Chip War: The Fight for the World's Most Critical Technology

The early history of the semiconductor industry was the most interesting part to me. Chip Wars does not pull any punches when it comes to the failings of Russia, China and Intel.Here are the passages that caught my eye or packed the most punch:“Last year the chip industry produced more transistors than the combined quantity of all goods produced by all other companies, in all other industries, in all human history. Nothing else comes close.” (p.xxi)“Around a quarter of the chip industry’s revenue comes from phones. Today, Apple’s most advanced processors can only be produced by a single company in a single building, the most expensive factory in human history.” (p.xx)Chip History — U.S. vs. USSR“At the outset, the integrated circuit cost 50x as much to make as a simpler device made with separate components wired together. Everyone agreed Noyce’s invention was clever, even brilliant. All it needed was a market. Three days after Noyce and Moore founded Fairchild Semiconductor, the answer to the question of who would pay for integrated circuits hurtled over their heads: Sputnik, the world’s first satellite, launched by the Soviet Union. Boy Noyce suddenly had a market for his integrated circuits: rockets. The first big order for Noyce’s chips came from NASA.” (19)“By November 1962, Charles Stark Draper, the famed engineer who run the MIT Instrumentation Lab had decided to bet on Fairchild chips for the Apollo program. The computer that eventually took Apollo 11 to the moon weighed 70 pounds and took up about one cubic foot of space, a thousand times less than the ENIAC computer that had calculated artillery trajectories in World War II. MIT considers the Apollo guidance computer one of its proudest accomplishments.” (20)“NASA’s trust in integrated circuits to guide astronauts to the moon was an important stamp of approval.” (21)In 1963, “TI’s shipments to the Air Force accounted for 60% of all dollars spent buying chips to date. By the end of 1964, Texas Instruments had supplied 100,000 integrated circuits to the Minuteman missile program.” (22)“In 1965, military and space applications would use over 95% of the integrated circuits produced that year.” (29)“Moore’s Law was the greatest technological prediction of the century. Moore later argued that Noyce’s price cuts were as big an innovation as the technology inside the integrated circuits.” (31)“In 1966, Burroughs, a computer firm, ordered 20 million chips from Fairchild — more than 20x what the Apollo program consumed. By 1968, the computer industry was buying as many chips as the military.” (32)“Copying was literally hardwired into the Soviet semiconductor industry, with some chipmaking machinery using inches rather than centimeters to better replicate American designs, even though the rest of the USSR used the metric system. The Soviet ‘copy it’ strategy was fundamentally flawed, however. Copying worked in building nuclear weapons, because the U.S. and the USSR built only tens of thousands of nukes over the entire Cold War.” (43)They could not keep up with Moore’s Law. “In 1985, the CIA conducted a study of Soviet microprocessors and found that the USSR produced replicas of Intel and Motorola chips like clockwork. They were always a half decade behind.” (144)“The KGB began stealing semiconductor manufacturing equipment too. The system of theft and replication never worked well enough to convince Soviet military leaders that they had a steady supply of quality chips, so they minimized the use of electronics and computers in military systems.” (143)“Japan alone spent 8x as much on capital investment in microelectronics as the USSR.” (149)“The problem with many guided munitions, the military concluded, was the vacuum tubes. The Sparrow missile’s radar system broke on average once every 5 to 10 hours of use. A post war study found that only 9.2% of Sparrows fired in Vietnam hit their target, while 66% malfunctioned, and the rest simply missed.” (58)“Even the vacuum-tube-powered Sidewinder air-to-air missiles that missed most of their targets above Vietnam were upgraded with semiconductor-based guidance systems. They were 6x as accurate in the Persian Gulf War as in Vietnam.” (153)“A simple laser sensor and a couple transistors turned a weapon with a zero-for-638 hit ratio into a tool of precision destruction. Outside a small number of military theorists and engineers, hardly anyone realized Vietnam had been a successful testing ground for weapons that married microelectronics and explosives in ways that would revolutionize warfare and transform American military power.” (61) Like AI + drones in Ukraine today.“If the future of war became a contest for accuracy, the Soviets would fall behind. Guided missiles would not only offset the USSR’s quantitative advantage, they’d force the Soviets to undertake a ruinously expensive anti-missile effort in response.” (75)“Soviet estimates suggested that if the U.S. launched a nuclear first strike in the 1980’s, it could have disabled or destroyed 98% of Soviet ICBMs.” (147)“The Iraqi military — armed with some of the best equipment the Soviet Union’s defense industry produced — was helpless in the wake of the American assault. The reverberations of the smart bombs were felt as powerfully in Moscow as in Baghdad.” (154)“The Russian chip industry faced humiliation, with one fab reduced in the 1990s to producing tiny chips for McDonald’s Happy Meal toys. The Cold War was over; Silicon Valley had won.” (159)Japan“Sony’s research director, the famed physicist Makoto Kikuchi told an American journalist that Japan had fewer geniuses than America, a country with ‘outstanding elites.’ But America also had a ‘long tail’ of people ‘with less than normal intelligence,’ Kikuchi argued, explaining why Japan was better at mass manufacturing.” (83)“In 1985, Japanese firms spent 46% of the world’s capital expenditures on semiconductors, compared to America’s 35%.” (89) That was the year they ruined Mostek, the world’s largest memory chip fab at the time:“’We’re in a death spiral,’ Bob Noyce told a reporter in 1986. In the late 1980s, Intel’s equipment was running only 30% of the time due to maintenance and repairs” (106)In 1989, Shintaro Ishihara wrote: “Japan has nearly a 100% share of 1-megabit semiconductors. Japan is at least five years ahead of the United Stated and the gap is widening.” (112)China“Many of the best graduates from China’s universities before the revolution ended up working in Taiwan or in California. The year after China produced its first integrated circuit, Mao plunged the company into the Cultural Revolution, arguing that expertise was a source of privilege that undermined socialist equality.” (172) Sounds oddly familiar.“During the decade in which China had descended into revolutionary chaos, Intel had invented microprocessors, while Japan had grabbed a large share of the global DRAM market. China accomplished nothing beyond harassing its smartest citizens.” (174)“A study in 1979 found that China had hardly any commercially viable semiconductor production and only 1500 computers in the entire country.” (175)“U.S. fabs made 37% of the world’s chips in 1990, but this number fell to 19% by 2000 and 13% by 2010. South Korea, Singapore and Taiwan rapidly increased output.” (177)“No country has been more successful than China at harnessing the digital world for authoritarian purposes.” (244)“China has less than 1% of the global software tools market. China supplies 4% of the of the world’s silicon wafers and other chipmaking materials. It has only a 7% market share in the business of fabricating chips. None of this fabrication capacity involves high-value, leading-edge technology.” (249)“The future of war will be defined by computing power… a belief in the Chinese military circles that warfare is being ‘intelligentized’ — inelegant military jargon that means applying AI to weapons systems.” (284)“29% of the world’s leading researchers in AI are from China, as opposed to 20% from the U.S. and 18% from Europe. However, a staggering share of these experts end up working in the U.S., which employs 59% of the world’s top AI researchers.” (286)“China is still staggeringly dependent on foreign semiconductor technology — in particular, U.S.-designed, Taiwan-fabricated processors — to undertake complex computation. 95% of GPUs in Chinese servers running AI workloads are designed by NVIDIA.” (286)“The U.S. military will only succeed if it has a decisive technological advantage. The 1970s offset was driven by digital microprocessors, IT, sensors, stealth. This time it will be advances in AI and autonomy.” (287)“Obama’s China team concluded ‘that everything we’re competing on in the 21st Century, all of it rests on the cornerstone of semiconductor mastery.” (300)“Escalating tech competition with the United States is like a Sputnik moment for China’s government.” (320)“Establishing a cutting-edge, all-domestic supply chain would take over a decade and cost well over a trillion dollars in that period. This is why, despite the rhetoric, China’s not actually pursuing an all-domestic supply chain. Beijing recognizes this is simply impossible.” (323)“China now spends more money each year importing chips than it spends on oil.” (p.xviii)Taiwan“TSMC’s Fab 18 fabricated well over 1 quintillion transistors.” (p.xxi)“Taiwan fabricates 37% of the world’s logic chips. After a disaster in Taiwan, the total costs would be measured in the trillions. It would take at least half a decade to rebuild the lost chipmaking capacity.” (341)Lithography“ASML builds 100% of the world’s extreme ultraviolet lithography machines, without which cutting edge chips are simply impossible to make. OPEC’s 40% share of world oil production looks unimpressive by comparison.” (p.xxv)In 1986, the U.S. pioneer “GCA lost its position as the only company building steppers. Japan’s Nikon had initially been a partner of GCA, providing the precision lenses for its stepper. It acquired a machine from GCA and reverse engineered it. Soon Nikon had more market share than GCA.” (94)“GCA struggled with mass production. Precision manufacturing was essential, since lithography was now so exact that a thunderstorm rolling through could change air pressure — and thus the angle at which light refracted — enough to distort the images carved on chips.” (94)“By the end of the 1980s, Japan was supplying 70% of the world’s lithography equipment. America’s share had fallen to 21%.” (99)“Intel would eventually spend billions of dollars on R&D and billions more learning how to use EUV to carve chips. It never planned to make its own EUV equipment” (184)“The manufacturing of EUV wasn’t globalized, it was monopolized. A single supply chain managed by a single company [ASML] would control the future of lithography.” (189)“EUV was one of the biggest technological gambles of our time. Intel alone invested $4B in ASML in 2012, an investment that followed billions of dollars of previous grants and investments Intel had spent on EUV, dating back to the era of Andy Grove.” (225)“Producing enough EUV light requires pulverizing a small ball of tin with a laser. The tin is struck twice with a laser. The first pulse is to warm it up, the second is to blast it into a plasma with a temperature around a half million degrees, many times hotter than the surface of the sun. This process is then repeated 50,000 times per second to produce EUV light in the quantities necessary to fabricate chips.” (226) The laser needed ultrapure diamond windows, multi-layer mirrors that are smoother than any other object manufactured, and each machine had 457,329 parts and cost over $100M each. Their new high-aperture EUV machine costs $300M each.“ASML’s EUV lithography tool is the most expensive mass-produced machine tool in history, so complex it’s impossible to use without extensive training from ASML personnel, who remain on-site for the tool’s entire life span.” (230)“Chapter 41: How Intel Forgot Innovation. The company spent over $10 billion a year on R&D throughout the 2010s, four times as much as TSMC. Only a couple companies in the world spent more. Intel has now spent half a decade announcing ‘temporary’ manufacturing delays. Most people in the industry think many of the company’s problems stem from Intel’s delayed adoption of EUV tools. By 2020, half of all EUV lithography tools, funded and nurtured by Intel, were installed at TSMC. By contrast, Intel had only barely begun to use EUV in its manufacturing process.” (240)

I can still remember being very young and listening with my father to his vacuum tube radio. My memory of those glowing tubes is somewhat faint though because that tube radio soon got replaced by something a lot smaller. The age of the transistor radio had arrived.At that point in time, sometime in the 60s, no one could have imagined how the world was going to be impacted by transistors and integrated circuits etched on silicon wafers. In this book, Chris Miller traces the evolution of the semiconductor chip. It’s a journey that tracks technological innovation from the very beginning when physicists worked out how to create transistors on silicon to the age of modern day chips with billions of transistors crammed into tiny chips by manufacturing processes that are insanely complex. Parallel with the mind boggling tech innovation, Miller also records the vitally important history of the geopolitical ramifications of the semiconductor industry. We learn how important chips are in modern warfare.Taiwan’s critical role within the semiconductor global supply chain and the very small number of other important players are crucial factors as we think about how tech and geopolitical rivalries evolve.While the U.S. had the early lead and still leads by many measures, China is quickly catching up. We are told that China is not making the same mistakes that the Soviet Union made when they sought to keep pace with the U.S. in chip technology. Semiconductors are deeply enmeshed in the U.S.-China power struggle. Reading this book, one gets the impression that China’s efforts to create an advanced domestic chip industry may yet surprise the world. One is left wondering if China will perhaps deliver a “DeepSeek Moment” in the realm of semiconductor technology.For anyone curious about the future and interested in technological innovation and geopolitics, this book tells a truly important story in an interesting and even exciting way. From start to finish it is packed with information that you will want to know about.

Well researched book that follows the Chips industry from its early infancy until 2022. As the sector is still evolving rapidly, this book is already a bit outdated and better used for historical references.Despite his best efforts to stay objective, the author invariably portrays the US as always "reasonable" while other countries are either "cheating" or "dangerous". For example, while many US chip companies are "heroically" helping US military to create deadly weapons, any Chinese tech company with any military association should be blacklisted.The author also annoyingly mentions "Gordon Moore" and "Caltech professor Carver Mead" together, many times, ignoring the fact that Moore himself is a Caltech PhD.