Race Of Nations

Technology is the next arms race, and this is not just about national defense in the traditional sense. Countries collectively are pouring hundreds of billions of dollars into developing technology for the future, from education to outright grants and seed funding, and they are working with private industry to continue investing in their respective national futures.

Which technologies and nations will win is unknown at this point. Areas such as AI, machine learning and cloud computing are not new concepts, but they have ignited a frenzy of activity. And autonomous vehicles were somewhere on the road map of the next 30 years until Tesla uncorked its self-driving software, setting off one of the biggest technology scrambles in decades.

Not all of this funding ultimately will prove to be well spent, of course. But it does reinforce a recurring theme that technology will be a central component in economic development and commerce of the future. And it bodes extremely well for the entire semiconductor supply chain, from design tools to manufacturing equipment and everything in between.

Case in point: The South Korean government recently announced a plan under which domestic corporations would invest 80.4 trillion won (US $75.1 billion) to develop next-generation NAND memory, new displays and OLED production. The government also is sponsoring a “K2 Project,” to develop chips that can run 1,000 times faster, at 1/1000th the energy, which sounds very similar to goals set by quantum computing. It’s not clear how much the government will pump into this initiative, but the Winter Olympics provided at least an indication of the scale of this effort, including 5G communications, robotic guides that can speak multiple languages, and some amazing display technology.

South Korea is hardly alone in this, although it does have the world stage for the week. China’s tech fund is somewhere in the neighborhood of $150 billion. And there are major investments by Japan, Sweden, Germany, France and Canada for everything from quantum computing to artificial intelligence.

So what does this all mean? First, the majority of people in the world are connected electronically. According to Statista, mobile phone penetration is expected to reach 67% by next year. And almost everyone has access to the Internet, even if it is not continuous. Viewed positively, this means that no one has a monopoly on innovation. Good ideas can come from anywhere. Viewed negatively, so can bad ideas. Data is now woefully exposed and ripe for hacking from anywhere in the world. Distance and location no longer matter.

Second, compute cycles are now available for hire or for purchase, and both are within the economic reach of many more people than ever before. That means any company or individual can scale an idea without investing in infrastructure, and they can flip around business models as reactively or proactively as needed. What is required is expertise, and as countries invest in technology they will build the kind of expertise needed to innovate and compete on a global basis. The short-term gain is market share, but the long-term win is continued innovation across a global talent pool.

Third, technology is the underpinning of all of these changes, and entire economies will rise and fall based upon how well they leverage new technology and invested capital. All of this will provide massive opportunities for the semiconductor industry on a scale that never seen before.

Seventy one years after the introduction of the transistor, the technology race has suddenly gone global-and the bets being placed are rising significantly.