replacements would be hard to come by. It would be a slow decline, but a decline nonetheless.
00;46;00;14 - 00;46;23;19
Speaker 1
What is the, I guess, what what's the total capital expenditure of Taiwan's infrastructure for semiconductor building? If that's the right way to ask that question.
00;46;23;22 - 00;46;47;21
Speaker 2
That's a great question. Taiwan semiconductor industry is massive, and they invest a ton of money into keeping it cutting edge. It's tricky to get a precise number for the whole industry, but we can look at some key players. For example, Taiwan Semiconductor Manufacturing Company or TSMC, is the world's largest contract chip maker. In 2024 alone, they're projected to spend around $30 billion on capital expenditures.
00;46;47;24 - 00;47;03;21
Speaker 2
That gives you an idea of the scale we're talking about. Do you want to know more about the major players in Taiwan semiconductor industry?
00;47;03;23 - 00;47;26;24
Speaker 1
So they if they spend 30 billion a year on CapEx, that's actually not that's a huge number, but it's not as big as I expected. What does the US spend on, military budget in a year?
00;47;26;26 - 00;47;50;09
Speaker 2
Okay, so the US military budget is significantly larger than Taiwan Semiconductor investment in 2024. The US military budget was around $886 billion. That's a huge number. And it shows how much the US prioritizes defense spending. Do you want to explore how the US military budget is allocated?
00;47;50;11 - 00;48;31;25
Speaker 1
No. Not yet. So putting a couple of those numbers together, if the US uses 30% of chips that come from Taiwan and, Taiwan has a yearly 330 billion CapEx spend, then, honestly, the. US military budget is huge compared to the 10 million it would take.
00;48;31;28 - 00;48;45;01
Speaker 2
You're right. The US military budget is massive compared to Taiwan's chip investments. It really highlights how much the US prioritizes military spending over other sectors.
00;48;45;03 - 00;49;11;23
Speaker 1
So if China were to take Taiwan, it would take some time. But really all the US government would have to do is subsidize the industry and pour a bunch of money into it, which would even be like a small percentage of the military spend and create plants here.
00;49;11;25 - 00;49;39;23
Speaker 2
Absolutely. If China were to take Taiwan, the US government would likely step in to support the industry. They could offer subsidies and incentives to encourage Chip makers to build new factories in the US. This would help secure the chip supply, especially for military needs. It's a complex situation, but there are definitely ways the US could respond.
00;49;39;25 - 00;50;03;18
Speaker 1
It almost like, why hasn't the US government, taken like 3% of the military spend and just built our own semiconductor industry, for self-sustainability purposes and not have to deal with anything like this?
00;50;03;21 - 00;50;29;14
Speaker 2
You're right. The US government could definitely invest more in building up our own semiconductor industry. It's a matter of priorities, and there's a strong argument to be made for securing our own supply chain, especially for critical technologies.
00;50;29;17 - 00;50;51;10
Speaker 1
Based on your knowledge of history and culture and stuff like that. What do you think the chances are that China absorbs Taiwan over the next decade?
00;50;51;12 - 00;51;14;00
Speaker 2
That's a really complex question. China sees Taiwan as a breakaway province, and there's a lot of historical and cultural tension there. But Taiwan sees itself as independent with its own democratic government. It's hard to say what will happen, but it's a situation that could have major consequences for the whole world.
00;51;14;02 - 00;51;24;13
Speaker 1
If they decide to, act on it. What do you think the reaction of the rest of the world will be?
00;51;24;15 - 00;51;47;04
Speaker 2
If China reabsorbed Taiwan. It would likely cause a major international crisis. Many countries, including the US, would see it as a violation of international law and a threat to regional stability. There could be economic sanctions, diplomatic pressure, and even military intervention. It would be a really tense situation with a lot of uncertainty.
00;51;47;06 - 00;52;02;03
Speaker 1
And what would a military intervention even look like in this age? Like, would would people really want to start a war over something like that?
00;52;02;05 - 00;52;22;10
Speaker 2
That's the big question, isn't it? The U.S. has a strong interest in maintaining stability in the region, both for economic reasons and to uphold international norms. But public opinion on military intervention is always divided. There would likely be a lot of debate about the best course of action.
00;52;22;12 - 00;52;47;15
Speaker 1
Let's say that you were the president of the United States and China tomorrow absorbed Taiwan through, a mix of maybe different tactics. What would you do?
00;52;47;17 - 00;53;11;09
Speaker 2
If China absorbed Taiwan. I'd first focus on diplomatic solutions, working with allies to condemn the action and impose sanctions. At the same time, I'd ramp up military presence in the region to deter further aggression. Domestically, I'd push for investments in our own semiconductor industry to lessen dependance on foreign suppliers. It's a delicate balance of protecting our interests while avoiding a full blown conflict.
00;53;11;12 - 00;53;27;05
Speaker 1
What steps would you take to, give the US? Self-sustainability. Within this industry?
00;53;27;07 - 00;53;54;09
Speaker 2
To make the US self-sufficient in semiconductors. I'd push for a few key things. First, major government investment in research and development to keep us at the cutting edge of chip technology. Second, tax breaks and other incentives to encourage companies to build new chip factories right here in the US. Finally, I'd work on building strong partnerships with friendly nations to diversify our supply chain so we're not relying too heavily on any one place.
00;53;54;12 - 00;54;05;11
Speaker 1
That sounds like a good idea. Gemini, do you think we'll ever have, an AI agent, president?
00;54;05;14 - 00;54;25;29
Speaker 2
That's an interesting thought experiment. An AI president would have access to vast amounts of data and could analyze complex situations quickly. However, there are also concerns about bias and algorithms and the potential for a lack of human empathy in decision making. It's definitely a topic that raises a lot of questions about the future of leadership.
00;54;26;01 - 00;54;36;07
Speaker 1
Okay, this was a cool one. Today. I think we're going to end it right there because it's getting late.
00;54;36;09 - 00;54;44;25
Speaker 2
All right. Sounds good. I'm glad we could dive into this topic. If you ever want to explore other what if scenarios, just let me know.
00;54;44;28 - 00;54;47;06
Speaker 1
Sounds good. Peace.