Understanding Computer Chips - Digital Financial Market

The computer chip is one of the technological wonders of the world. We present a detailed article for an invention with an outstanding reliability for powering our electronics.

Article Summary

We divided our Article into Four distinct sections to help guide you to the right information.

Brief Overview of Computer Chips
The Global Computer Chip Crisis of the 2020’s
PC Computer Parts: CPU Processing Chips
Physics, Materials and History of Computer Chip

Overview of Computer Chips

Computer Chips

Computer chips are some of the most advanced technologies in modern devices. The use of anything from a simple circuit board to a fully functional microchip can be applied to more than just computers, including many everyday objects.

In our everyday lives, computer chips are essential in all modern electronics. From cars, to appliances, to smaller electronics, the microchip ranges in forms from advanced computer CPUs to small electronic circuits seen in Tamagotchi’s, Hasbro brand toys and even McDonald’s toys.

Computer Chips in Modern Devices

Computer chips are in all our modern electronics. Major advancements in the transistor and modern computer engineering have refined computer chips to be capable of advanced CPU processing, dubbing the Web2 era.

This acceleration in computer processing has enabled the rise of cloud computing at scale. Many companies, including Intel, have moved away from producing and distributing individual chips and developed many CPU cloud structures, data houses, and scaled cloud infrastructure in its place.

The Complexity of a Computer Chip

The Computer chip is perhaps the most revolutionary technology of the 21st Century. With a virtually endless capacity to capture the magic of computer engineering, today’s advanced computer chips need to be manufactured by specialized factories with advanced microscopic and atomic scale accuracy.

Although the Micro Chip was first invented in the United States, modern distributors have outsourced their production line to specialized facilities in countries such as Taiwan due to high manufacturing costs and high barriers to entry.

Global Chip Crisis of the 2020’s

Leading Up To Global Chip Crisis of the 2020’s

Recent economic circumstances has led to a shortened supply of computer chips since the beginning of the pandemic in 2020.

In late 2019 and early 2020, the COVID-19 Pandemic was visibly identifiable to around the world. Overseas, China had initiated an emergency contagion lockdown that halted production in its manufacturing.

With an anticipated lockdowns for other countries in 2020, many computer chip manufacturers estimated that their products would reduce in demand. This led many chip buyers to reduce their orders for chip inventory for 2020, but the COVID lockdowns actually increased the demand for many products that require computer chips.

2020 Covid Lockdown: An Effect on Chip Demand

As the United States had actioned its lockdown policies beginning in March 2020, the lockdown had increased the need for microchips for many businesses, organizations, and individuals .

A nationwide lockdown saw a huge boom in cloud services, smartphones, tablets, and computer devices.

2021 Supply Chain Crisis

The ongoing effects of the lockdown and global supply chain slowdowns saw imports and exports increase in price due to procedural costs and incurred expenses from COVID restrictions.

Even before the US experienced heightened inflation in 2021, expenses for basic construction supplies, imported goods, and everyday items began to rise in price.

A combination of lack of financial resources, defaulted debts, and business slowdowns led many businesses to fold, and a labor imbalance presented.

California saw a multiple ship supply pileup rumored in the thousands, however Officials Stated The total amounted to as many as 153 boats in the ports of Long Beach.

2022 Global Microchip Shortage

As some backed up supply chains resolved in the earlier half of 2022, the shortage on Microchips had continued to have lasting effects. Notable products such as newly manufactured cars had increased in price or had inventory forecasts slashed due to insufficient electronic components.

2022 CHIPS and Science Act

As of 2022, Over 75% of the world’s production of microchips are sourced from China, Taiwan, and other factories located in the far East.

Accelerated technology demands have led American economists and policymakers to pursue incentives for growth in the micro chip sector within the US.

A bipartisan bill was presented to address the microchip shortage, and congress proposed the CHIPS and Science Act

Chips Act Passes, Funding Billions For US Microchip Sector

In Summer of 2022, congress passed the CHIPS and Science Act, solidifying these budgets into upcoming financial calendars.

The White House released an official statement on the $52.7 Billion in subsidies that will be funded as a part of passing the Chips and Science Act.

White House Budget For Microchip Subsidies

Category of Funding	Budget	Percentage
Manufacturing Incentives	$39 Billon	74.0%
Workforce Development (R&D)	$13.2 Billion	25.05%
Tech Security & Supply Chain Activity	$500 Million	0.95%
Total:	$52.7 Billion	100%

Sourced from White House Official Statement

Key Facts

Outlines a 25 percent investment tax credit for capital expenses for manufacturing of semiconductors.
Of the $39 Billion in Manufacturing incentives, $2 Billion is assigned to legacy chips for cars, automobiles, and defense systems.
China, Taiwan, and other Eastern factories house 75% of the worlds microchip production, while the US supplies 10% of Microchips

The passing of the Chips and Science Act will provide new avenues for US manufacturers to produce Microchips within the country.

As of late 2022, the Global Microchip Shortage is still ongoing as many upcoming projects are underway to increase supply and innovation in the Microchip Sector.

Computer Chips as PC Building Parts

Computer Chips as PC Parts: CPU Processors

In modern buildable PCs, there are a range of selections for the many parts of a computer, but the CPU Processor Computer chip market has narrowed down to AMD and Intel.

Modern Buildable PCs: Intel vs. AMD CPUs

Currently, the microchip industry has such a high barrier to entry that Intel has dominated the field for decades. Over the recent decade, California-based Advanced Micro Devices (AMD) has specialized in accelerating CPU performance for high performance uses.

With only AMD and Intel in competition for CPUs on the market, these major competitors have presented some phenomenal competitive products for modern PC parts.

Computer Parts: AMD CPU

The AMD Ryzen Series ranges from consumer level to advanced professional CPU performance. The Ryzen 5 could be regarded as a more average CPU, while advanced products include the legendary AMD Threadripper with 64 Cores and 128 Threads.

AMD holds the record for highest performance CPU with the AMD Threadripper and highest-value standard CPU with the Ryzen 9 5950X.

Computer Parts: Intel CPU

Intel has long hailed many Chip Models since before the concept of buildable PCs were on the consumer market. However, this recent decade has generated a massive popularity in purchasing CPUs as a component of PC building.

Intel introduced some buildable products in the 2000’s but did not reach popularity until its Intel i3, i5, and i7 Series in the 2010’s. In 2017, the Desktop i9 Processor was released with the highest specs for Intel CPUs.

Currently, the highest performance for an Intel CPU is the Intel i9 12900K.

A Step by Step Tutorial on how to build an Advanced PC

Wondering how to build your first PC? This tutorial from BitWit is a clear and concise way to get down all the basics of PC Building. He details the different parts required for an advanced build. In this step by step tutorial, he installs the AMD Ryzen 5 CPU, the CPU Cooler, the RAM memory, the Motherboard, Casing, Power Supply, Storage and Video Card.

How to Choose Compatible PC Parts

Tutorial on Compatible Builds for PC Parts

Ultimate Guide on Choosing PC Parts for Your Next Build

This simple tutorial explains how to choose PC Parts to create a compatible desktop out of individual components. This guide from BitWit still holds some great insight into the planning and purchasing phase of PC building.

Understanding the Computer Chip

Types of Computer Chips

There are many components of a computers motherboard and extended wiring, but when it comes to the term Computer Chip, there are only 2 classifications of computer chips

Memory Computer Chips (RAM, etc.)

The part of a computer that stores and accesses memory is called a Primary Storage Chip or Memory Chip. This is where data is stored and is synonymous with computer memory terms such as RAM (Random Access Memory).

Microprocessor Computer Chips (CPU)

The infamous Microprocessor is the name for the small, transistor based component that generates compute power to run an Operating System (OS) and the applications within it. This small but powerful microchip is called the Central Processing Unit (CPU) and also goes by the name Logic Chip.

Materials of a Computer Chips

To better understand the economic implications of the manufacturing of computer chips, it is helpful to understand the materials of a computer chip and why they are so valuable.

Computer Chip Material: Silicon

Silicon is a common material used for electrical semiconductor in modern microchips. Silicon is derived from crystals like clear quartz and is found in its crystalline form or in high-grade Silicon sand.

How Silicon Is Made Into Computer Chips

The silicon used in microchips is refined from Silicon rich sand melted into ingots. These Silicon ingots are then further manufactured using a process called photolithography.

The Term: Silicon Valley

Silicon Valley gets its name from the 1971 term coined by journalist Don Hoefler. The phrase was regarding the invention of the silicon transistor by Intel. The term referenced Intel and other tech companies headquartered in the San Francisco Bay area, hence “Silicon Valley”.

Computer Chip Material: Gold

Gold is a super conductor used in Modern chips. Modern motherboards use a small amount of gold as a electrical conductor to transmit highly reliable signals. Gold is rust and tarnish resistant, making it an ideal compound for Gold alloy wiring.

The Use of Gold in Computer Chips

Newer models for computer chips has minimized the need for gold, so the use of Gold in modern computer chips is seldom. The highly expensive gold electrical lining is specialized in specific use cases, such as pins connecting the CPU to the motherboard.

Computer Chip Material: Cobalt

Cobalt is one of the three electromagnetically charged elements along with Nickel and Iron. This magnetic quality has made it a resource for Advanced electronics such as Computer Chips, Electric Batteries, and Electric or Magnet-based Technology.

Colbalt Mining Controversy

After ongoing controversy over the sourcing of many rare earth minerals needed for the industrial manufacturing of computer chips, Cobalt has stood out as an subject of scrutiny for mining operations.

Specifically, over 50% of currently discovered Cobalt resides in the country of Congo. Families in the Democratic Republic of Congo (DRC) have action Congolese courts to hold major tech companies like Facebook and Apple accountable for profits and the lack of safety and regulation among the worlds largest cobalt mines located in Congo.

For more details, see The Guardian’s Article on Congolese Families Filing Lawsuit Against Tech Companies Over Child Labor.

Cobalt Mining Conditions

Complaints among these mining operations are of the serious third world conditions that employs child labor, unsafe working conditions, and lack of oversight for mining engineers and inspectors. Some tragedies have included cave-ins with multiple causalities, some including children.

Many of these Congo mining operations are owned by Chinese Companies, examples include the Congo Dongfang International Mining Company under its Zhejiang Huayou Cobalt division.

You can See The Official Australian Broadcast Channel 2022 Exclusive Documentary on the Congolese Cobalt Mining Conditions

Computer Chip Material: Copper

Copper is a semiconductor used as electrical wiring and an electrical current transmitter. Found commonly as wiring and circuit lining, copper is a rather cheap and reliable alternative in comparison to refined metals.

Recycled Circuit Copper

Copper has been an essential element in any modern circuit board. Data derived from ResearchGate.net has revealed Results of 19% Copper in Motherboards and 13% in Memory Circuit Boards seen in their individual study.

You can read the full Publication on The Recycling Study For Copper on Circuit Boards for more details.

History of The Computer Chip

Computer Chip Transistor Technology

The modern transistor as well as computer chip technology has been the platform for modern computers and the Internet.

First Integrated Circuit

The first design of a computer chip came to creation in 1958 by scientist Jack Kilby of Texas Instruments. He was the first to create a working hybrid Integrated Circuit Chip and patented his invention later that year.

First Computer Chip

Robert Noyce Public Domain Photo — *Robert Noyce 1959, Public domain*

In 1960, the first monolithic Integrated Circuit was created by by Robert Noyce of Intel Corp and Fairchild Semiconductor. This design was the first functional computer chip invented and used the concept of the transistor in the field.

First Computer Microchip

The first fully functional production Microchip was the Intel 4004 Computer Chip designed by Masatoshi Shima, Ted Hoff, Stanley Mazor and Fredrico Faggin who has his initials, “FF” engraved on the far corner of the microchip design.

The First computer chip comprised of 4 different cores as the Units connected a ROM, an Interfacing Chip and Two CPU models. This new chip was then called the MCS4 and was to be used as a part of the Busicom Calculators as part of a product line in the 1970’s.

See the Institute of Electrical and Electronics Engineers Hall of Fame Publication on the 1st Microchip.